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Consumers feeling the pinch

5 Mins read
Price Hikes

Consumers are feeling the pinch of rocketing prices of goods and services, the Consumer Protection Commission (CPC) has  said .

CPC board chairman, Mthokozisi Nkosi, who spoke at the stakeholders’ awareness meeting held in the capital last week, said consumers were now stretched as prices shot up like a rocket over the past few weeks.

“We are living in a jungle, a time of unpredictability where the consumer is the prey of choice,” Nkosi said.

 “…(It) has really been bad for consumers in terms of price increases which is very unfortunate.” 

He added: “I know the temptation of a business person in Zimbabwe is to profiteer as much as possible but what we have tried to do is engage sectoral associations and business organisations to ensure that they restrain their member organisations, because if they hike prices beyond the reach of the very customer that they exist for it does not make any sense.

In addition to measures which the central bank has come up with we believe that moral suasion will actually do in…

We are hoping that maybe for the next couple of weeks we will see some stability in pricing because again we don’t want there to be forced drastic measures which will raise the issue of price control…

As a commission we really want to engage and we want to say if the price is to go up because of pressure coming from outside let’s do it in a manner that will leave the very customer that you operate for willing to do business with you.”

Florence Makombe, who spoke on behalf of the Minister of Industry and Commerce, Sekai Nzenza concurred with Nkosi.

“I wish to at this juncture urge the business community in Zimbabwe to advance the interests of the consumer ahead of profiteering…

Consumers have and continue to lament over escalating prices among other business mal-practices. I would therefore urge business to exercise restraint in increasing prices will-nilly. This way it is possible to achieve a win-win situation that benefits both business and the consumer.”

The ministry and the CPC are currently working on a Consumer Protection Policy and adding General Regulations to the Act in order to augment the legal framework for ensuring consumer rights.   

 Prices of basic goods are shooting over the roof.           

A survey conducted by Business Times showed that the price of economy beef has gone up to ZWL$1950 per kilogramme from ZWL$1300 a week ago.

 A 2kg packet of salt has gone up to above ZWL$450 from ZWL$175,2kg while chicken has gone up to ZWL$3475 from ZWL$2550.

A 2 litre bottle of cooking oil has gone up to ZWL$1800 from ZWL$1120.

A 2kg packet of flour is  now  selling at ZWL$889 from ZWL$650, green bar of soap now stands at ZWL$700 from ZWL$550, a 2kg  packet of rice now ZWL$780 from ZWL$630 a week ago and a 2kg packet of sugar is now priced at ZWL$921 from ZWL$685.

Multiple economists said the rising prices were inflicting pain on citizens who are struggling to make ends meet.

“The problem with Zimbabwe is that it is being hit on two fronts which are internal and external shocks hence the prices tend to go up,” economist Gift Mugano said.

“From the internal shocks, the country is battling with inflation and a parallel market exchange rate which is hovering above US$1: ZWL$450 hence with that goods prices will certainly go up.” 

The government has reviewed fuel prices to US$1.63 for petrol and US$1.71 for diesel from US$1.59 and US$1.60. 

“Goods were going up once a week but during the past week, the prices are now going up twice a week due to the role of fuel across the value chain where it has multiplier effects,” Mugano said.

“The problem of fuel price is that it is a multiplier web which has knock- on effects. The effects will hit the consumer harder.” 

Another economist and lecturer at the University of Zimbabwe, Moses Chundu said the government should rein in on businesses to help the citizens.

“The fact that we have a huge difference between the parallel market rate and the official rate and with the business pricing their products using  the parallel market rate, means the prices of goods will continue to go up,” Chundu said.

“The sad part is that some businesses are accessing the money from the auction system and their prices are not reflecting that hence the government should monitor those ones by putting stiffer penalties. When it continues to be like that it’s better to abandon the auction.”

He added: “The government should come up with statutory instruments that guide these businesses from too much hiking of prices.”

The wanton rising of prices has caused restive citizens to live on margins.

Zimbabwe Congress of Trade Unions (ZCTU) president Florence Taruvinga said workers have always been very clear about what they want.

“Workers in Zimbabwe are demanding salaries above the poverty datum line. That can only be understood in the context of the dollarised salaries. The economy has dollarised, prices of goods and commodities are now charged in US$. It is therefore imperative that workers must likewise be paid in the currency that is being recognised in the country,” Taruvinga said.

Civil servants want the government to restore the average salary for civil servants to US$540 a month.

“It is our considered view that dollarisation can restore the wages and salaries of workers to that which prevailed in   October 2018,” Taruvinga said.

“The position of ZCTU is clear and has been indicated officially at the TNF.  As ZCTU we are aware of the high levels of suffering and agitation of the workers and general populace with the prevailing situation.” 

She added: “We have given our government and employers the chance to resolve the current impasses at TNF and various respective National Employment Councils.  We trust that social partners of TNF will understand that as long as the issues of salaries remains unresolved, we are sitting on a time bomb whose time is fast approaching.”

The cost of living, as measured by the Consumer Council of Zimbabwe’s (CCZ), for a family of six increased to ZWL98 279.13  by end of April 2022 from the end of March  figure of  ZWL$92 192.89, showing an increase of ZWL$6086.24.

The food basket increased by ZWL$5551.99(16.77%) to ZWL$38644.51 by end-April 2022 from ZWL$33092.52 by end of March 2022.

The price of detergents increased by ZWL$534.25, a percentage of 21.68% to ZWL$2998.12 from ZWL$2463.87.

“All products on the basket except for items like rice and flour among others have increased; the most notable ones are onions by 27.31%, cooking oil 49.61% and meat by 29.49%. Most of the increases follow the parallel market rate e.g. local tuck shops are now demanding payment in US$ s which is now at ZWL$360 for US$1.

“The Russia and Ukraine conflict continues to have spillover effects on international markets as well as domestic prices as prices of cooking oil and fuel continue to increase at an alarming rate. The parallel exchange rate rose from to ZWL$360 (end of April) ZWL$300 (beginning of April), most retailers are following this exchange rate which has seen products rising on a daily basis,” CCZ said.

“CCZ continues to encourage consumers to buy wisely, through formal channels, where they can get recourse in the event of violation of their rights on the market place.”  

Consumers must shop around and compare prices before they settle to buy, according to CCZ.

“Consumers should also exercise their right to information by carefully examining if the products they are purchasing are well labelled, packaged and provided with vital information which includes manufacturing dates, expiry dates, ingredients used in the make-up of the products and physical address of the manufacturer,” CCZ said.

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