‘Pricing structures need adjustment’

‘Pricing structures need adjustment’ Barclays managing director Mr George Guvamatanga
Barclays  managing director Mr George Guvamatanga

Barclays managing director Mr George Guvamatanga

Conrad Mwanawashe – Business Reporter

ZIMBABWE should realign pricing structures in line with economic developments locally and internationally, a senior banker has said. Barclays Bank Zimbabwe (BBZ) managing director Mr George Guvamatanga said pricing structures in Zimbabwe need to be readjusted to speak to developments on the ground.Zimbabwe’s pricing models, particularly of enablers, have been a key component in contributing to the unfriendly business environment particularly because the country uses a much stronger currency than its neighbouring competitors.

Despite the fall in international fuel prices and the weakening of the South African rand, Zimbabwe’s major trading partner, local prices have remained above regional levels.

Mr Guvamatanga said Barclays witnessed a three percent growth in its cost line last year, partly as a result of the local pricing structures. Hence the bank is expecting its service providers and suppliers to realign their prices.

“The three percent increase in the cost line is not in line with our own internal target. Our internal target was a flat cost line between 2014 and 2015. The same target is that there should not be any increase in the cost line. If anything we should have a reduction.

“But for that to happen we all have to realign as Zimbabweans because if the cost of fuel is coming down, if the rand has depreciated by 40 percent and you are my supplier getting product from South Africa, I do not understand why your product still costs the same today.

“So I think there is need for realignment, a readjustment of the economy outside just realignment for us as Barclays because the cost structures still do not speak into the reality on the ground,” said Mr Guvamatanga.

Imports from South Africa, where prices are lower due to the depreciation of the rand, have had a negative effect on local manufacturers.

“For me the very interesting one is around food. Every time I watch television there are adverts which say you can buy two large pizzas for R59,99 in South Africa and I do the mathematics and say two large pizzas for less than $4 and I imagine what we pay here.

“I see an advert for Wimpy saying that you can get a very good breakfast for R29,99 and I work it out and it’s less than $2 and I imagine what we pay for breakfast here,” said Mr Guvamatanga.

“It simply says to me we have to push harder as an economy to realign our pricing. But as a bank we are having an expectation from all our suppliers that pricing needs to be realigned to speak to what is happening in this economy.

That would assist us to reduce the cost to serve and reduce the cost of banking to our customers,” he said.

Government is in the process of reviewing the doing business environment to make the country attractive for local and international investors.

In that regard, Government is in the process of amending the National Incomes and Pricing Commission Act to pave way for the creation of the National Competitiveness Commission Act which will lead to the formation of the National Competitiveness Commission.

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