The Zimbabwe government has launched a crackdown on producers of consumer goods, vowing to close any firms it finds to have engaged in profiteering.
Financial police Wednesday arrested Blue Ribbon Industries Managing Director Mike Manga and National Foods Managing Director Ian Kind. Police said the two had asked the Ministry of Trade for permission to raise baking flour prices.
A Reserve Bank survey found that prices had quadrupled in one week recently in expectation of a currency devaluation by the central bank, though Reserve Bank Governor Gideon Gono surprised many Jan. 31 when he refused to devalue.
The RBZ survey found food, alcohol, clothes and furniture prices rose as much as 400% in less than a week. The price of a two liter bottle of cooking oil climbed some 118% to Z$17,000, for example, while clothing prices soared by 400%.
Zimbabwe National Chamber of Commerce President Marah Hativagone condemned the arrests on Thursday at a news conference in Harare.
Hativagone told reporters the state action was unwarranted and high-handed.
She told reporter Blessing Zulu of VOA’s Studio 7 for Zimbabwe that the state should exercise restraint if it wanted to maintain the social contract Gono has advocated.
Sources in the police unit assigned to pursue the crackdown said enforcing price controls is problematic, as some senior government officials own significant stakes in the businesses on which which police have been ordered to keep surveillance.
Mashonaland East Governor Ray Kaukonde, Labor Minister Nicholas Goche and ZANU-PF Political Commissar Elliot Manyika, a minister without portfolio, are major shareholders in Takepart Investments, a stakeholder in National Foods.
Dahaw Trading, owned by the family of Vice President Joyce Mujuru, has a 40% stake in Wildale, a brick-making firm which recently raised its prices by more than 100%.