|
Zim price-freeze thawed
07/09/2007 08:37 - (SA)
Chris Muronzi - Finweek's Harare correspondent
Harare - President Robert Mugabe's government has increased prices of goods and services by 20% to ensure firms remain viable, a state newspaper reported.
State-owned daily The Herald said government gave businesses the green light to add a 20% mark up on goods and services and to add value-added tax.
According to the paper, firms that did not hike prices of goods since the June 18 when Mugabe froze prices could now increase prices.
Only a few weeks ago Mugabe banned price and wage increases and gave the Price and Incomes Commission the power to approve price increases should there be a justifiable reason to increase prices.
"The taskforce on price monitoring and stabilisation would like to remind the business community that the prices of all the goods and services that have not yet been reviewed by the taskforce should be priced using the manufacturer/supplier prices of June 18, 2007 plus a mark-up of up to 20%, plus value-added tax (VAT) where applicable," acting chairperson of the Cabinet Taskforce on Price Monitoring and Stabilisation Elliot Manyika said told The Herald.
Manyika is also a ruling Zanu PF campaign official and Minister without Portfolio.
It remains to be seen however, if the government's move to increase prices will offer an already struggling industry an incentive to increase supplies and production.
'Elements of greed' warned
The troubled southern African country's police chief Augustine Chihuri warned businesspeople against hoarding and diverting goods for resale on the black market at exorbitant prices.
"We want to warn all elements who are driven by greed and would want to take advantage of the situation and exploit people," Chihuri said.
Mugabe ordered businesses to reduce prices of goods and services in June accusing them of causing a runaway inflation through a wave of price increases meant to topple his government.
After the decree all basic goods disappeared from the shops, but are however, available on the flourishing black market.
Mugabe's critics say his price control and monitoring policy has only hurt consumers, the supposed beneficiaries of the aged leader's rare act of generosity.
Zimbabwe has the highest inflation rate in the world - now above 7 600% - while a third of the population is facing starvation according to the World Food Programme.
But despite glaring evidence that Mugabe, who has a penchant for destructive economic policies, has failed to turnaround the economy, he is not showing any signs of backing off from his price control policy.
Critics say Mugabe must free the market and let the market determine price of goods and services.
- Fin24
- Finance24
|
News
Zimbabwe Special Report
