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Thursday, January 30, 2025
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HomeBusinessPrice Controls Are Signs of Failed Economy - Trade Group

Price Controls Are Signs of Failed Economy – Trade Group

The National Working Group on Trade Policy says the recent moves by Government to control prices of some commodities are signs of a failed economic management.

The group’s Chairperson Frederick Changaya was reacting to the move by the Competition and Fair Trading Commission (CFTC) to stop nine companies from raising prices.

On Tuesday CFTC issued interim orders to nine farm input distribution companies and two poultry feed manufacturers ordering them to cease and desist from engaging in excessive pricing and unconscionable comduct.

However, Changaya argued that pricing trends are a reflection of a run away inflation worsened by foreign exchange shortage.

He warned that price controls could lead businesses into losses since the government is not controlling the cost of running the business, especially forex.

Said Changaya: “You cannot control the output side of the business while leaving the input side liberalised. That would be unfair.

“People don’t know the exchange rate tomorrow. Today you buy a dollar at K3 250, tomorrow you buy it at K3 500. Even if you don’t buy dollars, next day since they aren’t readily available, economic players do hedging”.

Changaya, a former Reserve Bank of Malawi (RBM) Monetary Policy Committee member, said the solutions lie in crafting responsive monetary and fiscal policies.

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