Some shops have hiked prices on basic grocery items, making the festive season increasingly gloomy for most citizens already struggling to make ends meet.
According to a survey conducted by NewsDay, shops have increased the prices of mealie-meal, sugar, cooking oil, rice and sugar, among others, even in United States dollars.
In some retail shops, a 2-litre bottle of cooking oil, which was selling at US$3, now costs US$4.50, while the price of a 2kg pack of rice rose to US$3.50 from US$2.
The price of a 2-litre bottle of Mazoe Crush rose to US$4,50 from $3, while a bar of washing soap now costs US$1.50 from US$1.
However, the Minister of Industry and Commerce Sithembiso Nyoni told NewsDay on Thursday that the Government will not impose price controls, but engage business over the price increases. She said:
Government does not tame prices. What we do is we discuss with the business and try to understand why they are hiking prices.
So, I will set up an office to look into that and then we will take the necessary dialogue steps to look into that.
Confederation of Zimbabwe Retailers (CZR) president Denford Mutashu warned of further price hikes.
He blamed the price increases on proposals to increase taxes by Finance, Economic Development and Investment Promotion Minister Mthuli Ncube in the 2024 budget. Said Mutashu:
There is a huge expectation of more price hikes before year-end and this has been triggered by the barrage of taxes on basic commodities contained in the 2024 budget.
The proposal to increase VAT [value-added tax] on basic commodities shocked the market because, since 1980, we have not had a hike on VAT on basic commodities.
The 1% wealth tax proposal has also resulted in property owners raising their rental fees.
So, business owners who rent property will increase the prices of the services and commodities.
He said the daily power cuts have increased the cost of running business as businesses are forced to rely on generators as alternative power sources. Mutashu said:
Big businesses are running on generators as a power source and it is not sustainable. It is not cost-effective, so all these cost drivers have piled pressure.
If there is no reversal of VAT on basic commodities and VAT on school fees, it is going to be a disaster because already schools have increased fees to cushion themselves from the VAT proposal.
Some schools have reportedly announced intentions to increase fees by up to 100% next term.
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