Governor John Mangudya said bakers had complained over lack of access to foreign currency to import wheat and procure fuel for deliveries.
Bakers recently raised the price of bread from US$1 to an average US$1.20 in response to rising fuel prices, disruptions to global wheat supply chains caused by the Ukraine war and lack of access to foreign currency to fund imports.
“Taking into account the submissions by the Bakers Association of Zimbabwe and the need to stabilise the price of bread, the Reserve Bank of Zimbabwe agreed with the bakers association that its members would access their full requirement of foreign exchange through the weekly foreign exchange auctions for importation of inputs and procurement of fuel for the distribution of bread across the country,” Mangudya said in a statement.
“It is expected that members of the bakers association will review the price of bread downwards. Going forward, the price of bread will be adjusted on account of economic fundamentals that include global price trends of inputs and the movement of the foreign currency exchange rate.”
Economic analyst Tinashe Murapata said the announcement by the reserve bank showed the country was moving towards “price controls”.
“It’s a visible admission of failure,” Murapata said. “They’re fixing the price of bread, otherwise known as price controls. How long will it take before there’re bread shortages?”
Former finance minister Tendai Biti contended that the agreement was the result of “command economics” which failed to address the causes of the price increase and would thus lead to bread shortages.
“Command economics doesn’t work. You can’t call bakers and force them to reduce the price of bread when you are not addressing the drivers of the price increase,” Biti said.
“The price of bread is going up because of wheat. Zimbabwe does not produce sufficient wheat. The price of bread is going up because the price of fuel has gone up, the price of bread is going up because the exchange rate has collapsed and bakers have nothing to do with that.
“Calling bakers to a meeting and forcing them to reduce the price of bread is not how you deal with inflation, you deal with inflation by addressing the fundamentals. The price will continue going up. The by-product of command economies is the disappearance of commodities in the formal market.”
Biti added: “It will be the creation of a very rubbish black market of bread. So bread will not be available in Pick ‘n Pay but will be available in a tuckshop in mbare.”
