EDITORIAL COMMENT: There’s no substitute for dialogue Minister Mangaliso Ndlovu

When prices of essentially all products and services shot up recently, the Government responded by lifting the ban on importation of basic commodities.

In force since mid 2016, the ban had left the domestic market to local manufacturers. They were able to increase production so as to satisfy demand and their revenues were enhanced.

A number of industries among them edible oils makers, maize millers, and milk processors and so on were doing very well although they were still encumbered by the general challenging economic climate.

It is partly because of the inherent challenges that when there was a run on the market a few weeks ago, local manufacturers were unable to meet the overnight surge in demand.

Shops were emptied and prices increased by an average 400 percent.

The consumer, whose income has not increased by 400 percent, has been badly hurt.

To address the social cost of the pricing madness while giving local manufacturers enough time to produce to boost stocks that were depleted during the panic-buying period, the Government relaxed import controls on basic commodities.

We regret that prices have not fallen as much as consumers expected; rather, they have stabilised at high levels.

For instance 2kg of rice is selling for $7 up from $3 before the price rally while 2litres of cooking oil is being sold for up to $8, an increase from about $3, 50.

To find ways for prices to decline to an affordable level, the Minister of Industry and Commerce Cde Mangaliso Ndlovu yesterday engaged retailers, manufacturers and other stakeholders.

“The issue of price hikes is temporary and it’s being addressed,” said Minister Ndlovu at the weekend.

“And for any investor, what is more critical is how Government responds to such hikes and our response has been engagement. We should be able to work things out. Tomorrow we are having a critical engagement session with manufacturers and retailers to try and identify critical cost push factors.”

There is absolutely no substitute for dialogue. For this reason we applaud the Government for continuing to engage relevant stakeholders in its quest to revive the economy.

Where in the past threats and other belligerent language were the order of the day in attempting to solve pressing national challenges, President Mnangagwa’s Government is deploying sincere dialogue and cordial engagement.

We have seen this approach being applied a number of times and we think it is a winning approach.

Threats and bellicose language only serve to entrench positions by two sides to a difference. Each of them would ready itself for a fight; to defeat the other side.

Each of them would be pursuing victory against the other side and it is often victory at all costs.

This poisons the operating environment. At the end of the day neither side wins. It is everyone’s economy that suffers; it is the consumer who suffers while the challenge that triggered the dispute deepens.

Therefore, the meeting that Minister Ndlovu had with the price influencers yesterday is good.

A way must be found for prices to normalise. We cannot continue buying a 2litre bottle of cooking oil for $8 or a shoe brush for $7, a kilogramme of inferior beef cuts for $9, 50 or 50 millilitres of shoe polish for $4.

It is simply unsustainable, seen against the static incomes of consumers.

Industry should limit its reliance on the illegal market for foreign currency.

For this to be achieved there must be sufficient foreign exchange in the formal financial services sector and the money should be accessible at decent exchange rates.

For banks to have sufficient foreign exchange, the economy should be able to generate the money through exports.

The economy can also earn foreign exchange through foreign direct investment.

The commitments that have been made by various potential investors should translate to concrete projects.

In addition to the foregoing, industry needs to clinch more lines of credit.

All these are achievable judging by the information at hand.

The Government is on course to containing its expenditure, industry has created about 800 000 jobs over the past 12 months or so, exports are on the rise, the same for investment inflows.

Former MDC-T policy advisor Mr Eddie Cross, wrote on his website on Saturday that the economic fundamentals are strong while predicting that the economy should turn the corner for the better by March next year.

He wrote:

“The emphasis of ‘being open for business’ and the start made in returning to the international playing field has elicited considerable private sector interest and I personally have a list of private sector projects that, if implemented, will involve the investment of US$30 billion and will generate many billions in new exports and hundreds of thousands of new jobs,” he said. “This was impossible under Mugabe. I now hear people saying that the resumption of shortages and fuel queues and the sudden emergence of a parallel market for hard currencies mean that we are going back into the conditions we experienced in 2005 to 2008. Nothing could be further from the truth. Our economic fundamentals are sound, exports and the GDP growing rapidly and once the new team in the Ministry of Finance started to tackle the macro-economic problems of the country, they were immediately rewarded by a sharp reduction in the fiscal deficit and we will be in surplus by Christmas. At this pace, we will be in a different country by March 2019. Let’s keep our current problems in perspective — if we do, they will not look so entrenched or formidable.”

We are on course but we may be unable to keep ourselves as a country on that course if there is no honest dialogue involving the Government, industry, labour and consumers.

Fortunately, all these parties are on talking terms as exemplified by Minister Ndlovu’s meeting with manufacturers and retailers yesterday.

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