THE National Incomes and Pricing Commission (NIPC) has ordered business to revert to September 26 prices or risk being fined or having their licences revoked.
NIPC chairman Godwills Masimirembwa told businessdigest yesterday that they had ordered all businesses which had not been given the green light to hike prizes to abandon the increases.
“A clampdown has started on all shops that are charging prices that had not been approved by the NIPC,” Masimirembwa said.
“Another serious issue that could see many shops being fined or risk having their licences revoked is having multiple prices,” he said.
Masimirembwa said a recent survey by NIPC revealed that most shops were charging cash prices that were lower than they had approved, while charging “unjustified” prices for cheque or Real Time Gross Settlement (RTG) payments.
Some shops yesterday were said to be “temporarily closed” following a tip-off that NIPC officers and police details would be “visiting” their shops.
“Shops are taking advantage of the current cash shortages to charge cash prices that are below what we would have approved. They will in turn charge unrealistic prices when one pays by cheque or transfer,” Masimirembwa said.
Masimirembwa said some shops were increasing their prices in response to the Reserve Bank’s maximum daily withdrawal limits and introduction of higher bank denominations.
Individuals can now withdraw $20 000 up from $1 000, while withdrawals for companies are up from a mere $1 000 to $10 000. The RBZ also introduced a new $10 000 and $20 000 which do not have properly crafted security features.
The cash review by the central bank came against a background of salary increments for the civil service and increased volumes of foreign currency trades on the Real Time Gross Settlement system.
However, the new daily limits have been overwhelmed by sharp increases of prices of basic goods and services that are currently being charged using a dual pricing system – the cash rate and the point-of-sale rate (commonly referred to as the swipe rate.) This week’s rampant price increases are also largely speculative following reports of a political deadlock on the formation of a new inclusive government.
Bankers Association president John Mangudya yesterday told businessdigest that no amount of daily limits under the prevailing macro-economic environment would meet daily cash demands unless capacity utilisation by local manufacturers is resuscitated. Statistics show that industry is currently operating below 30% of capacity although there is hope for increased productivity resulting from the licensing of foreign currency retailers and wholesalers by the central bank.
“The only problem the country’s is facing is failure to increase production,” Mangudya said.
“No amount of limit could be sufficient under the prevailing conditions . . . queues at banks are a result of high inflation. The propensity to save is diminished under prevailing conditions hence people often visit banks to withdraw cash.”
A bank in central Harare this week used comical means to control a big crowd desperate to withdraw their cash. They instructed soldiers to mark everyone on the cheek. Anti-riot police could also be seen keeping watch on the long winding queues in anticipation of chaos.
Gono speaking at an agricultural show in Masvingo said: “I will not stop printing money. It is for infrastructural development until sanctions are removed.”
Meanwhile the public has expressed concern over the security features on the new $20 000 note amid reports of counterfeits in circulation. A depositor was this week arrested and later released on suspicion of possessing fake notes. The bill, unlike other notes in circulation, is made of poor quality paper and also lacks conventional security features such as the watermark.
By Paul Nyakazeya/Bernard Mpofu