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. Last Updated: 07/27/2016

Zimbabwe Tightens Price Controls

HARARE, Zimbabwe -- Zimbabwe has imposed tight profit margins for businesses, stepping up a price rollback program that has led to empty store shelves, long gasoline lines and renewed fears of a total economic collapse.

President Robert Mugabe ordered that prices for a wide range of foodstuffs and consumer items be slashed two weeks ago, accusing businesses of raising prices as part of an effort by Western opponents to overthrow his 27-year rule.

State radio recently reported that a government task force overseeing the anti-inflation price scheme had set the price markup from producers to wholesalers at 5 percent and at 10 percent for prices from wholesalers to retailers.

Industry and Trade Minister Obert Mpofu, who chairs the task force, also has revoked permits of private slaughterhouses and transferred all the country's meat processing business to the larger state-owned Cold Storage, it said. Mpofu moved against the abattoirs -- which handle about 40 percent of the southern African country's meat business -- because they had stopped meat supplies.

Farmers said Cold Storage buyers offered as little as 3 million Zimbabwean dollars -- which at the official exchange rate is worth $200 but at dominant, black market rates is worth $25 -- for cattle valued at up to 12 million Zimbabwe dollars a head ($800 at official rates; $92 at black market rates).

"They are telling me I'm worth a huge amount less than I thought I was worth. Hard work, feedstock problems and everything else, I am insulted," one farmer said. He said he was told that it was his "national duty" to sell his livestock. He asked not to be identified for fear of incrimination. "They must think I'm crazy."

Police and government inspectors continued to arrest traders and businessmen accused of selling goods at above stipulated prices. At least five second-hand car dealers joined scores of executives and company directors arrested over the past week. Most have been released after being fined as individuals in their private capacity with their companies also paying penalties.

Shelves in stores across the country remained bare of cornmeal, bread, meat and other staples. Factories, stores and gas stations have been unable to replace materials sold at below the original cost since June 26. The sudden drop in prices has sparked panic buying, stampedes and near riots by impoverished Zimbabweans. In Harare, gasoline shortages worsened and commuter bus operators ignored orders to slash their fares and abandoned some routes. But as the cold winter dusk fell, buses cruised past crowded downtown stops demanding fares even higher than those before the price cuts from commuters who managed to get to work and were anxious to go home to the capital's satellite townships.

Mpofu said the government would cancel the licenses of bus owners flouting its rules on fares. Gasoline, subsidized to half the importation cost, was being made available to transporters, he said.

Police said more than 1,300 businesses have been charged and fined over the previous two weeks for defying orders to slash prices in half or hoarding goods. Police spokesman Oliver Mandipaka said the crackdown was "not a gimmick and will be sustained at all costs to stop consumers being ripped off."

The government will this week enforce an indefinite price freeze in a bid to rein in runaway inflation, state media reported Sunday. Official inflation is running at 4,500 percent, the highest in the world, though independent financial institutions estimate real inflation is closer to 9,000 percent.

Reuters, AP