BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh

 You are in: Business
Front Page 
UK Politics 
Market Data 
Your Money 
Business Basics 
Talking Point 
In Depth 

Commonwealth Games 2002

BBC Sport

BBC Weather

Friday, 26 October, 2001, 15:23 GMT 16:23 UK
Food shortages in Zimbabwe shops
The land dispute in Zimbabwe has reduced grain supplies
Zimbabwe is facing serious food shortages due to price controls imposed earlier this month by the government in a bid to control runaway inflation.

According to reports in the independent Zimbabwean media, price caps on basic foodstuffs have forced many producers to operate at a loss, leaving them with no choice but to go out of business.

The baking industry, which has been losing an estimated $33,000 a day, has been hit particularly hard.

Rationing now in force

Basic goods including bread, wheat, maize, cooking oil and soap are reported to be becoming increasingly scarce as a result, with rationing now in force in many areas.

The Zimbabwean Government imposed the price caps on 10 October, citing the need to bring the country's inflation rate under control, which is currently running at over 70% a year. Currency squeeze

The country's soaring inflation stems from the weakness of the Zimbabwean dollar and its heavy reliance on imported fuel, priced in US dollars.

A slump in the world price of metals and agricultural commodities, the country's principal exports, has deprived Zimbabwean importers of hard currency.

Grain shortages caused by the government's policy of seizing white-owned farms have also fuelled a sharp increase in food prices.

Some observers in the Zimbabwean capital, Harare, believe that the price controls are a populist measure designed to shore up electoral support for Mr Mugabe's government ahead of presidential elections next year.

"The government wants to be sure that it can rely on the urban vote, but the policy is backfiring already. We are heading into serious shortages, and the people are angry," said one local source.

Zimbabwe is due to hold presidential elections by April 2002, but no firm date has yet been set.

See also:

19 Oct 01 | Business
Zimbabwe price controls hit home
10 Oct 01 | Business
Zimbabwe slashes food prices
26 Sep 01 | Africa
IMF cuts all funding to Zimbabwe
Internet links:

The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.

E-mail this story to a friend

Links to more Business stories