Solution to price hikes in sight
20 November 2018
‘. . . price increases unjustified’
Government through the Reserve Bank of Zimbabwe will continue to support the productive sector through foreign currency allocation to ensure that there is adequate stock in the upcoming festive season, a cabinet minister has said.
Addressing manufacturers and retailers yesterday, Industry and Commerce Minister Mangaliso Ndlovu said they were worried about the prevailing situation.
“As government we are worried over the recent price hikes that are taking place from the end product to the consumer and we said this needs all stakeholders to come together and come with ways in which we can deal with this situation.
“The engagement between government and private sector is a process we cannot avoid if we are to collectively resolve the challenges that we face if we are to come up with sustainable solutions that confront our business on a day to day basis,” he said.
Minister Ndlovu said government was cognizant of the upward pressure on prices due to some cost factors.
“Government will continue to provide support to the productive sectors so that we will be able to return to stability in the availability of goods particularly the locally manufactured goods.
“It is important to look at the issue holistically so that we look at how we can bring sanity in our pricing. We need to not lose sight of the progress made so far, our industry is growing and we need to intensify efforts to continue on the growth trajectory,” he said.
He said the situation on the medical drugs continued to be of concern as most pharmacies demanded payment in US dollars.
“Some retail shops and pharmacies continue to use the three tier pricing system while a few demand only the US dollar for payment.
“Most pharmacies demand payment in US dollars and when they do accept other forms of payment the prices will be too high.
Minister Mangaliso said his ministry sought to interrogate and understand the reason behind such prices in the value chain in order to come up with solutions to such price hikes.
“I wish to commend various players in the manufacturing sector who have really come on board to finance and support agriculture, we have had a meeting with the minister of agriculture and they have channeled significant resources in the upcoming farming season because we have begun the process of import sanctitution in the near future to be able to supply domestic production the major part of our raw materials for our manufacturing industries,” he said.
He said manufacturers and service providers should publicise the display recommended retail price on all goods on shelves.
Confederation of Zimbabwe Retailers Denford Mutashu said as an association they were disturbed by the recent price increases, which he felt were unjustified and bent on sheer profiteering.
“The price hikes are due to the shortage of foreign currency leading to supply constraints experienced by both producers and distributors across the country.
“The US dollar is now scarce and not much is being produced locally. As a result, companies are converting their bond notes to US dollars at a higher rate. Manufacturers experience a hidden cost. They have to recover those costs along the chain. The end user is the one that feels it all,” said Mr Mutashu.
He said it was not a secret that the Reserve Bank had no foreign currency but they were working tirelessly to avail foreign currency to manufacturers.
“The RBZ should not be expected to provide foreign currency, we will get to a point were companies will be required to be self-sustainable because the RBZ cannot produce foreign currency at the moment and there is not much foreign currency that we can actually talk about,” said Mutashu.
He said there was need for local manufacturers to support agriculture.