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Zim demand will hit inflation here

By unknown | Jul 27, 2007 | COMMENTS [ 0 ]

Heard the joke about hyperinflation in Germany in 1923? As people walked to the shops with wheelbarrows full of money, thieves stole the barrows and left the worthless money behind.

Most Zimbabweans working here have been sending groceries home every month. Now the trend has shifted to moving trailers of groceries north daily. In Hillbrow there are places where Zimbabweans, who do not go home, but want to send goods, can make arrangements to transport the stuff home. With shops becoming empty in Zimbabwe, most people will enter neighbouring countries to buy groceries.

With many already coming to Limpopo, will our economy manage to serve both us and them? Won't the demand created by Zimbabweans result in prices increasing to match demand? South Africa has to meet its own demand before exporting, but in this case foreign consumers are importing directly.

It will affect international trade laws. And when quotas and tariffs are transgressed, our balance of trade will be affected. And most importantly, the Zimbabwean demand will offset our inflation and destabilise our economy. The law of supply and demand states that demand should be complemented by a rise in the price of products.

Phillimon Mnisi



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