News / National
Zimbabwe govt says 'no shortages of basic commodities'
15 Oct 2024 at 09:08hrs | Views
The Government has dismissed claims of shortages of basic commodities in the formal market, attributing the perceived scarcities to economic agents redirecting supplies to the informal sector. In a post-Cabinet media briefing on Tuesday, Minister of Information, Publicity, and Broadcasting Services, Dr. Jenfan Muswere, said that suppliers were intentionally limiting stock to formal outlets in favor of the informal market to take advantage of exchange rate differentials.
Dr. Muswere noted that commodities such as cooking oil, mealie-meal, bread, and sugar were in low supply in formal shops but widely available in informal markets. He said that the scarcity in formal outlets was driven by hoarding and resale of these goods to informal retailers, where transactions are conducted exclusively in U.S. dollars.
"This is attributable to arbitrage as informal retail economic agents seek to capitalise on exchange rate differentials, given the reported cases of hoarding in the formal sector for resale to informal outlets exclusively in US$," said Dr. Muswere.
He emphasized that while stock levels might appear limited, there is no actual shortage of basic goods in Zimbabwe. The minister pointed to surveys conducted by the Ministry of Industry and Commerce between September 27 and October 4, which indicated that prices for basic goods had increased in formal shops, reflecting adjustments to the local currency.
However, Dr. Muswere noted that the U.S. dollar prices for these commodities remained stable in both formal and informal sectors. The minister also pointed out that the persistent price hikes in formal outlets in Zimbabwean dollars (ZiG) suggested speculative pricing practices linked to black market rates.
In response, the Government has pledged to regularly monitor the situation and engage with stakeholders to ensure continued market interventions. Measures are being put in place to support the formal sector and prevent further disruptions in the supply chain.
Dr. Muswere noted that commodities such as cooking oil, mealie-meal, bread, and sugar were in low supply in formal shops but widely available in informal markets. He said that the scarcity in formal outlets was driven by hoarding and resale of these goods to informal retailers, where transactions are conducted exclusively in U.S. dollars.
"This is attributable to arbitrage as informal retail economic agents seek to capitalise on exchange rate differentials, given the reported cases of hoarding in the formal sector for resale to informal outlets exclusively in US$," said Dr. Muswere.
However, Dr. Muswere noted that the U.S. dollar prices for these commodities remained stable in both formal and informal sectors. The minister also pointed out that the persistent price hikes in formal outlets in Zimbabwean dollars (ZiG) suggested speculative pricing practices linked to black market rates.
In response, the Government has pledged to regularly monitor the situation and engage with stakeholders to ensure continued market interventions. Measures are being put in place to support the formal sector and prevent further disruptions in the supply chain.
Source - the chronicle
