Airline fees doubled, black market dominates in Zimbabwe


HARARE, Zimbabwe (eTN): The state airline doubled its fares Monday and the cost of a new Zimbabwe passport went up thirty fold.

Spiraling prices also saw restaurant and bar prices double over the weekend, and prices were sometimes raised during a restaurant meal.

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Waitresses in a sports club advised patrons to place their orders before a price hike came into force an hour later and some restaurants began accepting American currency as chronic shortages of local cash worsened.

A new spate of price increases in the crumbling economy dealt a further blow to official efforts to combat black market dealing in money and goods and left Zimbabweans facing the reality of living in a U.S. “dollarized” world as their own currency slumped in value.

In a statement to travel agents, Air Zimbabwe said Monday a round trip to London doubled to 804 million Zimbabwe dollars, about US$400 (euro272) at the dominant black market exchange rate or a massive US$ 27,000 (euro18,365) at the obsolete official exchange rate of 30,000-1.

The central bank has not officially devalued the local currency but has said imported luxuries for the upcoming Christmas period can be sold at an exchange rate equivalent of 850,000-1, less than half the black market rate.

That pricing would be monitored by government price control inspectors, making imports available only at a loss to businesses already battling to stay viable.

Notices in the Harare passport office Monday showed a range of higher costs from immediate effect in local currency for passports and other documents.

A regular passport went up thirty fold and passports were also being issued in a “fast track” service over several days for US$220 (euro150) in American bills.

Official inflation in October was given nearly 8,000 percent, by far the highest in the world. Independent finance houses estimate real inflation stands closer to 40,000 percent and the International Monetary Fund has forecast it reaching 100,000 percent by the end of the year.

After an absence of five months, cigarettes have reappeared in stores after the price doubled to about 50 U.S. cents (34 euro cents) a pack, still among the cheapest tobacco products in the world at the black market exchange rate, but the most expensive at US$40 (euro28) a pack at the government’s official exchange rate.

A senior teacher earns about the equivalent of US$10 (euro7) a month at the unofficial exchange rate.

Until disruptions to the agriculture-based economy began with the often violent seizures of thousands of white-owned commercial farms in 2000, Zimbabwe was the world’s second largest tobacco exporter after Brazil.

With price increases Monday, local beer was catching up with international prices of up to US$3 (euro2) a bottle.

According to additional independent estimates, inflation last month exceeded 70,000 percent for upper income Zimbabweans who travel, use mobile phones and e-mail and buy scarce gasoline, car spares, computer accessories and luxuries such as liquor and restaurant meals.