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Zimbabwe nearly doubles bread price as economic woes mount

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Bread Price Zimbabwe

The price of bread nearly doubled in Zimbabwe on Tuesday, another burden for citizens already struggling with a weakening currency and rising prices for basic goods.

Bread now costs 3.50 RTGS dollars a loaf, up from 1.80 on Monday, according to prices displayed by most shops visited by Reuters in the capital, Harare.

“Bread has now become a luxury. How many people can afford it at this rate?” said Sarah Chisvo, a mother of three who was picking up groceries in a supermarket in central Harare. “The government needs to do something before this gets out of hand.”

Zimbabwe ditched its own currency for the U.S. dollar and other currencies in 2009, after hyperinflation reached 500 billion per cent the previous year.

In February, faced with acute shortages of U.S. dollars, Zimbabwe introduced a new currency, called the Real Time Gross Settlement dollar. The RTGS has been losing value ever since, forcing companies to increase prices.

Year-on-year inflation raced to 66.8 per cent in March, up from 59.39 the previous month, according to statistics agency Zimstats.

On Tuesday, the RTGS dollar was trading at 3.19 to the dollar on the interbank market and 5 on the black market. That means a loaf of bread costs about 70 U.S. cents (53p) a loaf, in a country where the average income is around $4 a day.

Bread is the most consumed staple after maize meal, and the increase follows that of other products like cooking oil, sugar and milk. In January, a fuel price increase led to protests that left several people dead following a military crackdown.

While prices of basic goods continue to spike, salaries have largely remained unchanged, increasing public anger against President Emmerson Mnangagwa’s government.

Zimbabwe is suffering from the twin effects of drought and a cyclone that wrecked the eastern parts of the country. That means the country needs to import food using scarce dollars, which will put further pressure on the exchange rate and prices, analysts say. Reuters

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BUSINESS

Zimbabwe set to rebase economy after adopting a new currency

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Zimbabwe Economy

Zimbabwe’s Finance Minister announced the rebasing of the economy on Wednesday, following the adoption of a new currency earlier this year, and said growth would be slowed this year by a drought and a cyclone that hit eastern regions.

The Zimbabwe economy grew higher than expected in 2018, Finance Minister Mthuli Ncube told parliament.

The central bank scrapped the peg between its quasi-currency bond note and electronic dollars against the U.S dollar in February and merged them into a single transitional currency called the RTGS dollar.

Rebasing the Zimbabwe economy broadly means changing the reference points used to calculate the country’s gross domestic product.

The southern African nation rebased its economy last October boosting it by 40% to $25.8 billion and Ncube said the adoption of the RTGS$ required another rebasing exercise, which put the economy at RTGS$70.1 billion or $21 billion at the official exchange rate.

Ncube said the Zimbabwe economy had grown by 6.2 per cent in 2018 compared to an initial forecast of 3.1 per cent but he saw growth being throttled this year by “severe economic shocks”, including a drought that has wilted crops and a cyclone that hit western parts of Zimbabwe in March.

He said Zimbabwe had 876 000 tonnes of maize in strategic grain reserves, enough to feed the country for seven months.

Ncube said the national treasury’s austerity measures had meant a budget surplus of RTGS$443 million was recorded in the first quarter and added that the target of a budget deficit of 5% of GDP would be achieved this year. Reuters

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BUSINESS

Mnangagwa extends John Mangudya’s term by another five years

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John Mangudya

President Emmerson Mnangagwa on Friday appointed John Mangudya for a second and final five-year term as central bank governor, a government official said.

John Mangudya was first appointed to the post in 2014 but his term was marred by the bank’s decision to introduce the surrogate bond note currency two years later in a bid to end a severe shortage of U.S. dollars and cash.

“The extension takes effect from 1 May 2019 for another five years,” Misheck Sibanda, chief secretary to the president and cabinet said in a statement.

Mangudya’s appointment had been largely expected after Mnangagwa’s spokesman George Charamba said the governor would get a second term.

Zimbabwe is gripped by a severe shortage of dollars that has seen the country struggle to import food and medicines for hospitals. Reuters

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BUSINESS

No change in passport fees: RG

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Zimbabwe passport fees

Registrar-General Mr Clement Masango yesterday dismissed social media reports alleging that Zimbabwe passport fees are set to be increased soon, saying Government had a well-structured method of conveying such messages.

In an interview, Mr Clement Masango said production of passports resumed last Friday afternoon after a system malfunction owing to a technical fault.

“There have been reports on social media alleging that passport fees will be hiked,” he said. “That is not true. I am concerned as the Registrar- General that some people seem to thrive on creating controversy meant to instil alarm and despondency in society.

“This kind of behaviour must be condemned in the strongest terms. To members of the public, I would want to say it is not Government practice to communicate official matters through social media. There are no plans to revise passport fees upwards as alleged by the social media.”

According to the online reports, fees for a normal passport were set to rise from $53 to $253. It had also been reported that fees for an urgent passport would go up from $253 to $800.

The reports of a Zimbabwe passport fees review coincided with a temporary halt in the issuance of passports due to the technical fault.

“The stoppage was as a result of a system malfunction,” said Mr Masango. “It was rectified and by Friday afternoon production had resumed. There is, therefore, no need for members of the public to panic.

“The situation is under control and production of passports has since resumed after that temporary setback. As a department, we want to apologise to our stakeholders for the inconvenience that they went through as a result of that stoppage.”

The RG’s Office is working round the clock to clear a passport backlog which has also been spawned by escalating for the prized document.

The Passport Office has also had to contend with limited financial resources to procure consumables, thereby taking longer to clear the backlog.

The office is on record as expressing its commitment to clear the backlog, which has been characterised by long and winding queues at the Central Registry in Harare.

The long queues have also created a fertile ground for rent-seeking behaviour, with some unscrupulous people cashing in on desperate passport applicants. The Herald

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