By Alois Vinga
ZIMBABWE’s economy tottering on the brink was Tuesday pushed to the brink after prices of basic commodities went up.
The Grain Millers Association of Zimbabwe (GMAZ) and beverages manufacturer, Schweppes Zimbabwe Limited, announced they had reviewed prices of their products like mealie meal, flour, and juices as well as purified water
In reviewing the price for mealie meal, GMAZ cited the increase in fuel and transport costs as the main cause behind new price structures.
“Following significant charges in the economy (have been) influenced by inter-alia, the charge in foreign exchange policy directing millers to use the interbank rate, increase in costs of fuel and pricing of packaging in foreign currency.
“The GMAZ costs review technical committee has thoroughly interrogated the costing of our prices and concluded the following prices to obtain with from June 1 2019,” the statement read in part.
Under the new price structure a 5kgs packet of maize meal will now cost ZWL$9.60 while a 10kgs bag will now cost ZWL$16.24.
A 2kg packet of flour will now cost ZWL$14.72 while the same quantity of salt has gone up to ZWL$4.80.
According to a new price list from Schweppes Zimbabwe (Ltd), a 2litre bottle of orange crush will now be sold at a recommended retail price of ZWL$21 while other flavors like cream soda , blackberry and raspberry will now be sold at ZWL$20.40.
Other products like 500ml juices will now be sold at ZWL$6 while a bottle of purified water of the same quantity will be sold at ZWL$3.
Economist John Robertson said that the price increases are a result of the continuous erosion of the value of the RTGS dollar.
“The local currency is weakening against increased demand for the US$ which continues to be scarce. The situation is being worsened by the over reliance on imports and the implication is that pressure for salary increments shall continue to rise which also pose more risk to drive inflation,” Robertson said.
He predicted that the obtaining situation will affect farmers who are being paid in local currency as they will be incapacitated to purchase implements for the coming seasons.
According to Robertson, the problems can be addressed by reconsidering the land reform program by making the current 99 year leases are bankable as this would unlock capital for farmers to produce key raw materials needed for industrial productivity.