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Zimbabwe: Relaxing price controls "too little, too late"
Businesses say the Zimbabwean government's about-turn on price controls this week, allowing manufacturers and retailers to increase the prices of basic commodities, is a classic case of "too little, too late", and most are sceptical about whether the decision will restore a normal flow of goods onto the market.
Not much to sell: empty shelves at a Harare supermarket. (Photo: Antony Kaminju/IRIN)
The government's reversal followed marathon meetings with businessmen, who warned that more companies would go under if goods and services continued to be provided at below-cost prices; many have already closed shop, saying they could not afford to restock.
Government announced this week that retailers would be allowed a maximum markup of 20 percent and charge Value Added Tax of 15 percent on goods, but Bulawayo-based economist Eric Bloch said he did not see the move bringing immediate relief.
"The stated increases announced by government do not cover operating costs for the firms to manufacture goods in large enough volumes to meet demand. I don't see this bringing back goods on shop shelves unless government abolishes price controls, reduces state spending and stops printing money."
Read the full article: http://www.irinnews.org/report.aspx?ReportID=73922
