File image: IOL.
File image: IOL.

Zimbabwe's Delta hikes price of beer as liquidity crunch bites

By ANA Reporter Time of article published Jan 8, 2019

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HARARE – Zimbabwe’s largest drinks company Delta Corporation has resorted to increasing the price of clear beer by an average 25 percent after the government stopped it from selling exclusively in United States dollars.

“The adjustment of the wholesale price is meant to cushion against the significant increases in local costs, as confirmed by the official inflation statistics,” Delta, a unit of the world’s largest beverages maker Anheuser-Busch InBev, said in a statement.

Delta had on January 2 announced plans to sell its drinks in the US dollar to remain viable in the face of an acute foreign currency crunch but dropped the decision after talks with the government and the central bank.

After the talks, the parties said in a statement the decision was “in the spirit of a multicurrency framework” and that the central bank would endeavour to provide the foreign currency required by Delta to operate.

Zimbabwe abandoned its own dollar a decade ago after it was rendered worthless by hyperinflation, adopting the use of the greenback and other foreign currency. It has however struggled with chronic shortages of forex due to weak exports.

Businesses traded mainly using the United States dollar, but in 2016, liquidity challenges forced the southern African country to introduce an African Development Bank-backed surrogate currency, known as called bond notes.

The notes are officially pegged at 1:1 against the dollar but have been losing value in spectacular fashion as the shortage of foreign currency triggers panic. It has also led to serious shortages of food items and fuel.

In the face of the shortages, the central bank and the finance and economic development ministry have ordered the separation of bank accounts for companies and individuals into ordinary ones and those denominated in foreign currency.

African News Agency (ANA)

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