Price hikes: Retailers dig in

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.”

Comments (8)

CABINET RESHUFFLE

g40 - 9 October 2017

As long as the country have technocrats who are in a denial mode like the country's executive the economic turbulence is far from being resolved. Magundya gives Mugabe and his family and to a lessor extent few lucky cronies ,foreign currency and believes that he has given all members of the business community in Zimbabwe.The unfortunate part of it is that the meltdown would continue unabated.The victims are simply ordinary majority.

Gen. Spinola - 9 October 2017

Old Mutual plc price in Harare - $11.72 and London $2.56. Divide 11.72 by 2.56 = 4.57. So 1 US dollar is = to mabondi 4.58. Comrades this is real - I am not joking - in financial markets things happen quickly - hold onto your US dollars at all costs & never bank them. All types of cash in hand is better than money in a bank - chokwadi

ace mukadota - 9 October 2017

What ansilly statement is this about Old Mutual and you can buy my Shares right now if you like as I am here leaving very cheap in Zimbabwe compared to your fucked up UK. For example if you were right means I can stay here at 65 $ room rate in a middle class hotel and than divided by your funny calculation means I pay just 14.2 US$ for my Hotel here, compared to the average UK-Room Rate of say 200 $ I find Zimbabwe is the better option.

Emperor - 10 October 2017

@emperor - you are a typical ZANUPF head in a flower pot fellow with little knowledge of economics. You can stay in a hotel in ZW and sooner or later you will have to pay with proper money (US dollars) - they will stop accepting mabondi as it is of no use to them. you can complain about the market but you must respect the market is not often wrong. soon the price of petrol in ZW will double if you pay in second class money or mabondi notes but in the meantime stay at your hotel and keep your head firmly in the flower pot and watch my predictions come true comrade Emperor

ace mukadota - 10 October 2017

@ Ace Mukadota thanks, my personal record has proved already that I understand about Economics very well, but it seems whilst you predict future I had enjoyed present therefore. What you don't understand is that money itself has no value always as it must be given value but also that an Economy must be set up to work competitive and for the wellbeing of all. Therfore where is your wellbeing in London and one needs to pay for a soccer entrance 77 £ while receiving just a salary of 1,200 £, is this the Economy your are talking about and if so one can argue that the £ where already the Curremcy in Hyperinflation instead of the Zim$ but basicially if prices would double here it is not a challenge as our salaries and earnings here also will double, so what? You better study Economics now and get out of your slavery in London is when we have more freedom here of people like you always complaining and not beimg productive, thanks!

Emperor - 10 October 2017

'Emperor'......... Patriotism is the last refuge of scoundrels.'

citizen - 10 October 2017

@ Ace Mukadota "Nothing is enough for the man to whom enough is to little." Epicurus of Samos

Emperor - 14 October 2017

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.