Prices of consumer goods are indeed high

The Consumer Council of Zimbabwe (CCZ) recently revealed that prices of most consumer goods remained high during the first 10 months of this year. It is a worrisome revelation that the basket for a family of six is now between $550-$590 per month.

While several factors can cause high prices of consumer goods, some businesspeople are taking advantage to reap super profits. These businesspeople are failing to adjust from the hyperinflationary regime when they used to get unjustified mega profits. Zimbabweans have not yet fully realised the value of the United States dollar.

A loaf of bread for instance, costs a dollar while the same product goes for $0.89 in the neighbouring South Africa. A comparison with the following countries can show how expensive our consumer goods are. A loaf in Namibia costs $0.84. In Tanzania, it costs $0.80, $0.75 in Sudan, $0.69 in Botswana, $0.57 in Kenya, $0.35 in Libya and only $0.17 in Gambia.
Of course, one can argue that some of these countries have stronger economies but the disparity in the pricing system in some instances is just too much. Even a brick that does not attract high cost of production in Zimbabwe is just too expensive. The ethanol-blended petrol came into the market amid expectations that the fuel would be lowly priced. Alas, the local product is still priced highly.

Some companies pegged salaries of their employees, especially the executives too high. They failed to adjust properly when we migrated from the Zimbabwe dollar regime. As a result, these salaries are no longer sustainable and the only option left for them to sustain the high salaries is to peg the prices of their products highly.

The salaries that ordinary workers are earning in Zimbabwe are not very bad. It is only that they are affected and eroded by the unreasonable prices of consumer goods. A civil servant's salary is by far inadequate for a basket of a family of six but the same salary can buy commodities that can last six months for the same family.

With this inflated pricing system, the buy Zimbabwe concept will become difficult to embrace. Consumers will continue to buy cheaper goods outside the country. This same problem is affecting most of the manufacturing companies in Zimbabwe including car assemblers such as Mazda Motor Industries and Quest Motors.

For a long time, vehicles from these assemblers were out of reach for an ordinary worker. Owning a car remained a pipe dream for workers until Japan and other European countries started exporting used cars to this country.

The prices of goods are also being affected by shortage of coins for small changes. Retailers resort to rounding off prices to a dollar because there are few coins for small change. It is even worse for change that is less than five cents because there are no such coins.  Customers are just leaving the coins in the shops and retailers are deliberately pricing their commodities in such a way that customers would leave coins in their shops. Retailers are actually making a killing out of the coins that customers leave in their shops.

The Minister of Finance and Economic development, Cde Patrick Chinamasa and the Reserve Bank of Zimbabwe Governor, Dr John Mangudya promised the nation some $20m worth of special coins. The special coins will be 1c, 5c, 10c, 20c and 50c that will be equivalent to US cents. Twenty-five million dollars worth of special coins will be in rand.

These special coins were promised to be availed this month and hopefully everything is on course. The availability of coins will reduce prices of commodities.

The backbone of this economy is agriculture. Farmers must increase productivity on the farms and this will reduce prices of foodstuff. At the moment, the food industry is replete with foreign foodstuff, most of which is genetically modified. As the rains are upon us, hopefully all farmers are geared to produce for the nation.