Zimbabwe’s bread woes are far from over – with a possible 350% price hike per loaf
According to Ngoni Mazango, president of NBAZ, bakers are making a loss due to the fluctuating rate of the local bond note – which was introduced as legal tender in November 2016 – against the US dollar.
He claimed the bond note is currently trading at around Z$4 to US$1, despite the government insisting the two are equal.
Mazango added the cost of making bread has skyrocketed – ranging between Z$4 and Z$5 – and has proposed the price of bread be increased from Z$1.50 to around Z$5.
Bread is not made by flour alone
“I want to make this clear. This is not the price of bread, but this is the cost that we meet when manufacturing the bread,” Mazango told the country’s media.
“[The price of] flour might [only] have moved slightly – from about Z$31,50 to around Z$36,50 per 50kg bag – but bread is not made by flour alone. We do not manufacture bread fat here in Zimbabwe; there are also enzymes; spare parts for our plants and even for service vehicles, which are also imported or bought with foreign currency.”
He noted the NBAZ has asked the government to subsidize bakers.
“We require between US$4m and US$7m each month and we are getting 20%-30% of that.
“We are still in engaging [with] the authorities for us to receive enough money that will be able to get us the raw materials we need and also pay the arrears we owe to our suppliers, [which] have said they will not supply us with anything until we clear those arrears,” he added.
No cause for alarm
Denford Mutashu, president of CZR, said the government was doing everything in its power to normalize the situation.
“It is important to for us to remain calm and not cause alarm. It is not good to scare the market, but rather there should be dialogue in which these issues are raised and are deliberated on.
“Prices [of commodities] like bread, sugar and maize meal cannot be increased just like that,” he added.
