Mnangagwa warns government might intervene in the market

President Emmerson Mnangagwa has expressed concern over the escalating prices of basic commodities and has warned that the government might intervene if there are clear failures and imperfections in the market.

He said he is going to meet the business community on his return from the United Nations General Assembly to set clear ground rules to ensure fairness in the market.

Mnangagwa left for the UN yesterday.

In a statement before his departure, Mnangagwa said while his administration conceded that the new monetary measures it introduced and the drought that hit the country may have contributed to the current price movements, it did not believe such movements were justified in all cases.

“We have observed with increasing concern a tendency within the business sector to randomly increase prices without reason or cause, except that of greedy profiteering,” he said.

“The whole situation becomes completely unjustified and untenable when only prices of basic commodities continue to escalate against static or even declining wages. Surely a generalised price escalation should and must have a bearing on wage levels in the economy?”

Prices have been escalating since the government floated its local currency which until October last year was at par with the United States dollar.

Yesterday, the local currency was officially trading at 14:1 against the greenback but some reports said it was as low as 30:1 on the black market.

Mnangagwa urged the business community to show leadership by taking business decisions which are professional, ethical and even compassionate.

“They must act in a manner consistent with the broader goal of economic recovery, tripartism and sustainable long-term macroeconomic stability.

“Soon, I shall be calling for a meeting with the business community so we agree on clear ground rules which ensure fair play in the market.

“It is not the intention of Government to interfere with the operation of business. However, where clear failures and/or imperfections become evident and rampant in the market, the hand of Government will inevitably show.

“To avoid this, I urge our business community to demonstrate leadership, empathy and patriotism while recovery takes root.”

The government has, so far, shied away from price controls because this could make things worse as goods will disappear from supermarket shelves and become even more expensive on the black market.

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