25/10/2023
*Artificial shortages of goods under probe*
The artificial shortage of some basic commodities in Harare’s formal market will be addressed soon, to ensure price stability, Industry and Commerce Minister, Dr Sithembiso Nyoni, has said.
She said this during an engagement with retail stakeholders on Monday, where she led a tour of informal shops, commonly known as tuckshops, in Harare’s downtown area.
Many wholesalers and retailers are buying large quantities of goods, especially basic commodities, directly from manufacturers, leaving established traders with limited stock.
Dr Nyoni said the trend was pushing up prices unnecessarily, as some products such as cerevita, cerelac, mineral water, Delta Beverages’ products and Mazoe, are artificially off supermarket shelves.
In the past few weeks, the Ministry of Industry has been actively engaging with Business Member Organisations (BMOs) representing manufacturers, as well as those representing formal and informal retailers, to discuss market disruptions being experienced within the supply chain.
“During these meetings, manufacturers and retailers have raised several critical issues that require our immediate attention,” said Dr Nyoni.
“One of the major concerns is the emergence of cash-rich informal wholesale and retail shops, particularly in the downtown area of Harare, which has led to an artificial shortage of basic commodities in the formal market.
“These informal shops are buying directly from manufacturers in US dollars, thereby impacting the availability of goods for formal retailers.”
Dr Nyoni said the other issue that came up pertained to manufacturers’ reluctance to supply basic goods to the formal sector, since it often takes up to 60 days for them to pay.
She said the development has resulted in manufacturers preferring to sell their products to informal traders, who exclusively sell in US dollars, disadvantaging people who do not have access to US dollars.
“Furthermore, it has come to our attention that a significant number of informal traders are not tax compliant and do not possess fiscalised devices.
“This non-compliance results in potential tax revenue loss for the Government, as these traders receive Zimbabwe dollar receipts from manufacturers despite paying for goods in US dollars,” she said.
However, Dr Nyoni said it is crucial to acknowledge that vendors represent a success story of empowerment.
Against this background, the Ministry of Industry, through its Empowerment Unit, will ensure the reserved sectors were protected, allowing vendors to continue their important role in the economy but in a more organised manner.
In an interview, Confederation of Zimbabwe Retailers president Dr Denford Mutashu said the Government should take a solution-oriented approach to the informal sector.
“If we are vindictive and there is too much rhetoric, we face the danger of the informal sector sinking much deeper into the shadow economy.
“There are quite a number of reasons why most businesses have decided not to formalise; the structural challenges, steeper regulatory and statutory fees, higher rentals as well as a lot of other concerns that they have raised around taxation,” he said. The Herald
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