The RBZ governor Dr. John Mangudya has said the economy is not doing badly as evidenced by the recent price increases which according to him signifies that people in Zimbabwe have money, The Herald reports
This comes after significant price increases were recorded on basic commodities including but not limited to meat, bread, cooking oil, rice, soap, and washing powder, despite a stable exchange rate.
Mangudya was commenting on the economy when he made the remarks and said the economy is not doing badly:
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The economy is not doing badly; the reason why businesses are increasing prices is that people have money. If people did not have money they would not increase prices, therefore, the business sector’s response has been to increase prices.
Unfortunately, businesses in Zimbabwe were used to high mark ups and the price increases are a continuation of the high mark ups. For example, a bag of cement in Zambia is between US$6-US$7.
In Zimbabwe, it’s about US$8 to U$10 per bag, for the same cement and same companies. If it was not supported by income, the prices would be lower and demand would (also) go down.
While he might use the increase in price as an indication that the economy is not doing badly, there is a possibility that businesses were just profiteering from the festive season as people tend to splurge during the festive season.