Zimbabwe Eases Price Freeze on Some Basic Goods

Zimbabwe has allowed businesses to raise the prices of some basic goods and services, slightly easing a price freeze which has left shop shelves empty and deepened an economic crisis.

President Robert Mugabe's goverment has ordered a price rollback to June 18 levels in a bid to stem inflation of more than 4,500 percent -- the highest in the world -- but the move has led manufacturers to cut production out of fear of losses.

The official Herald newspaper reported on Wednesday that Industry and International Trade Minister Obert Mpofu had approved price rises for some food products, farming inputs, beverages, air and commuter train fares and other items.

The government set a maximum 20 percent mark-up for retailers. A team of price monitors and police were still in place to ensure businesses complied, said the newspaper.

"The benchmark for all other prices of commodities not covered by review remains at June 18, 2007 levels until further notice," the Herald said.

The increases came a day after the government reopened dozens of private slaughterhouses in a bid to end severe meat shortages blamed on the price freeze.

It had cancelled the slaughterhouses' licences five weeks ago for raising prices and refusing to supply butchers at controlled prices.

More than 7,500 business people have been arrested and fined for breaching the price controls, which analysts say have worsened the economic turmoil ravaging the country.

Mugabe, in power since independence from Britain in 1980, has accused some businesses of raising prices without justification as part of what he calls a Western plot to topple him.

The forced price cuts sparked panic buying around the country, leaving many urban shops empty of basic goods that were already in short supply as a result of an eight-year recession.

Businesses say they have suffered heavy losses in the price crackdown and are unable to restock shops.

Mugabe blames Zimbabwe's economic problems on sabotage by Western powers which he says is punishment for his seizure of white-owned farms for redistribution to landless blacks.