What game are retailers playing and for who?

05 Nov, 2017 - 00:11 0 Views
What game are retailers playing and for who?

The Sunday Mail

For the last couple of years, Uganda has been choking from food prices that have been spiraling out of control. The price increases in the East African country have been attributed to the shortage of supplies.

The sudden rise in inflation has also been blamed on the increase in fuel prices and increased cost of electricity.

In 2015, South Africa faced the same predicament with food prices shooting up by 15 percent due to drought that ravaged the country’s key production regions and the value added tax that was placed on essential food items.

In West Africa, experts are warning of a food security threat in Africa’s most populous country – Nigeria – following last year’s 60 percent price spike on maize.  That is the African narrative at a glance, a narrative that is perennially shoved down our throats; that of gloom, of a continent that has irreparable conditions that justify economy derailing unending price shocks.

Apparently, every African nation is supposed to fit into that mold, no matter how the fundamentals differ from Cape to Cairo. But Zimbabwe is a sovereign nation, a vocal one for that matter. Zimbabwe definitely does not have any circumstance that fosters unstable prices for basic commodities.

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 made baked beans or chewing gum!

The cost of doing business has generally remained constant during the past year. Electricity remains pegged at 9,86 cents per kilowatt. Salaries and wages remain constant.

As for agricultural production, which is the economy’s backbone; last year witnessed a great boom following the birth of the Command Agriculture programme, which seeks to complement the Presidential Input Scheme in capacitating local farmers.

The programme coincided with sufficient rains during the 2016/17 farming season and the result was a bumper harvest to feed the nation.

And yet prices of basic commodities such as mealie meal, meat, washing powder, soap and salt have been shooting up relentlessly.

A kilogram of beef is now being sold for $7, up from about $4,50 in 2016. A two-litre cooling oil bottle is now going for around $3,60, 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 ten months and the situation has worsened.

When taking a closer look at the rudiments, there is absolutely no justification for these increases. If anything, prices should be going south, not north.

Clearly, the money changers roaming our streets are not the only rent seekers in town. Retailers are equally culpable and Government needs to put its foot down. This nonsense simply has to stop.

What 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?

It is now a case of greedy retailers who are bent on profiteering from making inappropriate profit margins at the expense of the public.

While Government introduced Statutory instrument 64 of 2016 to the spur growth of local industries, it appears like the SI in now being abused to rip off consumers. The nation is supposed to be enjoying the benefits of the situation created by this oligopoly in production.

And it’s been over a month since people panicked into buying basic commodities in bulk following messages that warned of impending food shortages circulated on social media platforms. Things have since stabilized and by now, prices should have gone back to normal.

Looks like retailers are playing some game. Whose game for now we have no idea, but we will soon know.

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