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Govt in price blitz climb-down
Augustine Mukaro, The Zimbabwe Independent
August 24, 2007

http://allafrica.com/stories/200708250046.html

GOVERNMENT has started reversing the unrealistic prices decreed by the government last month in what amounts to a major climb-down after the programme backfired.

Sources privy to the policy shift said the Price Monitoring and Stabilisation Taskforce has been mandated to rethink the operation as the Zanu PF leadership gives in to pressure to stop the destructive exercise. From its launch, top government officials have failed to agree on the blitz, with Vice President Joice Mujuru and central bank governor Gideon Gono understood to oppose it.

Mujuru is next week expected to address business captains at the Employers Confederation of Zimbabwe congress which starts in Victoria Falls on Wednesday. She has been mandated to clean up the mess caused by the price blitz and would reconstitute the taskforce. This comes after President Robert Mugabe has been convinced his campaign has been a huge disaster.

"The Emcoz slogan 'for industrial peace and productivity' will be under stern test at a time when neither peace nor productivity in Zimbabwean industry are as they need to be," the employers said in a statement yesterday.

Government sources this week said Mujuru has been actively promoting dialogue between government and business at all levels. This has resulted in the holding of consultative meetings between price monitoring taskforce members and businesspeople across the country.

The retreat by the state has manifested itself in the upward revision of prices and services almost on a daily basis. The most notable revision this week was in the telecommunications sector where operators were allowed to raise rates to 10 times the June 18 standard.

The price monitoring taskforce has been given a new mandate to revise the prices of all commodities in response to the recommendations submitted by various stakeholders.

The taskforce was last week presented with an assessment report of the blitz, clearly showing that the crackdown has had disastrous consequences, rendering government's stakeholder-driven turnaround initiative useless, reducing government revenue, promoting parallel market activities, eroding investor confidence and militating against efforts to reduce inflation.

"Shortages of basic commodities, deteriorating services in virtually all sectors and the general public outcry forced government to revise the policy in relation to representations submitted by the stakeholders," sources said.

Sources said the taskforce office at the Police General Headquarters has received thousands of representations from affected businesses seeking a review of the pricing structure in relation to the production costs. "Businesses are clamouring for a credible pricing mechanism that ensures both business viability and affordability to consumers," the sources said. "The taskforce is now in the process of going through the various representations and recommending the appropriate adjustments, which might see a complete departure from the price blitz directives."

The past week has seen a major shift with government backing down on unrealistic prices set out during the price reduction crackdown resulting in serious shortages. Government this week approved the increase in telecommunications tariffs, freight charges, and train and airfares. Earlier in the week, it had allowed suppliers of foodstuffs, soap, farming inputs and tyres to hike their prices to ensure the supplies on the market. Foodstuffs whose prices were increased included sugar, tea-leaves, chicken and soda. Prices of motor vehicle tyres, Bata shoes, the whole soap range and maize seed were also increased. It proceeded to re-license 42 private abattoirs to avert the worsening meat shortages which had forced all butcheries to close.

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