Police clashed with protesters in the Zimbabwean capital as the main labor-union confederation began a three-day national strike after the government more than doubled fuel prices to the highest in the world.
The stay-away comes as a foreign-exchange shortage has sparked scarcities of everything from fuel to bread, caused doctors to stay away from work and companies to cut or cease production because they can’t import raw materials.
The main industry body said in a letter to the government that businesses across the southern African nation are on the brink of collapse.
“The house is burning,” the Confederation of Zimbabwe Industries said in a letter to the Industry Ministry.
Residents in the Harare suburbs of Epworth and Mabvuku erected barricades of stones as police fired teargas to disperse protesters. Most of the city’s public transport was at a standstill, with fewer shops than usual open for business and schools asking pupils to return home.
“So far the stay-away has been effective,” Peter Mutasa, president of the Zimbabwe Congress of Trade Unions, said by phone. “We think it’s an act of courage by people who have stayed away. Considering that the strike call was made on a weekend, this has been a success.”
The ZCTU, which represents most labor unions in the southern African nation, started the action two days after the state more than doubled the cost of gasoline to $3.31 a litre and diesel to $3.11 a litre. The gasoline price compares with a global average of $1.08 a litre with Hong Kong, at $2.04, being the highest, according to GlobalPetrolPrices.com.
Still, the fuel can be bought with a quasi-currency known as bond notes because they trade at a discount to hard currency on the black market even though the government insists that they trade on par. Electronic money also trades at a discount. Diplomats and tourists can by fuel for hard currency at a lower rate at designated filling stations.
The roots of the crisis lie in a 2009 decision to abolish the Zimbabwe dollar in favor of the use of other currencies, primarily the US dollar.
Industries in Zimbabwe have been denied access to foreign currency since October and companies have been forced to obtain dollars illegally on the black market, the Confederation of Zimbabwe Industries said in the letter. It urged the government to permit interbank trading of foreign exchange,.
Zimbabwe doesn’t have enough foreign exchange to fund imports and pay workers, many of whom are refusing to accept salaries in electronic money or so-called bond notes.
“Most of the companies do not have raw materials that go beyond January as most of our suppliers cut us out of stock, and it is only payment in foreign exchange that will unlock supply lines,” CZI President Sifelani Jabangwe said in the letter.
Already the country’s biggest company by market value, brewer Delta Corp. has said it would only accept payment in foreign currency before the central bank promised to find it sufficient foreign exchange. Fast-food company Simbisa Brands Ltd. said last month it would give customers a discount if they paid in hard currency.
The government plans to reintroduce its own currency within 12 months, the state-controlled Herald newspaper reported on Saturday, citing Finance Minister Mthuli Ncube. The CZI said the country need its own currency and wants a clear time frame as to when this will happen.
While the crisis deepens, President Emmerson Mnangagwa is due to be away for two weeks with a trip spanning Russia and Azerbaijan to the World Economic Forum meeting in Davos, Switzerland.
While Mnangagwa has come under criticism for the state of the economy he is under little threat. He was put in power by the military in November 2017, replacing Robert Mugabe who was in power for 38 years, and won a disputed election last year after which six people were killed by the military during protests.
Still, protests today were widespread.
“I think if nothing happens now after this ridiculous fuel price hike we Zimbabweans deserve what we get,” said Hamukwandi Mungofa, a 54-year-old self-employed mechanic in Harare, the capital. “I am for a national shutdown.”