14 March 2013

Zimbabwe: Consumers to Pay More for Maize-Meal

Consumers will now fork out almost double the amount for a bag of maize meal, in what is thought to be a response to a fuel duty hike by the government last week.

On March 11th Finance Minister Tendai Biti announced a 20 percent increase on fuel duty in a desperate bid to raise money for the upcoming elections.

Following the announcement suppliers indicated they would be passing the increase on to consumers, with the pump price for petrol already up by 6-9 cents.

In a country with 90% unemployment and where the average wage is $150, any increase, however minor, is a cause for concern as indicated by the general outcry that greeted Biti's remarks.

In what is feared to be the first of expected increases, most Harare shops had by Friday hiked the price of a 10kg bag of mealie-meal to $6,50 - $7,50 up from $4,70, the Herald reports. Grain vendors responded with a $2 increase on a bucket of maize, from $4 to $6.

However the Consumer Council of Zimbabwe (CCZ) said they did not think the price hike on maize meal had anything to do with that of fuel "as those were two sectors".

The head of the consumer body, Rosemary Siyachitema, said the country is facing a shortage of grain which she blamed on last year's poor harvest.

Siyachitema also said there had been issues with the original supplier of cheaper grain, meaning that the country had to look elsewhere for imports.

"As a result, maize had to be sourced from elsewhere, and from the Grain Marketing Board, where it is more expensive.

Siyachitema expressed concern at the lack of consultation by government prior to raising fuel duty, saying consulting would have yielded alternatives.

"A fuel price rise means the cost of transport, services and basic commodities will also go up and this is not matched by any substantive salary increase.

"I am sure by month-end we will see a spate of other increases because we import a lot of our goods. This adds more pressure on the already hard-pressed consumer," she said.

Speaking to SW Radio Africa on Wednesday, economic analyst Tony Hawkins said he felt the government's options were limited given that Zimbabweans are already over-taxed.

Hawkins added that it wasn't surprising that Biti opted for a fuel tax, as it is "a relatively inexpensive way of raising government revenue."

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