Any economist worth his title will tell you that price controls alone don’t work. I am not even a qualified economists and yet even I know that. This makes the government’s latest decision to resort back to price controls baffling. 2008 and a lot of other incidences over the years are first hand proof that using price controls is not a viable solution.
And yet the Minister of Industry and Commerce, Sekai Nzenza, says she recently met with the Grain Millers Association of Zimbabwe (GMAZ) and Confederation of Zimbabwe Retailers among other business organisations in her bid freeze the price of basic foodstuffs that have been subjected to accelerated inflation over the past few weeks even by our own banal standards.
We met with suppliers and producers and this was a multi-sectoral meeting held on April 11 and the people involved are those who produce, manufacture and distribute food and the purpose of that meeting was to find out how we can put our heads together and protect the consumer and the people involved include the GMAZ, the CZR and others.
We came to an agreement, which still needs to be announced and we intend to make the announcement together in due course where everyone will be present.
Minister Nzenza on the issue of prices
It wont’ matter what they agree
The truth is it doesn’t matter what these organisations and the government agree on. Ultimately if there is not enough supply there will always be a black market. For example, the government has made a concerted effort to make sure mealie-meal is affordable and subsidised it. However because there is a shortage a coterie of shop workers/owners and ordinary people have worked hand in glove to make sure that the mealie-meal finds it’s way to the black market where it’s sold for $5 USD.
Corruption is rife throughout Zimbabwe and businesses have been adept at exploiting it to their advantage. Tuckshops continue to refuse Ecocash and charge people a fortune for basics such as cooking oil, salt, bread and mealie-meal. A price freeze will just mean more profit to these unscrupulous businesses.
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