Hard-pressed consumers, who have started feeling the pinch of price increases of basic merchandise on the local market, are hoping Finance minister Tendai Biti – who is expected to present his 2012 National Budget this week – will give them breathing space.
The country’s bookkeeper has been holding Budget consultations with stakeholders throughout the country ahead of the Budget presentation.
While Biti is expected to outline a raft of measures to tame the external debt, pacify an increasingly restless and underpaid civil service, among others, ordinary people who spoke to NewsDay expressed concern at price increases and hoped a solution would be found.
Recently, prices of beef and some basic foodstuffs including cooking oil and maize meal rose marginally, with manufacturers attributing the price ascent to the recent 31% increase in electricity tariffs.
The sharp rise in the cost of living has also been blamed on the recent increase in import duty, which has seen the country’s inflation rate go up to 3,3%, an increase of 0,3% from June.
Cosmas Murisa, a civil servant, accused retailers of unjustified price increases which he said were meant to “rip off” consumers.
He said it was the trend that towards the end of every year, during which time government employees and others in the private sector, receive their 13th cheque, retailers would turn predatory.
“I think government has to intervene and do something,” he said.
“Over the past few months, retailers have also been increasing prices of basics like cooking oil and I hope when Biti presents the Budget he will look into that issue.”
But in his mid-term Budget statement in July, Biti justified the restoration of duty, saying it was meant to protect industry from cheap imports.
According to a local research firm, however, cost-push inflationary pressures are expected to persist in the fourth quarter of this year as the manufacturing sector remains fragile, with the country likely to miss its 4,5% inflation target by December.
Cost-push inflation is a type of inflation caused by substantial increases in the cost of important goods or services where no suitable alternative is available.
According to an Interfin Securities’ third quarter review of the equities market, the manufacturing sector remained fragile as the country is a net importer of most basic commodities and capital goods.
“This has also left the country exposed to exchange rate risks as currencies of its major trade partners are strengthening, especially emerging markets currencies,” reads part of the report.
Recent statistics by the Consumer Council of Zimbabwe (CCZ) show the monthly basket for a family of six increased by $527,52 from $505,06 reflecting a 0,04% increase.
Consumer goods price increases were registered in the following products — cooking oil by 13c, mealie meal by 30c, tea leaves by 25c, rice by 4c, washing soap bars by 25c and washing powder by 4c.
CCZ executive director Rosemary Siyachitema is on record saying government had abandoned consumers to the wolves as the cumulative effects of the price increases would be felt mainly among low-income earners who constitute the majority of the population.
She has also expressed frustration over the snail pace at which the crafting of the proposed Consumer Act was moving.
“This is all frustrating because we have been left behind.
“In Zimbabwe we have a competition law but we do not have a consumer law and we keep referring to the South African version that has comprehensive laws,” she was quoted saying.