Harare - President Robert Mugabe's government has given manufacturers and retailers the green light to increase prices of selected goods in a desperate bid to end shortages of basic goods and other important commodities, a state newspaper reported.
State daily, The Herald, reported that government had okayed a series of increases of certain goods ranging from basic goods to telephone tariffs.
Prices of chicken, sugar, tea leaves, and bi-carbonate of soda were increased.
The paper also said the prices of bathing and washing shops had been increased while adjustments for train and air fares, telecommunications and freight tariffs have been approved and the new fares and tariffs will be communicated through the relevant authorities.
Industry and International Trade Minister Obert Mpofu, who is also chairperson of the crack price control monitoring team, announced that retailers are allowed to add a mark-up of more than 20% and charge Value Added Tax (VAT) of 15% on a commodity.
For example, a retailer who gets a product from a supplier at ZW$100 000 will sell the product at a maximum price of ZW$138 000, the paper reported.
"To ensure consistency and uniformity, price inspectors and monitors would use the manufacturer's price of June 18 as the benchmark and a mark up of 20% plus 15% VAT as the price of basic goods and commodities in retail shops," the paper reported.
Farming inputs such as maize seed and herbicide dust which is used to protect grain against weevils while prices of motor tyres and shoes were also increased.
The government says commodities not covered by the review shall remain at June 18 levels until further notice.
But Mugabe's critics say the gesture to industry is a far cry and will not help improve the supply situation.
Critics say the shortages are going to continue until Mugabe's government backs off from his price control policy on business.
Until the government realises the need to free the economy, analysts say Zimbabwe will continue to grapple with food shortages.
Early this month, Mugabe's government made piece meal increases in the prices of some basic goods, packaging material, stock feed and cement to improve supplies in the market but did not get the desired results as shortages persisted.
The announcement lends credence to reports that Mugabe might want to back off from price controls over the weekend after the state owned Sunday Mail said there was need to increase prices.
Mugabe ordered businesses to slash price of goods by 50% accusing them of profiteering and robbing hapless consumers through a series of price increases.
The aged leader, 83 and in power since 1980, accused businesses of working in cahoots with his political foes to oust him out of power through a wave of price increases, which he believes were meant to turn the people against him.
Zimbabwe has the highest inflation rate in the world believed to be above 4 500% in April.
- Fin24