THE Competition and Tariff Commission is investigating collusion by manufacturers and businesses on pricing and will soon be backed by new legislation, while existing laws allowing consumers to pay in local currency will be enforced.
These are among the measures the Government is taking, which include the Ministry of Industry and Commerce conducting an enforcement blitz on the quality and measurements of basic commodities and issuing appropriate fines.
Speaking after a Cabinet meeting last night, Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa said Cabinet received a report from the committee investigating price hikes of essential goods and services, which was presented by Industry and Commerce Minister Sekai Nzenza.
She said the Consumer Protection Commission is creating a hotline that will receive and respond to complaints from consumers to mitigate against unfair trading practices in the market.
“Government is increasing the enforcement against the collusion on pricing by the Competition and Tariff Commission so that they quickly address the unfair business practices which have become rampant in the economy.
“The Ministry will expedite the amendment of the Competition and Tariff Act and the drafting of the Consumer Protection Regulations in order to come up with enforcement mechanisms to address the unfair business practices in the economy,” Minister Mutsvangwa said.
The Ministry of Industry and Commerce is preparing to conduct an evidence based research within seven days in collaboration with key stakeholders, including the National Competitiveness Commission, Competition and Tariff Commission and the Consumer Protection Commission among others, with the ultimate goal being to ensure that consumers continue to access basic commodities at affordable prices.
Minister Mutsvangwa said import duty on 14 basic commodities will remain suspended for six months in order to ensure their availability at competitive prices.
GMB subsidiary, Silo Food Industries, would be producing and selling mealie-meal at affordable prices in Grain Marketing Board shops across the country, ensuring supplies meet and exceed demand within the formal sector.
The Reserve Bank of Zimbabwe Foreign Currency Auction System was being reviewed, while ICT systems will be deployed to promote more usage of swipe cards in the economy.
Minister Mutsvangwa said the Government would continue promoting local industry, quality, standards, and competitiveness, while endeavouring to protect consumers from unfair trade practices.
“In this regard, the manufacturing sector has shown a positive trajectory with capacity utilisation currently at 66 percent, from 36 percent before Covid-19 and shelf occupancy at 80 percent, from 47 percent before Covid-19.
“From the survey undertaken, most basic commodities are generally available both in formal and informal retail shops, although there are artificial shortages observed of some locally produced goods especially in formal retail shops,” she said.
Minister Mutsvangwa said from the investigation, prices in the formal retail sector are relatively high in both United States dollar and Zimbabwe dollar terms when compared to the informal retail sector and were thus indicative of speculative and forward pricing.
This refers to the practice of trying to fix a price in local currency in a few weeks time, often by using the speculative guess of the black market rate then from that price, today’s official rate is used to calculate the US dollar price, which will show an increase where none should exist, and then charging that price and the consequent local currency price on conversion.
Minister Mutsvangwa also noted that the shortage of low denomination US dollar notes and the absence of change had created another problem.
“Consumers are being forced to buy goods that they don’t need in formal retail outlets when they pay using US dollars so that they may offset the change balance. This is because the retail outlets are refusing to mix US dollars and Zimbabwe dollar transactions,” she said.
Minister Mutsvangwa said last week the Government announced measures to stabilise the exchange rate and the macroeconomic situation, highlighted by the scrapping of import duty on basic commodities.
She said this was done in order to enhance supply and availability of commodities at competitive prices. Local manufacturers are now in direct competition with imports and so have to price competitively, and ensure that they supply markets fairly. – The Herald
