ZIMBABWE should brace for price increases driven by rent-seeking behaviour during the festive season, the country’s consumer watchdog has warned.
Consumer Council of Zimbabwe (CCZ) executive Rosemary Siyachitema said despite containing single digit inflation during the first nine months to September, retailers are this year expected to effect price changes as retail activity picks.
The government, the largest employer in the former sector, has already undertaken to pay bonuses in the coming month at a time when most companies in the private sector are struggling.
Experts say Zimbabwe, which adopted a multiple currency regime in 2009, has managed to contain inflation figures.
In an interview yesterday with our sister paper NewsDay, Siyachitema said the average cost for the consumer basket has been $560 with the highest figure recorded in March at $573,22.
The consumer basket includes food, clothes, rent, utilities and transport requirements for a family of six per month.
“The basket hasn’t been moving up because of fuel which has been steady — it’s usually the cost pusher in this market. The increases in prices will be seen around this time towards the festive period.
“During this season prices rally up, but there would be no justification for the increases,” Siyachitema said.
She said the Zimbabwean market is different from other markets. During the festive season shops in other countries reduce prices to earn more profit as compared to increasing prices.
Increases in the salaries of civil servants would be a major driver in the rallying up of consumer goods prices, Siyachitema said.
“When civil servants are given an increment, the supermarkets will also plan on how to get the money from them without any economic reason to do so,” she said.
Turning to utilities, Siyachitema said service providers such as Zesa Holdings and Harare City Council should put their houses in order after the government effected a slash on domestic consumers bills.
“If you look at electricity and water bills there has been a lot of mismanagement and the bills were astronomical as there were no actual bill readings. Lots of mistakes were made on the bills, but I think the slashing of the debts is kind of the pay-back that customers are getting.
“The move should result in service providers putting their houses in order so that the readings of meters is correct,” Siyachitema said.
Official statistics and independent estimates show that the informal sector remains the country’s top employer in the country where the bulk of the economically-active adults are living below the poverty datum line of $541.