Zimbabwe Crisis: Fuel Price Hike, Currency Crisis and the Violent Protests

Alao Abiodun
20% Complete
 16-Jan-2019

 

Angry Zimbabwe protesters barricaded roads with burning tyres and rocks on Monday, 14th January 2019, after the government increased the price of fuel in a bid to improve supplies as the country battles its worst gasoline shortages in a decade.

It was reported that Protesters turned back drivers and blocked buses from carrying passengers in Zimbabwe’s two main cities of Harare and Bulawayo as the main labour federation called for three-day nationwide strike.

Soldiers, Security Operatives deployed

Soldiers were deployed at a shopping centre in Bulawayo’s township of Entumbane where protesters looted shops.

Demonstrators in the second city had attacked minibuses heading to the city centre and used burning tyres and stones to block the main routes into town while some schools were turning away pupils fearing for their safety.

Shops closed in downtown Harare as riot police patrolled the streets and a military helicopter flew over the capital.

According to video footage from the Centre for Innovation & Technology, police fired teargas to disperse youths protesting outside the high court in Zimbabwe’s second city of Bulawayo.

In the southern city of Bulawayo, commuter bus drivers and touts blocked thoroughfares with burning tyres, tree branches, and blocks of stone.

Riot police tried to quell demonstrations in the western suburbs of Emakhandeni and Luveve, firing warning shots and tear gas but the protesters remained defiant.

Demonstrator Glen Ncube, 25, expressed anger at the president’s announcement on Saturday of a 150 per cent fuel price increase and the police actions.

“What kind of a man does this? Can Mnangagwa even be called a president? He’s making life hard for us and these police are trying to stop us as if they don’t know our pain,’’ Ncube said.

Emmerson Mnangagwa’s Dilemma

President Emmerson Mnangagwa last week announced more than 100-per cent rise in the price of petrol and diesel in a move he said would end fuel shortages.

The last time things were this bad was in 2008, when the country was contending with hyperinflation that saw prices doubling every day, left shop shelves empty and forced people to buy groceries from neighbouring countries or on the black market.

The following year, the government abolished the Zimbabwean dollar in favour of the use of other currencies, primarily the US dollar.

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Mnangagwa has said his government will not let businesses raise prices but they have been doing so anyway, arguing that they have no choice but to buy dollars at a premium on the black market.

Inflation is already at a 10-year high of 31 percent and, in the past two weeks, public transport firms have tripled fares citing a shortage of fuel, which some have been buying on the black market.

Fuel price hike

In a televised address last week, Mnangagwa said prices of petrol and diesel would more than double to tackle a shortfall caused by increased demand and “rampant” illegal trading.

Petrol prices have been raised from $1.24 a litre to $3.31 (2.89 euros) and diesel from $1.36 a litre to $3.11.

The president’s announcement came after fuel shortages which began in October last year worsened in recent weeks with motorists sometimes spending nights in fuel pump queues that stretch for kilometres.

Most service stations still had no fuel to sell to motorists who have been sleeping in their vehicles to queue. Some said they were awaiting an official notice from the regulatory authority (ZERA).

Deputy Information Minister of Energy, Mutodi tweeted that commodity price volatility “will be temporary before goods prices normalize”.

Currency crisis

The acute shortage of U.S. dollars has made it hard for President Emmerson Mnangagwa’s government to import fuel.

Zimbabwe abandoned its own currency in 2009 after it was wrecked by hyperinflation, and adopted the greenback and other hard currencies such as sterling and the South African rand.

There’s not enough hard currency to back up more than $10 billion in electronic funds trapped in local bank accounts, prompting demands from businesses and civil servants for cash that can be deposited and used to make payments.

Finance Minister Mthuli Ncube told a townhall meeting on Friday a new local currency would be introduced in less than 12 months.

“On the issue of raising enough foreign currency to introduce the new currency, we are on our way already, give us months, not years,” he said.

Mnangagwa is under pressure to revive the economy but dollar shortages are undermining efforts to win back foreign investors sidelined under his predecessor Robert Mugabe.

People killed, Injured in the fuel hike protest

A human rights group in Zimbabwe says five people were killed in clashes between demonstrators protesting fuel hikes and security forces who opened fire on some crowds.

The Zimbabwe Association of Doctors for Human Rights on Tuesday reported the death toll as many businesses in the capital, Harare, and other cities were closed following Monday’s violence. This is Zimbabwe’s biggest unrest since deadly post-election violence in August.

Another human rights group says 26 people suffered gunshot wounds and that some were afraid to go to hospitals for fear of arrest.

State security minister Owen Ncube says lives were lost, police officers were injured and property was damaged. He says more than 200 people were arrested and blames the main opposition MDC party and some civil society groups for the violence

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