The Sunday Mail
Leroy Dzenga and Harmony Agere
Supermarkets have become war zones, with consumers on the receiving end.
Prices of some basic commodities have been galloping over the past two months.
In April, for example, a 2-litre bottle of cooking was selling at an average $1 150, but now the asking price is $2 400.
In the same period, maize-meal prices have more than doubled to an average price of $2 500 from $1 200 for a 10kg bag.
The situation, however, is not peculiar to Zimbabwe, as developed countries are also reeling from rising inflation driven by supply disruptions occasioned by the Russia-Ukraine conflict.
Annual inflation in the US, the world’s biggest economy, rose to a 40-year high of 8,6 percent in May due to high fuel and food prices.
While it is agreed the conflict in Ukraine has disrupted supply chains, authorities believe the rate at which prices are being adjusted is unjustified.
Consumer Protection Commission chairperson Dr Mthokozisi Nkosi said businesses seem to be using rising global prices as a pretext to profiteer.
“We are concerned because consumer purchasing power is being eroded. We understand the supply side could have contributed as there is imported inflation, but we are also aware that our businesses have the propensity to increase prices at any slight opportunity,” said Dr Nkosi.
“There are known cost drivers like fuel; however, you find that if fuel goes up by a few cents, the prices of goods increase by almost 100 percent in some instances.” Salaries for most workers have not been able to keep pace with soaring costs.
“People’s salaries are not changing much, yet prices are moving at a frantic rate. We need to protect the consumer, especially against profiteering. The Government is working on measures and we are ready to support them. In the meantime, we have been engaging businesses to understand their costs and compare them to their prices.”
Annual inflation currently sits on 137,1 percent, according to the Zimbabwe National Statistics Agency.
Although workers’ unions have been pushing for salary adjustments, employers argue they cannot meet what is being demanded.
Social Pact
Employers’ Confederation of Zimbabwe (EMCOZ) president Mr Demos Mbauya said many businesses are struggling to stay afloat.
“The current hyperinflationary environment is affecting business viability and sustainability on one hand and on the other hand it is a major threat to employee welfare as disposable incomes are being eroded massively,” he said.
Companies, he said, are dealing with twin evils of falling demand due to erosion of disposable income and loss of value on earnings due to hyperinflation.
“This matter cannot be cured on the collective bargain platform because it’s emanating from the broader macroeconomic environment. It’s high time the Government, business and labour come together via the TNF platform to come up with an inclusive and comprehensive social pact to stabilise the economy.”
On its part, Government is willing to engage stakeholders to come up with a solution. Public Service, Labour and Social Welfare Minister Professor Paul Mavima said they have scheduled meetings with the Tripartite Negotiating Forum and the National Joint Negotiating Council (NJNC).
The TNF is made up of Government, employees and business, while the NJNC is dialogue between the Public Service Commission and its employees.
“I wouldn’t want to pre-empt dates and the agenda. But, generally, we have experienced an erosion on the local currency component and they may be need to have a discussion around those issues,” Professor Mavima said.
Government recently gave retailers leeway to peg prices using the willing-buyer, willing-seller exchange rate, a market-determined exchange rate that depends on transactions on the interbank market.
But retailers continue to chase the parallel market rate.
Zimbabwe Anti-Corruption Commission (ZACC) spokesperson Commissioner John Makamure urged members of the public to report errant businesses.
“We know there is a tendency for businesses to take advantage of the consumer because of the prevailing economic situation. We want to warn them that the manipulation of exchange rates and prices borders on money laundering and illicit financial operations.
“We will open investigations if these cases are reported. We encourage members of the public to come forward with evidence so that we act swiftly on these cases,” said Comm Makamure.
Politicians are equally concerned.
The Political Actors Dialogue (Polad) forum — a platform assembled to ensure political players of different persuasions contribute to national development — is trying to bring all economic stakeholders under one roof.
Mr Trust Chikohora, an economist and chairperson of the Polad Economic Committee, said there is going to be a stakeholders meeting on price and currency stability on Thursday.
“We are concerned with what is happening on the market and have called for a currency indaba on June 16 in Harare.
“This is where we will put our heads together as political players, bankers, RBZ (Reserve Bank of Zimbabwe), business organisations, Government, lobby groups, academia, consumers and everyone involved. We want to lay all issues on the table and unpack them.
“We are confident that at the end of the indaba we will be speaking with one voice,” he said.
