Be ethical, reduce prices, ZNCC urges
THE Zimbabwe National Chamber of Commerce (ZNCC) Matabeleland Chamber has joined growing calls by consumers for businesses to reduce prices in line with the continued drop in fuel prices and easing of inflationary pressures.
This comes as Zimbabwe’s month on month inflation has sharply dropped to 12.4 percent this month from 25.6 percent in July in response to corrective macro-economic policy measures being implemented by the Government, which have started pushing the cost of living downwards.
The slowdown is also being buttressed by the continued decrease in fuel prices as the country strives to contain the cost of production, especially energy, which has recently been a major factor behind spiralling prices of basic goods and services.
According to the Zimbabwe Energy Regulatory Authority (Zera), the latest price for diesel is US$1.74 per litre from a peak of US$1.88 while petrol is US$1.58 from a peak of US$1.77. Government has also adopted tough monetary policy measures targeting speculative exchange rate manipulators who were previously fuelling unjustified black-market volatility that eroded the value of the local currency.
THE Zimbabwe Energy Regulatory Authority (Zera)
Speaking during a recent 2023 pre-national budget consultation meeting in Bulawayo, ZNCC Matabeleland Chapter chairperson, Mr Mackenzie Dongo, said business must do the right thing and reduce prices in line with the drop in cost of production.
He said embracing ethics was critical in transforming the economy as it benefits the public, businesses and the economy at large.
“I have actually observed of late and I hope you will all agree that fuel prices have been going down three times but the issue of prices, we haven’t started noticing a reduction in prices,” said Mr Dongo.
“Remember we are the captains of industry and we drive the economy. It’s my humble plea that if we are going to talk about market forces, we should start seeing a reduction in prices. We were so quick to increase our prices to match fuel increases as a serious major cost driver. It should also automatically follow suit that we should start witnessing a reduction in prices since fuel, being a major economic driver, is going down.
“Let’s not be sticky there. We have an important part to play and we need to lead by example and we just need to be ethical.”
Despite the earlier fuel price escalation that was linked to the global supply chain complications mainly the Russia-Ukraine war, the Zimbabwe Energy Regulatory Authority has for the past week been reviewing fuel prices downwards, easing the burden for motorists and businesses.
Ironically, some enterprises have continued to unjustifiably increase prices, which Mr Dongo said was unfair business practice and urged operators to desist from profiteering, which frustrates consumers.
“We acknowledge the excellent progress that is being made on the inflation drop-pages and this is commendable by the successful measures implemented by the Government to control that run-away train,” he said.
“At some point the retailers must respect and play their part in bringing their prices down to fall in line with what is happening in the economy.
“I think in some instances it may be a case of opportunism taking place and making the best of what you can while you can.
“In other cases, we must understand that although inflation has come down, some of the stocks were procured during the time of high prices and as such this must be compensated through their prices until they’ve cleared that old stock.”
Mr Dongo said the latest developments demand that wholesalers be accountable for price reductions and promote continuity as their sector has a key role in instilling confidence thus allowing for the retailers and industry to bring their pricing down for sustainability. Contacted for comment, economist Mr Reginald Shoko said economic measures put in place by the Government have brought stability in the market as far as the exchange rate is concerned.
“The huge drop is certainly due to monetary measures that were put in place by Reserve Bank of Zimbabwe (RBZ), especially the upward review of lending rates up to 200 percent and introduction of gold coin to mop up excess liquidity in the money market,” said Mr Shoko.
Reginald Shoko
Speaking at the same event, independent consultant Prof Albert Mukochekanwa who is also a member of RBZ Monetary Policy Committee said the introduction of 200 percent lending rate was put in place in a bid to discourage those who were taking loans to supply the black market.
He said people were taking loans and going to the forex auction floor to buy United States dollars and reselling to the black market for their own benefit. – -chronciel.cl.zw
