Zimbabwean businesses peg prices on the black market exchange rate of the Zimbabwe dollar against the United States dollar but the prices continue to escalate while the interbank rate has remained steady at 15:1 for some time.
Sources in business say prices are not based on the current exchange rate but future expected rate which means prices are pegged at 24: 1 and in some cases 40:1.
The escalating prices have, however, also seen a decline is sales with the retail sector saying general sales have declined by 40 percent while sales of non-basic goods has declined by 60 percent.
Mnangagwa said yesterday government might be forced to step in if the business sector continues to increase prices which are now beyond the reach of the average Zimbabwean,
“Wherever I am going these days, people are complaining about the ever-increasing prices of basic commodities, saying you promised to whip such business into line. So where is that whip?” he told rural district councillors.
“As a father, you don’t discipline your children every time they do something wrong, but just warn before taking any action. However, I think we have reached a point where action has to be taken because we don’t see any reason why there is this continuous rise in prices.”