Govt to address pricing madness

GOVERNMENT is working on mechanisms for the National Competitiveness Commission (NCC) to work with industry on a framework for pricing of goods, standards and service delivery. This was said by Industry and Commerce Deputy Minister Raj Modi in his key-note address during the 4th retailers and wholesalers’ Indaba 2019 in Harare yesterday, organised by the Confederation of Zimbabwe Retailers (CZR).

Deputy Minister Modi’s remarks come at a time prices of goods and services have risen by between 25 percent and 75 percent in recent months, eating into the pockets of consumers.

But the NCC, which was set up in 2017 to examine cost drivers to improve business competitiveness using the value chain approach, has largely been invisible in all this pricing madness. Deputy Minister Modi said the NCC was understaffed while its chairperson Mr Kumbirai Katsande, was reportedly running the show on his own, a move that curtails his chances of attending to all pertinent issues affecting the market.

Deputy Minister Modi said the NCC was currently doing “the best they can under the current circumstances”, as the organisation still does not have a CEO and other critical staff.

However, Government says the NCC has been playing a critical role in addressing issues around bread prices. Deputy Minister Modi wants the NCC to be resourced so that it carries out its mandate, in conjunction with industry.

“I hope that industry players in all sectors of the economy will work closely with the commission,” said Deputy Minister Modi.

“My ministry is also looking at how the NCC can, together with suppliers, wholesalers and retailers, engage to come up with best practices on pertinent issues of pricing, standards and service delivery.

“There is need to agree on how our products can be priced using reasonable mark-ups especially between wholesalers and retailers as your role is critical to consumers.”

Currently, there are concerns that both retailers and wholesalers are charging high profit margins on products, of between 10 percent and 50 percent, which is seen as unethical.

Reserve Bank of Zimbabwe (RBZ) deputy director for Economic Research Division Dr Nebson Mupunga yesterday implored wholesalers and retailers to desist from speculative tendencies, and adopt acceptable profit margins.

Government says it is “fully” cognisant of the challenges facing retailers and wholesalers, which include lack of regulation of the informal sector, smuggling of goods, price distortions, vending, and demands for wage and salary adjustments by employees.

Nonetheless, Deputy Minister Modi said through working together, some of the challenges would be overcome.

“The engagement between Government and private sector to improve the doing business environment is an ongoing process and this should help in alleviating some of the challenges. . . ” he said.

Deputy Minister Modi added that both Government and the private sector were critical in stabilising the economy.

On its part, Government says it is committed to creating a conducive operating environment for businesses to thrive. Already, the Ministry of Industry has developed the Zimbabwe National Industrial Development Policy (2019-2023), the National Trade Policy (2019-2013) and the National Export Strategy (2019-2023).

The policies have been crafted to diversify and strengthen the domestic manufacturing sector and ensure the crystallisation of the economic reform agenda, with particular emphasis on industry and commerce.

The private sector, especially through representative bodies such as the Confederation of Zimbabwe Industries (CZI) and the Zimbabwe National Chamber of Commerce (ZNCC), have contributed to the establishment of the policies.