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It’s Official, 2008 Is Back. Vice President Announces Price Controls

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Zimbabwean flag ( Kwesé is not Zimbabwean)

Vice President Kembo Mohadi has issued the riot act against businesses for ‘overpricing.’ I cannot pretend this doesn’t send a chill down my spine. This is deja vu except it’s not a feeling that this happened before, this actually happened before!

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Where were you?

The Americans have this thing were they ask each other where they were when the news broke that a plane had crashed into the World Trade Centre or for an older generation, where they were when the news broke that President Kennedy had been shot or an even older generation, where they were when the news broke that the Japanese had bombed Pearl Harbour.

In Zimbabwe we should ask each other where we were when the government announced price controls in 2008 and the shops were raided bare by unashamed folks who knew they were paying nothing for stuff of value. So, I was on my way to a funeral (I was in university then) and I stopped over at some shops in Houghton Park to find that the grocery store only had a few packets of ‘Cheeses’ and nothing else. Where were you?

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If you were not born yet

If you were not born yet or were too little to comprehend what was going on or too young to even remember, don’t worry. The government has decided to make sure you don’t miss out on the opportunity to tell these kinda stories. They have brought back 2008! I don’t think it’s a coincidence that 2008 has been reintroduced in 2018.

Ten years ago it was Robert Mugabe himself that announced that prices should be set to what they were regardless of what the market forces deemed prices to be. This time, it’s the less visible of our two vice presidents, Vice President Kembo Mohadi who has done the honours. Here’s what he said:

…Anyone pricing above these regulated fuel prices is doing so illegally. Price monitors are on the ground monitoring the situation. All those caught selling fuel at prices not approved by Zera (Zimbabwe Energy Regulatory Authority) and those service stations either demanding payment in hard currency or engaging in other untoward trading practices will have their licenses revoked…

There you have it. The proverbial history is repeating itself except you never really consider 10 years ago to be history enough to warrant a repeat but this is Zimbabwe. Already, shops have been looted even before the statement by the vice president. People went on a spree shopping with their electronic money after ‘burning’ just a couple of USD this afternoon.

What’s going on?

In case you were under a rock: there is a difference in value between the USD and the fake USD that we have circulating in our bank accounts. Over the past few weeks, that difference has been growing following the announcement of plans to demonetize the Bond Notes.

The gap widened at a faster rate when the monetary policy statement and the infamous 2% transaction tax were announced just over a week ago. Today, the rate of gap widening accelerated even more following the announcement by Mthuli Ncube that the Bond Note is not equal to the USD (duh!) and hence should be scrapped.

Now, the vice president is pretending as if the prices are not increasing due to market forces but due to some sinister hand that wants to see the country burn.

Haaya

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Kembo MohadiBond NotesMthuli Ncube

Kembo Mohadi is a Zimbabwean politician who is the Vice President of the Republic of Zimbabwe and second secretary of Zanu-PF. Mohadi is a member of the Zimbabwe African National Union-Patriotic Front (Zanu-PF) where he is a member of the Central Committee and Politburo. He... Read More About Kembo Mohadi

Bond Notes are a currency of notes backed by a bond that the Zimbabwe government announced on 4 May 2016 by Reserve Bank of Zimbabwe (RBZ) governor John Mangudya. The $2 denomination of the notes was finally introduced on 28 November 2016. More notes were... Read More About Bond Notes

Professor Mthuli Ncube is the Minister of Finance and Economic Development.He was the Chief Economist and Vice President of the African Development Bank ,financial, economics, investment, and public policy expert, entrepreneur and academic. Professor Ncube divides his time between the private sector in Switzerland and... Read More About Mthuli Ncube

12 thoughts on “It’s Official, 2008 Is Back. Vice President Announces Price Controls

    1. What doesn’t it have top do with tech?
      Coverage of tech requires more a coverage of society than the actual tech

    2. I was getting a tyre for my car yesterday the first place I went to wanted 280 bond or $80 US the second place I went would only except US dollar also most chemist will only except US dollar

  1. Personally I don’t think we are at 2008 levels yet. More like 2005-2007 period. The groundwork is being laid down but at a more accelerated rate as people scramble. most people remember 2008 and no one wants to be the sucker and suffer the full brunt of the economy. To some extent this is what is driving us to speculate and behave in a frenzied way. Economic collapse is usually a self-fulfilling prophecy. I contend things are not as great as the government would have us believe but neither are they as bad as this article would have us believe. People tend to only to remember the depressions and booms but forget the time in between.

    1. I think when we get to price controls, we are kinda in 2008 territory already.
      I agree that economic decline is a self fulfilling prophecy. Economics is a behavioral science and when things reach a certain level then no one can stop the avalanche. This is the point actually, a lot of people want to believe that prices are going up because retailers are mean and selfish. No, this is happening because human behavior is not rational and it is that aspect that matters more in economics than the underlying rational theories that always start with the words, “all things being equal.” Things are never equal.
      We are here Garikai, I only pray we are not here for too long

  2. We need tough love for Zim to go back on track. Things will be hard a bit but we will soon smile. Mind you the country’s economy was tattered and torn. Evrything of Zim are bits and pieaces being picked from the garbage. So let’s work together, support the efforts and shame the remnants who want to proove their stupidity.

    1. I agree with that Tracy. Every decision that we make has to measured and appreciative of the broader context. The government primarily has to be careful. The last one and half weeks the government has been very myopic and careless and they have failed to account for the context that the population does not trust them much. The sooner they acknowledge this reality, the earlier we get to see them being more realistic and actually succeeding

  3. It seems that the only ones who learnt from 2008 were the retailers / service providers, hence the temporal closing of some shops for this or that reason. Those of us who were there ten, eleven years ago should know better than to go about panic buying because at day’s end, we are the same ones who will bear the brunt of it all — but as Tinashe said, human behaviour is not rational, therefore we do what we have to do…

  4. The Mugabe Legacy lives on under ED which we & the World knew would happen. This does involve Techzim coz all tech stuff has shot through the roof. Only in southern africa does history keep repeating itself under dictatorship.

  5. If the announcement was made by Kembo Mohadi, it means it can and will most likely be repudiated by ED or Chiwenga. Who would honestly take Kembo Mohadi for serious?

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