Two weeks ago, Zimbabwe’s Industry Minister Obert Mpofu ordered businesses to cut the prices of certain commodities in half. In an effort to curb the country’s inflation rate, now well beyond 5000 %, Zimbabwe’s President Robert Mbeka threatened to seize and nationalize companies if they were found to be profiteering. However, many businesses defied the government imposed price cut.
On Saturday, the crackdown began on defiant businesses.Since Monday, 1,328 shop owners and business managers have been arrested. Among those arrested were two directors of Zimbabwe’s main food distributor and fast food chain.
Earlier economists warned that the price cut would only lead to empty shelves and the closure of more businesses. That premonition has come true. The sudden drop in prices led to stampedes, bulk purchases and panic buying of staple commodities. Unable to replace food sold at below cost prices, bread, meat and fuel have run dry.
Buses, ordered to reduce fares by three-fourths, are simply abandoning routes. Businesses, incurring significant losses, are expected to make huge lay-off since workers are failing to go to work.
In just two weeks, the economy is coming to a standstill and many blame the President.
The effects of food shortages hit the country’s main university in Harare, the University of Zimbabwe. Thousands of students were evicted, this past weekend, when they protested against a decision to deny them food for not paying their fees.
Students were ordered to pay an extra one million dollars (4,000 US dollars), for an extended semester after a strike by lecturers shortened the semester. According to Benjamin Nyandoro, the spokesman for the Zimbabwe’s National Student Union, many of those evicted lived on campus because they had no friends or family in the area. Now they have no choice but to sleep in the streets.
For more information please see:
BBC – Mass Zimbabwe Arrest Over Prices – 09 July 2007
Yahoo – Price Cut Paralyzing Zimbabwe Economy – 09 July 2007
Yahoo – 1,300 Arrested in Zimbabwe Prices Crackdown – 09 July 2007
Yahoo – Zimbabwe University Evicts Students Following Food Riots – 09 July 2007
