News / National
Mugabe's govt threatens to reintroduce price controls
03 Nov 2017 at 04:53hrs | Views
GOVERNMENT has threatened to reintroduce price controls on most basic commodities to cushion citizens against profiteering businesses fond of unilaterally hiking prices citing foreign currency shortages.
Industry and Commerce minister Mike Bimha threatened the stringent measures yesterday in an interview with NewsDay on the sidelines of the ongoing Marketers Association of Zimbabwe ninth annual convention in Victoria Falls.
Two months ago, President Robert Mugabe made similar threats following a wave of 'price hike madness' by producers, wholesalers and retailers.
Mugabe's threats coincided with a statement purportedly issued by the National Competitiveness Commission board (NCC), chaired by renowned industrialist Kumbirai Katsande, warning of a crackdown on prices.
Bimha said relevant stakeholders were now meeting in Harare to brainstorm on the crisis, with cooking oil being the most affected.
'On September 22 and 23, we experienced hikes on various commodities and not only that, there was also the issue of shortages of goods and as a result, this led to panic-buying and hiking of prices by producers,' he said.
'One asks who came up with that unofficial message on social media. We are still puzzled and trying to come up with remedies to that effect.'
The price distortions have also seen the emergence of a five-tier pricing model, that is a separate price for consumers using either United States dollar, local bond notes, EcoCash, bank transfers (real time gross settlement balances) or bank cards to purchase goods.
'A committee of ministers that I chair has been tasked to look at the matter urgently. They are currently sitting in Harare with producers and retailers, but if you remember, the last time government came up with a pricing control policy, producers stopped producing goods and the situation worsened. So what we want to do now is to engage all the parties and discuss the September 22 and 23 incident which paralysed the system up to now,' he said.
'Cooking oil is the most affected commodity and the Reserve Bank of Zimbabwe is trying to come up with forex, so that they be able to import those raw materials like soya beans that are needed in production.'
The minister urged the Consumer Council of Zimbabwe to also act on the matter, by disseminating correct information to consumers, so that they keep abreast with pricing issues.
Bimha invited marketers to work with the government in order to rebrand Zimbabwe's image.
'The marketers are very critical on their own discipline and their different companies, but we are saying, as an association, they can actually put up themselves as think-tanks to offer services to government and give that public relations to a lot of government ministers.'
But economists and industrialists have warned that the mooted price control regime could precipitate a shortage of basic commodities on a larger scale than experienced in the 2007-8 era.
Confederation of Zimbabwe Industries president Sifelani Jabangwe said price controls could result in the collapse of businesses.
He confirmed that government had spoken about price controls in their discussions.
'We have had discussions with the Ministry of Industry and Commerce, where we already discussed this thing [price controls] and actually suggested that we look at price stabilisation rather than price controls,' he said.
Jabangwe said most price increments were on imported goods, owing to the serious foreign currency shortages prevailing in the country.
Confederation of Zimbabwe Retailers president Denford Mutashu said there were alternatives to price controls.
'We do not have to introduce price controls. Rather, we need to look at the reason behind the price hikes, looking at it from the producers and retailers' side,' he said.
'I think this also calls for a review on Statutory Instrument 64 of 2016, to look at the positives and negatives of the statutory instrument.'
Mutashu feared that such an announcement would affect market confidence, which was already low and trigger panic in the economy.
Industry and Commerce minister Mike Bimha threatened the stringent measures yesterday in an interview with NewsDay on the sidelines of the ongoing Marketers Association of Zimbabwe ninth annual convention in Victoria Falls.
Two months ago, President Robert Mugabe made similar threats following a wave of 'price hike madness' by producers, wholesalers and retailers.
Mugabe's threats coincided with a statement purportedly issued by the National Competitiveness Commission board (NCC), chaired by renowned industrialist Kumbirai Katsande, warning of a crackdown on prices.
Bimha said relevant stakeholders were now meeting in Harare to brainstorm on the crisis, with cooking oil being the most affected.
'On September 22 and 23, we experienced hikes on various commodities and not only that, there was also the issue of shortages of goods and as a result, this led to panic-buying and hiking of prices by producers,' he said.
'One asks who came up with that unofficial message on social media. We are still puzzled and trying to come up with remedies to that effect.'
The price distortions have also seen the emergence of a five-tier pricing model, that is a separate price for consumers using either United States dollar, local bond notes, EcoCash, bank transfers (real time gross settlement balances) or bank cards to purchase goods.
'A committee of ministers that I chair has been tasked to look at the matter urgently. They are currently sitting in Harare with producers and retailers, but if you remember, the last time government came up with a pricing control policy, producers stopped producing goods and the situation worsened. So what we want to do now is to engage all the parties and discuss the September 22 and 23 incident which paralysed the system up to now,' he said.
'Cooking oil is the most affected commodity and the Reserve Bank of Zimbabwe is trying to come up with forex, so that they be able to import those raw materials like soya beans that are needed in production.'
The minister urged the Consumer Council of Zimbabwe to also act on the matter, by disseminating correct information to consumers, so that they keep abreast with pricing issues.
'The marketers are very critical on their own discipline and their different companies, but we are saying, as an association, they can actually put up themselves as think-tanks to offer services to government and give that public relations to a lot of government ministers.'
But economists and industrialists have warned that the mooted price control regime could precipitate a shortage of basic commodities on a larger scale than experienced in the 2007-8 era.
Confederation of Zimbabwe Industries president Sifelani Jabangwe said price controls could result in the collapse of businesses.
He confirmed that government had spoken about price controls in their discussions.
'We have had discussions with the Ministry of Industry and Commerce, where we already discussed this thing [price controls] and actually suggested that we look at price stabilisation rather than price controls,' he said.
Jabangwe said most price increments were on imported goods, owing to the serious foreign currency shortages prevailing in the country.
Confederation of Zimbabwe Retailers president Denford Mutashu said there were alternatives to price controls.
'We do not have to introduce price controls. Rather, we need to look at the reason behind the price hikes, looking at it from the producers and retailers' side,' he said.
'I think this also calls for a review on Statutory Instrument 64 of 2016, to look at the positives and negatives of the statutory instrument.'
Mutashu feared that such an announcement would affect market confidence, which was already low and trigger panic in the economy.
Source - newsday
