Zim govt 'threatens to revoke operational licences from businesses inflating prices' – report

The Zimbabwean government has reportedly threatened to revoke operational licences from businesses that are inflating prices, as it tries to stop an economic meltdown triggered by recent fiscal reforms.

In a bid to control the spiralling basic commodity prices, cash shortages and fuel crisis, the government also issued a warning to those selling products in foreign currencies, especially the US dollar, reported New Zimbabwe.com.

Vice President Kembo Mohadi told reporters in Harare this week that it was wrong for retailers to increase prices, adding that price monitors were on the ground.

"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 licences revoked," Mohadi was quoted as saying.

An economist, Aeneas Chuma, however, warned that the government’s move would achieve nothing.

Unity government

He said the government should not regulate prices, as the market would regulate itself naturally.

An AP report said that many Zimbabweans feared the current crisis could spiral into the kind of collapse seen a decade ago when Zimbabwe's hyperinflation reached 500 billion %, according to the International Monetary Fund.

Plastic bags of 100-trillion Zimbabwe dollar banknotes were not enough to buy basic groceries, forcing then president Robert Mugabe to form a "unity government" with the opposition and adopt a multi-currency system.

Since then, daily transactions had been dominated by the US dollar.

But the new currency shortage had forced most people to use a surrogate currency called bond notes, bank cards and mobile money, all of which were devaluing quickly against the US dollar on the black market.

Retailers said the soaring rates for US dollars on the black market, where they sourced most of their foreign currency, were making it difficult for them to restock. Some businesses had been forced to close.

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