Government has warned it will consider revoking the operating licences of businesses found guilty of unilateral and unjustified price increases, after Cabinet recently endorsed a raft of measures to stabilise prices and resolve production and supply bottlenecks of 15 essential products. Industry and Commerce Minister Mike Bimha, said Cabinet on October 2, 2017 resolved to set up a special taskforce on price stabilisation and supply of essential commodities following price hikes and supply bottlenecks experienced from September 22-24, 2017 to resolve challenges in the short, medium and long term.
Dr Bimha said businesses, retailers, wholesalers and manufacturers were a creation of some licensing process and Government would consider revoking the licences for delinquent entities found on the wrong side of the law. He said the Competition and Tariff Commission had also been instructed to lookout for collusive and anti-competitive behaviour in basic goods.
“When companies operate, they operate on the basis of licensing and permits, which Government has a leeway to withdraw if a company is not behaving as required. However, we do not want to come up with measures that punish everybody and yet they are probably few, its better for us to be able to identify the culprits and deal with them,” Minister Bimha said. Government has since identified 15 essential products, which are key and of interest to consumers, for which it will ensure prioritisation in the allocation of foreign currency to import key raw materials for their production.
The commodities include cooking oil, sugar, laundry soap, cement, fuel, flour, rice fuel, milk, eggs, salt, beef, chicken, washing powder, bread mealie meal. Dr Bimha said the Reserve Bank had given assurances it would ensure producers of key commodities access hard currency for raw materials under facilities secured from the African Export and Import Bank and other lenders.
“I was made to believe that he (Reserve Bank of Zimbabwe Governor John Mangudya) has made some arrangements with the Afreximbank and other banks, which is more focused on production of essential commodities,” he said.
“The RBZ is being assisted by other institutions to supply forex especially to cooking oil producers. We will have enough supplies during the festive season and beyond.” Government will also accelerate production of key raw materials such as soya beans and Government’s Command programme and Presidential Input Scheme. Minister Bimha said the terms of reference of the inter-ministerial taskforce included critically reviewing products covered by Statutory Instrument 64 of 2016, with a view to interrogate any existence of supply bottlenecks and the reasons for basic commodity shortages and price increases in September.
It was also mandated to come up with short, medium and long-term policy interventions on production hiccups for key value chains, sectorally, and to identify value chains where local firms have advantages and should participate in joint venture arrangements with foreigners without affecting quality. The Cabinet task-force was also assigned “to come up with policy measures to enhance the performance of all exporting companies, regardless of their ownership, to boost foreign currency earnings, tax revenue and employment jobs.
Further, it would devise measures to boost access to and enhance currency trading on formal markets, interrogate and reinforce effectiveness of current strategies to improve public confidence in the banking system as well as suggest measures to plug leakage of precious minerals, deal with market indiscipline and improve acquittal of foreign currency export receipts. The task-force established that the price increases and supply challenges on some essential commodities emanated from unsubstantiated social media messages, which insinuated that there would be shortage and increase of prices. Ahead of the forthcoming season, Government will allow the importation of essential products where necessary to fill the gap of key products.
Manufacturers of the 15 identified essential products are expected to publish the recommended prices of their products every two weeks with cooking oil manufacturers having already started the prices for consumer awareness.
ZimStat will publish their price monitoring surveys by the 15th of every month and are expected to conduct public awareness programme on key commodities. Minister Bimha said the Ministry of Industry and Commerce will intensify its co-ordination on price monitoring and surveillance with the National Competitiveness Commission and the Consumer Council of Zimbabwe. To increase foreign currency generation, ZimTrade will intensify its export programmes in tandem with local manufacturers so that they play their role in foreign currency generation while manufacturers are expected to be outward looking and aggressive in marketing their products and services beyond Zimbabwe.