HomeBusiness DigestBasic goods vanish as crisis deepens

Basic goods vanish as crisis deepens

Ashleigh Swaile/Tahna Fleishman

THE shortage of basic commodities has widened to include soap and salt as the economic crisis continues to deepen.

ca, sans-serif”>Shortages of basic commodities intensified this week with most retail shops running out of essential goods such as salt and soap.

The recent shortages also add to the list of basics that have disappeared from shelves as companies grapple with perennial foreign currency shortages and increased overheads caused by skewed economic policies.

Currently the list of shortages includes milk, bread, flour, cooking oil and toothpaste. Experts say the list is likely to widen as the economy continues to crash and government intensifies its interference in the manufacturing sector. The government is also likely to worsen the situation with its plans to reintroduce price controls.

Although government blames companies of hoarding the basic commodities, manufacturers say their operations have been affected by the foreign currency shortages.

Human resources director of Unilever Noah Matibiri, in an interview this week, attributed the shortages of locally-produced goods, particularly soaps and washing powders, “to foreign currency concerns”. Unilever produces more than 50% of the basic commodities.

Matibiri said the company had not stopped production of the goods but availability has been limited by foreign currency constraints.

According to the Consumer Council of Zimbabwe (CCZ) spokesperson, Tonderai Mukeredzi, the shortages were a result of the foreign currency shortages or some companies withholding their products in a demonstration of their displeasure with government’s price controls.

“From what we understand, many companies are experiencing problems due to foreign currency (problems). They do not have the money to import essentials and are therefore forced to scale down their operations, some companies by at least 50%,” Mukeredzi said.

“We cannot rule out the possibility that they may have the capacity to produce but are not doing so, because they are not happy with government intervention.”

He said although it was necessary for government to intervene it was not proper to introduce outright controls.

“We believe sometimes it is necessary for government to intervene, but not necessarily to control. At present we have only three controlled products – bread, flour and roller meal. Everything else are monitored products,” he said.

The CCZ recently held price surveys to assess the situation and advise government on the way forward. “We are concerned that basic commodities continue to be in short supply,” said Mukeredzi.

As of June, basic commodity prices have soared. The CCZ report for this month has placed the cost of living for a family of six at $4,2 million, up from the $3,1 million in May.

“This has caused a 34,5% increase in the cost of living,” Mukeredzi said. In addition to these hikes, prices for consumer goods such as margarine have risen by 82% and meat by approximately 26%. The CCZ also estimates that the price of soap has increased by 57%.

The increase in prices of basics has seriously eroded the incomes of the workers who are already affected by other hikes in transport and medical fees.

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