Relaxation on basics imports to trigger inflation: CZI

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Oliver Kazunga, Senior Business Reporter
THE Confederation of Zimbabwe Industries (CZI) says relaxing regulations on the importation of basic commodities into the country by Government may trigger inflation.

Industry and Commerce Minister Dr Mike Bimha told a press conference at the weekend that Government has relaxed regulations on the importation of basic commodities and invited individuals and organisations with free funds to approach his ministry for import permits.

In the past two months, there have been unjustified price increases on basic commodities and services following social media reports that the country was going to face food shortages.

Speaking by telephone from Harare yesterday, CZI president Mr Sifelani Jabangwe said:

“From the way we understand it (import regulations relaxation), it’s being implemented where we really have the shortages and this may be part of the stabilisation measures.”

He said CZI believes it was better to manufacture than bringing in finished products.

“Unfortunately, those who would bring in finished products will still need to convert their money back into US dollars. And those products cannot land at cheaper price than locally manufactured products, so that could actually drive inflation upwards,” said Mr Jabangwe.

In this light, he said it was important that local manufacturers keep supplying in order to avoid the escalation of prices if imports flood the market.

He urged the Reserve Bank of Zimbabwe (RBZ) to continue supporting industry by prioritising foreign currency allocation to the manufacturing sector to ensure industry keep supplying.

“We are also urging the local companies that they must find ways to keep producing and supplying the market because we need to keep inflation down. Wholly imported products will drive prices up,” he said.

The Government has identified 15 essential products which are key and of interest to consumers, for which it would ensure prioritisation in the allocation of foreign currency to import critical raw materials for their production.

The products include cooking oil, sugar, flour, rice, milk, eggs, salt, beef, washing powder, and fuel.

Mr Jabangwe said CZI continues to engage the Government over the relaxation of import regulations to ensure there would not be a market glut of imported products.

“We have been discussing with the Government on issues to do with price stabilisation and also ensuring supply. At the moment, with the current levels of valuation of that is there between the Real Time Gross Settlements and the United States dollar, local products should be cheaper and local manufacturers should not at all feel threatened by the imports,” he said.

Asked if the relaxation of import regulations had been effected by Government in retaliation to defiant retailers whose prices have remained high following the recent price hikes, Mr Jabangwe said:

“I don’t think its retaliation by the Government. The major thing that we were all concerned with is ensuring that there are no shortages over the festive period. And this measure we see it as trying to ensuring there is adequate supply in the market during the festive season.”

A snap survey carried out by this paper on Sunday revealed that most shops in Bulawayo were yet to reduce their prices following the unjust price increases effected in September.

Last week, Government warned that it would consider revoking operating licences of businesses found guilty of wantonly hiking prices despite a raft of measures to stabilise prices and resolve production and supply bottlenecks.

@okazunga