Is there a hidden political mission to the price hike madness?


Naturally, the situation could not go on without drawing a reaction from the government, as would happen anywhere in the world.

But careful not to destabilise the economy and create an even worse problem, government reaction to the ‘pricing crisis’ – more accurately election meddling by business – was modest and measured.

It temporarily allowed duty-free importation last month of a selected range of products, mostly essential consumer goods, by anyone with free funds.

The move is intended to offer competition, in pricing terms, to the local business sector – manufacturer and retailer alike – for the benefit of the long devilishly exploited man in the street.

Though government indicated the move was temporary, it enlisted immediate howls of protests from business, which armed itself with several sets of permutations of how the move would damage the economy, in efforts to convince authorities to reverse course. 

Among its arguments is increased outflows of foreign currency from the country, and externalisation of jobs at the expense of the local economy. 

Apparently, to the business sector, only counter moves to its trading misbehaviour, damage the economy. 

But the government is unswayed by the business sector’s cries, and is pressing ahead with the temporary duty-free import waiver for basic goods, along the way dropping hints the basket of commodities covered might be widened in the interest of the public. 

In its view, given the timing and ferocity, the government – as many observers do – sees political undertones to the pricing madness, linked to opposition politics. 

It says an investigation it carried out into the matter recently revealed trading malpractices that go beyond frequent price hikes in the local formal retail sector.

These included, among other things, artificial commodity shortages, and forcing shoppers to buy unneeded things in lieu of US dollar change. 

Information, Publicity and Broadcasting Services Minister, Monica Mutsvangwa: “From the survey undertaken, most basic commodities are generally available both in formal and informal retail shops, although there are artificial shortages observed of some locally produced goods, especially in formal retail shops.”

“From the investigation, prices in (the) formal retail sector are relatively high in both US (dollar) and ZWL (dollar) terms when compared to the informal retail sector and are thus indicative of speculative and forward pricing. Consumers are being forced to buy goods that they don’t need in formal retail outlets when they pay using USD so that they may offset the change balance. This is because the retail outlets are refusing to mix USD and ZWL transactions,” she added.  

The government and the public expect prices of targeted basic goods to start dropping as soon as the cheaper duty-free commodities start flooding the domestic market, much to the pain of the local business sector.

A bitter lesson for business that political fields can be muddy, and that there is real risk of being tripped to the ground and get messily soaked, if one unwisely steps in.-New Ziana



Don't be shellfish... Please SHAREShare on google
Share on twitter
Share on facebook
Share on linkedin
Share on email
Share on print

Like it? Share with your friends!

Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.


Your email address will not be published. Required fields are marked *