Harare-The government is set to step up efforts in engaging manufacturers and retailers with the aim to control prices of goods that are being charged at exorbitant prices in the wake of a sharp decline in the value of local currency on the parallel market, Pindula News reports.
In a post-Cabinet briefing on Wednesday, Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa said the government will imminently announce the steps that will be taken to stabilise the prices.
“We will surely urge; we will surely reach out to industry or maybe this time to firm up so that we could control these prices.
“So that they do not immediately react because that is what has been happening that they have been a reaction to the parallel rate when the parallel rate moves the retail sector prices also move,” she said.
In June 2020, the industry had complied with the government’s request for them to revert prices to the 25th of March 2020, however, in contrary to what had been agreed upon, prices have continued to go up while salaries of the majority remain inert.
Meanwhile, in a new research document titled ‘Sustainable and Friendly Interventions to Addressing Price Spiraling During The Lockdown’, the Zimbabwe National Chamber of Commerce (ZNCC) warned the government’s efforts to enforce price control could result in the shortages of basic commodities.
The ZNCC said retailers have been ignoring the order to revert their prices as inflation continues to rise rapidly.
The document reads:“As Zimbabwe National Chamber of Commerce (ZNCC), with membership across all the value chains of the economy, was not consulted when the decision on the price freeze was implemented. This is not the first time that price controls have been introduced in Zimbabwe. In 2007, the economy came to a halt due to price controls.
“With products to be affected by the price moratorium set to include basic commodities; sugar, rice, maize meal, cooking oil, salt and bread, price freeze of these commodities may decrease product availability from manufacturers and producers which will spawn shortages on retail and wholesale shelves. The suppliers of the basic commodities have not reduced the prices as
The ZNCC said price control enforcement by the government would see manufactures slacking in production because of the unattractive prices in the market.
“Though the overall objective of price controls is to lower prices for consumers, controls distort market forces of supply and demand and can lead to serious shortages of goods and services, thereby worsening the problems on the market rather than solve them,” reads the document.
In terms of competition in the market, any price control lowers the rivalry among business people, hence it kills competition.