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Price Controls:

PDP warns of empty supermarket shelves

13/01/2018 00:00:00
by Staff Reporter
 
Price controls unhelpful ... Jacob Mafume
 
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AN opposition party has warned the Zanu PF regime against introducing price controls, saying this could lead to basic commodity shortages reminiscent of the hyperinflationary era which peaked in 2008.

President Emmerson Mnangagwa has already expressed concern over the recent spike in prices which followed his assumption of power after what critics have described as a coup last November.

Clearly worried about the price increases, Wednesday’s meeting of Zanu PF’s politburo established an ad-hoc committee led by vice president Constantino Chiwenga to deal with the challenge.

The ruling party was also quick to claim sabotage and threaten severe consequences to those responsible.

“The party is aware of those who want to cause confusion and inflict economic pain on our people. The issue of the three-tier pricing system was also discussed and measures to curb this will be announced in due course,” party spokesman Simon Khaya Moyo told reporters after the meeting.

However, the opposition People’s Democratic Party (PDP) warned against imposing price controls.

Party spokesman Jacob Mafume said price controls risked returning the country to the chaos of 2007-08 when shoppers were confronted by empty supermarket shelves.

Instead of price controls, the government should the structural challenges and economic fundamentals which are causing the prices hikes.

“In lightning speed, fear takes the citizen back to 2007 when the effects of price controls almost turned major supermarkets into ghost houses.

Back then, just like now, it was failure to manage the hygiene of the economy which had created hyperinflationary conditions,” said Mafume.

PDP, which is led by former finance minister Tendai Biti, the previous government crackdown on retailers resulted in the emptying of supermarket shelves and the flourishing of the black market.

“The People’s Democratic Party is therefore shocked by the decision to take a similar route which just a decade ago proved catastrophic,” said Mafume.

“In this case inflation is a result of forex premiums on all imported goods. We find the deliberate misunderstanding of basic economics by this government extremely regrettable.”

The opposition party blamed the multiple exchange rates on bond notes, RTGS transfers, EcoCash and the US dollar for the price hikes.



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Mafume said government’s ill-advised introduction of bond notes and the price of the US dollars were the major drivers of inflation, causing serious distortions in the market.

“We therefore find the noise around sabotage and the introduction of a price control crack team shocking, this only serves to dig the economy further down a bottomless abyss, the guy ignorantly referred to as ED and his team will not be able to dig us out of it,” he said.


 
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