Harare - Queues are back at the tills in Zimbabwe as shops stock up again offering clients simple and almost forgotten luxuries, marking the southern African nation slow progress from world record inflation.
For more than a year, supermarket shelves were bare and shops resembled empty warehouses as the country reeled under an economic crisis that turned sugar and the staple corn meal into rare commodities.
Now shops are stocking up again, after the government in January agreed to allow retailers to conduct business in foreign currency.
The government has even stopped printing Zimbabwe dollars, which it once churned out in trillion-dollar denominations that quickly became worthless under inflation that independent economists estimated in the quadrillions.
The switch to foreign currency has already started bringing prices down in US dollar terms, according to official statistics which are being borne out at the till.
A 10-kilo packet of maize meal used to make a thick porridge called sadza cost 12 dollars in December, but is now half the price. Two kilos of sugar cost five dollars then, but is also down by half.
"Things are back to normal," said Simbarashe Mawarire, a manager at a branch of the retail chain Savemor.
His store had so much trouble obtaining goods last year that it simply closed off four of its five shelves.
"It's not only business which is now functioning properly. Look at our politics as well. They said (President Robert) Mugabe and (Prime Minister Morgan) Tsvangirai would never work together but since February 11 things have taken a different dimension."
The two rivals formed a unity government last month that remains fraught with political tensions, but so far they have made a show of common purpose in efforts to revive the economy, which has contracted more than 45 percent over the last five years.
The government has loosened price controls and eased import restrictions, making it easier for retailers to buy and sell goods.
In the past Mugabe had rigidly enforced price controls. In June 2007 he ordered businesses to slash their prices by half after accusing them of working with his Western foes to topple his government.
The price blitz was accompanied by violence in grocery stores and led to the closures of shops, job losses and the shutdown of most factories.
The few shops licensed to sell in foreign currency charged prices about four times the regional average. Now that all shops are competing under the same rules, prices are falling.
"Initially retailers were ripping us off, but due to dollarisation this has removed price distortions that were initially in the market," said Tendai Muzadzi, an independent Harare-based financial analyst.
"We are moving in the right direction by having prices of goods in foreign currency as this allows prices of goods to go down. Before that, most shops had closed half of their wings."
Despite the falling prices, most Zimbabweans still struggle to survive as most have no income in a country with 94% unemployment.
"The selling of goods in shops in foreign currency has now stabilised their prices," said Kumbarirai Katsande, president of the Confederation of Zimbabwe Industries (CZI).
"However, what now has to be addressed is the issue of disposable income to enable people to buy the goods," he told AFP.
As a result of the dollarisation, unions are now demanding pay reviews in foreign currency.
The government is giving civil servants a monthly allowance of 100 US dollars, but the Zimbabwe Congress of Trade Unions is demanding 450 dollars as the minimum monthly salary.
- Reuters