Zimbabwe Prices Spiral After Businesses Told to Stop Pricing in Dollars
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By MacDonald Dzirutwe
HARARE, June 2 (Reuters) - Prices of goods in Zimbabwe are spiralling again, threatening to halt a decline in consumer inflation, after authorities last week forced businesses to stop quoting prices in U.S. dollars in a bid to encourage more use of the faltering local currency.
Despite the re-introduction of the Zimbabwe dollar in 2019, most businesses have been charging in U.S. dollars, with customers having an option to pay using local money at rates higher than the official exchange rate.
After losing their pensions and savings during a decade of hyperinflation to 2009, Zimbabweans prefer using the greenback to their own currency.
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Zimbabwe: One vast informal business
Downtown Harare. PHOTO Sadat Sanhehwe
Zimbabwe’s economy has seen a drastic collapse since 2000. Once a fairly highly industrialised country, Zimbabwe is now a vast informal economy after the collapse of its once-thriving manufacturing and agricultural sectors.
Industry is operating at 30% of its capacity. Since 2011, more than 6,000 companies have closed shop, rendering hundreds of thousands unemployed, according to a 2016 Confederation of Zimbabwe Industries (CZI) study. The CZI is the umbrella body of the manufacturing industry.
Hundreds of thousands of school leavers are graduating with no hope of formal employment, the CZI says. Unemployment now hovers around 85% and for many, the only hope is now in the informal sector.