It all started with a fake social media message that circulated about three months ago, warning Zimbabweans of an impending shortage of basic commodities.
People went into panic mode and spent all they had; hoarding anything they could get their hands on. Retailers, greedy as they are, gleefully took advantage of the situation and sharply increased prices of basic commodities.
Ever since, even after it became apparent that Zimbabwe was nowhere near any shortage of basic commodities, the price madness has continued. Prices for goods such as cooking oil, mealie meal, rice, meat, washing powder, soap and salt have been shooting up relentlessly.
Even bakeries, who have been selling bread at a stable price for close to a decade now, recently also tried their luck with an unjustified 10 percent hike. They got a rude awakening.
A kilogramme of beef is now being sold for around $8, up from about $4,50 in 2016. A two-litre cooling oil bottle is now going for close to $4, up from last year’s $3.
The cost of living as measured by the Consumer Council of Zimbabwe’s low income urban earner monthly basket for a family of six increased from the December 2016 figure of $577,97 to $590,52 by end of January 2017, showing an increase of $12,55 in just one month.
Fast forward 11 months and the situation has worsened, a low-income urban earner now has to spend in excess of $600 for a monthly basket, and there are no luxuries in that basket.
The result has been heavily distorted prices that have eroded the buying power of the ordinary consumer, especially considering that disposable income has remained pretty much the same. Thousands of Zimbabweans endured a bleak Christmas as retailers further hiked prices of basic goods over the holidays.
President Emmerson Mnangagwa is not impressed, although he expresses his dismay in a very calm manner. Faced with unjustified price hikes and a multi-tier pricing model that seeks to sabotage the positive trajectory in this new dispensation, the President has condemned business leaders who are wantonly increasing prices at the expense of the long-suffering consumers.
A crisis meeting between His Excellency, manufacturers, wholesalers and retailers over the prices of basic commodities is on the cards.
Withdrawing licences for profiteering businesses is definitely not the answer; and the President is fully aware of that. Price ceilings will also not get us anywhere. We have been there before and the results were empty shelves and a booming black market. Such measures would only be an ultimate punishment to the consumers.
Rather, the President wishes to etch out an understanding. The Minister of Industry and Commerce, Dr Mike Bimha, needs to start singing from the same hymn book and throw away those emotions. That is the only way industry will be lured to the table to find a lasting solution. Threats will not bring down prices.
As the President alluded, business leaders should understand where we are coming from and where we are going. The old Zimbabwe is long gone; the future is brimming with hope for a brighter Zimbabwe. For the past several months, retailers have been singing the chorus of premium foreign currency exchange rates on the black market, but these have since tumbled to as low as 10 percent.
Why then are the prices going north, instead of south?
Zimbabwe does not have any shortage of supplies, be it raw materials or finished basic goods. Any doubting Thomas can check local shop shelves; they are well stocked with locally manufactured products. Never mind those who prefer spending their hard-earned money on expensive foreign packed mineral water or toothpicks!
The cost of doing business has generally remained constant during the past year. Electricity remains pegged at 9,86 cents per kilowatt hour. Salaries and wages remain constant.
What then is informing the decision to hike the price of cooking oil for example, when local producers of the commodity have reassured the public that their product is still available in abundance at the same price? Surely, we cannot just stand by and watch as profiteering businesses erode the financial stability that the country has enjoyed over the last eight years.
The local industry needs to welcome the new trajectory tone set by President Mnangagwa and realise that they too stand to benefit immensely from the new policies that promote development. But those benefits are only there for the taking after they play ball.
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