Zimbabweans brace themselves for drastic maize meal increases

By Tichaona Sibanda
15 February 2007

There are fears retailers in the country will be forced to increase the price of maize meal to consumers following the Grain Marketing Board’s decision on Thursday to raise the price of maize to Millers from Z$6 000 a tonne to Z$58 000 a tonne.

Eddie Cross, a Bulawayo businessman and opposition MDC official said the new GMB price will push maize meal prices in stores to over Z$200 000 a tonne. Of concern however to the business community is the way the GMB is being allowed to peg its prices without hindrance from government.

In the last two months, several company executives have been arrested for allegedly hiking prices of basic commodities without approval from the government. Cross, who is also an economic adviser to the main faction of the opposition Movement for Democratic Change party said the recent surge in prices was triggered by the GMB’s price increase of wheat to millers.

‘We have a government that is arresting people for hiking prices, whilst its own companies are allowed to do so without any hassle,’ Cross said.

The government, battling to keep a lid on rising prices and runaway inflation, has banned businesses from hiking prices of selected basic goods without prior permission from the state. More than 200 bakers and retailers were last month arrested for selling bread above the official price. They were later released.

Cross said skyrocketing prices are just one on a long list of problems bedevilling the regime in its seventh year of an economic meltdown, described by the World Bank as the worst in the world outside a war zone. The country also has the world’s highest inflation rate of more than 1500 percent, rampant unemployment, shortages of foreign currency, food, fuel, essential medicines and increasing poverty levels.

‘This (GMB) is a price increase of 9 600 per cent. The Minister of Finance in his November 2006 statement in Parliament first mooted this price adjustment. It follows similar price adjustments to the price of wheat which has been raised three times since 20th December bringing bakers flour from Z$150 000 a tonne to Z$900 000 a tonne with a further increase due this week - again due to an increase in wheat prices charged by the GMB to millers,’ he said.

He added; ‘There is still no local cooking oil in the market although imported product is generally available at twice the controlled price. There is no price control on imported products. There is very little sugar as the producers into the market are rationing this product. Sugar prices are still well below the cost of production. Fats such as margarine are also very hard to find for the same reason. A further increase in the price of bread is imminent.’

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