'Price hikes under probe'

Government will soon engage stakeholders to establish the justification for the recent wave of price increases that were effected by some businesses, a Cabinet Minister has said.

Finance and Economic Development Minister Patrick Chinamasa said the Ministry of Industry and Commerce will carry out a survey to determine what motivated the increases with a view to taking corrective action.

Minister Chinamasa said this in the National Assembly last Thursday while responding to questions from backbenchers after he had issued a ministerial statement on the state of the economy in the wake of recent price hikes.

Hatfield MP Dr Tapiwa Mashakada (MDC-T) had asked what Government was doing to ensure that businesses reverse the price increases.

"The ministry has started undertaking a survey to determine two things, is there a shortage of any of the essential commodities in the market. We do not think there is but that should be highlighted. Secondly, to determine the price increases and the justification for increasing those prices. Only when we have scientific data can we justify taking any measures," said Minister Chinamasa.

"What I want to say Mr. Speaker Sir, this happened in a discussion in Cabinet yesterday, I told Cabinet that I am opposed to the reintroduction of price controls – they will worsen and exacerbate the situation. We must handle it in a market-friendly way and I think it can be done. The problems that we know are fiscal deficit and this is not a matter that should be the responsibility of a Minister of Finance and Economic Development alone, it is our collective responsibility, here at Parliament."

Minister Chinamasa said there were adequate supplies of fuel.

"At the moment, every week the consumption is about 30 – 35 million litres. After the panic buying emptied the storage tanks, we have put 40 million additional litres into the market for this week. It is now just a question of logistics to deliver it to the service stations. There is no shortage and I want to underline that," said Minister Chinamasa.

Minister Chinamasa reiterated that Government had no intention to reintroduce the local currency soon because the economic fundamentals were right.

"Not now, we are not ready because we have not yet dealt with issues of confidence – To get to that position, we must learn first to address the fiscal deficit. We must aim to address the trade imbalance which I must also say Mr. Speaker Sir, is narrowing," said Minister Chinamasa.

He said Government felt it was not necessary to establish independent board to supervise the issuance of bond notes.

"Given the levels of bond notes that we are being issued; we did not consider that the expense of an independent board was justified. So, for that reason, we resorted to a mechanism which was already there and that Audit Committee is chaired by the vice chairman of the board (Rita Lukukuma) who is an independent person," he said.