Govt says no to price controls

via Govt says no to price controls 19 December 2014

GOVERNMENT will not be dictating the pricing of goods and services following the introduction of bonded coins, Industry and Commerce Minister Mike Bimha said Thursday.

The government introduced bonded coins in 1c, 5c, 10c and 25c denominations with the sole aim of addressing the shortage of loose change. The coins have been pegged against the value of the US dollar and shall, as such, work in tandem with the valuable currency.

With the advent of the bonded coins, government was expected to level up the pricing regime. But Minister Bimha told in an interview that government will not be tempted to adopt a populist approach on the pricing regime.

“I don’t think we would like to do that,” Bimha said, adding that such decisions were made by cabinet in consultation with relevant ministries.

He added: “We are in the process of rebranding what used to be incomes and pricing commission, to a national competitiveness commission and the intention is really for us to get information on how we are doing in as far as pricing is concerned.”

Pricing concerns occasioned by the shortage of change have often seen retailers and service providers rounding off prices to the nearest dollar. Short of this, they would give customers sweets, matches, chocolate bars, among a list of miscellaneous products in lieu of change.

Even after the change was available in the form of South African rand coins, issues of exchange rate were conveniently ignored, leading to loss of points usually by the less sophisticated consumers.

Meanwhile, Minister Bimha said government was adopting an open-minded approach to the costing and selling of goods and was also keen on listening to the concerns of manufacturers.

“Our concern is not on pricing per se; our interest is more on costs,” he said.

“Pricing emanates on what it costs to produce and obviously we add the mark-up and obviously there has to be a reasonable mark-up in addition to what we would have to recover on what we would have put in the production.”

“It is in the interest of government as well as consumers to ensure that there is fair play.”