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New Foreign Currency Measures Trigger Price Hikes

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By Bulawayo Correspondent


PRICES of commodities and services have astronomically gone up following new foreign currency measures announced by the government last week.

The government gazetted the new rules under Statutory Instrument (SI) 127 of 2021 and seen as an attempt to curtail the galloping exchange rate on the parallel market and stabilise the local currency.

However, the effects of the new measures are already being felt by most consumers.

According to the government, the new measures were going to result in the reduction of prices of goods and services, but the SI 127 of 2021, has brought more misery to the already cash-strapped and overcharged consumers.

Soon after the announcement of the SI, the price of a 660 ml green bottle of beer went up from US$1.50 to US$1.80 while the price of a 375 ml pint was raised from 80 cents to US$1.

For goods that cost $10 000 last week, a customer could pay US$83.35 because shops used a weaker exchange rate of $120 per US dollar. However, this week, a customer needed US$111.10 for the same goods using the official exchange rate.

The price of a 2 litre Pure Drop cooking oil went up from $340 to $465 while a 2kg packet of brown sugar rose from $200 to $299.

Other commodities whose prices have increased Mazoe Orange Crush, a cordial drink, washing powder, meat, and toothpaste.

Consumers who spoke to NewZimbabwe.com strongly criticised the new foreign currency measures for sparking the latest round of price increases.

“By compelling shops and service providers to peg the exchange rate at US$1:84 against the Zimbabwe dollar, everyone thought the prices of commodities were going to be reduced since the rate was now controlled,” said Evans Gumede, a Luveve suburb resident.

“Instead, prices of most basic commodities in shops have been increased by very wide margins. What is also shocking is the prices have increased in both foreign currency and local currency.”

Another consumer, Mildred Mlambo also protested over the price increases.

“Before the introduction of the SI, I think the prices of most commodities had relatively stabilised. These measures are ill-timed and they are certainly going to cause more suffering for poor workers already struggling to survive. The only people who are going to benefit from this madness are the elites who will mop cheap foreign currency from the poor consumers,” Mlambo said.

Economic experts and opposition parties have also warned the foreign currency measures could lead to lower economic activity and herald a return to the yester-year hyperinflation era.

“The government should stop this habit of abusing these statutory instruments whenever they have failed to come up with sound economic policies. The government is simply treating the symptoms of a bigger disease in the economy and politics of our country, and the ailment,” Zapu spokesperson Iphithule Maphosa said.