Prices increase by more than 50%

The government says prices have increased by at least 50% in recent weeks, according to preliminary results from a survey it is conducting.

Industry and Commerce permanent secretary, Abigail Shoniwa told NewsDay on the side lines of a Confederation of Zimbabwe Industries (CZI) breakfast meeting yesterday in Harare that the government would not tolerate any price increments.

"What I reported today is really the information that I am getting from the people out there, the consumers. They (consumers) have sent us write-ups, but we have got our people on the ground, teams that have gone out in urban areas and outside to really gather the information, so that we make a comparative pricing schedule and report," she said.

"Price increments are there, but they do vary. The information that we have, which has still got to be verified, I have talked about 50% (price increments), but in some instances, as much as 100%. The feedback that I got was from the printing, fabric and food sector among others."

Two weeks ago, consumers descended into panic-buying, amid reports on social media that the country was heading for a repeat of 2008, where shortages of basic commodities were experienced.

This has triggered a hike in cash premiums on the parallel market to between 40% and 45%.

Before the panic-buying spree, cash premiums were ranging between 15% and 20%.

Since most of the companies are getting cash from the parallel market, they passed on the cost of cash premiums to the consumer by increasing prices, which still remain despite an injection of some nostro funds from the central bank.

CZI Groceries and Manufacturers' Association chairperson, Nancy Guzha blamed the price hike on their suppliers, who have increased their prices.

"What we have been told by our members is the pain they are under because none of them is getting the 100% foreign currency that they want," she said.

"When we put the payment to our bankers, we wait six or maybe eight weeks and if we are very lucky we can wait two weeks and that puts us in a very compromising position of having to source forex at a premium inasmuch as people do not want to admit it. This is what they are doing, this happens or we will have to scale down production."

Guzha said companies were facing difficulties although it seemed that these manufacturers were trying to profiteer off the foreign currency shortages by leaving prices high.

Confederation of Zimbabwe Retailers president, Denford Mutashu said retailers had no choice, but to pass on the cost to the consumer, since the manufacturers' hiked prices.

Central bank governor, John Mangudya said another reason for the price hike was the increased demand and shop owners saw an opportunity to profiteer.