Be Realistic – Business Tells ED, Scoffs At President’s “Inhumane” Comments

Government needs to be realistic about the economic situation in the country, captains of industry have said.

They were reacting to statements made by President Emmerson Mnangagwa in his keynote speech at celebrations to mark the country 39th Independence anniversary.

An angry Mnangagwa described recent price increases of basic commodities as “inhumane and unpatriotic.”

In an interview with Business, Confederation of Zimbabwe Industries (CZI), president Sifelani Jabangwe said it was unfair to blame business arguing there are external factors like the recent policy announcements pushing prices upwards.

“What just needs to be understood is that prices are a reflection of deeper market structures and our country’s terrain was relatively stable until the time government began to make new pronouncements.

“This can be testified by the fact that from January to September 2018 business managed to maintain consistency in pricing up until October 2018, when a new monetary policy which separated RTGS dollar bank accounts from Foreign Currency Accounts was announced,” Jabangwe said.

“The move led to panic in the market, as people could not come to terms with the fact that they had initially been told that the RTGS and bond note have an equal value, while speculation was rife that the local mediums could be scrapped.”

The CZI boss, said that a similar situation occurred when government introduced the two percent tax which had a ripple effect on prices as business was forced to push down the extra costs to the consumer.

Jabangwe noted that when government announced fuel price hikes by over 150 percent, the market reacted by passing down the extra costs to consumers.

“More recently the Interbank Foreign Exchange market, effected by yet another Monetary Policy Statement, has had the effects of raising hopes that are yet to be met in as far as availing foreign currency to the Industry at reasonable rates is concerned,” he added.

Confederation of Zimbabwe Retailers President, Denford Mutashu described claims that business is selfishly increasing prices as “fallacious” nchored in dinialism.

“It’s fallacious and it comes from those who choose to ignore the reality. As retailers we are just price takers.

“The bulk of retailers have maintained their markups until recently when there was an increase in producer prices of wheat and grain which meant that input costs had to adjust along the value chain,” he said.

Mutashu said that when the price of sugar goes up, it naturally affects various manufacturers who use it as raw material.

Business leader and Zimbabwe National Chamber of Commerce past president, Devine Ndlukhula urged government to exhibit full commitment and work on policy mechanisms.

“The bulk of current problems are centered on currency issues and it appears as if when the Central Bank floated the exchange rates, the process was done half- heartedly because as I am speaking we cannot access foreign currency through the Interbank Foreign Currency exchange market.

“So as a result, business is forced to get foreign currency on the black market where one US$ is being exchanged against the RTGS dollar at the rate of 1:5. The temptation to pass down the extra cost to the consumer remains high,” she said.

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