THE recent price reviews announced by the National Incomes and Prices Commission (NIPC) are not enough to encourage manufacturers to produce more commodi
ties to reduce the current shortages, a local business organisation has said.
The Harare Chamber of Commerce, a member of the Zimbabwe National Chamber of Commerce, said the profit margins approved by NIPC were out of sync with the inflation figures.
Latest figures from the Central Statistics Office show that year-on-year inflation went up to 7892,1% for September .
“NIPC has caused shortage of goods in shops,” said Oswell Binha, chairman of the Harare Chamber of Commerce.
Binha said the shortage of basic commodities is likely to persist unless prices are raised to viable levels.
“We need to have policies that go hand-in-hand with the inflation.”
“For example, the margins that were given, are they enough to kick start business and how are they going to restore productivity that has been affected by the price controls? A margin that is viable should be put in place within a given timeframe.”
Binha blamed the current shortages on government’s failure to implement sound economic policies that encourage production. He predicted that price controls will continue to have a devastating effect on the economy and the supply chain.
Binha said government was focusing on enforcement rather than consulting business before implementing policies.
“During the recent price controls, literally all state resources were deployed to enforce these policies,” said Binha.
“As an example, the monetary policy statements have declared Zimbabwe’s runaway inflation as enemy number one but there is no matching deployment of combat resources and drastic action to deal with this enemy.” He said there was nothing positive about the NIPC.
Binha said there was an urgent need to create a business environment that enabled determination of prices by supply and demand forces. On the Indigenisation and Empowerment bill, Binha said although its intentions were noble the timing was wrong.
“Why does it have to be done now when the country is on its knees?”
He said the Bill was weak because it gave the impression that it seeks distribute rather that create wealth.
“It’s more important to create wealth rather than distributing the little that is left. The Indigenisation Bill is also likely to affect activity on the stock exchange.
“It is possible that by the time it is implemented, there may not be anything on the shelves. The government needs to invest in the education of this Bill.”
Although the Bill refers to formation of an Investment Trust it’s funding and modalities still lacked clarity, Binha said.
“As an example, we have been singing the Look East tune, inviting the Chinese to invest in Zimbabwe. How will you explain this Bill to them without reinforcing the negative country perception?”