AS the dust settles in South Africa after deadly riots and damages to infrastructure, Zimbabwe is beginning to feel the effects as prices of most basic consumer goods have gone up sharply in local supermarkets.

Consumers and business people told the Daily News On Sunday yesterday that the fresh bout of price increases was a result of delays in shipments of raw materials and some imported goods to Zimbabwe, as normalcy returns in South Africa — after it was recently pummelled by devastating riots.

This comes as South Africa, the regional economic powerhouse and Zimbabwe’s biggest trading partner, was left reeling from the horrific human and infrastructure cost of the violent protests — the worst spate of chaos experienced by Pretoria since apartheid ended in 1994.

The SA riots came in the wake of the shock jailing of the country’s former president Jacob Zuma.

Authorities in Pretoria announced that at least 337 people had died during the ugly disturbances.

A snap survey by the Daily News On Sunday crews last week showed that the prices of basic consumer goods, especially those that were imported, had gone up sharply in most supermarkets.

Among the goods that had their prices hiked were detergents, dishwashers, laundry and bath soap, fruits, cooking oil, rice and beverages.

The National Consumer Rights Association (Nacora) was among the organisations that cited the disruptions to movements of goods and raw materials from South Africa to Zimbabwe, as being behind the latest price hikes.

“We are starting to see the impact of the disruptions by way of higher prices for certain commodities but that is not the general picture we are seeing yet.

“Over the coming weeks we are likely to see price hikes for the majority of goods that are being imported from South Africa,” Nacora spokesman Effie Ncube told the Daily News On Sunday.

“The disruption is going to cause shortages and … further price hikes. The Durban route is very critical for Zimbabwe because most of the goods we import come through that route and even the goods that we export.

“So the disruption is affecting Zimbabwe. The challenges are likely to be for a short period because companies that were supposed to import could not do so because of disruption.

“But as soon as the supply chain starts to function, we will go back to normalcy but the challenge is will business willing to go back to pre-disruption normal prices?” Ncube further told the Daily News On Sunday.

The president of Confederation of Zimbabwe Retailers Association (CZRA), Denford Mutashu, said the recent chaos in SA had pushed up prices in most supermarkets but was quick to add that there were other factors too.

“Most South African suppliers of raw materials and finished goods have increased prices to cater for costs directly related to the recent uprising and looting.

“Also, prices of basic goods are going up largely due to the cost of foreign currency on the parallel market where the exchange rate has jumped to ZW145-US$1,” Mutashu said.

In assessing the impact of the SA riots, the Confederation of Zimbabwe Industries (CZI), had warned that the disturbances were likely to affect the country as local companies depended heavily on South Africa for raw materials.

“If the situation in South Africa does not change soon, our economy will be significantly affected.

“Shortages of goods in shops will be witnessed as production starts to fall due to shortages of raw materials and prices will skyrocket.

“Prices of goods are likely to go up in South Africa due to these disturbances and it will result in imported inflation for Zimbabwe,” the CZI had warned in its paper, ‘Impact of Disturbances in South Africa’.

Yesterday leading economist, Victor Bhoroma, told the Daily News On Sunday that the recent SA riots had seriously affected smooth transportation of goods to Zimbabwe, and had caused the latest price increases on most basic consumer goods.

“The increase in prices is a result of a number of endogenous and exogenous factors.

“These include growth in money supply locally and depreciation of the local currency on the open market.

“The riots in South Africa led to delays in raw material transportation, increase in cargo insurance and critically costly switch to alternative routes for inland haulage.  

“Globally, freight charges also went up depending on the source market,” Bhoroma said.

All this comes as the government has projected the economy to grow significantly this year and in 2022, anchored on agriculture and growth in the mining and manufacturing sectors.

Authorities have also insisted that economic stability remains key to their policies, with Finance minister Mthuli Ncube on Wednesday telling parliament that a string of measures that had been undertaken by the government continued to bear fruits.

“Gross Domestic Product (GDP) growth for the year 2021 is projected to remain strong at 7, 8 percent, slightly above the 2021 National Budget growth target of 7,4 percent.

“The strong rebound of the economy is anchored on a better 2020/21 rainfall season, higher international mineral commodity prices, stable macroeconomic environment and managed Covid-19 pandemic.

“The current month-on-month inflation trends of less than three percent is expected to prevail during the second half of 2021.

“As a result of the current disinflationary trajectory, annual inflation for the month of July has declined to 56 percent and is expected to further decline to between 22 percent and 35 percent by December 2021,” Ncube said.

The Treasury chief also told parliament that the Zimbabwe dollar would continue to hold steady against the United States dollar — pinning hopes of more foreign currency availability on the formal market on the strong performances by minerals and reduced food imports.

“Reflecting ongoing strengthening of confidence in our policies and in the economy, foreign currency flows into the formal system have been on an increase since the beginning of 2020.

“Amounts allocated through successive auctions increased significantly for both the main and small medium enterprises auctions, bringing the total allotments to US$1,544.98 million as at 30th June 2021.

“Despite increases in international prices for most agricultural products of more than 20 percent since January 2021, domestic food prices have remained stable owing to the bumper harvest recorded in 2021,” Ncube further told MPs.

He said higher growth rates were projected in agriculture, electricity generation, manufacturing as well as financial services.

This comes at a time when the once rickety Zim dollar has been relatively stable against the greenback over the past year, on the back of a raft of measures that have been introduced by authorities, including the launch of the foreign currency auction system.

The forex auction system has been credited with stopping a precipitous decline in the value of the once wobbly local unit — which has seen the prices of basic goods and services stabilising, and the once rampant black market being kept in check. – Daily News