Source: Price hikes: Retailers dig in – DailyNews Live
Farayi Machamire 9 October 2017
HARARE – The Confederation of Zimbabwe Retailers (CZR) has said shops have
“no choice” but to increase prices as they are sourcing foreign currency
from the black market where they are charged steep premiums.
This comes as retailers have significantly increased prices of basic
goods, amid escalation of the cash crisis in the country.
This is despite the Reserve Bank of Zimbabwe governor, John Magudya,
insisting that Zimbabwe’s “economic indicators are improving”, accusing
the retailers of having “rent seeking behaviour”.
CZR president, Denford Mutashu, told the Daily News that “retailers don’t
want to increase prices. But the issue of foreign currency (shortage) and
retailers having to go on the black market to get forex has been the
biggest factor”.
“We have no choice but to pass that component on to the consumers,” he
said.
Concurring with Mutashu, Confederation of Zimbabwe Industries (CZI)’s
branch, the Groceries and Manufacturers Association, said the sectors’
viability is under threat after players have been hit by a spate of price
hikes by suppliers.
The association’s chairperson, Nancy Guzha, said the situation was far
from improving.
“As manufactures, what we have seen coming to us is a spate of price
increases from our suppliers. I think a lot of us who use cooking oil have
seen this increase. We have seen price increases in packaging,” she said.
“We had one packaging supplier saying they are temporarily sending their
employees home because they don’t have enough forex to import raw
materials,” Guzha said, adding that “not only are there price increases
but there is a complexity”.
She said none of their members was getting enough of their foreign
currency requirements.
“We will put in a payment to bankers and wait for six or eight weeks and
if you are very lucky maybe two weeks and that is putting us in a
predicament of sourcing forex at a premium on the black market or else
having to take the hard decision to scale down production,” she said.
“We find ourselves in a tough position and the reality is that we are
fighting hard to just maintain the bottom line that we budgeted,” Guzha
said.
Industry and Commerce permanent secretary, Abigail Shoniwa, told the Daily
News that in the advent of price increases, they have been getting
complaints daily of the trend continuing.
“We are receiving information from all corners of the country that prices
are going up. Retailers of all sorts, I have heard about fabrics prices
going up 50 percent. Takeaway prices have gone up from $3 to $4, 50. I can
go on and on,” she said.
“Prices have gone up 100 percent overnight just because of the panic. We
have the information. Seriously, I think we need to think of the consumer
because in the long term there could be resistance of some products.”
But Magudya argues that Zimbabwe is experiencing side effects of a
“growing economy”.
“The economy is growing on account of the agriculture and mining sectors
that are doing well. Sometimes I feel I am not in the same country as
others because when I read the magazines and newspapers I read that
certain companies are retrenching or that some are closing. (But) to the
contrary, we have seen a net increase in employment in Zimbabwe…I can
give you a number of firms for example clothing industry I think a year
ago they employed 1 000 people, now they employ 6 000, so maybe it’s
because Zimbabweans want to spend time on the negative side,” he said.
“I know in life there are always two sides. So it’s natural. But as far as
we are concerned, the economy is expanding and what we are going through
are the side effects of a growing economy.”
Instead, Mangudya urged Zimbabweans to practice consumer resistance and
“just don’t buy” goods and services that are astronomically priced.
“There is need for consumer resistance,” Mangudya.
“There is a lot of rent behaviour (from business). People say ahh because
people could afford cooking oil at $5 so it remains there.
“What should actually happen is that business should reduce their prices,”
he said, adding “we don’t expect prices to remain high. That is rent
seeking behaviour. We don’t expect that from business people.”
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