As the International Monetary Fund (IMF) kicks of its assessment mission in Zimbabwe this week, the country’s courts sent two officials of a well-known bakery to prison for breaking the price control law, writes IRINnews.
Burombo Mudumo, chief executive officer of Lobels Bakery, and Lemmy Chikomo, the manager, were sentenced last Thursday to four months in prison for breaching the Pricing of Goods Act by selling a loaf of bread for Z$300 (about US$1.19) instead of the official Z$185 (about 70 US cents)
The bakery was also fined Z$10,000 (about US$40) for flouting price control regulations.
Calling the violation “unforgivable”, the presiding magistrate said the sentence should deter “other would-be offenders, lest they get attracted to this fast-becoming notorious practice of overcharging”.
Mudumo and Chikomo argued that their losses, and the trade and industry minister’s failure to respond to their letter seeking permission to increase prices, had forced them to sell bread at a higher price without obtaining approval.
A price freeze on essential goods – and crackdowns on the parallel market – is the government’s answer to try and keep basic items affordable.
Zimbabwe’s annual inflation rate is currently around 1,200 percent – the highest in the world – but the IMF has warned that it could exceed 4,000 percent in 2007 if current policies were maintained.
Shortages of foreign currency to pay for fuel, food and other commodities, and 70 percent unemployment, have accelerated the economic meltdown.
In 2005 Zimbabwe narrowly averted expulsion from the IMF for debt arrears by paying off US$120 million of the US$295 million it owed. The authorities said the funds had been sourced from exporters and holders of free funds rather than resorting to printing money.
The country still owes the IMF about US$119 million, and there has been speculation in the local media that Zimbabwe might again face expulsion when the IMF board meets in February to review Harare’s debt repayments.
