EDITORIAL COMMENT: Stop hiking prices of basic commodities wantonly

Easter shopping picture

UNSCRUPULOUS businesses have once gain reverted to their default mode of wantonly increasing prices of basic commodities at a time when the Government has embarked on sweeping reforms to stabilise the economy and ensure that the country is on a positive growth trajectory.

What makes the actions of these retailers and wholesalers suspicious is the fact that there is absolutely no justification for the massive price hikes except profiteering and we feel they are clearly on a path to sabotage the new administration of President Emmerson Mnangagwa.

Since the President’s inauguration on 24 November, the markets have been reacting favourably and parallel market rates have been tumbling — a sign of confidence in the new administration. Granted, the liquidity situation has not yet improved dramatically but the economic fundamentals have largely remained the same raising questions about the agenda of businesses that have clearly set themselves on a collision course with the Government through unjustified price hikes.

At the weekend, Bakers Inn, one of the major bakers in the country, hiked prices of bread from 90 cents to $1 for a standard loaf and $1 to $1,10 for a family loaf. The increases were subsequently reversed after the intervention of Government through the Ministry of Industry, Commerce and Enterprise Development on Monday. The decision followed a meeting between Government, bakers and other stakeholders. It emerged during the meeting that there was no justifiable reason to hike the bread price since the price of flour — the main raw material — had not changed.

The GMAZ, a body which represents suppliers of flour to bakers, said it was surprised with the increase since bakers had not objected to the maximum wholesale and retail prices of maize meal, rice, salt and flour set by the Government three weeks ago (the same price maintained by the milling industry for the past five years). During the meeting with Industry and Commerce Minister Dr Mike Bimha, Government also pledged to continue engaging the critical stakeholders in the entire bread value chain, particularly the packaging sector.

“My Ministry is also working on price escalations for other essential products and similar consultations are continuing,” said Dr Bimha.  “The Ministry is appealing to all players in the value chain to be part of the solution, for instance the packaging sector.” The Minister said there was a need to cross-examine all industry constraints in an effort to improve the manufacturing sector.

“We need to interrogate these constraints as they present to us and that is the work that is going to take place from now onwards to engage the various stakeholders,” he said.

“The players will make their presentation to NCC and explain the various constraints, not just in terms of increasing, but also issues of viability as an industry and we will have to come up with long term plans to deal with these issues.”  We are glad that Government and various stakeholders are finding each other with regards to price hikes and exhort them to continue engaging in a bid to reach common ground.

The issue of pricing should be resolved holistically in the context of their entire value chain. Wanton and unjustified price hikes are unacceptable but at the same time Government should not constrain industries which are choking under high costs of production.

It is in the best interests of Government to have a viable manufacturing sector which creates jobs and contributes to economic development than a comatose industry. We are therefore hopeful that going forward, both sides will work together to find a lasting solution to the issue of pricing.

In the meantime, we urge producers of other basic commodities like cooking oil, beef, chicken, maize meal, rice and sugar to stop wanton price increases particularly during this festive season as this might dampen the mood in the country. We call on them to heed the message from President Mnangagwa who on Monday night condemned unjustified price hikes by some businesses, saying such actions cannot be allowed to continue.

Addressing delegates attending the 6th Buy Zimbabwe Annual Awards at a Harare hotel, President Mnangagwa said “no to such counter-economic practices.” “Government notes with concern the existence of a multi-tier pricing system and this cannot go unabated,” he said.

“We need to examine our modus operandi as captains of industry and commerce if we are ever going to move forward. There are some dealers, suppliers and business owners who are in the habit of increasing prices willy-nilly without proper justification, let me hasten to say my Government says no to such counter-economic practices.

“I urge our wholesalers and retailers, as we approach this festive season, to refrain from profiteering by charging unscrupulous prices and never to put measures that may derail our efforts for a quick turnaround of the economy. Government wants to protect the rights of the consumers and ensure that its citizenry is not short changed or duped by unscrupulous dealers.

“Our people need a decent festive season where they can make and enjoy their holidays.”

Article Source: The Chronicle