Government in price climb-down

By Henry Makiwa
12 October 2007

The government raised the prices of basic commodities in shops on Thursday, signalling a major climb-down from the ill-fated price freeze policy instituted by Robert Mugabe three month ago.

Announcements by the government-appointed National Incomes and Pricing Commission (NIPC) will see most basic commodities rise in price as the country’s economic meltdown continues. Analysts and observers say the move demonstrates an admittance by government that its price freeze policy was a failure.

The NIPC which is charged with regulating prices, issued a statement outlining the new raised retail prices of maize-meal, milk and sugar; as well as farming inputs such as seed and fertilisers, which are needed urgently with the farming season now fast approaching.

The latest round of price increases comes in the wake of assurances by the government that it was working closely with manufacturers and business stakeholders to come up with a viable pricing structure.

Journalist, Kumbirai Mafunda, said the new measures were unlikely to bring an immediate reprieve to the ongoing economic crisis.

Mafunda said: “The shelves of shops remain empty and most people are relying on the black market to acquire day to day household commodities. No one will take notice of the latest price increases because the goods are no-where to be seen.”

He added: “All it means is that government has admitted that its communist style populist policies are a failure; especially as we have seen it back-tracking on one or another aspect of its price freeze policy every week since June.”

In June Mugabe announced sweeping price freezes of basic goods in an attempt to curb the world’s highest inflation rate, estimated at 7 000 percent.

Mugabe then accused companies of raising prices as part of a plot to unseat him. The 83-year-old despot threatened to seize and nationalise foreign companies, including mines, which he accused of also working to sabotage the economy as a means to overthrow him.