Commodity prices shoot as duty stays

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Prices of foodstuffs and other commodities shot up this week, presumably following indications by Finance minister Tendai Biti that duty on imported goods might not be reviewed soon.

The recent price hikes have reportedly added misery to the already burdened consumers.

While consumers hope that duty on imported foodstuff and other goods will be reviewed, Biti last week painted a gloomy picture of any possibility of a review on duty imposed on these products during the 2011 Budget.

“We have a problem with the issue of tariffs and duty because on the one hand there is the textile industry which is saying increase duty because imports are killing our industry and we have another constituency saying do not increase duty,” said Biti.

“Farmers are also saying increase duty on every food product brought here in processed form and the issue of protectionism does not work anywhere in the world.”

Biti said there was a problem because a minority of the business community had no respect for prices and still think they can do what they used to do before dollarisation where they were making obscene profits.
“One thing we do not want to do is to put price controls,” the minister said.
“We want to create a fair business environment and we will carefully consider the issue of tariffs by ensuring that our people do not go hungry and it might mean if the local chicken industry cannot supply Zimbabwe, we will allow chickens to come in without duty,” he said.
He said whatever the government decided to do should ensure the result did not cause inflation.
Biti said the government had set aside
$7 million for demonitisation, but faced challenges on how to deal with demonitisation so that it was meaningful.
“We require $54 million to demonitise and this economy does not have that kind of money. We should also come up with formulas to do that and Cabinet favours that we have a cut-off point whereby for example, if you have a quintillion and above that, we assume you were burning money and we do not pay above that. If we give someone $1 or 10c during the demonitisation, then it is not a meaningful exercise,” he said.