Sunday, April 28, 2019

Govt Crafting Price Control Model

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In an interview with the state media after touring Bulawayo wholesalers last Thursday, Finance and Economic Development Minister Professor Mthuli Ncube said the Government was saddened by the unabated price increases, which continue to erode consumers’ purchasing power.
Ncube said this as he toured wholesalers with goods to be delivered to shops that were looted during the January violent strike triggered by President Emmerson Mnangagwa’s announcement on fuel price increases,
Ncube said the Government is crafting a pricing model aimed at benchmarking most goods especially basic commodities sold by retailers as it moves to protect citizens against the prevailing wanton price increases.
He said:
“It’s unfortunate that prices continue to be high and are putting a constraint on the purchasing power on most ordinary citizens. I think what we have to do in the end is perhaps to publish what these kind of prices are in a place like in South Africa because most of the goods seem to be imported, what are they (worth) in Rand and we apply the official exchange rate interbank market and convert that into RTGS dollars so that we can get a sense of import parity.”
He said the import parity will then be used to come up with a pricing guide for retailers. Import Parity Price or IPP is defined as the price that a purchaser pays or can expect to pay for imported goods. It takes into account the Cost Insurance and Freight (CFI) import price plus tariff, plus transport cost to the purchaser’s location.
“It looks like at the moment there is no guide, you listen to what the competitors are saying or doing and then you try to benchmark accordingly, it can’t be like that, perhaps we need to benchmark on import parity prices, maybe as Government we should assist in that price discovery process for the retailers, give them a roadmap to know what kind of benchmark to use for pricing,” said Prof Ncube.
Meanwhile, Prof Ncube said he was satisfied with the process being undertaken by the Government towards assisting businesses, which were looted and had their property destroyed during the January protests to restock and rebuild their assets.
The Government disbursed a $30 million emergency relief facility to assist the affected businesses, most of which were grocery shops in Bulawayo.
“We have come here to check or just to make sure that the stock of goods we promised as Government, that we will support the shop owners who lost their goods, is indeed sent down to them and they receive it and do restock. We are pleased to say that we saw the stock. Some of it is on its way. Government has made its commitment to support these businesses. We are also helping them to rebuild their premises, to make sure they go back to what they used to be if not better. So we are really walking the talk and making sure we support those businesses that lost their assets during the unfortunate incidents,” he said.
Prof Ncube said efforts have been made to ensure the fund and the distribution process of goods to beneficiaries would not be flouted.
“I’m very satisfied, first of all we got the names, the invoice numbers and the amounts in terms of the value of the goods they are going to receive, so it’s (the process) very transparent. Those can be published in the media because after all this is tax payers money, they (tax payers) want to know how their monies are being utilised but also we are tracking the invoices. The whole system is well tracked, verified so that there is no leakages and corruption. We certainly won’t allow that through the system we have put in place,” he said.
Prof Ncube’s sentiments were reiterated by Minister Ndlovu who said: “We have made sure the facility is water tight. We don’t want a repeat of previous programmes where businesses benefit from such facilities but fail to repay. These are tax payers’ funds we want to make sure they are utilised in a responsible manner. We believe we have a water tight system now and businesses have begun to benefit from this week.”
He said the ministry has received about 200 applications for the relief fund from the business community.
“It’s still early to give numbers of how many have benefited so far but the initial approval of 25 have gone through. We have received close to 188 applications for various relief needs. We have restocking, we have equipment (replacement) and also we have reconstruction of structures that were burnt down, so we will be assisting in all those three . . . ,” said Minister Ndlovu.
Sunday News is in possession of the list of some of the beneficiaries as well as the varying amounts they have been allocated. The businesses that are restocking are accessing the loan at a concessionary interest rate of four percent per annum and are expected to repay within three to six months.
Those wishing to replace equipment would be paying an interest rate of three percent per annum and have 12 to 24 months to repay, while those who lost their buildings will access funding at a concessionary rate of two percent per annum and have 10 to 15 years repayment period.
Metro Peech and Browne Wholesalers branch manager Mr Erben Ncube acknowledged receiving a list of beneficiaries under the fund from the Government to be supplied with goods.