HomePoliticsNew price blitz targets ZSE

New price blitz targets ZSE

Shakeman Mugari

GOVERNMENT plans to launch a second phase of the price crackdown specifically targeting Zimbabwe Stock Exchange-listed firms and foreign-owned companies.

Some companies have already received an ultimatum from National Incomes and Pricing Commission (NIPC) chairman, Godwills Masimirembwa, to reduce prices of all imported basic commodities by November 23.

Business managers were instructed to reduce the prices or risk being arrested.

A confidential document leaked to the Zimbabwe Independent this week reveals that plans for a second price blitz are advanced for a possible launch in the next two weeks.

The document, compiled by the Ministry of Industry and International Trade, is expected to be presented to cabinet next week. Once cabinet approves the plan, the NIPC will, together with security agencies, launch the operation.

The document gives an update of the current pricing situation and recommends that a new crackdown be launched to deal with “price madness”.

“It is our conviction that the revolution which was started in June should be brought to its logical conclusion, otherwise the government would have set a very bad precedent by arresting people, then release them and leave them doing exactly what they were arrested for,” the document says.

It said there was need to deal severely with businesspeople because they had shown that they “will never repent”.

The document, dated November 7, recommends that government also deals with the ZSE which it said had “become the biggest haven of speculators”. “Funds being invested on ZSE are not helping Zimbabwe in any way. There is no justification whatsoever for the mega returns obtaining on ZSE.

“At a market capitalisation of more than $7 000 trillion, or $7 qdrln, ZSE is destroying any effort to fight inflation.

“This form of inflationary money is unacceptable. Government should be able to track the biggest speculators on the bourse and scrutinise their motives,” the document says.

“There is need for investors to account where they got the huge funds they are dabbling on the ZSE. Information at hand indicates that most of these funds are from parallel market activities. The ZSE is also providing a huge cash base for parallel market activities to complete a vicious circle. There is need to radically review commissions and levies charged on ZSE transactions.”

The report also recommended that government uses the Indigenisation and Economic Empowerment Act, which is yet to be assented to by President Robert Mugabe, to take over foreign companies that were allegedly increasing prices “to destabilise the economy”.

“Once this Bill has been given the crucial presidential assent, the ministry will move with speed to make sure that all companies working to destabilise the economy are indigenised,” it says.

“We have also noted with concern that some big companies are already employing tactics to evade the indigenisation process by going into mergers with black-owned companies with a clear intention to mask the true ownership of their companies.”

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