By the time you finish reading this article the cost of a taxi-ride home from work in Harare will have doubled.
Zimbabwe, which continues to subsidise fuel prices, has had fuel shortages for the past seven years. A shortage of foreign currency has dramatically reduced the state’s ability to pay for fuel imports. The official price is Z$ 300 per litre but parallel market fuel prices were Z$ 100 000 per litre a week ago. With unofficial inflation rates at 11 000%, and expected to rise to 1.5 million % by the end of the year, the current fuel price is mere speculation.
Whythawk Ratings, which investigates regional development needs as well as emerging market business opportunities, has recently completed research into the informal sector in Harare and Bulawayo in Zimbabwe.
The transport sector consists of both state-supported parastatals, and the official and unofficial private players.
The Zimbabwe government makes their subsidised fuel available, in order of hierarchy, to the parastatals and then some private operators who own large conventional (75-seater) buses.
Those companies who have smaller buses or South African-style mini-bus taxis are last on the list and are usually unable to access this fuel. They then stock up on the parallel market. The result is a vast difference in fares charged by these operators. For a distance of 20 km â€“ the average distance home for commuters in Harare and Bulawayo – the operators receiving government fuel charge between Z$ 3 000 – Z$ 6 000. Those purchasing fuel on the parallel market charge at least Z$ 30 000 for a similar distance.
There is a tremendous shortage of subsidised public transport and fuel is not, in any case, always available.
With average monthly family incomes now ranging from Z$ 1.5 to 2 million most Zimbabweans cannot afford the more expensive private transport services. Most people have no choice but to wait in ever lengthening queues.
The working day in Zimbabwe officially ends at 16h30. Commuters finish work and then gather at bus stations from 17h00. With vast demand and only limited supply many people only get home by midnight. The more desperate are compelled to take private transport who increase their fees to Z $50 000 late at night. Then they have to get up early to repeat the performance to get back to work.
With unemployment at 80% no-one with a job can afford to give it up.
There are, however, winners in this unstable and insecure market. To find out who and how see the full report at http://www.whythawk.com/ Available to subscribers.