By Kingsley Jassi:
The government plans to cap prices for sugar and other essential commodities, a move experts have described as unsustainable and counter-productive.
Industry and Trade Minister Vitumbiko Mumba said a proposed law, termed ‘Essential Commodities Bill’, being developed will list a number of goods that will be classified as essential, such that their prices will not be left to market dynamics.
“We are introducing a law that will give the government legal control on pricing of essential goods. We tried to do that but we were challenged because there was no law. As such, we will create a law for that,” Mumba said.
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This comes amid the escalation of prices of various basic commodities, notably sugar, cooking oil and maize.
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But experts have urged the authorities to focus on production to increase supply and suppress protracted inflation.
Sugar hit K6, 000 per kilogramme this month, against the recommended price of K2, 900 as the government and sugar companies blame distributors they accuse of hoarding and aiding the smuggling of the commodity amid low production during this off-production season.
Economic commentator David Kamchacha said much as the intention was to protect the public from profiteering, the move was unsustainable.
“The best way in controlling prices is to increase production to ensure more supply. The price comes down on its own but capping is unsustainable,” Kamchacha said.
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The country has been experiencing sugar, maize and fuel supply constraints that have disrupted market dynamics.
But Kamchacha said the country’s installed production capacity was overwhelmed by increasing population and cross-border demand, saying studies show the need to increase production. The government has control over fuel prices, water and electricity tariffs.
