Govt cracks whip on er­rant man­u­fac­tur­ers

Sunday News (Zimbabwe) - - Front Page -

THE Gov­ern­ment is con­sid­er­ing tak­ing stern mea­sures against un­scrupu­lous man­u­fac­tur­ers that in­crease prices of their prod­ucts de­spite be­ing al­lo­cated for­eign cur­rency by the Re­serve Bank of Zim­babwe (RBZ) for the pro­cure­ment of raw ma­te­ri­als as it forges ahead to pro­tect con­sumers from un­war­ranted price hikes.

In­dus­try and Com­merce Min­is­ter Man­gal­iso Ndlovu said the Min­istry was aware of some man­u­fac­tur­ers that have clan­des­tinely in­creased prices of the goods they pro­duce de­spite ob­tain­ing for­eign cur­rency sup­port from the Gov­ern­ment to im­port raw ma­te­ri­als.

“When it comes to most of the ba­sic com­modi­ties that’s where we have a big say be­cause for those ones we are sup­port­ing the man­u­fac­tur­ers in terms of for­eign cur­rency, who then un­scrupu­lously go on to in­crease prices or give the im­pres­sion that they are not sup­ported,” he said.

Min­is­ter Ndlovu, how­ever, ac­knowl­edged that al­though the for­eign cur­rency al­lo­cated to man­u­fac­tur­ers was in­ad­e­quate due to the pre­vail­ing liq­uid­ity chal­lenges in the coun­try there was no rea­son for them to ef­fect wan­ton price in­creases. There has been a wave of price in­creases es­pe­cially of ba­sic com­modi­ties over the last three months with most man­u­fac­tur­ers push­ing the blame on whole­salers and re­tail­ers. Min­is­ter Ndlovu said the Gov­ern­ment would put in place mea­sures to curb the price mad­ness as it was tan­ta­mount to ex­ploita­tion of con­sumers.

“We are dis­cour­ag­ing busi­nesses from wan­ton price in­creases and we are aware of the un­scrupu­lous ac­tiv­i­ties they are em­ploy­ing with a lot of them try­ing to beat the sys­tem. We are work­ing around is­sues so that we come up with a proper sys­tem of curb­ing that. We know that there are busi­nesses that are in­creas­ing prices even when they are get­ting al­lo­ca­tions. We are work­ing on some­thing and Gov­ern­ment will not tol­er­ate that kind of ex­ploita­tion of the peo­ple,” he said.

Con­tacted for a com­ment Con­fed­er­a­tion of Zim­babwe In­dus­try (CZI) Bu­l­awayo chap­ter pres­i­dent Mr Joseph Gunda said the coun­try’s apex or­gan­i­sa­tion for in­dus­try was un­aware of the man­u­fac­tur­ers that were in­creas­ing prices of their prod­ucts de­spite be­ing al­lo­cated for­eign cur­rency by the Cen­tral Bank but said it was un­couth for them to do so.

“Cer­tainly it won’t be a good prac­tice if one has been al­lo­cated forex from RBZ at a ra­tio of one is one (1:1) with the bond note and then you ad­just prices,” he said.

Mr Gunda how­ever, said RBZ has lately been fac­ing chal­lenges to al­lo­cate play­ers in the man­u­fac­tur­ing sec­tor with suf­fi­cient for­eign cur­rency ow­ing to its de­pleted cof­fers.

“The only chal­lenge that we have had of late is that the al­lo­ca­tion from RBZ has been dry­ing up. So man­u­fac­tur­ers have been faced with a chal­lenge of say­ing should they close or source the forex from other sources out­side RBZ and when they do that they can’t ab­sorb the price but pass it onto the cus­tomers, that’s the only rea­son man­u­fac­tur­ers will in­crease their prices be­cause they would not have ob­tained the forex at 1:1 but if they would have ob­tained it at 1:1 at RBZ I don’t see the ra­tio­nale of in­creas­ing prices,” he said.

Mr Gunda said the min­istry should make con­certed ef­forts to en­sure play­ers in the man­u­fac­tur­ing sec­tor were al­lo­cated ad­e­quate for­eign cur­rency at the op­por­tune time.

“The most im­por­tant thing that the min­is­ter should do is to fight for our case or course at RBZ, for al­lo­ca­tion of forex to man­u­fac­tur­ers. If that doesn’t hap­pen you will find us fight­ing against those peo­ple that are rais­ing prices be­cause they can’t ab­sorb the cost they se­cure the forex out­side RBZ,” he said.

In his pre­sen­ta­tion of the 2019 Na­tional Bud­get State­ment re­cently Fi­nance and Eco­nomic Devel­op­ment Min­is­ter Pro­fes­sor Mthuli Ncube said there would be grad­ual move­ment to­wards a more ef­fi­cient and op­ti­mal for­eign cur­rency al­lo­ca­tion sys­tem.

“In the in­terim, steps are be­ing taken to es­tab­lish a For­eign Cur­rency Al­lo­ca­tion Com­mit­tee to pro­mote ef­fi­cient man­age­ment of our for­eign cur­rency in­flows,” he said.

Mr Gunda said the For­eign Cur­rency Al­lo­ca­tion Com­mit­tee should have rep­re­sen­ta­tives from the man­u­fac­tur­ing sec­tor so as to en­sure ef­fi­ciency and trans­parency in the dis­tri­bu­tion of the

funds.

Min­is­terMan­gal­iso Ndlovu

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