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Commodity prices rising and rising… govt just stunned!

The Principal Secretary in the Ministry of Trade and Industry Soaile Mochaba

June 24, 2020 3 min read

MASERU - In the face of rising food prices in the country due to Coronavirus outbreak, the government of Lesotho has admitted that it is difficult to control commodity prices as almost all of the products are imported.

That means prices of commodities may continue to go up as the virus continues to wreak havoc and negatively affect economic activity.

The government, however, was quick to reveal that the matter is currently being discussed at a regional level to try and control the situation.

Price controls will mean a direct economic intervention by government to manage the availability of certain goods.

Lesotho imports almost 85 per cent of its products from South Africa according the International Monetary Fund (IMF) 2019 statistics.   

On Wednesday last week, the president of the Lesotho Liquor and Restaurant Owners Association (LIRWA) Motseki Nkeane said in an interview with Maseru Metro that while prices remain normal for most beer products, the situation is not the same with other food and beverage products.

“We have maintained prices for beer products but with other products such as maize meal and flour, prices have almost doubled. We are still trying to talk to some of our members who are taking advantage of the current situation to refrain and maintain prices as normal as possible.

“The problem is that government keeps on saying prices should be kept as normal and reasonable but no one is actually monitoring the situation,” Nkeane said in an interview on Wednesday last week.

On Tuesday this week, Ministry of Trade and Industry admitted that while it is encouraged that prices stay normal, it is similarly difficult for government to control such behavior.

“The problem is that we are not producing a lot of our commodities in the country. We import from South Africa and they are having the same problem and this is also a global challenge as we speak. So for us it is very difficult to control because these are imported prices.


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 “Any businessman wants to make profit and if the suppliers adjust their prices, you will obviously adjust yours if you want to stay in business,” said the Principal Secretary in the Ministry of Trade and Industry Soaile Mochaba in an interview with Maseru Metro on Tuesday this week.

Mochaba added however that the issue is currently being discussed at South African Customs Union (SACU) level to try and come up with a possible solution.

“In the region, it is also an issue that is being discussed at SACU level to come up with strategies to control that but we have not come to a solution yet because like I am saying it is not easy.

“And if as a government you are going to be very strict on this thing of price increase and at the same time still wants the economy to keep going, it says you will have to close that gap,” he added.

Consumers have raised alarm on the sky-rocketing prices especially on imported goods. For instance prices for cigarettes and wines and spirits have almost tripled in the past three weeks as a result of low supply and high demand.

What has also been raised as a concern has been the rising prices for the staples which Maize Meal prices having gone up by more than 25 percent in most shops.

 

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