CRUNCH TIME!
Govt warns of looming price increases post SOE
As the State of Emergency (SOE), originally enforced last April and extended twice, draws to an end, it seems the ‘new dawn’ will get off to a painful start, at least where people’s pockets are concerned.
According to the Minister of Investment, Trade and Industry, Mmusi Kgafela, the lifting of the SOE, set for the start of October, is likely to be promptly followed by an increase in the prices of basic goods.
With unemployment sky high, and many already struggling to make ends meet as it is, the news will come as a body blow, leaving precious little to celebrate as the country gears towards 55 years of independence.
Dropping his bombshell when outlining his ministry’s post SOE plans, Kgafela admitted the cost of living is set to get more expensive from next month.
Since the new financial year began in April, Botswana has been battling with soaring inflation, which currently sits at 8.8 percent, breaching Bank of Botswana objective range of 3 to 6 percent.
Kgafela also pointed out that SOE regulations state there shall be no increase of essential goods prices with a margin that surpasses additional costs incurred by the supplier in procuring that product. Such ‘price control mechanisms’ will cease to exist when the President’s Emergency Powers are lifted.
“Post SOE, we expect prices to increase looking at the fact that in April this year, there was an increase in Value Added Tax (VAT), increase in fuel prices, increase in electricity and Botswana Housing Corporation, too, increased its rental prices,” mentioned the Minister.
“We will continue to monitor businesses to ensure that they are compliant with local standards and the terms upon which products are imported into the country,” continued Kgafela, adding that anti-competitive behaviour will be investigated and action taken if any breaches are discovered.
Meanwhile, Kgafela revealed that as of 1st October, all businesses will revert to their traditional trading hours.
This spells good news for long-suffering owners of nightclubs and bars, whose operations have been decimated by Covid-19 regulations.
As it stands, sit-ins will be allowed again, although government is expected to implement certain restrictions before the end of the month.
Additionally, should Covid-19 cases spiral again, Kgafela warned the ministry will invoke the Shops and Restaurants Hours Act of 1942 to reduce the trading hours of these businesses.
Regarding liquor trading, Kgafela noted the recently Amended Liquor Act has empowered the Director of Health Services to control the sale of liquor through engaging the Ministry of Trade should the situation deteriorate.