Harare - Zimbabwean President Robert Mugabe has ordered a new ban on all price increases for food and services.
State newspaper The Herald reported that no one could now increase prices of goods, salaries and wages, service charges and school fees amid a continued rise in consumer inflation and on the basis that exchange rates - both the official and black market rates - have increased.
The new decree was made under the Presidential Powers (Temporary Measures) Act.
The new order, according to the paper, will remain in force until it falls away in the next six months when parliament amends certain acts affected by the announcement.
Under the new order, all proposed fees, tariffs and charges by government departments, state universities, and statutory bodies, including statutory professional associations, and companies where the state is a majority or sole shareholder must be approved by a 14-member price control commission in advance.
All fee increases by non-government schools since June 18 have been banned until approval is granted.
Pay, price freeze
The paper added that the commission can only approve an increase "if it is justified" on some other premise apart from the application of the CPI in a bid to fight price increases and inflation.
The Herald said: "This would allow the Commission to start with the June 18 freeze date for prices, or any date it desires for pay, before implementing the standard system. The net effect of the changes will be to push inflation down since all increases will be by less than the current inflation rate.
"The regulations are less harsh than a total pay and price freeze," the paper added "but are designed to have a similar anti-inflationary effect".
Sections of collective bargaining agreements, leases and contracts that take into account CPI, exchange rate and VAT increases have been declared void.
Mugabe warned that those who break the ban on indexing pay, fees or prices against inflation or an exchange rate, and those who breach the standards set by the commission when increasing pay, fees or prices, will be fined a level 8 fine, jailed for up to six months or given both punishments.
Food shortages
The new wave of threats come after Mugabe ordered businesses in June to slash prices by 50% in a desperate bid to fight a runaway inflation critics say is because of uncontrolled government spending and continued printing of money by the country's central bank.
Analysts say the Zimbabwean workers, currently bearing the brunt of food shortages after Mugabe ordered price cuts, are going to be the worst hit.
Zimbabwe has become a nation of queues after the aged leader, 83, issued a decree to slash prices by half.
Over 7 000 businesspeople have been arrested since the price cuts while more and more others are being arrested daily for allegedly defying Mugabe's orders.
A number of companies especially those that depend on imports are using black market rates to come up with price and cost structures given that the official exchange rate rarely moves and is not a true reflection of the real value of the Zimbabwe dollar.
Zimbabwe has the highest inflation rate in the world now above 7 600% but experts say the figures are sanitized by the Central Statistics Office.
- Fin24