CCZ warns of further price hikes, as Zimdollar sinks deeper

The Consumer Council of Zimbabwe (CCZ) has warned of further price hikes following government’s decision to rescind the suspension of import duty on basic commodities.

The government recently reimposed duty on basic commodities, and according to CCZ this will have a negative impact on the country’s depressed economy.

Government on Tuesday last week issued Statutory Instrument 10A of 2024 to re-introduce duty on basic commodities.

The commodities in that bracket include maize meal, milk, sugar, rice, flour, salt, bath soap, laundry soap, washing powder and toothpaste with effect from February 1, 2024.

Apparently, CCZ spokesperson Phillmon Chereni has issued a warning saying shortages of basic commodities must be expected as local industries are bound to fail to meet market demand of the goods.

“Businesses with free funds were allowed to import basics without paying duty on listed products, the Finance, Economic Development and Investment Promotion minister Mthuli Ncube has since rescinded the directive,” Chereni said.

“Though the move protects local industry from imports that have flooded local markets reducing capacity utilisation, prices of basic commodities are most likely to go up further eroding consumers’ purchasing power as we have already noted through our routine research in the CCZ basket showing an upward increase of basics [prices] especially in local currency.

“There is a need for policymakers to ascertain through consultations if local industry can fill the gap to avoid unforeseen shortages that might emanate.”

The government last year suspended import duty and value added tax on basic commodities as a measure to protect consumers from unwarranted price increases that had hit the market.

Meanwhile, the local currency Zimdollar has been performing badly against the major convertible currencies.

According to renowned American economic analyst Steve Hanke, Zimbabwe’s inflation is the highest worldwide.

He calls for a complete dollarisation, but President Emmerson Dambudzo Mnangagwa is on record saying the local currency is here to stay.

Zwnews