Mugabe tells Parliament price freeze to stay

Zimbabwe president Robert Mugabe today said there was no going back on price controls and told MPs they faced a massive task in guiding Zimbabwe through what he called “adverse challenges” in the nation’s economic crisis.

A government order last month to slash prices by around 50% to curb inflation has led to acute shortages of staple foods, petrol and many basics, including matches needed during daily power and water outages.

Mugabe, at the state opening of the Parliament in Harare, said the government was committed to its programme to restore “price stability” in the economy.

Blaming Western economic sanctions, erratic rains and profiteering for the crisis, he said the new session of the Parliament would address legislation relating to the economy, including price controls, and changes to constitutional and electoral laws ahead of parliamentary and presidential elections scheduled next year.

Among the proposed new laws is one which would provide for local Zimbabweans to have a 51% stake in the country’s businesses and companies. The Indigenisation and Economic Empowerment Bill has led to jitters that the government may move to take over foreign-owned companies.

“Your task is a mammoth one. It demands the sound and balanced application of your minds,” Mugabe said in reference to the packed session.

Opposition MPs have criticised price cuts as a tactic by the ruling party to shore up its support ahead of next year’s polls.

Mugabe said the cuts were aimed to bring relief to ordinary Zimbabweans from “inexplicable and astronomical” price increases by profiteers he alleged were encouraged by his opponents backed by Western nations in a campaign for “regime change,” thereby forcing the government to intervene.

“Our economy continues to face adverse challenges emanating mainly from illegal sanctions and successive droughts,” he said.

Western nations have imposed travel restrictions on Mugabe and ruling party leaders known as targeted sanctions to protest the country’s human rights record.

Foreign investment, loans and development aid have also dried up in nearly seven years of political and economic turmoil after the often violent seizures of thousands of white-owned farms began in 2000, disrupting the agriculture-based economy.

Official inflation has soared to 4,500%, the highest in the world, but private financial institutions estimates real inflation closer to 9,000%.

Mugabe arrived at the parliament house in an open-backed vintage Rolls Royce limousine, escorted by a ceremonial guard of honour on horseback, the riders carrying regimental flags and wearing white colonial-style pith helmets. Judges, seen as Mugabe appointees favouring the ruling party, wore scarlet robes and horsehair wigs at the opening ceremony broadcast on state television.

Across the central Harare square, shelves at a leading downtown supermarket were bare of cornmeal staple, meat, bread and other staples for the third straight week.

The price cuts led to stampedes and near riots until goods ran out.

At least 3,000 executives and business managers have been arrested and fined in the prices clampdown for alleged overcharging. Most of those arrested in the clampdown – among them, several of the country’s top corporate businessmen - have been briefly jailed in filthy and harsh police cells.

Eight shop owners were jailed yesterday to appear in court for sentencing tomorrow after state prosecutors opposed applications to free them on bail, calling them economic saboteurs with a high level of moral blameworthiness, the state Herald newspaper reported.

Finance Minister Samual Mumbengegwi acknowledged the cuts saw “the emergence of greedy consumers” who took advantage of the price freeze to hoard goods for resale on the black market, The Herald reported.

Fuel shortages have disrupted commuter transport services across the country. Industry Minister Obert Mpofu ordered fuel to be sold at half the cost of importing it, promising bus operators erratic supplies of government subsidised gas.