No justification for price hikes: Buy Zimbabwe Mr Munyaradzi Hwengwere

Lovemore Ranga Mataire

Q & A

PRESIDENT Mnangagwa recently announced measures to arrest inflation and stabilise prices of basic commodities.

While most industrialists and economists welcomed the measures, there was no commensurate response from retailers.

Buy Zimbabwe Campaign has been on the forefront of advocating for the manufacturing and consumption of local goods to stimulate economic growth and indigenisation. Our Group Political Editor Lovemore Ranga Mataire (LRM) had a chat with Buy Zimbabwe Campaign chairman, Mr Munyaradzi Hwengwere (MH) on price hikes, use of local currency and several other issues.

Price hikes

LRM: Following President Mnangagwa’s announcement of measures meant to curb inflation and stabilise prices of basic commodities almost two weeks ago, some retailers immediately removed certain basic commodities from the shelves only to return them later. In your view, what could have motivated this sort of action by retailers?

MH: Buy Zimbabwe is doing weekly market surveys to actually see the availability of local products. Yes, we were concerned by reports that some retailers were removing goods from their shelves but we don’t have as yet any concrete evidence of that happening. If it was happening, it is indeed regrettable.

LRM: A casual observation in shops shows a high percentage of local goods on the shelves. What could be the justification for the high prices given the fact that the goods are produced locally?

MH: I think there has been a lot of growth in the domestic sector particularly spurred by the growth in the agricultural sector. You may be aware that a lot of the manufacturing sector in Zimbabwe at the present moment is largely dependent on the agricultural sector. So the improvement of the agricultural sector not only improves the incomes of people in rural areas but helps the supply side.

Maize meal – Image taken from Shutterstock

Look at maize meal for instance; we were importing for a number of years except for last year when there was sufficient stock. What it means is that all those milling companies or even grinding mills in the rural areas suddenly were working. The general improvement in doing business has also assisted. There has been great innovation by the local industry supported by Buy Zimbabwe.

Buy Zimbabwe has done a great job in conscientising the local market and overtime people have actually realised that our products are competitive in terms of price and quality.

What really killed the Zimbabwean industry was when we had that lost decade and literally the manufacturing sector was on its knees. People had no option but to go for South African goods. It takes time to then get people to change products to Zimbabwe given the fact that we had adopted the US dollar.

The US dollar is a stronger currency and one can literally buy products anywhere. So the local market could no longer compete because we were using a stronger currency, which is way stronger than the Rand and therefore South African products appeared lowly priced.

LRM: What is your view regarding the recent waiver by the Ministry of Finance and Economic Development to allow those with access to free funds to import basic commodities like flour, sugar, cooking oil, tea, milk formula?

MH: Our primary concern with the waiver has been with respect to sugar because it is not in short supply and it’s produced in Zimbabwe. There are products we do not make like salt and flour — yes, there is a bit of wheat but we have always blended.

Sugar – Image taken from Shutterstock

In terms of cooking oil- there is global shortage and also in Zimbabwe our production sector whether its cotton seed or sunflower is not sufficient to cater for the local demand.

So we are importing raw cooking oil and to that extent, one could understand why Government had to balance that issue. On sugar, we think the interest of Zimbabwe must be to ensure that all those that depend on sugar from Chiredzi are not decimated by cheap imports.

We need to be careful to protect our local value chains. We had a very erratic agriculture season last year and therefore we don’t have sufficient stock with regards to maize. It can be understandable in that respect. I would say the waiver on a product like sugar that we produce here is regrettable.

LRM: What efforts are you undertaking as Buy Zimbabwe to encourage consumers to go for local products?

MH: Consumers globally are sensitive to price adjustments. While we encourage consumers to invest and create conditions for wealth, job creation and so forth, the onus is on industry to also realise that against situations where disposable incomes are limited and price is an issue.

Cooking oil- Image taken from Shutterstock

We also need to do more to build on the local value chain so that the consumers themselves become the number one supporters of Buy Zimbabwe. This thing is a Zimbabwean product only by package (that) has its own weaknesses.

But if we have a product that goes all the way down to the consumer like we have with sugar, the people in sugar understand the impact of imports of sugar to the country.

Look at Victoria Falls, everyone understands the importance of tourism because everyone is involved.

That’s the importance of investing across the value chain because when you invest in the value chain from primary, secondary to tertiary — it means everyone along the line understands that this product gives me money in my pocket that I need to take my kids to school or hospital.

Our value chain synergies are to a large extent still at the top and therefore we are unable to mobilise everyone from the grassroots to actually see the essence of buying local. It is something that the Government, business and labour need to work on to say let’s increase our local content across the value chain.

Value chain- Image taken from Shutterstock

LRM: Some retailers are refusing to accept local currency in favour of the US dollar. What can be done to promote the use of our own money?

MH: First, you may be aware that 75 percent of the money in circulation is our own Zimbabwean dollar. We understand there are some retailers refusing our local currency especially in the suburban areas particularly the kiosks.

But by and large, large retailers like OK, Pick and Pay, Bon Marche are still taking our currency. The truth is that retailers who refuse local currency think that they will be hedging themselves against potential depreciation of the local currency yet the majority of Zimbabweans use our money.

So if you restrict yourself to the US dollar you are limiting yourself to your own growth. The second point is that consumers have a long memory. A lot of retailers have collapsed because of the failure to respect consumers. When things turn and you want that consumer to come back, he or she won’t come back.

The reason why the big retailers survived after the hyperinflation environment is because they respected the consumer and were able to restock. The market is sovereign; the consumer is sovereign. Retailers must learn to respect the market. In any case, the conversation of the RTGs to the US dollar is not rocket science. So priority must always be given to the consumer. Those retailers are offside.

LRM: Mr Hwengwere, thank you so much for your time.

 

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