It is now Mnangagwa's Zimbabwe and all eyes are on him for the economic miracle

Mnangagwa’s Fuel Hike Puts Zimbabwe in Turmoil

By Prince Kurupati

It is now Mnangagwa's Zimbabwe and all eyes are on him for the economic miracle
It is now Mnangagwa’s Zimbabwe and all eyes are on him for the economic miracle

On Saturday the night of 12 January, Zimbabwe’s president in a state of the nation address announced that with immediate effect, fuel prices were to increase by at least 150 percent. The news came as a shock to the suffering millions who already were finding it extremely difficult to purchase fuel, most of whom were spending numerous nights in fuel queues.

The decision to hike the price of fuel according to the government was both a measure of addressing the pressing fuel challenges that the country was facing as well as correcting the pricing distortions which saw the government pocketing less (from the original price it bought the fuel at).

Addressing Pressing Fuel Challenges

In his address, President Mnangagwa said that one of the reasons which had prompted the government to raise the prices for fuel was as a result of the pressing fuel challenges the country was facing. For over a month, Zimbabwe had witnessed massive fuel queues. According to the president, from the investigations carried out by the government, the fuel queues (fuel challenges) were exacerbated by the black market, something which saw unscrupulous dealers’ hoarding fuel from service stations and reselling it at a higher price. By hoarding the fuel, black market dealers ensured that there was nothing left for ordinary citizens to refuel their cars. As such, the move to increase the fuel prices was a strategy by the government to deter black market dealers from hoarding fuel.

Correcting Pricing Distortions

In recent times, the ‘local currency’ of Zimbabwe i.e. the bond note has on the black market lost value against the US Dollar. While the government has maintained that the Bond Note is still at par with the US Dollar, in practice, this has not been the case. As such, due to this discrepancy, selling fuel using the Bond Note meant that the government (and service stations) were selling fuel at a lower price than the one which they bought the fuel at. In business terms, the government was, therefore, making a loss. Though the government for some time had been refusing to acknowledge this, the truth is that the books of accounts showed that it had been making massive losses. As such, in order to correct this discrepancy, the president raised the prices of fuel so as to cushion the government from realizing massive losses.

(Violent) Response to the Increase in Fuel Prices

The above two reasons to some made sense, however, to thousands of ordinary Zimbabweans who had been languishing in poverty, the increase in fuel prices was the last straw. To them, the rise in fuel prices meant that (due to the ripple effect) the prices of other commodities were to increase also. This was something the public could not bear considering that salaries were remaining stagnant. As such, civil society leaders called on the masses to show their dissatisfaction to the government by ‘staying away’ from their workplaces. Effectively, by ‘staying away’, the masses were supposed to stay at home and remain in their homes until the government addressed their needs.

While the civil society had called for a ‘peaceful’ stay away, things did not exactly turn out the way they had planned. On the first day of the planned stay away, thousands in Zimbabwe’s two main cities i.e. Harare and Bulawayo chose not to stay in their homes but decided to enter the streets protesting. Among them, some opportunistic elements decided to start looting shops, barricading roads and forcing everyone to join them or face a beating.

A stay away which was supposed to be peaceful therefore turned into a violent protest.

Government Response

Realizing the damage which had been done by the opportunistic elements, the government decided to intervene to calm the situation. The government’s response, however, was not exactly exemplary. Reports state that the security forces beat civilians and abducted a whole lot of others.

Current Situation

At the time of writing, this is the first day after the planned three-day protest. In general, the situation has calmed down but the atmosphere is still tense. With the president still out of the country following his state visit to Russia followed by his attendance at the World Economic Forum in Davos, the nation is awaiting his response once he lands in the country.

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