Thursday, December 16, 2010

Food Price Rises Drive Zimbabwe 12-Month Inflation Rate to 4.2 Percent

Economist John Robertson of Harare said US dollar weakness against the South African rand has increased the cost of imported goods
Blessing Zulu & Gibbs Dube
Washington 15 December 2010

Consumer inflation in Zimbabwe for the 12 months through November accelerated to 4.2 percent from 3.6 percent in October, the Zimbabwe National Statistical Agency said.

Consumer prices rose by 0.5 percent during the month of November compared with a rise of 0.2 percent in October, ZimStats said. It said the rise in the cost of living was driven by food prices, including beef, milk and cooking oil.

Independent economist John Robertson of Harare said US dollar weakness against the South African rand has increased the cost of cross-border imports.

Elsewhere, the unity government in Harare is moving to restructure the moribund Grain Marketing Board, which long held a monopoly in cereals, by breaking it into a two units, one a strategic grain reserve, the other a commercial operating unit.

Sources said an inter-ministerial committee is moving to finalize the so-called GMB unbundling - though the government is still looking for a strategic partner to operate the proposed commercial arm and accountants are reviewing GMB books.

Economic commentator Masimba Kuchera said the GMB privatization is long overdue given the perennial losses posted by the state-controlled enterprise.

“If everything is done well, we expect the parastatal to start engaging in viable operations instead of being used by some political parties to distribute grains to supporters,” Kuchera said.

Privatizing the Grain Marketing Board is part of a government plan to revive at least 10 state enterprises which have run heavy losses and accumulated substantial debt.

Harare is partnering with Mauritian-based Essar Africa Holdings to restructure the Zimbabwe Iron and Steel Co. or Ziscosteel, which collapsed in 2008.

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