Zim businesses: ‘This is the end for us’
Traders are devastated by an astonishing price hike that makes Zimbabwe’s fuel the most expensive in the world
Disheartened Zimbabwean businesspeople in the city of Mutare, some 270km east of Harare, on Monday described their prospects as “dim” as petrol price protests hit the country.
Traders and business owners told Times Select they would join the national stayaway called by a labour union, which led to clashes in Harare and Bulawayo two days after the devastating announcement that made Zimbabwe’s fuel the priciest in the world.
“Our business is no longer viable. This is the end for us. If we go at this rate for the next three months, most traders here will close shop. We have tried our best to look for ways to sustain ourselves, but we have run out of ideas,” said Lameck Simango, who operates a secondhand-clothes shop at the Sakubva flea market.
“We have no choice but to join the stayaway. Maybe that’s the only way the president [Emmerson Mnangagwa] can listen to our concerns.”
President Emmerson Mnangagwa hiked the petrol price by 150%. It went up from $1.38 a litre to $3.11 a litre for diesel and from $1.43 to $3.31 a litre for petrol. This is about R45 a litre in rands.
Mnangagwa’s decision to make Zimbabwe’s petrol the most expensive in the world was aimed at boosting fuel supply that has been curbed by foreign-exchange shortages, Bloomberg reported. The lack of dollars has caused food shortages and made imports difficult. Zimbabwe abandoned its own currency in 2009. A decade ago, it battled hyperinflation of about 500 billion percent.
Trader Daniel Mareya said Mnangagwa, who succeeded Robert Mugabe after the long-time ruler was ousted in 2017, did not seem capable of fixing the country’s economic woes. “We thought that Mnangagwa was going to fix the problems, but following his surprise fuel-price increment, things have gone from bad to worse. The black market rate has jumped from $280 to around $600 and $1,000 bond notes per every US$100. This has instantly killed our business because we cannot afford to increase prices because no one is buying,” said Mareya.
He said he would be unable to restock from next week as the costs were now exorbitant.
Traders at the Sakubva Fruit and Vegetables Market said they would temporarily close business until things normalised since that was the “safest thing to do”.
“The fuel increment has killed our business. Transport costs are now too high. I buy 200 pockets of potatoes from Nyanga on a weekly basis. Each pocket used to cost $2 to transport, but the charge has jumped to $5. We used to buy the packaging sacks at $1 per three, but they have jumped to $1.25 each. I used to make $6 profit per pocket, but it has gone down to $2.50,” said potato trader Henry Munyangaru.
Munyangaru said the only way out was to either close shop, cross the borders or to join other dissenting voices calling for economic reforms.
“We have reached a crossroad. There is nothing else we can do. The only option is to close business before I lose more and maybe go to South Africa for better prospects. But the best option is to join peaceful protests and hope that our leaders will listen,” he said.
The same sentiments were shared by indigenous entrepreneurs at Green Market, a light industry area, together with small business players in Mutare’s CBD.
“I don’t think that I’m going to buy any new stock for now. I think wise businesspeople know when it’s time to put the brakes, and this is it for me. Because if I get new stock with the prevailing black market rates, it means that I have to adjust my prices upwards – who then will buy my products considering that no one has received salary increments?” said Given Mudzimu, a cellphones and accessories trader.
The Confederation of Zimbabwe Industries in a recent letter to the industry ministry said “the house is burning” in its description of the challenges faced by formal businesses in the country.
The association’s president, Sifelani Jabangwe, said companies “had about 10 to 14 days” to remain afloat or face the real prospect of closing down by month-end.
In Harare on Monday, protesters barricaded roads and burned tyres to voice their discontent over the hike, while the police fired teargas in Bulawayo to disperse youths protesting outside the high court, Reuters reported.