HARARE, The Zimbabwe government has been urged to issue more import permits to manufacturers to enable them import raw materials and increase production to end the shortage of goods on the market which will result in a reduction of prices.
Confederation of Zimbabwe Retailers president Denford Mutashu said Tuesday that the price hikes which have hit the market are a result of an increase in demand for goods which are not locally produced in Zimbabwe.
"In a free market economy, usually price increments are a symptom of a shortage on the supply side, hence, demand outstripping supply. Government should issue more import permits for those commodities whose prices have increased," he said.
The comments by Mutashu came amid growing calls to scrap Statutory Instrument (SI) 64 of 2016, which regulates the importation of certain products which are manufactured in the country. The government is considering scrapping SI 64, as one tangible measure to reduce the cost of food and goods.
When SI 64 of 2016 was introduced, capacity utilization grew by 13.1 per cent to 47.4 per cent from 2015. Buy Zimbabwe economist Kipson Gundani said the government should focus on improving supply of foreign currency to producers for them to import raw materials.
"There is a misplaced thinking that prices are going up because the cost of production in Zimbabwe is high, that is wrong in the first place," he said. "The principal reason why prices are going up is emanating from the foreign currency shortages which limit producers to buy more raw materials outside the country."
Source: NAM NEWS NETWORK