It’s a bleak Xmas for cash-strapped citizens

THE festive season is the most wonderful time for families around the world. It is when houses are filled with twinkling lights, Christmas trees decorated with ornaments, as well as banisters and mantels strung with garlands, giving a feeling of holiday cheer.

By Faith Zaba

I remember this time of the year growing up in Harare’s Kambuzuma high-density suburb, where even though we were poor, we were able to enjoy the Christmas cheer. We would decorate the lounge with garlands, Christmas cards and balloons. As kids, we would receive new clothes and go from house to house to eat, exchange sweets and chocolates.

There was a party at almost every house. A lot of people would put their stereos outside, in front of the house and blast away their favourite music.

That was then.

This year, most Zimbabweans face another bleak Christmas, more so after recent price hikes by retail outlets dampened the spirit of people who were still celebrating the dramatic fall of former president Robert Mugabe.

This week, the price of bread shot up 10% from US$1 to US$1,10 before an outcry by consumers forced bakeries to revert to the initial price after consultations with government and business representatives.

But as government restored the bread price to its initial price benchmark, inflation this week quickened to 2,94%, while price increases of other basic commodities continued unrestrained, with a kilogramme of fresh kapenta shooting to an average of US$14 in most retail outlets.

Meat price also skyrocketed. A kilogramme of beef and chicken now go for US$10 and US$14 respectively, with pork costing more than US$9.

Besides a few outlets that have reduced prices as part of sales promotions, the high prices will further squeeze Zimbabweans’ meagre disposable incomes, already reeling from either low or non-payment of salaries, company closures and retrenchments.

The price hikes have eroded the incomes of ordinary workers who are already finding it difficult to survive on paltry wages.

According to the Zimbabwe Congress of Trade Unions, most of the workers, who constitute 5% of the employable population, earn an average US$300 a month and therefore cannot afford to provide their families with a joyous Christmas. If anything, this Christmas will be sombre.

Despite government’s exhortations for retail outlets not to increase prices, some sectors such as meat traders have stuck to their guns, defending the hikes.

This presents President Emmerson Mnangagwa with one of his major challenges in his fledgling presidency.

Although some retailers are clearly profiteering, government must act swiftly to curb the escalating prices of commodities.

It seems businesses are pricing based on future replacement cost of inputs, based on the black market rate premium currently at around 50/60%.

Unless solutions are found to the multi-faceted economic challenges, the problem of price increases will continue. The long-term solution lies in currency stability, restoring confidence and stabilising inflation.