Zim announces price freeze as food costs skyrocket during lockdown

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(iStock)
(iStock)

Zimbabwe has announced a price freeze on goods and services and ordered businesses to instead revert to prices obtained on 25 March 2020, just before the country went into a nationwide lockdown. 

At a meeting attended by representatives of the manufacturing and retail sector, Vice President Kembo Mohadi, who is also chair of the Covid-19 taskforce, said the country has been experiencing escalating food prices that has made essentials unaffordable for many.

Skyrocketing prices

He said a survey conducted by the Ministry of Industry and Commerce had shown prices had gone up by as much as 42% between end 11 February and 11 April.

He said the price freeze was agreed upon by both government and business. 

"There was a general agreement among multi-sectorial partners that price increases, particularly during the lockdown period, were speculative and unjustified.

"So the multi-sectorial stakeholders committed to a price moratorium based on the prices which were applicable on 25 March 2020," said Mohadi. 

The moratorium will apply to all players in the value chain. This decision was supported by Cabinet and will be effective immediately, he said.

Market watchers said price increases were driven by uncertainty around the falling exchange rate of the Zimbabwe dollar and food shortages.

Between 30 March and 22 April, the Zimbabwe dollar lost half its value, falling from a pegged official exchange rate of 25 to the US dollar, to 50 to the US dollar. 

This, observers say, has pushed food prices up at time more than 7.7 million people are already said to be food insecure.

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