HARARE – As Zimbabwe’s economy burns, inflamed by foreign currency and commodity shortages as well as crippled investment inflows, companies in the country have resorted to awarding hardship bonuses for employees, shorter working hours and adoption of forex as the major transaction currency.
Inflation has spiked to 5.3% according to official statistics from Zimstats while independent economists such as Professor Steve Hanke say it is as high as 150%. The result has been “too much money chasing too few goods” as the country’s citizens scramble for commodities such as cooking oil, fuel and bread.
“I have been here since 7:30 am because that is the only way I will have a chance to get diesel for this commuter taxi. I cannot afford the fuel that is being sold from the streets; it is too much for me at $13 per five liter,” said Milos Gono, who transports school children in his 18 seater emergency taxi.
At the petrol stations, fuel costs about $7 for 5 liters but there are long queues to deal with. Most Zimbabwean motorists now spend more time look for fuel while for those in a hurry, they have to resort to the expensive parallel market petroleum which many cannot afford.
The situation is the same at the formal supermarkets where people have been lining up to buy cooking oil and other commodities that are in short supply. Shoppers told Business Report Online on Thursday morning that goods are readily available from the streets but at a premium, hence the large numbers. Moreover, some shops have adopted survival strategies of closing shop on the pretext of being closed for staff training or for stock-taking.
OK Zimbabwe, the largest retailer has closed some branches, saying it was carrying out upgrades at its massive OK Mart outlet while another branch in Harare’s CBD has been closed since early this week.
Shoppers in batches
Pick n Pay has resorted to taking shoppers in batches whenever they receive a consignment of cooking oil as they cannot manage to have everyone inside the shop at the same time, said a shift supervisor on Thursday. Other businesses are adopting measures such as turning away customers with local bond notes or digital payment.
Alliance Health has said to its medical aid holders that it is now offering premium payments in US Dollar or South Africa rand in addition to the option of paying in local currency. However, under the scheme covered by local currency payments, the health insurer “foresees members encountering larger shortfalls and problems if prices continue to rise” as is the case currently.
Moreover, “medical services (may only be) available in US Dollar” as “recently announced by several service providers” in healthcare across Zimbabwe. The central bank of Zimbabwe has been accused of running backlogs for the allocation of forex to cover medicinal and fuel imports.
But not everyone is running for the covers as Zimbabwe’s economy takes a pounding. Dairy firm, Dendairy, has shown commitment to the well-being of its employees and has sought to protect them from the current hardships. Dendairy said on Wednesday that it was awarding its employees a 10% hardship bonus to cushion them from the economic turmoil in Zimbabwe.
“Due to the current prevailing economic hardships in the country, the company will pay a 10% hardship allowance on basic salary to all Dendairy employees. However, once the economic situation improves, the allowance will fall away or be discontinued,” said the company’s finance and admin manager in a memo to workers.
The Chicken Inn franchise operator has also said that it is “not chickening out” of Zimbabwe due to the economic challenges. The company has however dropped its promotion giving an extra piece of chicken for purchases on Mondays.
BUSINESS REPORT ONLINE