Bread has reason from RTGS$1.50 to RTGS$3.50 in the past two days while prices of other basic commodities have also risen massively. File Photo: IOL

HARARE – Zimbabwean leader, Emerson Mnangagwa on Thursday criticised business leaders for price increases as companies in the struggling economy cushion their bottom lines by hiking prices in line with steep rises in the parallel market currency rates.

Bread has reason from RTGS$1.50 to RTGS$3.50 in the past two days while prices of other basic commodities have also risen massively.

The parallel market rates have surged this week from around 1:3.8 to 1:5 by this morning despite part liberalization of the official exchange rate which is trading around 1:3 although some have complained of being unable to buy US Dollar notes from the banks.

Mnangagwa said his government remained “committed to address distortions in all sectors of the economy” although the price increases appeared to be a major area of concern.

Mnangagwa was addressing Zimbabweans at the National Sports Stadium in Harare during a 39th anniversary ceremony to mark Zimbabwe’s independence from Britain.

“Government is alarmed by the recent wanton and indiscriminate increases in pricing. This conduct by stakeholders in business is inhuman and unethical and goes against the grain of economic dialogue we have espoused,” he said.

Zimbabwe recently paid a wage increase for civil servants but this has quickly been eroded by inflation which is on the rampage. Fuel supplies have been erratic while companies are cutting back on productivity.

“We are adopting long term strategies to stabilise availability and pricing of fuel. Introduction of market bases exchange rate expected to stabilise,” Mnangagwa said without further elaboration.

He said his government was determined “to restore the purchasing power of all workers” in light of the massive price increases rocking the economy.

The IMF said this week that it had agreed with Zimbabwean authorities “on macroeconomic policies and structural reforms” that can underpin a staff-monitored programme.

“Zimbabwe is facing deep macroeconomic imbalances, with large fiscal deficits and significant distortions in foreign exchange and other markets, which severely hamper the functioning of the economy,” said the IMF.

The SMP, which will be monitored on a quarterly basis, “aims to implement a coherent set of policies that can facilitate a return to macroeconomic stability” while successful implementation of the monitored program “will assist in building a track record and facilitate Zimbabwe’s re-engagement” with the international community.

The economic reform framework to be monitored by the will focus on fiscal consolidation, the elimination of central bank financing of the fiscal deficit, and adoption of reforms that allow market forces to drive the effective functioning of foreign exchange and other financial markets.