Concerns among Zimbabwe’s business leaders are mounting over President Emmerson Mnangagwa’s administration looking to introduce price controls, as the cabinet agreed to engage businesses over the current price hikes stemming from the ongoing loss in local currency value.

In recent weeks, Zimbabwe’s local unit of exchange has been plummeting, falling to $1: ZWL2200 this week on the parallel foreign exchange market, in comparison to almost half of this value on official channels. This has led to fresh price hikes for goods and commodities.

“The cabinet is concerned by the spiralling prices of the 14 basic goods. The Minister of Industry and Commerce is already engaging the concerned stakeholders, including manufacturers, wholesalers, retailers and other associations, on the matter,” according to Mnangagwa’s administration following a cabinet meeting in Harare earlier this week. 

As such, a cabinet committee has been established – featuring ministers from the Industry and Commerce, Finance and Economic Development and ICT sectors – to look into the price hikes “to ensure corrective measures” will be taken. 

Due to the Zimbabwe Dollar’s ongoing loss in value and the price increases, the year-on-year inflation is forecast at 75%. The country now utilises a basket of local currency and US dollar pricing to calculate inflation, IOL reports. 

“The blended inflation rate is useless because it does not recognise the reality of the fast-paced increases in the local currency prices. It leans heavily and speaks to a better inflation trend with the US Dollar pricing that is now more common… it’s worrisome that the government wants to control prices when things are like this,” according to an executive with a large manufacturing company in Zimbabwe.

Whereas former finance minister, Tendai Biti, said there has been “rampant rejection of the local currency in the market” with manufacturers “openly rejecting” the local currency. 

Furthermore, this week the country’s central bank unveiled a digital token backed by gold, which it is hoped will provide an alternative store of value to US Dollars.

The digital gold coin would be used as a means of payment settlement in Zimbabwe’s attempts to curb inflation by linking it to bullion held by the Reserve Bank of Zimbabwe.