Economists Accuse Businesses Of Profiteering
Two prominent economists, Prosper Chitambara and Persistence Gwanyanya have accused local businesses of profiteering and indiscipline, traits which they say explains the spike in prices of commodities.
In December 2020, Zimbabwe recorded a 4.2 percent inflation rate after prices of most basic commodities rose sharply partly due to input costs in fuel and operating license fees among other issues.
The economists observe that some businesses were however taking advantage of the developments to unreasonably raise the prices of their commodities.
Speaking to NewZimbabwe on Monday, Chitambara said:
The tendency of profiteering exists among our businesses and in many cases the mark-up prices are much higher than international best practices which state that increases must not surpass 30% of mark up.
Activating statutory bodies to investigate and hold businesses found guilty of malpractices can be implemented through holistic engagement of the private sector in the long term.
Chitambara also blamed poor competition in the markets saying sectors like telecommunication operators are enjoying duopoly, a practice which occurs when two companies control the market.
Meanwhile, Gwanyanya accused unscrupulous traders of hoarding goods and reselling them taking advantage of price differences in the markets.
Admittedly, there are some factors which leave companies with no choice except to increase prices, but it is important for traders to do so in line with justified reasons.
He said the Reserve Bank of Zimbabwe (RBZ) foreign exchange auction has done a lot to eradicate such malpractices and expressed optimism that going forward pricing discipline will likely position itself.
More: NewZimbabwe
