The government has admitted that the price control exercise on price increases imposed by retailers during the COVID-19 crisis has failed as prices of basic commodities continue shooting through the roof.
Industry and Commerce Minister Sekai Nzenza admitted that the moratorium on price increases agreed on by the government and businesses during the COVID-10 crisis had not worked.
Prices of basic commodities are now beyond the reach of many, with a 10kg bag of mealie-meal, which is supposed to sell at a subsidized price of $70, now costing around $170 at most retail outlets. This is despite government, through Vice-President Kembo Mohadi, trying to freeze prices of basic goods at levels obtaining on March 25, a few days before the country was placed on COV-ID-19 lockdown.
“This agreement with VP Mohadi was done in good faith and based on moral suasion, but what we have noted is that the moratorium on the increase in prices has not worked and I want to admit that it is partly because of the cost of production, lack of foreign currency to bring raw materials needed for production and some of the borders have closed and prices have remained high,” Nzenza said.
“Another point is to do with behavior and monetary practices, where retailers and manufacturers have not been sympathetic to consumers and we are witnessing rent-seeking behavior which is affecting inflating and parallel market rates which change on a daily basis and is difficult to control.”
As a result, Nzenza said President Emmerson Mnangagwa had an urgent meeting with Finance minister Mthuli Ncube and Reserve Bank of Zimbabwe governor John Mangudya to address the issue, adding that positive announcements would be made soon. On the price of a subsidized roller meal, Nzenza told Parliament that it was either being smuggled outside the country or sold at tuckshops at exorbitant prices, leading to shortages.
“We will now ensure that each subsidized bag of roller meal is marked ‘government of Zimbabwe subsidized roller meal to curb abuse. My ministry will be working with the millers to ensure that our verification process is done on time.”
She said millers get the maize from the Grain Marketing Board and mill it and then take it to retailers, and they go back for verification to ensure that the government pays the subsidy.