By Tatira Zwinoira
A recent report by the United States Agency for International Development’s food security agency, Famine Early Warning Systems Network (Fewsnet), found household food stocks across the country are starting to run out. . It comes at a time when commodity prices have skyrocketed beyond the reach of the majority of the country’s citizens. Our senior business reporter, Tatira Zwinoira (TZ), met the Acting Executive Director of the Zimbabwe Consumers Council (CCZ) Rosemary Mpofu (RM) to find out what it means and further discuss the challenges consumers face.
TZ: In their latest report (Fewsnet), they say they notice that food stocks within households, both in urban and rural areas across the country, are declining especially in areas that have not received a lot of precipitation and also because of the rising cost of living. As a Consumers Council, have you received similar reports?
RM: Yes and no. Yes, in the sense that with the price hikes we have seen in recent months, it is becoming more and more difficult for consumers to secure food in their homes.
But, at the same time, why I say no is because the last rainy season has been very good and many people have managed to grow their own grain, especially corn. And, you find that even now the price of corn is usually right because at other times around this time, in other years, we would have already experienced a price hike in the maze. Like a bucket of corn right now, you can still get it for US $ 4, US $ 5. Last year this time was more than that. So that’s why I said yes and no.
But generally, as the Consumer Council, we are concerned about price increases because there is no justification.
We are aware that manufacturers, millers and many other key players in the food value chain are accessing foreign currencies at the RBZ (Reserve Bank of Zimbabwe) auction rate and there is no justification for continuing to see increases. of price, in particular, for food.
At the moment, we continue to see an increase every month. We want to understand why. It’s like our retailers, our manufacturers, our wholesalers are so used to just raising the prices, even when there’s no reason. They think it is one of their functions. They think that if they don’t increase the prices in a given month, they will have hurt their business. They think this is one of the conditions for raising prices, even when there is no justification. So we complain as consumers that we want that rationale and we follow them.
We are looking at all of them, people who are getting currencies and are part of the same value chain, so there is no justification for them to raise prices right now because there is a lot of foreign currencies. in this country. We are repeatedly told that forex is available and even now people can access forex. The ordinary person, you and I, can access foreign currencies through exchange bureaus, so why should we keep seeing price increases?
TZ: So, would you say that the decline in food stocks in urban and rural households is mainly due to the fact that consumers cannot afford the rising cost of living? Would it be an accurate assessment?
RM: It is precisely a question of affordability. Consumers cannot afford the same groceries they could buy two years ago. Even last year, this time, with the same amount of money, you can’t buy the same groceries. Even in US terms, if you went to a supermarket using your US dollars, with the same amount that you used to buy groceries, say US $ 100, you would get a lot less, so what’s the rationale?
When we follow the prices, we also compare with other countries in the region. You will find that our prices are much higher and that will cause consumers to start buying across borders, which we do not want to do as Zimbabweans. We don’t want to start over because we’re just going to increase the value of imports and do an injustice to our foreign exchange reserves in this country, but people are already doing it. Households now use runners to buy sugar from South Africa, to buy corn flakes from South Africa for example. So it is not acceptable.
We should be buying our own products here in Zimbabwe, but if the products become uncompetitive in terms of price, we just cannot afford it. It’s going to force every Jack and Jill to start importing commodities from South Africa again, you know, outsourcing the much-needed forex.
TZ: Where do you think the officials are going wrong? Because according to them, and I’m sure you’ve heard the conundrum in this country, you know, on paper inflation is going down. They say the rate of price increase is decreasing, they say. But then on the ground, even in USD, even companies complain about what they call “USD inflation” where prices in US dollars go up.
RM: No, no, they are not mistaken Tatira.
When they say that the rate at which prices are increasing has decreased, it means that the prices continue to rise even though they are still increasing at a much slower rate. So inflation is going down in this direction. But, what I’m saying is we don’t even want inflation to go up, even if it’s at a slower rate.
We don’t need inflation; we don’t need it. If anything, it has to go down because we are back in a multi-currency regime where people can get currencies, where manufacturers have enough currencies to manufacture, and retailers also have currencies. There is no need for inflation, let it be as slow as zero, we don’t need it. He’s got to come down, there’s no justification.
Yes it is increasing at a slower rate, but we don’t even want that slower rate.
TZ: In the field, people use parallel market rates and the government uses official rates. Even some departments are now starting to use parallel market rates, which are almost double. So if you calculate inflation using a currency when the preferred currency is the US dollar, the rate at which prices increase in USD has actually accelerated. What is your take on this?
RM: What you are saying is true. To say that the prices continue to rise even in USD.
Another observation that we have always made is that these same people receive foreign currency at the auction rate, which is usually ZW $ 85, ZW $ 86, very low. But, when it comes to pricing, if you look at most supermarkets, all the products are priced using the black market rate. I don’t even want to call it a parallel rate, it’s a black market and it blackens our economy and these people charge like they’re buying forex on the black market. The prices should actually reflect that they are using the auction rate. Their prices should reflect the auction rate, but they don’t reflect the auction rate, they reflect the black market rate.
That’s why some departments – even today someone complained to us that departments are also using the black market. They’re now following the price, you know, everybody else is using the black market rate, which is not acceptable. How are we going to restore stability to our country? How are we going to stabilize our prices? How are we going to stabilize our economy, our currency, if we continue to follow the black market?
Corruption is our biggest threat to this economy. It is not the currency. It’s not even our Zimbabwean dollar. Our money is going well. Even if you look at our exports versus imports, we’re fine, it’s just our attitude as Zimbabweans. Our attitude must be corrected and we call on the government to restore consumer confidence in the population.
Consumers have to have faith in the economy for us to stop all this hoarding, we stop speculative behavior because people are always speculating and saying “that means the next step is next, so I have to do it”.
It is still speculation. We must restore consumer confidence.
It’s all about trust. It is a question of attitude as Zimbabweans. Let’s have a positive attitude, love our own country, market our own country. Let’s not speak negatively about our country because no one will bless our country if we don’t do it ourselves.
TZ: Would you say that the Consumer Protection Act has been helpful in addressing some of the concerns of consumers?
RM: Yes, yes, the Consumer Protection Act is very useful. The legislation that was put in place to try to protect consumers is starting to work.
If suppliers of goods and services do not respect consumers’ rights, a consumer has the right to choose, so if consumers are not respected, they may lack confidence in the economy and feel more secure. by buying elsewhere, which is not what we want.
We want to promote our own economy. We want to promote our own local businesses; we want to buy Zimbabwe and want to buy local. But, if we are constantly confronted with unfair practices, where consumers are constantly trampled on and their rights are not respected, there is no way to have the trust of consumers.
There is no way that we can even respect our own currency. Therefore, it is very important for the business sector to take care of consumer protection issues.
They have to read and understand the Consumer Protection Act, they actually have to be trained.