THE Confederation of Zimbabwe Industries (CZI) has blamed the National Incomes and Pricing Commission (NIPC) for the recent slump in manufacturing output.
CZI president, Callisto Jokonya told businessdigest this week that the manufacturing sector capacity has now dropped to around 10%.
The figure had previously averaged 20% since 2002. Last year capacity utilisation in the manufacturing sector was around 25%.
Jokonya accused NIPC chairman, Godwills Masimirembwa, of failing to assist industry to survive in a volatile and harsh economic environment.
“The average is now 10%, not all companies are producing at that level,” Jokonya said.
“Several companies are producing at levels lower than that. To be honest with you, if we find a company producing at 10%, it is rather pleasing at the moment.”
Jokonya said Masimirembwa was only approving price increases after products had already disappeared from the market.
“No one will produce at a loss. It is wrong to label businesses which are not producing as being unpatriotic. When production stops, NIPC tells everyone that it is giving industry price increases. I want to find out why NIPC is the habit of doing this,” Jokonya said.
Jokonya said NIPC was being used as a political tool and antagonising business.
Zimbabwe National Chamber of Commerce (ZNCC) president, Marah Hativagone, said the NIPC was slow in the making decisions on prices.
“They are always too slow. They are now just beginning to understand issues. What we said last year is what they are beginning to implement this year,” said Hativagone.
“But still that remains a problem because time does not stand still and things change everyday.”
Hativagone said NIPC had failed to understand that it was supposed to research into the causes of escalating prices and find lasting solutions instead of seeking to control prices. Masimirembwa however dismissed the accusations saying the CZI and the ZNCC had a political agenda.
“It does look like these two umbrella organisations have a political agenda and are always making false accusations against the NIPC,” he said.
Masimirembwa said NIPC was vetting applications for price increases and approving them within seven days.
“We are doing the best we can to approve prices within seven days. In cases of basic commodities, there is not a single outstanding application apart from fertiliser,” he said.
Masimirembwa said NIPC would no longer work with the ZNCC and the CZI. He said the two organisations were slowing down the price applications.
“We have since discovered that these two umbrella bodies slow down things. We are making much more progress working directly with manufacturers and companies than working with them through the ZNCC and the CZI,” Masimirembwa said.
NIPC has come under fire from the Reserve Bank of Zimbabwe for overstepping its mandate.
The central bank recommended that the NIPC should control the prices of three basic commodities — maize meal, bread and flour — and monitor the prices of 16 other products. The CZI and the ZNCC estimate that 80% of all products in shops and supermarkets are imported goods as local manufacturers are yet to recover from last year’s price blitz.