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#Economy

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

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!

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

PS: Buy the Techzim Report on the payments sector in Zimbabwe for only $4.99 via EcoCash below:


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