Minister decries price hike culture
INDUSTRY and Commerce Minister Dr Mike Bimha yesterday chided companies for seeking to survive on price increases as he challenged them to revise their business models and improve product efficiency.
Addressing delegates attending the 2017 ZimTrade Exporters’ Conference here, Dr Bimha (pictured right) said the culture of increasing prices was not sustainable as the modern consumer needs high quality and low priced products.
The Minister was making reference to recent price hikes and panic buying, which triggered some artificial shortages on certain basic commodities.
“Basically, the strategy by companies should not be about surviving on increasing prices as has been the case recently on our domestic market. Companies on their own should endeavour to revive business models and invest in new equipment and technologies to improve on efficiency and quality of products,” he said.
“The consumer of today is in need of high quality and low-priced products. As such this calls for efficiency in production and improvement in production and improvement in competitiveness to be able to survive global competition and ensure export success.”
Dr Bimha said the recent price hikes and panic buying on the market were not a result of any major changes in economic fundamentals but mere speculation through the social media.
He, however, said Government appreciates the fact that the shortage of foreign currency had given rise to a multi-tier pricing system as a result of illegal parallel market transactions.
To counter these distortions and retrogressive developments, the minister stressed the need for the country to increase exports in the medium to long term. He challenged the private sector to pay their role and work with Government in improving domestic production competitiveness.
Dr Bimha said Government, through the Reserve Bank of Zimbabwe, has put in place measures to assist firms with foreign payments for procurement of raw materials, machinery and critical equipment as well as foreign sourced services such as product certification.
“However, in as much as companies require foreign exchange to fund critical imports, there is a need for our companies to also generate foreign exchange rather than being mere consumers of foreign exchange.
“There is a need to inculcate and entrench an export culture among industrialists and SMEs for them to be able to generate more foreign currency,” said Dr Bimha.