Retailers slammed  over USD price hikes

Business Writers

THE Consumer Protection Commission (CPC) has criticised retailers for increasing prices in United States dollars, branding the action as reckless, unethical and deceitful while economists are urging a tripartite approach involving labour, business and Government to tackle stakeholders’ issues.

The criticism coincides with the recent introduction of Statutory Instrument 81A of 2024 by the Government, mandating businesses to adhere to the official exchange rate when setting prices of goods and services.

Violators of these regulations face a fixed penalty of ZiG200,000 or its forex equivalent.

Additionally, the regulations have abolished the previous 10 percent mark-up, which was used to facilitate business operations while safeguarding consumers against profiteering.

Before these new regulations, unscrupulous businesses had inflated their prices well above the official rate, with some establishments charging rates as high as US$1 to ZiG22.

Many businesses have now begun using the Government-mandated exchange rates.

However, their prices in local currency are so inflated that when converted to US dollars, they are exorbitant, adversely affecting those wishing to transact in US dollars.

Chairman of the CPC, Dr Mthokozisi Nkosi, emphasised that this conduct exploits consumers and assured that appropriate actions will be taken.

“This practice by businesses is reckless, unethical and deceitful. We highly condemn this barbaric act by the unscrupulous businesses.

“We have always advocated for a fair trading environment where consumers and service providers enjoy the market place,” said Dr Nkosi.

 “Consumers must not and cannot be short-changed at will. As the CPC, we are deeply concerned and we cannot be by-standers. We are engaging the respective sector associations and regulators to understand the price movements.”

He said where there is no justification for the price adjustments in US dollar terms, the available instruments will be applied to bring sanity to the market.

“We will continue engaging the business associations to understand issues and hope to address them amicably rather than resorting to unjustified price hikes,” he said.

Economists have also said there is a need for a fixed exchange rate, which will allow traders to properly set prices in both currencies.

They said businesses are being affected by the fact that some suppliers demand payment in US dollars, which is not available to them, therefore they will need to get it from the parallel market, which is a bit expensive.

“The retailers need to have a properly fixed bank rate to come up with proper pricing of their goods to consumers in all currency,”Lupane State University institutional business analyst, Ms Shynet Chivasa said.

“We encourage dialogue and the business community to trust the new currency and embrace all currencies to stabilise the economy.”

Economist, Dr Prosper Chitambara weighed in saying that members of the public should not expect a significant change in prices, especially in US dollar pricing.

“My own view is that we don’t expect significant changes in prices especially in US dollar pricing given that there have not been any significant push factors to warrant significant change.

“We should push for ZiG adjustment of having value and avoid depreciation of ZiG,” added Dr Chitambara.

Bulawayo businessman and economic analyst, Mr Morris Mpala said a tripartite approach between labour, business and Government is required to go back to basics by addressing all the stakeholders’ concerns.

He said trust, confidence, honest and consistent implementations of agreed positions is critical. 


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