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Zimbabwe

KFC to car batteries, Zimbabwe's economic pinch is on

Price spikes, panic and tactical closures strip shelves of goods

14 October 2018 - 00:00 By JAMES THOMPSON

From salons to fast-food restaurants, hardware shops to corporations, the wave of price increases that has hit Zimbabwe in the past fortnight has spared few businesses.
There have been acute shortages of fuel, drugs and food, and spikes in the price of a range of goods, presenting the biggest test for President Emmerson Mnangagwa's first 100 days in office.
A national strike was called on Thursday to protest against sharp price hikes, a new tax on electronic transactions and daily shortages of necessities.
On Tuesday, Stanley Moyo, a manager at a company that sells batteries in Bulawayo, had to change the price of his goods twice on the same day.
"In the morning, I was selling a standard 658 battery that powers twin-cab cars for $350 in bond notes . by end of day we had put it at $990. Already we have a foreign currency price and it won't change, it will remain at $185. We import these batteries; that is why when the market catches a cold, we run for cover," said Moyo.
The government insists that the multi-currency regime will remain in place. On paper, the bond note is equivalent in value to the US dollar - but on the black market it is hovering at 1:4 to the greenback, a rate not seen before.
KFC Africa said this week it had decided to shutter its operations in Zimbabwe for a while. It was only four years ago that the franchise re-entered the Zimbabwe market after an absence of seven years.
"KFC Africa has taken the decision to temporarily close our restaurants in Zimbabwe as we are unable to continue to trade due to the current pressure on the country's economy. The currency challenges have affected our operations and supply and we are exploring various ways to reopen our restaurants soon," it said.
At a furniture shop, the price of a TV set that recently cost $900 has escalated to $7,000.
"We have stopped taking lay-by and hire-purchase deals. In any case, if they have hard currency they will import. We just wish for a quick solution to the situation," said an employee at the furniture shop.
Major clothing shops and some supermarkets have also either closed shop or removed stock from the shelves.
At shops owned by Raj Modi, the deputy minister of industry & trade, who runs a liquor hub and supermarket chain in Bulawayo, the prices cannot wantonly be increased - after all, he is part of a government trying to convince businesses to avoid price increases. His outlets remain open, but shoppers there said they have noticed subtle price increases.
Choppies supermarket is also being careful to not unnerve politicians. Choppies Zimbabwe is embroiled in an ownership wrangle between former vice-president Phelekezela Mphoko and its Botswana management under former Botswana president Festus Mogae. The Choppies group opposes the 51% indigenisation law and is courting government support for its stance.
An employee at Choppies Zimbabwe said they were selling stock bought a few months ago. "Under normal circumstances it was going to run for three more months but there's a lot of panic buying, therefore we have limited customers to one item each. If things go on as they are, we will have empty shelves soon," he said.
In Harare, night spots are demanding foreign currency for imported beverages such as champagne and pricey cognacs...

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