Prices: Cab­i­net team rolls up its sleeves

The Sunday Mail (Zimbabwe) - - NEWS - Lin­coln Towindo Se­nior Re­porter

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.”

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