Hoarding of goods resurfaces – Industry and Commerce Minister Nyoni
There is a growing tendency of hoarding of goods, to push up prices, among informal wholesalers and retailers which is worrisome to Government, according to a senior Cabinet Minister.
Most of the wholesalers and retailers are buying up the goods, especially basic commodities, in bulk directly from manufacturers, depriving established traders of stock.
Industry and Commerce Minister, Sithembiso Nyoni, said the trend was worrying Government as it was pushing up prices unnecessarily, as a result of artificial shortages created.
Most of the wholesalers are cash-rich, some foreign, and are paying for the goods from manufacturers predominantly in attractive United States dollars.
As a result of their actions, some goods are becoming unavailable on the market, pushing up prices, and through this inflation.
“Over the past few weeks, the Ministry has been actively engaging with Business Member Organisations (BMOs) representing manufacturers, as well as those representing both formal and informal retailers. The objective of these meetings was to discuss the market disruptions we are experiencing within the supply chain distribution channel. It is vital that we come together and find effective solutions to address these anomalies,” Nyoni said.
She was speaking after leading an inter-ministerial fact-finding team of retail outlets in the capital to appreciate the depth of the problem.
Lured by the cash payment modalities of the informal wholesalers, Nyoni said manufacturers were now reluctant to supply basic goods to the formal retailers, who often take up to 60 days to make payments.
She said this delay in payment is unsustainable and has led manufacturers to favour selling to informal traders who exclusively trade in United States dollars.
“Taking into account the views expressed by both manufacturers and retailers, the Ministry believes it is essential to convene an inter-Ministerial meeting. This meeting will provide us with an opportunity to delve deeper into the issues raised and develop a comprehensive way forward, as these challenges require a whole-of-government approach,” she said.
“Furthermore, it has come to our attention that a significant number of informal traders are not tax compliant and do not possess fiscalised devices. This non-compliance results in potential tax revenue loss for the government, as these traders receive ZWL receipts from manufacturers despite paying for goods in USD,” Nyoni added.-ebusinessweekly
