Home / Business / Bread price increase above board: RBZ

Bread price increase above board: RBZ

Livingstone Marufu Business Reporter
THE Reserve Bank of Zimbabwe (RBZ) says the increase in the price of bread to $1 from 90 cents was arrived at following wide consultations across all sectors and realisation that cost pressures had increased in the baking industry in recent years.

This comes at a time when most local companies are facing serious operational inefficiencies caused by the lack of equipment as most firms are struggling to get foreign currency to import new machinery as well as spare parts.

RBZ governor Dr John Mangudya told The Herald Business that the baking sector acted accordingly to increase bread prices.

“The industry took necessary measures to increase the bread prices as they presented their challenges and justifications to the Industry, Commerce and Enterprise Development Ministry and National Competitive Commission (NCC).

“And all processes were above board,” said Dr Mangudya.

Meanwhile, National Bakers’ Association of Zimbabwe (NBAZ) president and Bakers Inn chief executive Ngoni Mazango said the increase was imminent due to the challenges that the industry is facing.

He also said the price increase was long overdue and it has not exceeded the dollar mark.

“I do not see anything amiss with the increase of bread price by 10 cents as we have had this price ($1) since dollarisation.

“One thing most people did not understand is that we reduced the price of the bread to 90 cents when things were good for us. We will certainly return to that price when the operating environment improves.

“The recent cost pressures have forced us to increase the price to $1.

We have consulted the National Competitiveness Commission (NCC), which was mandated by Vice President Constantino Chiwenga to oversee the viability of the sector.

“We have proved beyond the reasonable doubt to NCC that we must increase bread prices and the authorities know that we have some cost pressures that are beyond us,” said Mr Mazango.

He said the sector had been facing many challenges such as costs and liabilities and price increment could help the sector to return to profitability.

Since November last year over five bakeries were closed down due to viability challenges.

NBAZ said bread price increase was mainly due to the increase in flour prices to $36 per 50kg from $32.

However, Grain Millers Association of Zimbabwe (GMAZ) said there was no need and justification for bread price increase as flour prices remained flat over the past two years.

Industry, Commerce and Enterprise Development Minister, Dr Mike Bimha said he was not aware of any bread price increase but if the price does not exceed $1 the increment is minimal.

Most bakeries have been selling underweight bread to justify the 90 cents price and a seven-member National Bread Standing Committee (NBSC) in February this year was formed to interrogate inefficiencies in the bread value chain.

GMAZ chairman Tafadzwa Musarara chairs operations of the NBSC   deputised by Consumer Council of Zimbabwe executive director Rosemary Siyachitema.

SOURCE: THE HERALD

Check Also

Beer maker pumps up the volume in Africa

JOHANNESBURG/BRUSSELS/LONDON. — Sitting outside the ramshackle Vimba Tavern in Johannesburg’s Alexandra township, Patrick Mashego swigs …

Leave a Reply

Your email address will not be published. Required fields are marked *