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Oliver Kazunga, Senior Business Reporter
GOVERNMENT will hold candid discussions with industry and commerce executives in Harare today to address the latest spate of basic commodity price increases, which have sparked an outcry from consumers and are frustrating economic progress, Industry and Commerce , said yesterday.
Responding to questions during a Bulawayo Provincial Investment Conference held at the Zimbabwe International Exhibition Centre, Minister Ndlovu said Government was equally concerned by the unjustified price increases.
“Businesses have been increasing prices in the last two weeks and someone was telling me that it is in response to the exchange rate.
I don’t know whether our economy is a foreign exchange market or what but this does not make sense,” said Minister Ndlovu.
He said he met operators in the tourism industry on Tuesday and they were also saying they had increased prices in response to the exchange rate.
“What component of their business requires foreign currency, what percentage requires foreign currency and why are our price increases or price adjustments a mirror of the foreign exchange rate and not the inflation rate?”
A few days ago retailers including major supermarkets increased prices of basic commodities by margins of up to 75 percent.
The move was despite the stability in the economy after the February Monetary Policy Statement, which has been widely endorsed by business.
Minister Ndlovu condemned the tendency by the private sector to profiteer through charging exorbitant prices.
“They are pushing consumers to revolt and thereafter want to engage and I believe that this is not responsible practice. I will be meeting them (private sector) tomorrow morning (today) and we want to have candid discussions around this issue which is killing our economy. It is killing our efforts to re-engage and have competitive products,” he said.
The Minister said some of the private sector players have informed the Government that there was no incentive to export because they were able to make their money locally.
“In other words it doesn’t matter to them whether or not our products are competitive in the region because they are making their money here.
“But they will come to Government for foreign currency to import raw materials, which foreign currency is earned by the private sector not by Government through exports. So it’s a concern to us and we hope this will be addressed,” said Minister Ndlovu.
The latest price increases have pushed prices beyond the reach of most consumers as their salaries have not been increased.
Prices of grocery items that include flour, rice, cooking oil, sugar, toiletries, washing powder, cereals and meat have been increased and as such are no longer affordable to most consumers.
A snap survey conducted by Business Chronicle a few days ago revealed that prices have gone up by margins of up to 75 percent.
A two litre bottle of cooking oil has gone up from an average of RTGS$7, 50 to RTGS$14 while a two kilogramme (kg) packet of chicken portions has gone up from RTGS$11 to RTGS$16.
A 10kg bag of mealie-meal has gone up from RTGS$6 to RTGS$8, 50 while 500g margarine shot up from RTGS$8 to RTGS$22.
– @okazunga
Online Reporter