Published by the government of Zimbabwe
Knowledge Mazvarira
5 August 2008
Harare — RETAILERS yesterday blamed the current price increases to cash shortages, as suppliers are now using at least three prices for the same product.
At a meeting held between retailers, represented by the Retailers Association of Zimbabwe and the National Incomes and Pricing Commission, retailers said suppliers were charging different prices depending on the form of payment.
For goods paid in cash, prices are lower than those paid through cheques or bank transfers.
As a result of cash shortages, payments are now mostly done through cheques or RTGS, which retailers said were driving prices "unreasonably" higher.
Consumers have struggled with cash limitations, as inflation rides firmer. Until last Friday, depositors could only withdraw a maximum $100 billion (old value) from the bank. Now they can get a maximum $200 (new value). But even with increased withdrawal limits, banks are constantly running out of cash.
"You will find that a product will have three different prices -- the cash rate, the cheque and transfer rate. With the current cash shortages, payments are mostly done through cheques or transfers and the prices are normally high, sometimes five times higher than the cash price," said one retailer.
Retailers Association of Zimbabwe president Mr Willard Zireva blamed lack of key economic data such as inflation saying manufacturers were charging prices basing on their own calculated figures.
"Some supplies are anticipating between 10 percent and 15 percent daily increase in inflation," confessed a manufacturer who cannot be named.
"For payments done through the RTGS, the supplier then takes account of their own inflation figures to come up with the final price and also takes into account an estimated number of days it takes," he added.
The Central Statistical Office reported annual inflation leapt to 2,2 million percent at the end of June. Official inflation was last released in February. CSO says the shortage of goods used in the inflation basket had remained scarce on the official market, hence the delays.
Yesterday, NIPC chairman Mr Godwills Masimirembwa said the commission would engage suppliers to ensure prices stabilised.
"We will engage suppliers soon so that we establish every cost driving in the chain value," said Mr Masimirembwa.
"We want to work together to maintain the stability of our revalued currency as it is every one's obligation to stop price increases everyday.
President Mugabe last week warned businesses over rapid price increases, and threatened emergency laws to curb the practice. He said the "hourly" price increases had caused immense suffering amongst the ordinary citizenry.
"Something must be wrong, have we turned into extortionist, self-centered people, no matter how much we impoverish the people. We must make a new beginning," said President Mugabe. He was speaking at the central bank's monetary policy presentation in Harare last week.
"Do not drive us further through this indiscipline like what you have done in the past. If you continue driving us we will impose further measures.
"We have the power to invoke further measures but we do not want to use the emergency rules. Emergency measures can be taken but we do not want that yet. We can do that to deter unjustified price increases. Please take care!" he said.
Of late, prices of goods and services have been going up on a daily basis with wider margins, thereby making most workers' salaries and incomes useless.
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