Industry and Commerce Minister Nqobizitha Mangaliso Ndlovu, yesterday spoke against firms increasing prices because they are buying foreign currency on the illegal market.
Ndlovu said prices of some products had gone up by more than 350 percent yet the foreign currency component needed to produce them was only 25 percent of the total production cost. He said if firms were increasing prices because they are obtaining foreign currency from illegal money changers then prices should have increased by 25% only. Said Ndlovu:
The justification is that they are obtaining foreign currency at premiums. But the (price) increases are actually a reflection that the foreign currency component (in production of the commodities) is 100 percent, which is incorrect. As Government, we are going to make difficult decisions (to rectify the situation). We will not allow consumers to be treated in this manner. It is the duty of the Government to stop this. If genuinely the price (increases) are about foreign currency, they should reflect the 25 percent (foreign currency) component needed to produce most of the products.
Speaking to The Chronicle, Confederation of Zimbabwe Industry president Sifelani Jabangwe, said the price increases were justified as producers and importers had to factor in premiums on foreign currency. Said jabangwe:
On average, the foreign currency component in local production is about 40 percent and as a result of the premiums, prices had to go up by as much as 200 percent, at cost. For imported products, prices went up by as much as 400 percent during the last quarter.
Mangaliso Ndlovu is the Minister of Industry. Read More About Mangaliso Ndlovu