SINCE the advent of the Second Republic in November 2017, the government made it clear that it does not believe in the economics of protectionism, nor it is a disciple of price controls.
But in recent weeks, there has been a very disturbing development. Prices of basic commodities have been going up exponentially, with businesses attributing it to shifting foreign currency exchange rate, mainly on the black market. They have also attributed the hikes to the intermittent power outages.
While we agree that the reasons are sagacious as they have huge impacts on cost of production, we also believe some of the businesses are taking advantage of profiteering at the expense of the ordinary people.
Some of the prices of basic commodities are unacceptable and exploitative.
For example, the price of two litres of cooking oil has gone up from $580 to $ 680, 2kg sugar is up to $370 from $310, a bar of soap from $190 to $270 and bread from $145 to $169.
The impact of the astronomical prices is heavily affecting the poor and the downtrodden. They have a negative impact on the country’s economic revival. In reality, the skewed pricing model is the greatest threat to the government’s efforts to kick start the economy.
The government has to intervene and stop the nonsense of profiteering.
By adopting a lackadaisical attitude, a wait and see approach, the government would be doing a disservice to the poor and prolonging the revival of the economy.
We will never have an economic rebirth as espoused by Finance minister Mthuli Ncube.
The government must ensure foreign currency exchange rate stability and should not allow arbitrage and rent seeking behaviour from unscrupulous business people.
It appears the unscrupulous business people are taking advantage of the annual bonuses awarded to workers ahead of the festive season to make maximum profits.
Instead, during this time of the year, prices of basic commodities should be slashed to allow companies to clear old stock and make profits from pushing volumes and replenish stock for the sake of next year.
The ball is entirely in the government’s hands to protect the masses from vampires masquerading as businesspeople.
Entrepreneurship is not profiteering and measures to stem stealing from the masses should not be confused as protectionism or a stride back to command economics.