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Shortages of goods in Zimbabwe under probe

by Staff reporter
25 Oct 2023 at 06:34hrs | Views
Industry and Commerce Minister Dr. Sithembiso Nyoni has addressed the artificial shortage of some essential goods in Harare's formal market, with a focus on ensuring price stability. During an engagement with retail stakeholders, she led a tour of informal shops, commonly referred to as tuckshops, in Harare's downtown area.

Many wholesalers and retailers have been procuring significant quantities of goods, especially essential commodities, directly from manufacturers, resulting in limited stock for established traders. Dr. Nyoni highlighted that this practice was leading to unnecessary price increases, particularly for products such as cerevita, cerelac, mineral water, Delta Beverages' products, and Mazoe, which have been artificially absent from supermarket shelves.

The Ministry of Industry has been actively engaging with Business Member Organizations (BMOs) representing manufacturers, formal retailers, and informal retailers to address the disruptions experienced within the supply chain.

Dr. Nyoni pointed out that one of the major concerns was the proliferation of cash-rich informal wholesale and retail shops, particularly in Harare's downtown area, leading to an artificial scarcity of essential goods in the formal market. These informal shops are purchasing directly from manufacturers in US dollars, affecting the availability of goods for formal retailers.

Another issue that emerged was manufacturers' hesitance to supply basic goods to the formal sector due to extended payment periods, which can be as long as 60 days. Consequently, manufacturers prefer selling their products to informal traders who exclusively transact in US dollars, disadvantaging those without access to foreign currency.

Furthermore, it has come to the government's attention that a significant number of informal traders are not tax-compliant and lack fiscalized devices. This non-compliance results in potential tax revenue losses for the government, as these traders receive Zimbabwean dollar receipts from manufacturers despite paying for goods in US dollars.

Dr. Nyoni emphasized the importance of recognizing that vendors represent a success story of empowerment. The Ministry of Industry, through its Empowerment Unit, will strive to protect reserved sectors while allowing vendors to continue their vital role in the economy but in a more organized manner.

Confederation of Zimbabwe Retailers President Dr. Denford Mutashu suggested that the government should adopt a solution-oriented approach to the informal sector to prevent it from sinking deeper into the shadow economy. He outlined various reasons for businesses' reluctance to formalize, including structural challenges, high regulatory fees, substantial statutory costs, elevated rentals, and taxation concerns.

Source - The Herald