CONSUMERS are waiting with guarded optimism to see whether the recent reductions in prices for some basic commodities will not only be sustained but also spread across the board.
It was gratifying to hear Vice-President General Constantino Chiwenga (Retired), who is heading a Cabinet committee on price stabilisation, confirm to the ZANU PF Politburo on Wednesday that there was indeed progress in the curbing of unjustified price increases.
Consumers had experienced rampant price hikes which had soared by as much as 200 percent.
Basic goods like tissue paper, cooking oil, meats, soaps, washing powder and beverages, among others, were no longer affordable. With the new dispensation, expectations rose but quickly sagged as prices shot through the roof.
What convinced us that the price hike madness was arbitrary was the absence of uniformity of prices of similar items in different shops. In some cases, the gap was so alarming.
What was even more ridiculous was that vendors’ prices were much cheaper than those of retail shops.
Was this some form of sabotage, we wondered.
In his State of the Nation Address, President Emmerson Mnangagwa implored the businesspeople to show restraint in their pricing.
This was at a time consumers were baying for legislation to control prices. However, this option could lead to price distortions which could force some retailers to withdraw certain items and avail them on the black market – thus this would be like jumping from the frying pan into the fire.
Instead, the President opted that prices be decided by market forces so long as businesspeople remained honest.
Continued unrestrained hikes could eventually boomerang as this would attract cheaper imports, forcing locals out of business. But then this would stifle the country’s efforts to develop local industry.
The net effect of reducing us to a virtual 10th province of South Africa is unacceptable.
Hence the introduction of SI 122 of 2017 to restrict the importation of finished products.
The main reason attributed to the price hike madness is the shortage of foreign currency, as manufacturers said they were buying the valued greenback at inflated prices on the black market. This they then passed on to the consumer.
The Reserve Bank of Zimbabwe had to take care of this argument.
What with the US$1,5 billion Africa Export Import Bank loan and other forex inflows which are trickling in.
The RBZ had to juggle around with the cash available and guaranteed industry preferential treatment.
Added to this, the reduction of fuel prices, a key cost driver in the production chain, shot holes in the defences of industry.
It was pleasant to note that the prices are falling without Government ‘tampering with market prices’, according to VP Chiwenga’s report presented to the Politburo.
There have been notable price reductions on some basic commodities, with economy beef coming down to about US$4 from about US$10. It looks like more reductions are guaranteed. We should definitely expect more deductions as from March when we shall expect more foreign currency from tobacco auction floors to assist manufacturers.
With Irvine’s back in full throttle after the eradication of Avian influenza, chicken cuts and eggs should become more affordable.
As noted in VP Chiwenga’s report, the expected improvement in our economy in line with the thrust of our new dispensation should witness continuation of a significant decrease in prices of basic commodities. We notice the battle to save the consumer from exploitation has been joined by manufacturers.
The adoption of a global test practice of publishing prices for various goods and services on either the packages or media as a means of exposing would-be profiteers, is a step in the right direction.
This practice is quite familiar as it is already common with
bread and soft drinks.
Of course the price displayed is the maximum, as retailers can charge much less, to maximise on sales volumes.
For the sake of the innocent consumer, we believe price display is the way to go.