Zimbabwe business leaders held out an olive branch to the government on Wednesday over its controversial price controls, pledging to make goods more affordable and accepting there would be no let-up of a crackdown that has seen hundreds of retailers arrested.
At a conference organised by the Harare Chamber of Commerce to discuss the impact of a recent government order to slash prices across the board, executives struck a markedly conciliatory tone and acknowledged they needed to produce and sell goods that were affordable to the public.
”There is no doubt that business have been affected by this directive [but] it is also important to recognise that business has an obligation to produce goods and services to satisfy demand at the affordable prices,” Ozwel Bimha, chairperson of the Chamber of Commerce, told delegates.
”In order to achieve this it is important for business to acknowledge that there was need for some intervention to avert this crisis.”
More than 1 700 shop owners and managers have been arrested since Industry Minister Obert Mpofu ordered businesses on June 26 to halve the prices of their goods and services after accusing them of rampant profiteering. Security forces were sent to raid shops and check compliance.
Among those who have been arrested are executives from international firms such as Nandos chicken and the Spar supermarket chain, most of whom have been released after paying heavy fines.
Stores had been hiking their prices several times a day as they tried to keep pace with the galloping rate of inflation, now believed to be well beyond 5 000%.
President Robert Mugabe, who is seeking re-election next year, has accused retailers of ”growing greedy at the expense of the majority” and dismissed critics of the price controls as stooges of former colonial power Britain.
Andy Hodges, head of treasury for the Zimbabwe Allied Banking Group, said the business sector had played into Mugabe’s hands with their price increases.
”In essence we set the stage for intervention as the government perceived prices increases as a third force,” Hodges told delegates.
”The government is not going to back down on this, although this has created shortages and that is worrying because people will have to hunt for these goods on the parallel market.”
Hodges said the price increases by the business sector over the past two months were as a result of manufacturers and retailers who were basing the price of their goods products on future inflation forecasts.
Manufacturers say the government-set prices mean they cannot cover their costs and have stopped production, leading to widespread shortages of staples such as cooking oil and salt.
Hodges said it was important there be dialogue between government and business leaders, ”since price controls do not work as they are not good for both government and business”.
Brains Muchemwa, a leading Zimbabwean economist, told delegates it was important the business sector was not at odds with the government.
”Business and government have to walk in one direction, but in this case business seems to be trailing behind,” he said.
Muchemwa also expressed concern on the loss of value of the local currency, saying this has resulted in no one wishing to have the Zimbabwe dollar in large quantities ”except if it is being used for speculative activities”. Sapa-dpa, AFP
Sacrificial lambs
Meanwhile, Zimbabwe’s main unions on Wednesday said they would fiercely resist a rumoured plan to cut worker salaries by 50%.
Details of the plan have not been officially confirmed, but the Zimbabwe Congress of Trade Unions (ZCTU) said it had wind of the proposal that would allegedly see workers subjected to a 50% salary slash in line with the half-price cuts being enforced by Mugabe’s government.
”It would be unfair for the government and its agencies to want to cut salaries by half when workers are struggling to survive,” said Wellington Chibebe, ZCTU secretary general.
He said workers were tired of being sacrificial lambs and warned there would be massive resistance should a 50% salary cut be enforced.
This is the first time rumours have surfaced of alleged plans to cut worker salaries and it was not immediately possible on Wednesday to confirm whether in fact such plans existed.
Chibebe claimed it had been mooted by businesses, government and the Reserve Bank of Zimbabwe, whose chief Gideon Gono was reported to have disagreed with the price blitz.
”We demand that the authorities rethink this heartless strategy,” Chibebe said in a statement. — AFP, Sapa-dpa