Tuesday, 7 April 2020

LOCKDOWN : BASIC GOODS PRICES SOAR


THE prices of basic goods in the country are surging demonically again, owing to the deepening local economic crisis and the devastating effects of the lethal coronavirus.

To make matters worse, economic experts told the Daily News yesterday that long-suffering Zimbabweans should brace for even more hellish prices at supermarket tills, following the surprise weekend hike in the pump prices of both petrol and diesel.

This comes as the majority of Zimbabweans are currently dirty poor, unemployed and living well below the breadline — with little hope that their lot will change for the better anytime soon.

A Daily News crew which moved around Harare and Bulawayo at the weekend established that the cost of most basic commodities had skyrocketed over the course of last week at many retail outlets.

In supermarkets located in Harare’s Central Business District (CBD), for example, the price of a 2kg packet of sugar had gone up to $66,49 from $45 the previous week.

A 2kg packet of rice had soared to $99 from $65, while a 2-litre bottle of cooking oil had risen to $135 from $110.
 A crate of eggs was now costing a whopping $160 from $108, while a 2-litre bottle of Mazoe orange crush now cost $109 from $90.

On the other hand, the cost of a bar of soap had jumped to $40 from $33, while a 1kg piece of chicken had been hiked to $180 from $114 the previous week.

With regards to one of the most sought after commodities at the moment, mealie-meal, a 10kg bag of roller-meal was now costing $270 from $225.

Economic experts who spoke to the Daily News said the fresh wave of price increases was a combination of many things — including the country’s current economic challenges, continuing foreign currency shortages, the effects of the deadly coronavirus and panic buying ahead of Zimbabwe’s 21-day lockdown.

“The panic buying that ensued was and is not informed by increased income levels, but desperation on the part of consumers, and business should be responsible in their pricing.
“It may be time to regulate the prices of some basics during the entire duration of the Covid-19 lockdown.

“We are, after all, in an extraordinary situation that requires extraordinary measures and it cannot be business as usual,” the leader of the Confederation of Zimbabwe Retailers (CZR), Denford Mutashu, said.

Well-known economist Tony Hawkins warned that the economic situation was likely to worsen given the growing threat of the deadly coronavirus.

“We all know that the poverty datum line has risen up to $4 200, yet people are getting half of that at most, if they are lucky.

“Wages are declining as the prices of basic commodities are increasing at a fast rate.

“The unfortunate part is that this is all happening before we really start feeling the economic impact of the coronavirus, as is the case with other countries,” Hawkins said.

“With the coronavirus, the world has experienced a dramatic economic shift … and it is only a matter of time before Zimbabwe experiences the same effects either due to infections or due to what is happening in other economies in the region like South Africa,” he added.

Hawkins also said it was going to be difficult for the government to fix the economy if it continued to implement “counter-productive policies”.

“The first step that the government should take is to acknowledge the depth of this economic crisis and stop talking nonsense that we are going to see prices decreasing or the inflation rate decreasing.

“That way, we can start looking at what needs to be done to address all of these problems,” he said.

 Veteran economist John Robertson said the government should, in the meantime, concentrate on production and boosting the agriculture sector to improve the country’s economy.

“Even though many of the imported stocks in the shops were probably imported before the Z$ rate weakened a bit on the parallel market, prices are increasing so that payments cover the costs of replacing the stocks sold, plus the businesses’ operating costs.

“If the current black market were to be brought to an end by an improved balance of payment, we would see retail prices coming down.

“Our best chances of seeing this improvement will come from improvements in output from Zimbabwean producers,” Robertson said.

“Agriculture would be the best place to start as food self-sufficiency would reduce the need for imports, and guaranteed supplies to food processing factories would encourage investors to restart production,” he added.

The advocacy and campaigns adviser for the National Consumer Rights Association (Nacora),  Effiel Ncube, said the latest price hikes were a confirmation that the economy was very bad for consumers, who were constantly losing their purchasing power.

“The challenge that we have as a country is that we don’t have most of the fundamentals for a stable economy … including a stable currency.

“The Zimbabwe dollar is just a political token with no value. That is why the local currency keeps on losing value and we continue seeing these price hikes.

“At the same time, people’s salaries have been eroded, and as such they don’t have disposable income to buy basic commodities,” Ncube said.

“The government should work on political and policy reforms to attract meaningful investment in the county.

“You can’t introduce a few economic measures and expect everything else to fall in place. Zimbabwe is failing to attract sound investors because of political uncertainty and policy inconsistency.

“Our currency is weak on the other hand because people do not have confidence in the government which is backing the currency,” Ncube added.

He also warned that failure to solve the current economic hardships would see the country going back to the horror 2008 era.

“2008 is not a far-fetched thing now. The only difference is that in 2008 there was no money or food to purchase from supermarkets.

“Now, the food is there but is highly priced and many people cannot afford it. People will go hungry unless we attend to the political problems and fix the economy urgently,” Ncube said.

The president of the Zimbabwe Congress of Trade Unions (ZCTU), Peter Mutasa, said the spiralling prices of basic commodities were an indication of “state failure”.

“The government has failed citizens and workers. During a crisis like this, where everyone is expected to contribute towards fighting Covid-19, such levels of profiteering we are seeing are immoral, if not criminal.

“That is when we must see the government taking an active role to protect consumers. We are, however, not seeing any measures from government besides brutality against the poor citizens who are facing starvation,” he said.

He also warned that the government needed to urgently address the problems before the current lockdown turned into “a running battle between hungry citizens and security services”.

“The government must also subsidise and even procure basic food items and make them available at affordable prices … or pay a reasonable food aid allowance equivalent to the food poverty line through a transparent cash transfer system,” Ncube added.

The executive director of the Consumer Council of Zimbabwe (CCZ), Rosemary Siyachitema, also said consumers had become economic spectators as prices continued to soar.

“We continue calling on the government to look into correcting the fundamentals of the economy so that these continued price increases can come to an end,” she said. Daily News

0 comments:

Post a comment