(HERALD) Mixed reactions arise over new ministerial taskforce
Mixed reactions arise over new ministerial taskforceBy Enacy Mapakame and John Kachembere
THE newly appointed ministerial taskforce on price stabilisation has received mixed reactions from the public with some applauding the move while others say it is a duplication of duties with the National Incomes and Pricing Commission.
The taskforce, chaired by the Minister of Industry and International Trade, Mr Obert Mpofu, was expected to come up with measures to enforce the relevant by-laws, which govern the sale of goods in designated areas and ensure that violators are brought to book.
It would also engage manufacturers, wholesalers and retailers, transporters, real estate agencies and local authorities on the need to restrain speculative price hikes in the spirit of the recently signed Incomes and Pricing Stabilisation Protocol.
In a snap survey carried by the Herald Business, people voiced concern over price increases saying they were eroding their disposable income and causing wanton suffering.
In line with the escalating prices, said some analysts, it was essential for Government to come up with stern measures to curb such problems thus the newly appointed taskforce was a welcome move.
An economic analyst with the Zimbabwe Allied Banking Group who preferred anonymity described the setting up of the task force as a welcome development saying it showed Government’s concern about the plight of Zimbabweans.
"The objectives and the aspirations of the task force to stabilise prices are quite conscientious.
"Prices cannot keep on escalating, something has to be done to put an end to all this madness and Government has done the right thing," he said.
He, however, called upon the task force to widely consult with all stakeholders and scrutinise a number of factors crucial to the stabilisation of prices.
"The task force should acknowledge the existence of a parallel market exchange rate as this has far greater impact on manufacturers and importers resulting in price increases.
"Unless the exchange rate issue is solved then the concerted efforts of the task force will hit a brick wall," he said.
In executing its duties, the taskforce was expected to ensure a transparent and objective pricing mechanism throughout the supply chain, through the application of scientific pricing models on all controlled and monitored goods and services.
"I think it is a noble idea that Government came up with a taskforce to caution against price increases, the parallel market and illegal foreign currency dealers among others.
"These have fuelled inflation, especially the parallel market, it is causing a lot of artificial shortages of basic goods and commodities in local shops yet you can find the same commodities on the parallel market at very exorbitant prices," said Ms Hope Makuyana.
The black market was seen by many as a critical problem. There was widespread diversion of essential goods into this market.
Some, however, said the appointment of a taskforce was a non-event with fears of duplication of functions with the National Incomes and Pricing Commission.
They argued that the only solution to curb unjustified price increases and inflation was to increase production, export more goods and earn the much-needed foreign currency.
"Prices will stabilise if production increases. Over the past few years the country’s production capacity has declined causing all these problems.
"There is no foreign currency and suppliers cannot reduce prices of their goods if they get the foreign currency from the parallel market at an inflated rate.
"Only production is the critical factor," said one vendor who preferred anonymity.
Government, business and labour recently signed protocols that could, over time, stabilise the prices of goods and services and should ensure that incomes match prices.
The protocol does not demand a wage and price freeze, but does demand that prices should be arrived at with the use of proper formulas, that the minimum wage should be based on the Poverty Datum Line and that wage increases should march in line with price increases.
Labels: INFLATION, THE HERALD, ZIMBABWE
posted by MrK @ 6:28 PM
1 Comments:
"Only production is the critical factor," said one vendor who preferred anonymity.
I seriously doubt that production is the key factor in the absence of foreign currency.
Read the "Zimbabwe Democracy and Economic Recovery Act of 2001", and there is a whole host of international lending institutions that are forbidden to lend money to Zimbabwe.
Somehow, no one is addressing that point.
The whole of inflation of the Zimbabwe currency can be reduced to the absence of foreign currency, and I think falling production is simply a symptom not the root cause, which are IMF/WB/US sanctions.
Zimbabwe can do several things to make it less dependent on foreign currency, but those take time.
Shifting to biofuel from fossile fuel would be a big start. Reducing the size of central government to expand local government would be generally a good idea. Trading regionally instead of depending on far away EU or US markets is another.
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