Industry minister grilled over prices
INDUSTRY minister Sekai Nzenza was on Wednesday grilled in the National Assembly over the steep rise in prices of basic goods and services. MPs said basic commodities such as cooking oil, sugar and mealie-meal were now out of reach of many people.
Nzenza responded: “This is an important issue which is causing problems to everyone in Zimbabwe. Yesterday (Tuesday) we met with retailers. Some of the issues are being caused by the exchange rate, while we have to import cooking oil from other countries. This situation is temporary, but we are engaging the Retailers Association of Zimbabwe and the Reserve Bank of Zimbabwe which determines the foreign currency rate so that the prices decrease.”
Harare East MP Tendai Biti then asked Nzenza to further explain the multi-tier pricing system at supermarkets, and the issue of shops not accepting local currency.
“The prices of basic commodities are actually rising in United States dollar terms. I would like to give you an example of cooking oil. Last week it was US$4, but today it is US$6. So an increase in prices in US$ terms cannot arise as a result of exchange control manipulation or mismanagement. Prices are going up in US$ terms. What is the reason minister, and what are you doing to address this problem?”
Biti said some of the products being charged in US dollars were manufactured by local companies such as United Refineries.
“They are local companies accessing cheap foreign currency on the auction floor, but they are still raising their prices in United States dollars. Lastly, you have got certain supermarkets that are now refusing to accept local currency for a locally-produced commodity. OK Bazaars, for instance, is not accepting local currency for locally-produced cooking fat,” Biti said.
Nzenza said she could not immediately respond to Biti’s question because she needed to research.
In a ministerial statement yesterday, Finance minister Mthuli Ncube said the economy was facing twin evils of the Russia-Ukraine impact and the country’s historical challenges of sustained periods of economic imbalances.
He said inflationary pressures were being sustained by exchange rate depreciation accounting for more than 60% and rising international prices.
“Inflation is also now being driven by expectations of higher inflation and exchange rate depreciation. Prices of goods and services are being quoted with a premium. This results in a self-fulfilling upward movement in general prices of goods and services in the economy,” Ncube said.
“In the meantime, we are monitoring the developments, if the situation worsens, Government would find other areas to intervene to cushion against price increases and exchange rate depreciation.”