Chris McGreal, reporting from Harare — how long will that be allowed? — notes that Mugabe’s price cuts bring cheap TVs today, new crisis tomorrow:
Zimbabweans are shopping like there’s no tomorrow. With police patrolling the aisles of Harare’s electrical shops to enforce massive government-ordered price cuts, the widescreen TVs were the first things to go, for as little as £20. Across the country, shoes, clothes, toiletries and different kinds of food were all swept from the shelves as a nation with the world’s fastest shrinking economy gorged itself on one last spending spree.Car dealers said officials were trying to force them to sell vehicles at the official exchange rate, effectively meaning that a car costing £15,000 could be had for £30 by changing money on the blackmarket. The owners of several dealerships have been arrested.
President Robert Mugabe’s order that all shop prices be cut by at least half, and sometimes several times more, has forced stores to open to hordes of customers waving thick blocks of near worthless money given new value by the price cuts. The police and groups of ruling party supporters could be seen leading the charge for a bargain.
Mr Mugabe has accused business interests of fuelling inflation, running at about 20,000%, to bring down his government. A hotline is in place to report “overcharging”, and retailers who flinch at slashing prices are being dragged before the courts. Several thousand have been arrested for “profiteering” over the past week, including the chief executives of the biggest retailers in the country, some of them foreign-owned.
Economists say the price cuts will only deepen the national crisis, leaving many shops bare because they will not be able to afford to restock while official retail prices remain lower than the cost of buying wholesale or importing. Mr Mugabe has dismissed such warnings as “bookish economics”.
Some businesses fear that Operation Reduce Prices is intended to pin the blame on the private sector for Zimbabwe’s economic problems as a step towards seizing control of many companies in the way that white-owned farms were expropriated at the beginning of the decade, sparking the crisis.
Parliament is expected to pass legislation in the coming weeks that will effectively give a controlling stake in all publicly traded companies to ruling party loyalists and others chosen by the government.
The impact of the price cuts was felt almost immediately as fuel virtually disappeared from sale after garages were forced to sell petrol for 23p a litre, less than they paid the state-owned supplier.
The police and army broke the locks on petrol pumps at some garages and tanks ran dry amid panic buying. Now petrol is available only on the blackmarket, at more than seven times the official price and three times what garages had been charging. By Saturday, most minibus taxis had gone from the roads because drivers could not find petrol. Crowds of workers were left on kerbs for hours trying to get to or from their jobs.
The riot police had to be called out to the South African-owned Makro super store in Harare after thousands of people stormed the shop after it was forced to slash prices. The scenes were replicated in stores throughout Harare. The Bata shoe chain’s shops were stripped bare in two days by people snapping up pairs for as little as 20p.
Food is still available, although bread, sugar, cornmeal and other staples are hard to find, and meat has all but disappeared because livestock owners say it is now uneconomic to slaughter their animals. Much of the meat that is available is goat slaughtered in backyards and sold in informal markets.
The rest of the food supply – already severely undermined by drought and lack of production on land seized from white farmers – is also under threat after Mr Mugabe threatened to take over manufacturers if they shut down their plants on the grounds that they were uneconomic. “Factories must produce. If they don’t, we will take you over … We will seize the factories,” he said.