‘Price hikes killing industry’

President Mnangagwa has called on the business community to desist from wanton price hikes which seek to justify the need for cheaper import substitutes in the name of protecting consumers.

Prices of basic commodities have been skyrocketing over the past few weeks and Government argues there have been no fundamental economic drawbacks to justify the hikes. Businesses, on the other hand, argue that the United States dollar is mostly available on the parallel market at a premium. However, the value of the bond note and plastic money, with which most consumers transact, has remained constant.

In his first State of the Nation Address (SONA), the President appealed to business to put a stop to the price hikes. He said the wanton price increases had the net effect of undermining Government’s thrust of growing local industry through protectionist policies.

The Government’s thrust is on increasing productivity and capacity utilisation across all sectors, enhancing foreign currency earnings, reducing the country risk perception, improving service delivery, drastically reducing the budget deficit and ensuring economic growth.

Government has been on an offensive to promote local industrial growth through local industry protectionist policies.

“Madam (Senate) President, Mr Speaker Sir, the manufacturing sector has continued to show signs of recovery particularly in those industries that benefited from Statutory Instrument 64 of 2016 measures, which limited the importation of certain basic commodities that are locally available, thereby giving local industry space and capacity to retool and recapitalise. Recent surveys have confirmed that manufactured output volume grew during the year under review.

“Government will continue to facilitate a conducive environment for the sector to grow whilst at the same time balancing the obligations and requirements of Zimbabwe under regional and international protocols. In the last few weeks, the country has witnessed rampant increases in the prices of goods and services.

“I appeal, yet again, to our business community, to show restraint and avoid wanton hiking of prices bearing in mind the fact that such actions raise the appeal of cheaper imports, which has the effect of undermining current efforts to develop our local industry,” he said.

The President, however, went on to assure business that Government will continue to pursue market economy policies that encourage both foreign and local investment.

Industry is projecting growth due to the interventions by the President Mnangagwa-led Government.  In its third quarter survey whose results were presented on Wednesday, the Confederation of Zimbabwe Industries (CZI) noted that the country’s manufacturing sector business Expectation Diffusion Index (EDI) year-on-year rose to 34,4 points as businesses expect a boom in the coming year.

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