Sunday, 20 November 2016

FOOD, FUEL PRICES RISE IN ZIM

BUSINESSPEOPLE have started increasing prices of some goods and services with notable adjustments seen in fuel which has gone up by an average of 10 percent, a move consumers say is working against the use of plastic money.

Retail shops are said to have effected between one and two percent extra charge for those who use plastic money over the already gazzetted charges that were put in place by the Reserve Bank of Zimbabwe as it tried to promote the use of plastic money.

The move comes at a time when the Government has said its hands were still tied to effect price controls of goods as the newly-gazetted National Competitiveness Commission (NCC) Bill is still to be made into law. NCC will replace the National Incomes and Pricing Commission which was used to effect price controls. The bill was gazetted in September and provides the framework to reduce prices of goods and services in the economy by encouraging competitiveness and improving the ease of doing business.

Industry and Commerce Minister Dr Mike Bimha told Sunday News that the Bill was still with Parliament and will only be effected if it is passed and signed into law.

“The National Competitiveness Commission Bill will only be into effect if Government passes it into law, at the moment it’s in discussion in Parliament. The first reading was done and it’s now at the committee stage,” Dr Bimha said yesterday.

This comes as consumers have complained over the notable adjustments of prices of some goods by retailers and fuel operators. Petrol for instance, now costs $1,40 per litre in some places, up from $1,27 per litre.

A survey also noted that some shops have slightly adjusted prices of commodities triggering fears that this could be motivated by misconceptions surrounding the introduction of bond notes. Businesses have also taken advantage of the increased usage of plastic money to charge extra for consumers.

If fact, some fuel stations now have a double pricing system where they offer different prices to those with cash and those using cards. Consumer Council of Zimbabwe executive director Ms Rosemary Siyachitema said her organisation has received reports on retailers applying surcharges for electronic money transactions. Ms Siyachitema said there was no justification for retailers to put extra charges on electronic money purchases, accusing businesses of being greedy. She described the move by retailers as converse to efforts being made by Government to ease the cash crunch.

“Generally retailers are being greedy. It’s wrong and they are not being fair to customers. They (retailers) are pushing people further to spend more time in bank queues looking for cash. What the retailers are doing is not there in any financial agreement. No extra charge should be put on plastic money purchases. There are charges already by banks, why extra?” she said.

The retailers are, however, citing “high costs” of cash adding that some of their suppliers were not accepting electronic money transactions and were demanding cash up front.

Delays in processing electronic money transfers have also been cited by retailers as the reason they are charging extra for plastic money transactions. RBZ, in June this year, reduced charges on all electronic transactions to ease the burden on banking clients and to promote use of electronic banking services.

Confederation of Zimbabwe Retailers president Mr Denford Mutashu said while retailers were being unfair to consumers by applying extra charges on plastic money transactions, a number of factors were forcing them to take that direction.

Among some of the factors highlighted by Mr Mutashu are cost of cash and depletion of banks’ nostro accounts which he said has created settlement problems for international payments. He said retailers who procure their goods from outside the country were the most affected.

“The underlying challenge is that telegraphic transfers are taking time. It’s a national challenge and we can’t isolate it to retailers only. We implore the Government and RBZ to expedite telegraphic transfers and improve funding of nostro accounts to deal with the challenge,” he said.

Mr Mutashu added, “The retailers are putting those extra charges in order to recoup the cost of cash. Because some of their suppliers demand cash up front, retailers have to buy cash at 10 to 15 percent premiums.”

Reserve Bank of Zimbabwe Governor Dr John Mangudya yesterday blasted the retailers and said it was surprising that there are some businesses still motivated by a dealer-type mentality.

“It’s quite unfortunate that those charging different prices between cash and plastic money do not appreciate what it is to be in business. It would appear that their definition of business is cash and not sales. We need to change the cash culture and build a business as opposed to dealer-type mentality. Business should not abuse consumers. In the case of fuel operators, that behaviour is uncalled for as they are the major users of foreign exchange earned in this country. They don’t export at all,” said Dr Mangudya. sunday news

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