Msika threatens businesses as shops run out of stock

By Tererai Karimakwenda
03 July 2007

Speaking at the burial of Retired Major General Gideon Lifa at the National Heroes Acre on Monday, Vice President Joseph Msika threatened businesses that did not comply with the new price freezes ordered by government last week. Msika said he sometimes pleads with Mugabe not to deal with opponents so harshly but warned he may be forced to support him if prices keep going up. The Vice President who was standing in for Mugabe at the burial said government would take over businesses that do not reduce prices by 50 percent as ordered. But with inflation running at least over 5,000%, businesses are struggling to keep up with supply costs and salaries.

The price reductions have brought about a chaotic situation in the shops around the country. Our Harare correspondent Simon Muchemwa toured the Central Business District on Tuesday and reports that the shelves are empty. He noted that basic commodities such as bread and salt are not available. Traditional bakers like Lobels and Bakers Inn have not produced any bread for 2 days.

Muchemwa also noted that the government price monitoring teams are attracting large crowds wherever they go, because people know they will force a reduction in prices. He said whenever a shop gets crowded, management closes the doors and serves the customers inside until they clear the shelves. No more products are put out for sale after that. Some small shops are already out of stock and doing no business.

According to Muchemwa, items such as Cerevita Cereral and baby foods have actually gone up in price and plenty can be found in the shops.

In the highest inflationary environment in the world a 50% price reduction means businesses would be operating at a loss. No government official, including Mugabe and Msika, has offered an explanation as to how they expect any company to continue operating without making any money. And already many shops are reported to be closed, with their owners going into hiding.