Economic liberalism advocates minimal government intervention in markets, emphasizing efficiency, property rights, and contract enforcement. However, it supports state involvement to correct market failures. This principle forms the backbone of market liberalism, which combines a free-market economy with personal liberties and human rights.
Zambia, as a free-market economy, operates without price controls, ensuring market forces determine prices. Yet, the Zambia National Service (ZNS) imposing retail prices on mealie meal raises critical questions about the adherence to free-market policies.
Free Market vs. Fixed Pricing
The essence of a free market lies in allowing retailers to set prices based on operational costs and market conditions. Fixed overhead costs like rentals, transportation, and labor vary across regions, making uniform pricing impractical. For instance, if a corner shop purchases supplies from a wholesaler like ShopRite, should the wholesaler dictate retail prices? The answer, under free-market principles, is no.
The ZNS practice of setting a fixed price for mealie meal and penalizing retailers for selling above this price appears to conflict with free-market ideals. Such actions raise questions:
- Is there a statutory instrument or regulation supporting ZNS’s pricing enforcement?
- If no legal framework exists, is the confiscation of mealie meal priced above ZNS recommendations lawful?
The Need for Legal Clarity
President of the Socialist Party, Fred M’membe, has highlighted the ambiguity surrounding ZNS’s pricing authority. He questions whether ZNS possesses the legal mandate to impose national uniform retail prices for mealie meal and whether such enforcement aligns with Zambia’s free-market policy.
A valid comparison can be made with fuel pricing, which is regulated by the Energy Regulation Board (ERB) through legal instruments. Without a similar framework for mealie meal, the actions by ZNS may lack legal grounding.
Traders dealing in ZNS mealie meal require clear guidelines backed by law. The Ministers of SMEs and Commerce, Trade, and Industry are urged to provide clarity and ensure that any price controls are legally justified.
Mixed Economy Considerations
While Zambia is predominantly a free-market economy, elements of a mixed economy persist. Some argue that products from public institutions like ZNS can and should have regulated prices to protect vulnerable populations. As one commentator suggested, the President could be granted the authority to issue executive orders setting affordable prices for essential goods.
The ZNS mealie meal pricing issue brings to light the tension between free-market principles and state intervention. While market liberalism opposes inefficiencies caused by excessive government control, it also acknowledges the need for regulation in specific scenarios.
For Zambia, finding a balance between protecting vulnerable communities and upholding free-market policies is crucial. Establishing clear legal frameworks and promoting transparency in pricing decisions will foster trust among traders and consumers, ensuring sustainable economic growth.
