PRICES of goods and services have continued to gallop away
with another massive hike effected at the weekend as retailers seek to cushion
their businesses against runaway inflation and foreign currency shortages.
This comes hardly a fortnight after government threatened
to introduce price controls as part of measures to tame the price madness and
protect hard-pressed Zimbabwean consumers, but the retail sector has warned
that price controls would trigger massive shortages of goods on the market.
A survey conducted by NewsDay yesterday revealed a new wave
of price hikes of most basic commodities with a two-litre bottle of cooking oil
now selling at between $13 and $15, up from about $11, two litres of Mazoe
orange crush jumped from $8,50 to $13, two kg of rice from $7,50 to $9, while a
kg of salt is now $2,15 from $1,90.
Beverage manufacturer, Delta Corporation has also increased
the prices of beer by at least 20% just after a 25% increase of the commodity
two months ago.
The wholesale prices of clear beer increased from $2 to $3
per pint.
Brown quarts in most liquor shops are being sold at $7 to
$8 from $5, while green bottle quarts are selling at $9 to $12. The wholesale
prices of opaque beer have also gone up with Chibuku Super now $3 and Scud $2.
Prices of basic commodities have increased by about 200%
since October last year after the Reserve Bank of Zimbabwe governor John
Mangudya separated bond note and foreign currency accounts. Prices jumped up
again in February as Mangudya’s monetary policy statement devalued the official
exchange rate from 1:1 to 1:2,5.
Confederation of Zimbabwe Retailers president Denford
Mutashu yesterday said the increases were necessitated by some suppliers who
were now demanding cash on delivery.
“The increases are suffocating the consumers who are
hapless under the current situation. It is, however, a chicken and egg
situation as suppliers have been increasing prices into the sector at a faster
pace, citing rising costs. Some suppliers are demanding payment in cash or
United States dollars, which pushes sector players to the parallel market,”
Mutashu said.
“Trading terms have shifted drastically and more are on
cash on delivery and moved from extended payment terms like a week (7 days),
fortnight (14 days) and a month (30 days), citing changing operating
environment anchored on one’s ability to source cheaper foreign currency. The
economy is dangerously dependent on the US$ availability in most sectors.”
Information deputy minister Energy Mutodi last night told
NewsDay that the issue will be discussed in Cabinet tomorrow.
“Cabinet will discuss the issue of wanton price increases
this Tuesday and a solution will be found. Certainly, we cannot have a market
where speculators hike prices unnecessarily. We want some discipline in the
retail sector. However, in the meantime, we are saying no to parallel market exchange
rate-driven inflation. Those bent on increasing prices basing on the parallel
market rates are economic saboteurs,” Mutodi said.
“We do not have a budget deficit as we speak. Now we have a
problem with the RTGS$ and US dollar supply ratio and we have noticed that once
the US dollar supply subsides on the market, speculators increase the exchange
rate by offering more RTGS dollars for one US dollar. Our people prefer US
dollars even for domestic transactions and for locally-made goods. This is what
we will discuss and see if we can come up with measures to curtail the
increasing pressure on foreign currency and the business of escalating prices
based on speculative US/RTGS dollar exchange rate movements,” he added.
Confederation of Zimbabwe Industries president Sifelani
Jabangwe told our sister paper, Zimbabwe Independent last week that the price
increases battering the economy were a reflection of toxic policies being
pursued by government.
“The main issue that you should note is that these prices are
a reflection of policies on the ground. Volumes are going down, margins are
going down, there is an increase in product costs and there is no money at the
inter-bank market. If you don’t increase prices, there is no way you will be
able to restock. There is also resistance on the currency market, liquidity is
getting less and less, so exporters are scaling down as rates are increasing on
the black market,” he said.
Following the latest price increases, many are expecting
the cost of living to shoot up. In a report late last year, the Consumer
Council of Zimbabwe (CCZ) conceded that the family food basket had increased,
but said most prices being charged by retailers were not justified.
Efforts to contact CCZ executive director Rosemary
Siyachitema over the latest wave of price increases were futile as her mobile
number was not reachable.
President Emmerson Mnangagwa recently told a Zanu PF youth
meeting that his government would not hesitate to introduce price controls to
protect the citizens against profiteering businesses. Business immediately
warned that such a move would trigger shortages, especially of foodstuff.
Zimbabwe Congress of Trade Union president Peter Mutasa
yesterday said: “It’s sad that the alliance between government and business
that is pushing us deep into crony capitalism is seriously affecting all
workers.”
“Most working men and women are now vulnerable, with the
majority now in abject poverty, failing to provide food for their families.
Many are failing to pay rent, school fees, medical care, clothing and other
basic needs. A lot of workers are walking to work, while most families are food
insecure.”
The trade unionist said medical aid schemes have been
rendered useless with workers being asked to top up as high as US$400 in case of
emergencies where one is requiring to be admitted overnight.
“Most workers have resorted to unorthodox medical
procedures endangering their lives, while many more are left to die. The
average salary is US$60 against a poverty datum line that is believed to be
around US$600.
“As schools open, many kids are going to drop out because
parents can’t afford fees and uniforms that are now beyond the reach of the
working class majority. The situation is dire and there is need for an urgent
intervention.” Newsday
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