The supply of basic goods is expected to increase towards the festive season, spurred by Government intervention through the indefinite suspension of Statutory Instrument (SI) 122 of 2017, and the provision of foreign currency by the Reserve Bank of Zimbabwe (RBZ) to producers of key products like cooking oil and bread.
Further, the jump in prices which resulted in year-on-year inflation rising to 20,85 percent for the month of October, from 5,39 percent in September, will not continue as the availability of goods increases.
RBZ Governor Dr John Mangudya disclosed this at the launch of the 2018 State of the Mining Industry Survey Report in Harare yesterday.
The central bank’s biggest mandate, Dr Mangudya said, was to ensure the value of money is preserved for consumers and manufacturers, hence the interventions by Government, which include ensuring that the value of the US dollar remains at par with bond notes and RTGS balances.
“In the past one-and-a-half months now, the prices have not been stable, but we are quite happy that sanity is beginning to prevail in the economy,” said Dr Mangudya.
“You have seen that fuel supplies have stabilised (and) in terms of products in the shops, they are coming back. The situation is normalising and in the festive season, there is going to be high supply of commodities in the market.”
Dr Mangudya said if goods are in short supply, there is a tendency by retailers to exploit consumers through arbitrarily increasing prices .
At the beginning of October when Government announced new measures including the opening up of foreign currency accounts (FCAs) by exporters and individuals with access to foreign currency and, the 2 percent tax on electronic transactions, some manufacturers scaled down production while others withheld products.
This prompted Government to suspend SI 122 of 2017, formerly SI 64 of 2016, to allow individuals and companies with free funds to import basic goods to avert shortages.
Dr Mangudya said the suspension of SI 122 has stabilised demand and consequently supply.
Some manufacturers started flooding the market with basic goods in the same week that Government suspended SI 122, in fear of losing market share to imported goods, which usually come at lower prices.
Said Dr Mangudya; “Going forward, the future looks positive. And as Government works on the fiscal deficit, it means that the source of consumer demand, which is internal, is also addressed.”