MPS should restore purchasing power: Consumer Council of Zimbabwe (CCZ)

THE Consumer Council of Zimbabwe (CCZ), says it expects the forthcoming Monetary Policy Statement (MPS) by the Reserve Bank of Zimbabwe to restore exchange rate stability and restore the consumer purchasing power.

The Apex Bank is expected to present the MPS for this year anytime soon, to buttress the fiscal policy pronouncements made by the Treasury and help consolidate the economic growth momentum.

Enhancing financial markets stability is critical in ensuring the success of the National Development Strategy (NDS1) and attainment of an upper middle-income economy by Vision 2030.

While business investments and production levels have been growing in recent years, consumers have expressed concern over the recent depreciation of the local currency, which has eroded disposable income in the local unit. Basic commodity prices have been rising in tandem, with the exchange rate movement crippling demand from those mainly earning in Zimbabwean dollar.

For instance, the price of a 10kg roller meal has increased from around $68 000 in January to more than $100 000 and yet the same product is available from the informal market for about US$5.

However, informal traders do not accept the local currency, which makes it hard for people who earn their salaries in local currency to buy, except through buying forex at a premium.

CCZ Matabeleland regional manager, Mr Comfort Muchekeza, said the distortions in exchange rates and attendant price movements should be urgently addressed to ensure consumers are protected.

However, some businesses have said the high costs of production were linked to the 2024 National Budget measures, which introduced new taxes and compliance costs.

“As CCZ we have noted price increases post 2024 National Budget announcements, after some levies, taxes and policy pronouncements reviewing import duties on some basic products had a negative impact, with producers reviewing their pricing structures to factor in taxes such as sugar tax,” said Mr Muchekeza.

“These have since been reviewed, and clarity has been put by monetary authorities,on which products should be charged. But the informal market rates have been skyrocketing, with current figures at US$1:$20 000 seriously affecting disposable incomes, especially for consumers who still earn part of their incomes in local currency.

“For such, the figures they earn can barely purchase meaningful groceries to sustain families,” he said.

“We recommend continuous dialogue involving all stakeholders in the food supply chain from the Government, producers and consumers, to find lasting solutions that protect vulnerable consumers.”

Mr Muchekeza said he hoped that the forthcoming MPS would tackle the exchange rate challenge, and bring to order the obscene rates used by some informal market players, so as to tame inflation.

He said as consumers they were disappointed that when authorities increase cost-driver tariffs such as electricity tariffs and toll gate fees, the users are often not included in negotiations.

Mr Muchekeza said unilateral increase of electricity tariffs, taxes and toll fees, among others, contribute to an increase in cost of production to companies, which at the end affect consumers as the costs are passed on to them. — @SikhulekelaniM1