Word got out on Monday night that the warehouse on the outskirts of Harare would be selling a small consignment of cement at the state-enforced price of Z$150,000 (40p) a sack.

When The Times arrived on Tuesday morning, there was a one-kilometre line of cars. The drivers had spent the night there waiting for the building supplies. No sooner had a lorry arrived carrying a cargo of 600 bags than uniformed soldiers and police turned up at the warehouse.

“They took charge. They told people to get in line,” one witness, who gave his name as Willie, said. He recounted how the soldiers distributed sacks of cement to a few customers at a price of Z$150,000. “Then the soldiers and police drove their own trucks in and took more than 100 pockets [sacks] at the same price. They are going to sell on the black market for Z$1.5 million,” he said.

As soon as the men in uniform were gone the staff began to sell the cement at the higher black-market rate of Z$1.5 million, but only to a select few who had personal contacts at the warehouse. Not until midday did the queue’s nerve break and the vehicles peel off. The scene was one of the unforeseen consequences of President Mugabe’s month-long attempt to smash inflation by forcing businesses to halve their prices. Those responsible for enforcing the price cuts are openly running a black market in the goods. Meanwhile, ordinary people cannot get goods and prices are going up faster than before.

The last official inflation figures were for April, when the annual figure hit 3,700 per cent. Data have not been released since, but Christopher Dell, the outspoken former United States Ambassador to Zimbabwe, predicted that President Mugabe would be forced out of office within six months as a result of uncontrolled inflation.

The business sector immediately became the new enemy, denounced as “agents of regime change”, forcing up prices deliberately to stoke up discontent that would spill over into mass street violence.

About 6,500 businessmen have been arrested since “Operation Reduce Prices” began. Shops dare not openly deviate from official prices that are below procurement costs. This week magistrates were jailing minibus operators for a week for each passenger that they charged above the official limit.

“Price controls that are being enforced are likely to exacerbate shortages and, ultimately, fuel inflation,” the International Monetary Fund said this week. If the current trend continues, “year-on-year inflation could well exceed 100,000 per cent by year end”. Commuter transport has withdrawn from the roads effectively. For weeks supermarkets have been without maize meal, the national staple, meat, chicken, eggs, milk and cooking oil. Yesterday even vegetables were running out.

The United Nations food agency appealed for £60 million in expanded food aid for Zimbabwe yesterday and pledged to assist about 3.3 million starving citizens. “On top of panic buying, the problem is fuel,” a supermar-ket chain executive said. Since the Government fixed the price of fuel at Z$60,000 a litre, fuel imports have dried up. “The manufacturers can’t deliver. They say, ‘Come and fetch your orders’, but we can’t,” he said.

Despite repeated declarations that “there is no going back on the war on prices”, the evidence is that President Mugabe is faltering. On Tuesday the central bank issued a Z$200,000 note, worth 50p at the unofficial rate. Previously the highest denomination was Z$100,000, which could buy a mug of black-market petrol.

On Monday the Government reversed a ban on the import of food-stuffs, an attempt to control the illegal currency market that would have had dire consequences for millions of Zimbabweans who survive on cross-border trading. At the same time it was announced that private abattoirs that had their slaughter licences revoked as punishment for refusing to sell meat below the cost they bought it at were going to be relicensed.

President Mugabe is pressing on with another key strategy for economic survival: printing money. “Where money for projects has not been found, we will print it,” he said last week.

“It’s like someone with lung cancer smoking 100 cigarettes a day to complement the chemotherapy,” a Harare business executive remarked.

Losing value

Eleven zeros adorned the Yugoslavian five hundred billion dinar note in 1993. As prices increased at a rate of 5 quadrillion per cent by 1995, the Government moved rapidly from dinars to new dinars to new, new dinars and finally super dinars

Zaire's inflation peaked at 13,773 per cent in 1994. The population turned to the black market, which grew larger than the formal economy

Germany financed its First World War effort with borrowing, assuming defeated enemies would pay. When it could not repay itself, it printed money, driving inflation to 3.25 million per cent

In 1985 President GarcÍa announced a halt to repayments on Peru’s debt. Creditors severed links with Peru, inflation spiralled and real salaries halved between 1987 and 1989

Sources: San Jose State University; IMF

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