Prices: Cabinet team rolls up its sleeves
PRESIDENT Mugabe has assembled a special Cabinet Committee to get to the bottom of nefarious parallel market activities and eliminate disparities in basic commodity pricing.
The panel, comprising all economic ministries, came on-stream following last month’s brief re-emergence of a hardcore black market which sparked a rally on basic commodity prices, panic buying and decline in the value of bond notes against the United States dollar.
An illegal three-tier pricing system has taken root.
Authorities reason that the panel, in addition to tweaking exchange control regulations and cracking down on unbanked businesses, will restore nomalcy.
Speaking exclusively to The Sunday Mail last week, Chief Secretary to the President and Cabinet Dr Misheck Sibanda said the committee would explore means of hastening revival of industrial productivity and sustainable import substitution.
“Cabinet has looked into the issues and a special Cabinet committee has been set up to look into challenges that resulted from events of September 23.
“The committee is looking into the whole regime of pricing. They are looking at areas where we can contribute along the value chain; to see whether we need to import some of the things we are importing. They are looking at where we can create our own value chain of local production without compromising quality.”
Dr Sibanda further explained: “The broader interventions will also see a revisit to the question: To what extent can we rely on imports? This involves looking at ways in which we can quicken the process of import substitution without compromising quality.
“In other words, to look at areas where we can have more participation of our local entrepreneurs working closely with outside investors.”
Dr Sibanda said Government’s Rapid Results Approach — which has State-private sector collaboration — will catalyse these and other economic endeavours.
“The economy is rebounding notwithstanding the challenges of September 23. We are on the road to take-off. We are already using the Rapid Results Approach. The President himself, when he put forward his 10-Point Plan For Economic Growth, challenged us to create a conducive environment for a rapid economic take-off via the Rapid Results Approach. In other words, you achieve quicker results if you involve all the players.”
On improving Zimbabwe’s business environment, he said: “So, we have been trying this in our Ease of Doing Business Reforms, and we are beginning to see positive results. What we are saying is we are beginning to work together as a team (the private sector and Government ministries).
“There are no silo mentalities anymore. We are quickening, especially in the area of registering. It used to take long for one to register or get certain licences. However, registration, like in the case of liquor licensing, is now being done online. This is a result of our Ease of Doing Business Reforms.
“We have put out 12 pieces of legislation to address the regulatory framework because that is where we had some hindrances. We will begin to see positive results by the end of this year when all the requisite pieces of legislation have been promulgated and become Acts.”
But Zimbabwe National Chamber of Commerce chief executive Mr Christopher Mugaga advised caution.
“Government should never interfere with the issue of pricing because once they try to control them, the situation could get worse. Price hikes and the black market are underlying factors of speculation and bigger problems facing the economy,” said Mr Mugaga.
“As such, I don’t think Government should be focusing on prices, but should be trying to establish the factors which caused speculation and ultimately panic buying, shortages, price hikes and black market activity. The committee should look into issues of production and not prices.”
Confederation of Zimbabwe Industries president Mr Sifelani Jabangwe chipped in: “Like we have always been saying, the issue of price hikes and the black market was a result of speculation. Speculation caused panic buying and that created an artificial shortage.
“So, when you have that kind of shortage, there arises a situation whereby a few unscrupulous individuals hoard commodities and resell them at astronomic prices.
“So, the committee is a positive move because it will put to rest the issue of speculation. But efforts should also be made to understand why the markets behaved in the way they did. The committee should establish the causes of speculation so that we avoid a repeat of what happened going forward.”