By Rutendo Ngara and Ketty Nyoni
THE prices of basic goods in major retail shops in Ha- rare and Bulawayo, as well as foreign currency rates on the parallel market continue to hold steady.
A survey by the Daily News On Sunday crews in the capital and in the second city yesterday showed that the retail price of many basic consumer goods, including bread, laundry soap, cooking oil, mealie- meal, flour, salt, sugar, rice and milk remain relatively stable despite the current crippling power cuts in the country.
This has once again prompted ordinary shoppers and business representatives to implore authorities to maintain the current economic measures in place that have been credited with stabilising the economy.
This comes as both the Zimbabwe dollar black market rates and month-on-month inflation continue to hold steady, with the local currency also now nearing convergence with parallel market rates at an average of $720 against the United States dollar yesterday.
The president of the Confederation of Zimbabwe Industries (CZI), Kurai Matsheza, told the Daily News On Sunday yesterday that authorities needed to hold the line on the current economic measures, to avoid upset- ting the relative stability that was pre- vailing throughout the economy.
“The stability is mainly because of the improvement in the forex rate on the parallel market. Now, things will depend on what happens with the ex- change rate going forward.
“If the parallel market rate goes up again, this stability will disappear. We hope that the factors that are reigning in the parallel market rate will contin- ue so that prices can remain stable.
“The lack of local currency on the parallel market and the introduction of gold coins has helped to thwart the inflation madness which we saw in
the past few months, which has all contributed to price stability,” Matsheza further told the Daily News On Sunday.
The president of the Confederation of Zimbabwe Retailers (CZR), Denford Mutashu, also said authorities needed to maintain the current eco- nomic momentum, while also help- ing to create more demand to allow spending by consumers.
“Prices of basic commodities have stabilised owing to both government measures and declined demand. The liquidity situation in the market has affected spending, driving down de- mand.
“The spending patterns have lately been concentrated on essentials and the hope is to work with the government to work on measures that stimulate demand to avoid serious economic contraction.
“We think this will continue into November when both the private sec- tor and the government pay bonuses, if they can both afford it. Then, more Zimbabwean dollars will be injected into the market,” Mutashu said.
On his part, the spokesperson of the National Consumer Rights Association (Nacora), Effie Ncube, warned that the current stability would be short-lived if authorities did not maintain a beady eye on the activities of the parallel forex market, which he said had been the main driver of inflation.
“The authorities have managed to reduce the liquidity in the market that was driving the speculative rates.
“There were too many Zimbabwe- an dollars circulating in the market and the measures that were introduced managed to reduce this liquidity. Secondly, the high interest rates are also making it difficult for people to borrow money.
“These measures have given consumers some relief. But if they are not followed up by additional measures, this is going to be a temporary solu- tion.
“There is a need for the economy to perform and generate foreign currency that will be able to stabilise the exchange rate sustainably,” Ncube
told the Daily News On Sunday.
In the meantime, authorities re- main bullish about the further stability of the economy.
A buoyant deputy Finance minister, Clemence Chiduwa, projected further stability in the prices of goods in the country last month, while also predicting that it was now a matter of time before once ubiquitous foreign exchange dealers go completely bust.
Speaking to the Daily News On Sunday then, Chiduwa said the government had found the requisite anti- dotes for the economic turmoil of the past few months, adding that the focus of authorities was now on further boosting business activity and lifting the quality of life of long-suffering Zimbabweans.
“Our measures are going to drive away money changers from the street soon. Indeed, the government’s new polices are working and we now have the ability to sustain and maintain the current stability.
“We are now on course and what we are seeing at the moment is a welcome convergence of the parallel market forex rates and the official one.
“The reality, of course, is that if there had been market discipline there would not have been any need for all these measures,” Chiduwa said at the time.
“The new measures are here to stay, and we now need to focus on production. Indeed, you don’t get foreign currency by changing rates on the street, but through production.
“The economy and the exchange rate are now stable, which will allow business to plan optimally for the fu- ture. I can say with confidence that we have now managed to hit the right chord. We are now on top of the situation and this is thanks to the efforts of the government and other key stakeholders,” Chiduwa added.
He also told the Daily News On Sunday that the government would continue to monitor the situation on the ground closely, so that the chaos of the past few months is avoided.
“Prices are stable and the situation is now normal. But if anything Deputy Finance minister, Clemence Chiduwa, untoward happens, we are going to respond quickly and accordingly.
“Among other things, we starved the market of extra liquidity which was not supported by production. This way, we mopped up excess money through money market instruments and gold coins.
“I can assure the country that this stability is going to be sustained and that it is here to stay. And it’s not only a government thing, but solid effort by all stakeholders and social partners,” Chiduwa said further. The Zaka East MP also reiterated that the Zimbabwe dollar would not be “going anywhere”.
“Some people continue to say that the country must dollarise, but look at the local currency appetite which people now have.
“Everyone is looking for the local currency. So, on the alleged issue of dollarising the economy, someone somewhere is not being honest.
“We now managed to convert the local currency to have real value and we are also, at the same time man- aging to construct key infrastructure that includes roads and other such projects using the local currency.
“If it’s that the magic that can be done by the Zimbabwe dollar we are going to stay with it forever,” Chiduwa said.
The Consumer Council of Zimbabwe (CCZ) has also said that it has begun to witness welcome reductions in the prices of some basic goods on the back of falling month-on-month inflation and the easing foreign currency parallel market.