Basic goods prices shoot up 200%

PRICES of basic commodities have risen sharply with some increasing by almost 200% between October last year and April this year, according to official statistics.

Presenting a paper titled Zimbabwe Industrial Policy in View of the Monetary Policy Statement: Is it working? Solvency, Survival and Employment at an Alpha Media Holdings (AMH) Conversations event last week, Industry and Commerce minister Nqobizitha Mangaliso Ndlovu revealed that prices of products such as cooking oil, washing powder and laundry bar soap have shot up by more than 100% in the last seven months.

The function was also attended by Confederation of Zimbabwe Industries president Sifelani Jabangwe, Chamber of Mines president Batirai Manhando, Institute of Personnel Management of Zimbabwe president Precious Nyika, University of Zimbabwe acting vice-chancellor Professor Paul Mapfumo, economist Patridge Sibanda and AMH managing director Kenias Mafukidze.

According to statistics availed by Ndlovu of price movements of 14 monitored products, the price of 2 litres of cooking oil has increased by 195% from $4 in October to $11,80 in April and the cost of washing powder skyrocketing by 183,9% from $8 in October to $22,71 in April. The price of laundry bar soap shot up by 122,2% in the seven-month period from $1,80 in October to $4 in April.

"Prices for the 14 monitored basic commodities were generally on an upward trend with major increases recorded on cooking oil which had an increase of 195% while the lowest increase was on beef which increased by 11,4% over the period," Ndlovu said in his presentation.

The minister said that the RTGS dollar depreciated by 24,44% from February 25 to April 8 2019. Year-on-year inflation currently stands at 66,8%, the highest it has been since the introduction of the multi-currency regime in 2009.

Ndlovu said government has put place in several measures to boost the growth of industry in its bid to increase its contribution to the gross domestic product from the current 11% to 25% of GDP. The manufacturing sector has been hard hit by a plethora of challenges stemming from the country's economic problems characterised by foreign currency shortages, low capacity utilisatiion, company closures and rising unemployment.

Ndlovu added government has introduced several measures in various sectors to boost production. He pointed out that in the clothing industry the government has limited imports of school uniforms and blankets, capacitated small-to-medium enterprises and has monitored exports of cotton lint so that 30% is reserved for the domestic market while 70% is exported.

In the leather industry, Ndlovu said government has, among other measures, implemented a pilot project financed via an African Development Bank grant of US$2,3 million targeting Matabeleland North, facilitated the formation of clusters in Bulawayo, Harare and Gweru and facilitated the Small Business Units Linkage Programme with Bata Shoe Company.

He said for the dairy sector, the government has ring-fenced facilities for importation of certain milk products as well as providing a restocking facility. Other measures, Ndlovu pointed out, include the rebate of duty and value-added tax deferment which is granted on importation of capital equipment to enhance industry retooling, introducing a local content policy as well as the creation of Special Economic Zones.

"Government prioritises manufacturing sector as one of the key economic sectors to spearhead the Transitional Sector Programme," Ndlovu said.