Mozambique Experiences Significant Price Increases in February

In February, Mozambique observed a 4.47% overall increase in prices, primarily driven by a 4.74% rise in food service costs. Urban centers like Tete and Xai-Xai reported the highest increases. Local businesses face challenges due to supplier disruptions and fluctuating consumer demand, particularly during Ramadan. Strategies to manage price adjustments while retaining customers are critical in this uncertain economic landscape.

In February, Mozambique experienced a notable increase in the prices of goods and services, predominantly influenced by a 4.74% rise in food service prices, as reported by the National Institute of Statistics. Consumers faced a challenging market with an overall price increase of 4.47%, surpassing the increases observed in February of the previous year. Notably, food and non-alcoholic beverages along with restaurants and hotel services exhibited the most significant price hikes, reported at 11.89% and 6.20%, respectively.

The report also highlighted that urban centers recorded the highest price increases, particularly the city of Tete, which saw an increase of approximately 6.85%, followed closely by Xai-Xai at 6.17%. Maputo, representing the majority of the data sample, recorded a rise of 4.74%, while Nampula saw a modest increase of 4.71%, with Quelimane reporting the least rise at 3.45%.

An investigation by our newspaper into food establishments in Maputo revealed that escalations in raw material costs, largely due to post-election protests, were a critical factor. Wilma da Cruz, a bakery employee, noted that the disruptions caused by closed suppliers compelled them to adjust prices, stating, “We had to change some of our suppliers.”

In response to changing suppliers, Wilma’s bakery implemented measured price increases to retain customers. She elaborated, “Not all of our products have been increased in scale, one or the other, to be able to maintain customers,” striving to limit price increases to 10%-20% to avoid deterring clientele.

Wilma’s bakery faced risks in adjusting prices, while others opted to absorb losses to protect customers. Raquel Lopes, a restaurant owner, remarked, “Knowing the situation, increasing the price is the most viable and quickest solution,” while emphasizing the need to balance customer relations with supplier price fluctuations.

Anaisse Perreira, a snack bar manager, described the ongoing uncertainties faced by the restaurant sector, stating, “I can’t say that we are happy with the accounts, nor that things are normal, but we can see that there was a huge drop.” She noted the challenges posed during Ramadan and the inconsistent flow of tourists, leading to a continued struggle for sales.

Despite the hardships, businesses are gradually recovering from a precarious situation. Anaisse recounted moments of closure and the uncertainty of daily operations, stating, “We often had difficulty obtaining our daily products because we work with local suppliers.” Amidst these challenges, many businesses struggled to remain operational following the protests, with no clear timeline for stabilization.

In conclusion, the month of February saw a significant rise in prices of goods and services in Mozambique, influenced by the food service sector and urban price inflations. Business owners are contending with increased raw material costs, supplier disruptions, and changes in consumer demand, particularly during Ramadan. While some businesses adopt strategies to mitigate these issues, the overall sentiment remains uncertain, marked by fluctuating sales and inconsistent market conditions. Thus, the ongoing economic challenges necessitate a careful balance between managing costs and maintaining customer loyalty.

Original Source: clubofmozambique.com