FIU target manufacturers

LIVINGSTONE MARUFU

The Financial Intelligence Unit (FIU) has expressed  disquiet  over high prices charged by local manufacturers amid worries this could set off another wave of price increases  across   the entire supply chain.

Oliver Chiperesa, director general of the FIU, told Business Times that the national task force’s desire was to remove the indiscipline tendencies from their source.

“Our biggest concern is  that  the wholesalers and manufacturers who supply the  goods and services to the retailers are the root of the problems as they are charging higher rates thereby forcing the retailers to charge high rates,” Chiperesa said.

However, the Confederation of Zimbabwe Industries (CZI) asserted that the manufacturers  were merely making ends meet rather than charging exorbitant prices.

“We are charging a price that allows us to continue producing, we can’t charge a price that will see us close shop again. There is a need to engage so that we can have a common understanding,” CZI said.

The threat comes as the sector accused the FIU of harassing struggling companies to enforce “price controls” out of concern that such a move would increase the value of the US dollar.

Companies are being pursued at a time when the government is battling exchange rate volatility, which has caused prices for goods and services to skyrocket recently.

“The FIU has been harshly enforcing compliance with the prescribed principle of ‘formal exchange rate plus a 10% margin.“The enforcement of price controls through the exchange rate by the FIU is actually also inflationary as it causes an increase in United States dollar prices at a time when the American dollar has a higher weight in the blending.In short, the United States dollar inflation is a compliance driven inflation as formal businesses tried to hedge against an unrealistic official exchange rate which they were being forced to us,” CZI said in its latest report.

The Minister of Industry and Commerce, Sithembiso Nyoni, recently accused manufacturers of excluding wholesalers and disrupting the market.