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Ministry of Finance News and Statements

Competition in retail sector pushes cost of living down

08 March 2010

By Danie Simango

THE cost of living for a family of six decreased by 2 percent in February due to competition in the retail sector and the non-awarding of a civil service salary increase during the period under review.

According to the consumer basket for February issued by the Consumer Council of Zimbabwe, the monthly budget for a family of six recorded a marginal decrease from US$502,53 in January to US$491,42 in February 2010, reflecting a 2 percent decrease.

"There was a decrease in the cost of the food basket in December 2009 (foodstuffs only) from US$145,88 in January 2010 to US$136,07 in February 2010, reflecting a 7 percent decrease," the CCZ said.

The cost of foodstuffs and detergents also decreased by 7 percent from US$158,53 in January 2010 to US$147,42 in February.

The cost for transport, rent, water, electricity, health, education and footwear remained static at US$344,00.

The decrease in the February basket has been attributed to stiff competition in the retail sector as most business operators are engaged in selling foodstuffs since civil servants are earning a moderate salary that is enough to buy mostly food.

Moreover, business operators anticipated a civil service salary increase but this did not happen so they were forced to reduce prices.

Mr Trymore Chidimuro, a manager at a shop in the CBD, said: "Between January and February most people are preoccupied with school fees so there will be low demand on the market and this promoted a fall in prices of basic commodities. "

He also highlighted that due to high competition in the market, retailers are forced to review their prices because most of the goods are now available in the country and this minimises transport cost.

The CCZ expressed concern over the exorbitant fees that are still being charged by public utilities such as Zesa and Harare City Council.

"There is confusion with the large bills which are being sent in spite of the long periods of load-shedding and water cuts that consumers have had to put up with.

"CCZ will support every effort that the Competition and Tariff Commission is putting in investigating Zesa charges, but we also feel that the net has to be cast wider to other utilities," the consumer watchdog said.

The CCZ urged consumers to seek fairness on the marketplace by ensuring that their rights are observed.

http://www.herald.co.zw/inside.aspx?sectid=16248&cat=8

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