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HARARE – The Zimbabwe government has been urged to issue more import permits to manufacturers to enable them import raw materials and increase production to end shortage of goods on the market which will result in reduction of prices. Confederation of Zimbabwe Retailers president Denford Mutashu said the price hikes that hit the market were a result of an increase in demand for goods that are not locally produced in Zimbabwe.
“In a free market economy, usually price increments are a symptom of a shortage on the supply side, hence, demand outstripping supply. Government should issue more import permits for those commodities whose prices have increased,” he said.
The comments by Mutashu come amid growing calls to scrap Statutory Instrument (SI) 64 of 2016, which regulated the importation of certain products that are manufactured in the country. The Government is considering scrapping SI-64, as one of the tangible measures to reduce the cost of food and goods.
When SI 64 of 2016 was introduced, capacity utilization grew by 13,1 percent to 47,4 percent from 2015. Buy Zimbabwe economist Kipson Gundani said the government should focus on improving supply of foreign currency to producers for them to import raw materials.
“There is a misplaced thinking that prices are going up because the cost of production in Zimbabwe is high, that is wrong in the first place. The principal reason why prices are going up is emanating from the foreign currency shortages which limit producers to buy more raw materials outside the country,” he said.- New Ziana
Bongani Ndlovu