EDITORIAL COMMENT:Lifting of imports ban will ease shortage of basic commodities

26 Oct, 2018 - 00:10 0 Views
EDITORIAL COMMENT:Lifting of imports ban will ease shortage of basic commodities RBZ

The Chronicle

WE welcome the decision by the Government to amend Statutory Instrument 122 of 2017 to allow companies and individuals with offshore and free funds to import specific basic commodities that are in short supply due to the speculative behaviour of local retailers and panic buying by consumers.

The move will improve the supply of the commodities while lowering their prices which had shot up due to the artificial shortages and profiteering tendencies by both manufacturers and retailers.

While the SI was promulgated to protect local industries which were suffering from competition from cheap imports, the Government has seen it fit to protect ordinary Zimbabweans who are being ripped off by unscrupulous retailers and some manufacturers out to make capital out of the prevailing situation.

Granted, there are some well-meaning manufacturers, particularly in the edible oil processing sector, who are producing enough for the market but a combination of panic buying and hoarding by retailers has seen cooking oil disappearing from supermarket shelves.

Sugar producers are also adequately supplying the market but elsewhere, despite the best efforts of grain millers to bring in flour and bakers to supply the market with enough bread, the commodity is in short supply because of a variety of reasons.

Some bakers have scaled down production citing rising inputs costs and an unsustainable pricing regime.

Intermittent flour supplies are also impeding efforts to satisfy the bread market. Beverages manufacturer, Delta, is hamstrung by a shortage of foreign currency to import critical raw materials (concentrates) for the production of soft drinks and beer.

Farmers have hiked prices of cattle citing rising costs of stockfeed and agro chemicals resulting in a sharp rise in the price of beef.

Generally, there is a siege mentality in the country with businesses wary of running out of stock and failing to restock while commodities are flying off the shelves at an alarming rate driven by speculators with huge bank balances from their illicit parallel market activities.

As Government cracks down on these economic saboteurs, it is important that it looks after the majority of poor Zimbabweans who are earning an honest living.

Thus the lifting of the imports ban is meant to alleviate the shortages so that normalcy returns to the market.

There is enormous pressure on the Reserve Bank of Zimbabwe to allocate the scarce foreign currency at its disposal to the competing needs of the country.

The reality is that the country is not producing enough for export to generate the much needed forex.

While the temptation is to say the Government will further widen the trade deficit by encouraging imports through its latest decision, the reality is that Zimbabweans need to put food on the table now and local industry is stretched to the limit by a market with a strong appetite for panic buying, speculative tendencies and hoarding.

Unrestricted imports on a selected range of goods will allow for competition on the market and prices will subsequently go down.

Most of the foreign currency circulating on the black market is from free funds sent by Zimbabweans in the diaspora to their relatives back home and this will now be harnessed to buy groceries for them in neighbouring countries, particularly South Africa.

In the same vein, supermarket chains with a strong presence in South Africa will find it easier to restock by moving commodities from their bases there to Zimbabwe.

In the construction industry for instance, cement will now be freely available in the country at cheaper prices.

There will be no need for retailers to hoard the commodity or channel it to the black market since competition from imports will take care of that.

We are cognisant of the need to protect jobs by encouraging protectionist policies but the behaviour of some manufacturers, wholesalers and retailers in the current environment shows that they neither deserve Government protection nor the generous foreign currency allocations from the RBZ.

In fact, some of them should be investigated for channelling some of the allocations to the black market, deliberately starving the market of essential commodities and massive profiteering from the prevailing chaos.

We are also tempted to urge the Government to extend the import reprieve to the fuel industry where the players are taking advantage of the current challenges to make a killing at the expense of motorists and the travelling public.

Fuel barons are diverting the commodity to the black market using their proxies with some garages charging in forex when they got the money to procure the commodity from the RBZ.

There is too much skullduggery and chicanery going on in the fuel sector warranting a thorough investigation.

This rent seeking behaviour should be nipped in the bud if Zimbabwe is to get out of the woods.

A culture of honest hard work should be inculcated in our people if the country is to attain its vision of a middle income economy by 2030. Economic saboteurs should be dealt with harshly.

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