FINANCE and Economic Development Minister Patrick Chinamasa
has opposed the introduction of price controls, telling lawmakers that the
matter came up for discussion in Cabinet last week.
President Robert Mugabe’s government was rattled by a spike
in prices of basic goods at the end of last month, as a worsening foreign
currency crisis triggered fears of widespread shortages.
Mugabe promised tough action over the price increases,
raising fears of price controls that his government introduced twice, with
disastrous consequences, in 2001 and 2007.
Following a Cabinet meeting on September 27, government
announced measures to end ‘market indiscipline’, including cracking down on
black market currency traders and deploying price monitors in stores, but came
short of regulating prices.
“What I want to say Mr. Speaker Sir, this happened in a
discussion in Cabinet yesterday, I told Cabinet that I am opposed to the
reintroduction of price controls; they will worsen and exacerbate the
situation. We must handle it in a market-friendly way and I think it can be
done,” Chinamasa said.
The minister was responding to a question from opposition
lawmaker, Tapiwa Mashakada, on government’s response to accelerated price
increases.
“The issues on what to do on prices which were hiked, is a
matter that is going to be the responsibility of the Ministry of Industry and
Commerce. They have started undertaking a survey, to determine two things:
(firstly), is there a shortage of any of the essential commodities in the
market? We do not think there is, but that should be highlighted. Secondly, to
determine the price increases and the justification for increasing those
prices. Only when we have scientific data can we justify taking any measures,”
Chinamasa added.
“The problems that we know are fiscal deficit and this is
not a matter that should be the responsibility of the Minister of Finance and
Economic Development alone, it is our collective responsibility, here at
Parliament.”
In 2001, after an economic crisis triggered by the
disruption of commercial agriculture following government’s land redistribution
drive which had begun a year earlier, government imposed price controls for
basic goods and services such as groceries and transport. This triggered
widespread shortages and drove inflation up.
Two years later, government relaxed the controls,
introducing a Prices and Incomes Stabilisation Protocol where prices of crucial
commodities and services would be negotiated under a Tripartite Negotiation
Forum.
Price controls were to be re-introduced in June 2007, further
fanning inflation, then running close to 7 000 percents, to reach astronomical
levels of about 500 billion percent by December 2008. Financial gazette
0 comments:
Post a Comment