Youth militia paid to harass businesses in RBZ price war

By Tererai Karimakwenda
13 February 2007

The ZimOnline news site has reported that the Central Bank has doubled salaries for youth militia squads that are going around monitoring prices in the shops. The report alleged that these violent government trained youth now make Z$1.2 million per month. This is a slap in the face for doctors, nurses, teachers, university lecturers and other civil servants who have been struggling to get decent salaries from government for years, yet still earn less than the youth. It’s also an economic mystery as to why the authorities have chosen to force private business into a fixed pricing regime, that would lead to major losses and closure not long after.

Our Harare correspondent Simon Muchemwa said the youth have been targeting mostly businesses owned by whites and Indians. He said Nigerian-owned and other African businesses are not harassed as much or at all. Government officials who own shops do not get harassed, even if they overcharge.
Muchemwa could not confirm the youths’ salaries had doubled, but said this would be in line with reports that their assignment is coming to an end in March. Zimonline say they spoke to one of the youths who said their assignment with the RBZ was ending. Muchemwa explained that the RBZ Governor Gideon Gono proposed a “Social Contract” in his last policy review which seeks to freeze salaries and prices for basic goods for a 4-month trial period, starting March 1st. If this comes into effect it would mean the gangs of youths would no longer be needed.

Muchemwa said banks advertised this weekend that all monies sent to Zimbabweans from abroad can now be claimed in any currency they desire. Given the serious shortage of forex in the country, it is not clear where the banks will get the foreign currency. Muchemwa said many suspect this is another government ploy to raise much needed forex, by holding on to this currency.
The “price war” as it is now commonly referred to has intensified as inflation keeps rising without any long term solution by the government. Businesses that try keeping prices down eventually have to match this hyperinflation - currently the highest in the world at 1,593%. But instead of finding permanent solutions that work for both consumers and businesses, the government has insisted on enforcing price controls and arresting business managers who do not comply.

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