The Sunday Mail
Prices of goods and services have been galloping over the last few months largely because of the conflict in Ukraine, which has raised food and oil prices, and disrupted global supply chains. Local businesses are also accused of taking advantage of global shortages to profiteer at the expense of consumers. Our Senior Reporter Leroy Dzenga (LD) spoke to Consumer Protection Commission (CPC) chairperson Dr Mthokozisi Nkosi (MN), who shared the commission’s position on present price hikes.
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LD: Can you give us your assessment of the current state of affairs in the market?
MN: Consumers are abused on a daily basis. Consumers are being routinely misled, cheated, duped and exploited. Goods are often imitations, adulterated, spurious and defective. Weights and measures used by retailers tend to be manipulated. These days we see businesses hiking prices every day.
Hoarding and “black-marketing” are rampant.
Another disturbing trend that we have witnessed over the past year or so are dubious and deceitful business awards.
Everyone has suddenly become an expert in judging performance of business.
The net effect has been rewarding mediocrity, and the country seems to be paying heavily for this.
LD: It has been a year since the appointment of CPC. Can you outline the commission’s successes over the period?
MN: Hiring the chief executive officer has been a major bottleneck in our work considering that the commissioners are non-executive. Management of the commission and its activities demands a full-time secretariat. We are glad to advise that the CEO assumed duty on July 1.
Despite the setback, the commission carried out a number of awareness campaign programmes, including exhibiting at this year’s ZITF (Zimbabwe International Trade Fair). We also did live radio programmes and roadshows in partnership with sector regulators such as Potraz (Postal Telecommunications Regulatory Authority of Zimbabwe), IPEC (Insurance and Pensions Commission) and RBZ (Reserve Bank of Zimbabwe).
An all-stakeholders workshop was recently held in Harare where participants who included sector regulators, consumer protection organisations, business representative groups, sector-specific associations and consumer advocacy groups came together.
The objective of the workshop was to understand each other’s territory and strategise on how we can synergise in ensuring that the consumer is well protected across sectors.
We will be having joint awareness campaigns countrywide.
LD:Prices of basic goods have been going up in recent months. Many are concerned that the CPC’s presence has not been felt. How do you react to that?
MN: The commission has been alive to these developments. We have taken note of developments outside our borders, including the effects of the Russia-Ukraine conflict on prices.
However, we have taken steps in areas where we feel the price hikes have not been justified.
As a consumer protection organisation, we have engaged a number of business organisations, sector regulators and monetary authorities to understand the price hikes.
This has led to policy interventions such as promulgation of Statutory Instrument 98 of 2022 by the Ministry of Industry and Commerce, which allows those with free funds to import basic commodities duty-free.
In our view, this will increase supply of goods and ideally result in price stability and, at best, reduced prices. On the other hand, the voice of the consumer is also alive to the monetary authorities. You are aware that currency speculators who are fuelling the parallel market, thereby resulting in price hikes, are facing the music in the courts.
In addition, a number of banks that were involved in similar illicit deals have been fined.
These measures might not be enough, but we are grateful that they are a good starting point in ensuring that there is sanity in the market. The consumer cannot remain the prey of choice.
As much as the country is desperate for investors, it cannot allow unscrupulous malcontents to continuously enjoy the suffering of consumers by hiking prices every day.
Maybe, it’s time for authorities to review operating licences of those businesses that wilfully violate basic business ethics and laws of the land. Business is licensed to provide a product or service and not to punish consumers.
LD: In your view, what could be contributing to the current price increases?
MN: Developments in the global economy, including the Russia-Ukraine conflict, are contributing to current price hikes. The conflict has disrupted supply chains.
The price of fuel, which is a major cost driver, has been going up and naturally prices of goods and services also go up.
However, it’s disturbing to note that the Zimbabwean businessperson has a profiteering mentality and uses every excuse in the book to hike prices.
At times, the magnitude of the increase is unbelievable, as what we are witnessing these days.
We urge the business community to exercise caution and understand that they exist because of the consumer.
Do not kill the goose that lays golden eggs.
LD: What should be done to rescue the situation?
MN: Let’s have genuine engagement between the private sector and Government.
Both need each other in ensuring that we achieve the targets set in the National Development Strategy 1 (NDS1) and the attainment of an upper middle-income economy by the year 2030.
Government and related authorities should come up with deliberate policies to remove entry barriers in the supply chain. These could include relaxation of registration fees for new entrants, tax-related incentives, capacity building and related incentives.
LD: Do you think price controls are a solution?
MN: Price controls are good at face value. Unfortunately, they normally work against the very same people that you want to protect.
They result in hoarding and shortages, leading to prices higher than the equilibrium level.
Hence, it’s not an option that we are considering at this stage.
LD: In the current environment, how can consumers protect themselves?
MN: We expect consumers to exercise and demand their rights. For example, consumers must select products according to their preferences; they must file a complaint if they are not satisfied with the quality of products or services they receive. Consumers must be cautious.
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They should not blindly believe businesses and service providers.
We expect them to insist on getting full information on quality, quantity, utility and price. It is their right − the right to information and education.
Consumers at all levels must be quality-conscious. They should not compromise on the quality of products and services.
For example, as a guide, when purchasing goods or services, consumers must look for quality certification marks.
In the case of our country, always check for the Standards Association of Zimbabwe (SAZ) and other regional stamps.
Every purchase must be accompanied by a receipt.
This is because to file a complaint the consumer needs evidence of purchase, and, therefore, a cash receipt is evidence or proof that the consumer has paid for the goods or services.
LD: Consumers’ disposable incomes are shrinking. Is the CPC looking into this aspect as well?
MN: This is not a direct mandate of the CPC. However, we continuously lobby for the opening up of businesses and removal of entry barriers in all sectors of the economy.
We believe this will encourage more players to supply goods and services, resulting in more competition and better choice for the consumer.
The prices will ultimately fall and ensure that the consumer has more purchasing power.
Other interventions, though not a favourite of economists but still a necessary evil in these difficult and trying times, include introduction of subsidies.
They could be introduced for a short period and removed as soon as the economy stabilises.
This might require cutting expenditure in non-strategic areas by the Government.
LD: We understand there are regulations being crafted in terms of the CPA (Consumer Protection Act). What do these regulations seek to address?
MN: Yes, the commission is working on a number of regulations. These include accreditation of consumer protection organisations such as the Consumer Council of Zimbabwe, consumer advocacy groups and consumer protection officers.
These are organisations that help the commission effectively carry out its mandate.
We are also working on regulations regarding fines on unfair business practices such as disclaimer clauses, conditional selling, false claims, selling expired products, among other unfair practices.
