Prices up again as Zimbabweans struggle with new currency

By Tererai Karimakwenda
30 August 2006

Less than a week after we reported that maize meal and fuel had become very scarce and prices had increased, prices have gone up yet again and there is confusion over the new currency that was introduced by the Reserve Bank of Zimbabwe. In Harare Simon Muchemwa told us people are trying to adjust to the new currency but there is still a lot of confusion because the colours of the new notes are not yet familiar. He said many people are getting the wrong change from large notes and losing money if they do not realise it before they leave the shops. Bus fares have gone up as well after supplies of petrol and diesel dried up at the weekend.

Muchemwa said the maize shortages are being made worse by the officials at roadblocks who are not allowing maize to be moved from one area to another. Last week maize meal was Z$600 for a 5kg bag. It is now Z$750, when it is available. A 10kg bag of maize meal now costs Z$1,500 up from Z$1 million. Fresh milk went up from Z$140 to Z$190 and “Chimombe” milk went up from Z$200 to Z$280. A bar of soap now costs anywhere from Z$450- Z$600 depending on the size and brand. All these prices are in the new currency. Just add three zeros to each price to fully understand the increases.

As for fuel, Muchemwa said there is no petrol at most service stations. The soldiers that had been deployed at the fuel stations to make sure owners were charging the prices stipulated by government have all left because there’s no fuel. Muchemwa said they are seen only when fuel is delivered.

The fuel shortages have led to an increase in bus fares as expected. Our contact in the Mabvuku high-density suburb of Harare told us someone travelling from Glenn View suburb to the city centre would need to take 2 minibuses at Z$250 each. That means a one-way trip to work for someone from the outer suburbs costs Z$500, which is Z$500,000 in the old currency.

Our Mabvuku contact also confirmed the maize meal shortages and confusion over the new notes. She told us that the elderly are having a very difficult time adjusting to the new system. An old lady in her area almost lost a million Zimbabwe dollar note thinking she had pulled out a ten thousand dollar note at the shops. The other problem is that there is no fixed price for anything these days. Our contact said prices change frequently.

Reserve Bank Governor Gideon Gono announced that the currency conversions were just the first phase of a broader campaign. Many more people stand to lose money if the next phase brings with it as much confusion as the first.