Price madness: A hidden political mission?

Harare (New Ziana) – The old, and wise, always advise adults against joining children in whatever game they would be playing in muddy fields, to demonstrate how good they were at the sport in their prime years.

This is centred on fears the adult could be tripped or dribbled to the ground by the agile children and then, in anger, unjustly beat them for not observing hierarchical protocols.

Unjustly because a children’s game in the mud, in almost all cases, would be played in strict accordance of their rules – of zero rules.

For years now, the business sector – particularly manufacturers and retailers – has subtly dubbed in opposition politics, especially on the eve of elections.

This has taken two main forms, withdrawal of products to create artificial shortages, and hiking prices of the limited available supplies to influence voting in upcoming elections.

Often the products are consumer goods in daily demand across the societal board, and the effect is most keenly felt by the common man in the street.

The intention is always to force the man in the street, constituting the biggest voting block, to vote with the stomach, not the head as should be the case.

To deflect attention and suspicion, the business sector would always cite a host of purported fiscal and monetary indiscretion by government, commonly failure to arrest inflation, stabilise volatile exchange rates, and to provide enough forex for key imports.

Wee are in that circle again, and as sure as the sun will rise in the east the next morning, the business sector is at it yet again.

Prices for essential commodities, primarily food, have spiked through the roof, and some supplies are becoming scarcer in the market, as the August polls draw close.

As usual, the business sector is singing the same song – lack of forex, rising inflation and exchange rate instability.

According to the Consumer Council of Zimbabwe (CCZ), prices of basic goods have shot up sharply since January, ‘coincidentally’ at the time the election season began.

This has only escalated since. Last month alone, according to the consumer watchdog, the price of the staple maize meal went up by 30 percent, that of sugar by 66.94 percent, fresh milk by 61 percent, that of cooking oil by 43.9 percent, bread by 45.9 percent and rice by 51.9 percent.

In tandem, charges for other human necessities such as accommodation, transport and school fees have also shot up considerably, squeezing the man in the street to the brink.

Reflecting the views of wider society, the CCZ believes the price hikes are a result of speculative and forward pricing by the business sector, both unwarranted and damaging to the economy in the long run as it constricts demand.

Rosemary Mpofu, CCZ executive director: “We see a lot of speculative pricing and forward pricing by industry, and this is not good for consumers, nor the economy. It is simply not sustainable.”

Concurs the Confederation of Zimbabwe Retailers: “The Confederation of Zimbabwe Retailers notes with sadness the rampant speculative and forward pricing taking centre stage on the local market which has massively eroded consumer purchasing power.”

“It has also been noted that some sector players and related economic agents are withdrawing POS (Point of Sale) machines from customers that wish to pay in ZWL and this smacks (of) economic sabotage and the consequences are likely going to be severe if law enforcement pounces on anyone found wanting,” it added.

Even more worrying are indications the peak in the price hikes, if unchecked, is yet to be reached. This, according to observers, would come around the actual polling time.

Naturally, the situation could not go on without drawing a reaction from the government, as would happen anywhere in the world.

But careful not to destabilise the economy and create an even worse problem, government reaction to the ‘pricing crisis’ – more accurately election meddling by business – was modest and measured.

It temporarily allowed duty-free importation last month of a selected range of products, mostly essential consumer goods, by anyone with free funds.

The move is intended to offer competition, in pricing terms, to the local business sector – manufacturer and retailer alike – for the benefit of the long devilishly exploited man in the street.

Though government indicated the move was temporary, it enlisted immediate howls of protests from business, which armed itself with several sets of permutations of how the move would damage the economy, in efforts to convince authorities to reverse course.

Among its arguments is increased outflows of foreign currency from the country, and externalisation of jobs at the expense of the local economy.

Apparently, to the business sector, only counter moves to its trading misbehaviour, damage the economy.

But the government is unswayed by the business sector’s cries, and is pressing ahead with the temporary duty-free import waiver for basic goods, along the way dropping hints the basket of commodities covered might be widened in the interest of the public.
In its view, given the timing and ferocity, the government – as many observers do – sees political undertones to the pricing madness, linked to opposition politics.

It says an investigation it carried out into the matter recently revealed trading malpractices that go beyond frequent price hikes in the local formal retail sector.

These included, among other things, artificial commodity shortages, and forcing shoppers to buy unneeded things in lieu of US dollar change.

Information, Publicity and Broadcasting Services Minister, Monica Mutsvangwa: “From the survey undertaken, most basic commodities are generally available both in formal and informal retail shops, although there are artificial shortages observed of some locally produced goods, especially in formal retail shops.”

“From the investigation, prices in (the) formal retail sector are relatively high in both US (dollar) and ZWL (dollar) terms when compared to the informal retail sector and are thus indicative of speculative and forward pricing. Consumers are being forced to buy goods that they don’t need in formal retail outlets when they pay using USD so that they may offset the change balance. This is because the retail outlets are refusing to mix USD and ZWL transactions,” she added.

The government and the public expect prices of targeted basic goods to start dropping as soon as the cheaper duty-free commodities start flooding the domestic market, much to the pain of the local business sector.
A bitter lesson for business that political fields can be muddy, and that there is real risk of being tripped to the ground and get messily soaked, if one unwisely steps in.
New Ziana