Price Controls in Zimbabwe
Price Controls of basic commodities in Zimbabwe have been used as an instrument to control runaway inflation in Zimbabwe. Price controls were introduced during the 2007 period of hyperinflation as well as in 2017 following the introduction of the Bond Notes the previous year.
Price Controls in 2007
Price controls were introduced on 25 June 2007. The government directed that retailers revert to the prices of 18 June 2007. [1]
Justifying the price controls, the Zimbabwean government, through its state media, said that business owners were causing the increase in inflation by profiteering. Business owners were referred to as "economic saboteurs".[2]
With the ever rising inflation, this resulted in retailers effectively slashing prices to extremely low prices relative to the exchange rate and caused and rush to buy products by consumers.[2]
In July, retailers had run out of products and could afford to restock, effectively shutting their businesses.[2]
In late September, the government eventually allowed retailers to start raising prices of some products gradually.[2]
Price Controls in 2017
Following a sharp rise in the price of basic commodities like cooking oil, the government announced on 6 November 2017 that it would start monitoring and controlling the prices of 16 basic products (Cooking oil, mealie meal, bread, flour, sugar, rice, salt, chicken, eggs, beef, fresh milk, laundry soaps, washing powder, cement, fuel and energy) "to normalise macro-economic indicators." The Minister of Industry and Commerce, Mike Bimha said the move was made to solve "rampant illegal price increases."[3]
The government claimed that it was providing retailers with forex to import basic products and that therefore there was no basis for them to use the parallel market forex rate to increases prices.
References
- ↑ Lance Mambondiani, A minute of silence for ‘Black Friday’, Zimbabwe Independent, Published: 2 November 2007, Retrieved: 14 November 2017
- ↑ 2.0 2.1 2.2 2.3 Zimbabwe price controls cause food disturbances, shortages, Voice of America, Published: 18 Oct 2007 , Retrieved: 14 Nov 2017
- ↑ Govt implements price controls on 16 products, ZBC, Published: 6 November 2017, Retrieved: 14 November 2017
