‘Prices of basic goods going down’ – Ncube

FINANCE Minister Mthuli Ncube says prices of basic goods in terms of RTGS$ were “grossly inflated” adding that Treasury calculations indicate prices were in fact going down.

But Confederation of Zimbabwe Retailers president Denford Mutashu was quick to dismiss the assertion arguing the RTGS was fast losing value instead.

“Prices for basic goods in the consumption basket in Zimbabwe have dropped by an average 19% in US$ terms, from January to June 2019,” Mthuli posted on social media.

“Prices in terms of RTGS$ terms are therefore grossly inflated.

“The US$ prices as offered by merchants at point of sale in January 2018 and in June 2019, cereals cerevita in January 2018 was $3.02 and in June $2.00 (-34%).

“Mealie meal Red Seal 10kg in January 2018 ($4.83 and June $2.00 (-59%) and flour Gloria Self Raising was $2.12 in January last year and now $1.75 June (-17%) and stewing beef was $5.61 in January 2018 now $2.20 (-61%) and fresh milk Chimombe 500 ml was 0.64 in January 2018 and $1.00 (17%).”

However, Mutashu said the Finance Minister was failing to see reality on the ground.

“This simply means the RTGS$ is fast losing ground against the greenback and increasingly points to a currency which is not backed by production,” Mutashu later told NewZimbabwe.com.

“It exonerates business from a barrage of attacks over alleged wanton profiteering.

“It simply means the challenge is the currency which is losing confidence.

“We have always said the current environment has more to do with confidence and trust on whatever we call currency given inconsistences by the same finance chief.”

Mutashu added, “It is the same reason the call for redollarisation have gathered momentum in recent weeks.

“A currency should be widely accepted as a medium of exchange, store value and predictable.”

Mutashu said the moment authorities begin to announce there is another currency to be introduced, the one in circulation loses traction as people hedge against any potential losses arising from the currency change over.

In a recent interview with a state owned radio station, President Emmerson Mnangagwa said the bond note was one of the strongest currencies in the region.