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Wednesday, 10 October, 2001, 12:03 GMT 13:03 UK
Zimbabwe slashes food prices
Maize field
Maize is the stable foodstuff in Zimbabwe
The Zimbabwean government has ordered widespread price controls to cut the cost of basic foods by about a third.

The controls come as the country suffers with soaring inflation, rising poverty and a crumbling economy.

Industry and International Trade Minister Herbert Murerwa told the state-run Herald newspaper that a prize freeze would be issued later on Wednesday.

The price of many basic foodstuffs, including maize, bread, sugar, cooking oil, beef, chicken and pork, will revert to August levels when prices were about one third cheaper.

Black market fears

Analysts have said that the the move marks a return to the country's dictatorial economic policies of the 1980s.

And according to food industry executives, the price controls threaten the viability of milling fims, bakers and other producers.

Mr Murerwa has said that inspectors will punish violations of the new pricing levels by fines or imprisonment.

In the past, price controls led to acute shortages due to hoarding, and an active black market.

The decision comes after the threat of demonstrations due to the spiralling cost of living.

And may observers see the price controls as a political ploy ahead of presidential elections next year.

Isolation

Zimbabwe is suffering its worst economic crisis since independence in 1980.

Economists say the country's financial difficulties spring, in part, from the manufacturers' lack of foreign currency.

The situation has been deepened by the government programme to seize white-owned farms, isolating the country and severing links with many key exporters.

Inflation reached a record 76% last month.

And independent studies suggest the price of some goods such as soap and vegetables have risen by up to 180% since January.

See also:

05 Jul 01 | Africa
Zimbabwe admits food crisis
18 Jun 01 | Africa
Fuel protest in Zimbabwe
07 Sep 01 | Business
Zimbabwe's economic crisis
20 Jul 01 | Business
Zimbabwe hit by rising grain prices
18 Jun 01 | Business
Zimbabwe on the verge of collapse
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