Analysts have implored the government not to resort to “command economics” in dealing with skyrocketing prices of goods and services saying it “will not work”.
This comes as President Emmerson Mnangagwa recently said the government has had enough of diplomacy as a way of addressing the economic crisis and now is determined to “tackle this wanton abuse in the marketplace.”
Analysts believe if the government resorts to price controls, there would be chaos in the commodities supply chain.
NewsDay’s Tapfumanei Mubaiwa cites University of Zimbabwe economics lecturer Gift Mugano as saying the government should not simply blame business, but deal with its side of the equation. Mugano is quoted as saying:
Businesses are now responding as rational economic agencies to the economy. The government must look at the root cause of this predicament which is money supply.
The government cannot assure the nation that there will be price stability before we talk of arresting money supply. Government must deal with its own fair share and stop any avenue for anyone in business or any economic agent to begin now to respond to safeguard their cash flows and working capital.
Political analyst Vivid Gwede said the obtaining situation demands a political solution. Gwede said:
We don’t know the instruments that the President promises to use, but if it is another resort to command economics, it will fail.
Apart from the tremors from the geopolitical crisis in Ukraine which have made food prices to soar globally, there are domestic problems affecting the Zimbabwean economy.
These require a political solution. Anything short of a reboot of the social contract will be piecemeal and unable to resolve the root problems.
National Consumer Rights Association spokesperson Effie Ncube said price increases were a response to the collapse of the economy which Ncube attributes to Mnangagwa and his administration.
Academic Methuseli Moyo, however, said the statement by Mnangagwa should have been a mere expression of his discomfort over the increase in prices and should not be interpreted as a call for price controls.