New Zimbabwe.com

Economy burns, gvt to engage cartels

By Leopold Munhende


AS the country’s economy moves further towards a complete implosion, government has revealed it was aware of cartels holding Zimbabweans to ransom.

Instead of prosecuting the cartels, government, after a Cabinet meeting Tuesday, reportedly decided it was better to “engage them” and avoid further destabilisation.

Industry and Commerce Minister, Mangaliso Ndlovu told a post-Cabinet media briefing Tuesday that while government is aware of the “cartels” behind the chaos in the economy, “no one is being investigated” but authorities were instead targeting breaking up monopolies in specific sectors.

The Cabinet Minister said government would engage the “cartels” to get them to reveal their modus operandi with a view to pardoning them.

“We have the Competition and Tariffs Commission, which is a body charged with making sure that competition is promoted in our economy. By nature, cartels operate covertly which is why you will find that in the principles, we are coming up with proposals to have a leniency programme, so that we can make use of players who are in the cartels to provide information.

“Ordinarily, we might want to talk more of monopolies because cartels are very difficult to break or identify,” said Ndlovu.

“It is apparent that there is a network of companies, individuals colluding for especially price fixing and product supply.”

Without mentioning any names, Ndlovu blamed the cartels for the current spike in prices of goods and services, something that has wreaked havoc in the economy and eroded the value of the local currency.

Fuel tycoon Kuda Tagwirei, who reportedly has strong ties with Vice President Constantino Chiwenga, has in recent months been the target of brickbats from ruling party storm-troopers aligned to President Emmerson Mnangagwa.

Tagwirei’s Sakunda Holdings provides almost all of Zimbabwe’s fuel needs and reports claim was the recipient of a major chunk of the Reserve Bank of Zimbabwe’s foreign currency allocation for fuel imports.

The programme was discontinued as Mnangagwa moved to liberalise the sector that is at the centre of the economy.

Continued fuel price increases are behind the economic troubles facing the country.

Ndlovu added: “The whole idea is not to target people say by investigating. The best approach is to come up with measures that promote competition, that break these monopolies, no one is being investigated specifically, we are looking at sectors.”

The rise in fuel prices has triggered a domino effect on availability and prices of basic commodities, pushing citizens into poverty.

Grain Millers Association of Zimbabwe (GMAZ) and the Confederation of Zimbabwe Retailers have resorted to price controls as prices continue to rise.

The price of bread has shot up from $0.90 last year to the current $3.50, prices of mealie meal and sugar as well as flour also went up this week as the situation continues to worsen.