Business Reporter

THE move to allow importation of basic commodities by Industry and Commerce Minister Dr Mike Bimha will without doubt bring relief to consumers who have been reeling from unjustified increases in basic commodities by unscrupulous traders.
In 2016, Government introduced Statutory Instrument (SI) 64 meant to restrict importation of certain goods, but it has been lifted.
To further cushion consumers, Government has also called for organisations with free funds to obtain licences that will allow them to import basic commodities during the festive season in order to reduce prices which have remained on the high.
While consumers have welcomed the intervention by Government, other organisations and local producers are not impressed, as they are arguing this will result in cheap products flooding the country.
The recent price increases are similar to those of 2008 when prices were increasing on a daily basis, a situation that drained hard-earned cash from consumers who were left with no choice but to bear the brunt of fluctuating prices everyday.
Government was forced to introduce price controls which resulted in a chronic shortage of basic commodities from the market.
In 2008, the diminishing in value of the local currency exacerbated the already untenable situation for the consumer.
But the introduction of the multi-currency system by Government on January 29 2009 has helped stabilise prices while the economy has picked up.
Therein lies the catch in the scrapping of SI 64.
The importation of these basic commodities will surpass the demand, thereby forcing the price to be reduced.
This will also result in a one-tier pricing model regardless of whether one is using Bond notes, US dollars or any other mode of payment.
A stabilising factor in the form of increased local production will repel price increases.
On September 23 2017, social media speculated the rise of prices and the effects were seen as prices went up in a flash.
Social media created an artificial shortage of basic commodities and there was panic buying.
Consumers were hoarding basic commodities, hence the demand and below expectation levels of production made it easy for prices to escalate.
The economy had no fall back plan.
Some supermarkets hiked prices while products were being held in their warehouses, a move that was castigated by consumers.
Local products have been staked high above the reach and preference of consumers who in turn go for the cheap imported goods.
While the local manufacturers claim they have enough to supply the whole nation, the predicament has been with their pricing.
Another factor affecting pricing is lack of foreign currency.
As a nation, we are having more imports than what we are exporting.
The net effect is that foreign currency is being taken out instead of being brought inside the country.
Most, if not all, of the raw materials used to manufacture some of these local products comes from outside, hence the amount of money we pay leaves us with little in our reserves compared to what we are bringing in through exports.
This means exporters must look for other new markets or increase their volumes such that they can balance the scales of trading as a nation.
The economy is already showing signs of huge growth.
Consumer Council of Zimbabwe (CCZ) leader Rose Siyachitema recently said consumers must do away with the habit of buying products from dealers who do not charge according to the mode of payment.
“Our task is to communicate with the manufacturers such that they make known their prices to the public,” she said.
“Retailers might differ a little bit on the selling price but it is within a reasonable range that is cents apart.
“The situation has been treated differently by those in the informal sector.
“Prices for some of their products are lower than those in the formal sector.”
It has been quite a tough period for consumers who have had to endure ever-increasing prices in an economy that, despite being on the rebound, is still fragile.
It is, however, hoped that the next coming few months will result in the much-needed relief for the burdened consumers.