News / National
Causes of price hikes under probe
27 Sep 2017 at 06:17hrs | Views
GOVERNMENT yesterday engaged captains of industry and Reserve Bank of Zimbabwe (RBZ) officials with a view to locating and solving challenges that triggered recent price increases and hoarding of products by consumers.
Industry and Commerce Minister Dr Mike Bimha said last night that he held marathon meetings with representatives of the Confederation of Zimbabwe Industries (CZI), Zimbabwe National Chamber of Commerce (ZNCC), Oil Expressers Association of Zimbabwe and Confederation of Zimbabwe Retailers (CZR) and RBZ.
Dr Bimha, who was in the United States for the 72nd Ordinary Session of the United Nations General Assembly when prices sky- rocketed, said industrialists and retailers told him that consumers had only reacted to "unsubstantiated social media reports" and stampeded to bulk-buy products.
"We heard about some of these issues (prices increase and shortages) while we were in New York, but when I came back this (yesterday) morning, I then asked to meet various stakeholders.
"I met with business organisations such as CZI, ZNCC, CZR and captains of industry in expressing industry. "I also had senior officials from the Reserve Bank and the issue was for me to get first-hand information from them to find out what happened, and what the real cause was."
Dr Bimha said it was disappointing that the price increases came at a time when industrialists had assured Government, after meeting President Mugabe, that while they faced challenges, they were ready to deliver products to consumers.
Said Dr Bimha: "Now, after we got onto that mode, I was surprised that there were these issues that were coming because if there were any problems, nothing prevented the private sector from meeting us.
"Therefore it (price hikes) was a surprise, but in the meeting that we had, all the stakeholders said much of that was caused by unsubstantiated information through the social media." He said the RBZ had pledged to continue availing foreign currency to producers so that there are no shortages of products in the country.
Cooking oil producers want foreign currency to import raw materials and between January and July this year, they only got $61 million out of $140 million they had requested from the RBZ.
Minister Bimha said Government acknowledged that there were foreign currency shortages, in particular now that the tobacco selling season has closed, but said efforts would be made to ensure producers are catered for.
"Yes there could be foreign currency issues, but we never said it was adequate. But it was something that we knew which was being managed. "So there was that consensus and there is a need to look at this issue and say 'how do we in go about it in the future so that people do unnecessarily panic'.
"One of the retailers we had in the afternoon said they put cooking oil on the shelves and no one was buying because consumers had hoarded because of these unsubstantiated claims, which is probably human behaviour but that is the issue we have to address," said Dr Bimha. He praised the RBZ for assuring manufactures that they will continue to be a priority, adding that industrialists had also done well to reassure consumers that there were adequate stocks of goods.
"We need to continue with the spirit of working together between Government and the private sector. Therefore I want to thank the private sector for behaving responsibly, which is what we want to see.
"The retailers, CZI, ZNCC and cooking oil producers were coming in the open to say everything are under control. (But) we are not saying that everyone would want to work in good spirit.
"There are others who take advantage of the situation. We know that when the situation is like this, there are also bad eggs in the system who capitalise on that and encourage hoarding while others want to increase prices in the value chain. "Others are bringing in smuggled goods, and others are buying products using the swipe system but sell them on cash so that they sell the money," said Dr Bimha.
Going forward, Government says it is crafting medium and long term solutions to the foreign currency shortages, including Command Soya bean farming to ensure raw materials needed in the manufacture of cooking oil are readily available.
Industry and Commerce Minister Dr Mike Bimha said last night that he held marathon meetings with representatives of the Confederation of Zimbabwe Industries (CZI), Zimbabwe National Chamber of Commerce (ZNCC), Oil Expressers Association of Zimbabwe and Confederation of Zimbabwe Retailers (CZR) and RBZ.
Dr Bimha, who was in the United States for the 72nd Ordinary Session of the United Nations General Assembly when prices sky- rocketed, said industrialists and retailers told him that consumers had only reacted to "unsubstantiated social media reports" and stampeded to bulk-buy products.
"We heard about some of these issues (prices increase and shortages) while we were in New York, but when I came back this (yesterday) morning, I then asked to meet various stakeholders.
"I met with business organisations such as CZI, ZNCC, CZR and captains of industry in expressing industry. "I also had senior officials from the Reserve Bank and the issue was for me to get first-hand information from them to find out what happened, and what the real cause was."
Dr Bimha said it was disappointing that the price increases came at a time when industrialists had assured Government, after meeting President Mugabe, that while they faced challenges, they were ready to deliver products to consumers.
Said Dr Bimha: "Now, after we got onto that mode, I was surprised that there were these issues that were coming because if there were any problems, nothing prevented the private sector from meeting us.
"Therefore it (price hikes) was a surprise, but in the meeting that we had, all the stakeholders said much of that was caused by unsubstantiated information through the social media." He said the RBZ had pledged to continue availing foreign currency to producers so that there are no shortages of products in the country.
Minister Bimha said Government acknowledged that there were foreign currency shortages, in particular now that the tobacco selling season has closed, but said efforts would be made to ensure producers are catered for.
"Yes there could be foreign currency issues, but we never said it was adequate. But it was something that we knew which was being managed. "So there was that consensus and there is a need to look at this issue and say 'how do we in go about it in the future so that people do unnecessarily panic'.
"One of the retailers we had in the afternoon said they put cooking oil on the shelves and no one was buying because consumers had hoarded because of these unsubstantiated claims, which is probably human behaviour but that is the issue we have to address," said Dr Bimha. He praised the RBZ for assuring manufactures that they will continue to be a priority, adding that industrialists had also done well to reassure consumers that there were adequate stocks of goods.
"We need to continue with the spirit of working together between Government and the private sector. Therefore I want to thank the private sector for behaving responsibly, which is what we want to see.
"The retailers, CZI, ZNCC and cooking oil producers were coming in the open to say everything are under control. (But) we are not saying that everyone would want to work in good spirit.
"There are others who take advantage of the situation. We know that when the situation is like this, there are also bad eggs in the system who capitalise on that and encourage hoarding while others want to increase prices in the value chain. "Others are bringing in smuggled goods, and others are buying products using the swipe system but sell them on cash so that they sell the money," said Dr Bimha.
Going forward, Government says it is crafting medium and long term solutions to the foreign currency shortages, including Command Soya bean farming to ensure raw materials needed in the manufacture of cooking oil are readily available.
Source - the herald
