Government mulls price reductions

THE Zimbabwean government is considering reducing prices for goods and services in line with prevailing regional and international rates amid concerns service providers are ripping off customers, a top government official has said.

Taurai Mangudhla

Cabinet is currently discussing the issue of pricing with a view to correcting the anomaly, Tourism minister Walter Mzembi on Wednesday told a press briefing.

Fuel dealers have colluded to continue selling fuel at high prices despite a global markdown on the product, Mzembi said.

Fuel prices are expected to fall even further as international reports on Wednesday said the price of brent crude oil had fallen below US$50 a barrel for the first time since May 2009.

“If I were the Minister of Energy, I would investigate this anomaly, it has ramifications on the competitiveness of the economy,” Mzembi said.

“If the region is benefiting from a global markdown on fuel, why should we be the only country that does not experience that?”
Mzembi said the pricing problems cut across all sectors and have a negative bearing on the economy.

“This is not just in my sector and when you talk of destination competitiveness it means everything,” he said.

“It is a problem when your hamburger costs US$15 dollars which is more than what your counterparts charge in Zambia. We are doing bungee jumping for US$150 and Zambia is charging two thirds of that on the same bridge.”

Apart from fuel, rentals remain high for Zimbabwe’s prime space at a time the economy is suffering from a number of challenges that have seen companies shutting down or retrenching.

Mobile phone and internet tariffs as well as medical fees have also been described by researchers as above regional averages.

Mzembi said it will remain difficult for the Zimbabwe Tourism Authority to market Zimbabwe as a preferable destination if the pricing anomalies are not addressed.

“If we don’t fix the issue of pricing, we can sell the destination’s weather which has no price, but the actual product will be out of sync with international standards,” said the minister.

He said international carrier, KLM Royal Dutch Airlines, discontinued flights to Harare in October after 18 months of operation for, among other reasons, the high cost of fuel.

He said despite having trouble to get the right load factors, KLM Roman Dutch Airlines officials revealed the high cost of fuel in Zimbabwe as one of their challenges.

Mzembi’s statement comes ahead of the 2015 edition of Netherlands’s holiday fare Benelux Market.

Zimbabwe’s delegation, to be led by the Ministry of Tourism, has been sponsored by the Royal Netherlands Embassy in Harare.

Dutch Ambassador to Zimbabwe, Zambia and Malawi Gera Sneller said the Dutch embassy has provided more than US$100 000 to fund the fare and other activities.

Sneller said the funding is part of her country’s efforts to put Zimbabwe on the map, first in the Netherlands and then Europe.
She said her government has funding to support activities that have a continuum between aid and trade.

“As the Netherlands, we have said one of the most important things is to support the private sector,” Sneller said.

ZTA CEO Karikoga Kaseke welcomed the financial support, saying it coincides with government’s thrust to re-engage the West.

He said total tourist arrivals from Belgium, Netherlands and Luxemburg stood at 14 000 in 2013, down from peak levels of 39 800 in 1999.