The ManicaPost
Samuel Kadungure and Tendai Gukutikwa
A LARGE number of retail outlets in Manicaland Province are stifling the use of local currency by using exorbitant black market rates to peg their prices while offering discounts to those buying in foreign currency, it has been established.
While the Zimbabwean dollar is being traded for $258 against the USD on the Reserve Bank of Zimbabwe auction, it is going for around 1:450 on the black market.
Investigations by The Manica Post in supermarkets, home appliance, hardware, stationery and clothing shops in Mutare, Rusape and Chipinge revealed that customers using local currency were paying through the nose as retailers sought to push for USD transactions.
In fact, the shops that are discouraging the use of local currency, especially the downtown tuckshops across the province, are now pegging their prices at rates as high as 1:600.
The Manica Post has also established that some outlets in the province, including Mutare Farm Supply and MSF Stationery, Hardware and Appliance Shops, have entirely ditched the Zimbabwean dollar for the United States dollar.
This is despite the fact that Zimbabwe has a multiple currency basket that includes the Zimbabwean dollar.
Statutory Instrument 185 of 2020 compels any person who provides goods or services in Zimbabwe to display, quote or offer the price for such goods or services in both the Zimbabwean dollar and foreign currency at the prevailing exchange rate.
In some furniture shops, there are USD price tags only.
Where tags are in local currency, the runaway parallel market exchange rate has seen a surge in prices of basic commodities over the last few weeks.
Mrs Charity Manzununu of Sakubva said retailers are driving the public to the black market.
“Retail outlets are colluding to charge three to four times the price of their products in ZWL, which is beyond the reach of many. What is happening is very unfortunate. We are then forced to buy foreign currency on the black market for use in these shops.
“Some retail outlets are selling a 2-little bottle of cooking oil for $2 300, which if converted at the prevailing auction rate is way above US$8. If you are to ask for the USD price, you will get the same bottle of cooking oil at US$4.50,” bemoaned Mrs Manzununu.
In large supermarkets, a 2l bottle of cooking oil is going for an average of $1 500.
However in Chipinge, a 2l bottle of cooking costs $2 000, R70 or US$4,50; while 2kgs of sugar costs R35, US$3 or $1 200.
Mr Gedion Chiororo of Checheche, Chipinge, said he is finding it difficult to buy basic commodities using his debit card due to the retailers’ exorbitant local currency charges.
“We do not have large retail outlets where plastic money is accepted here in Checheche. We are being charged exorbitant prices when paying using the local currency. Most outlets do not accept mobile money transfers and are forcing us to pay in forex,” said Mr Chiororo.
A Chipinge businessman who requested not to be named said he prefers the South African rand to the Zimbabwean dollar when transacting since his suppliers are in the neighbouring country.
Mr Taurai Chiripamberi of Magamba, Rusape, said consumers are in-between a hard rock and hard surface as they are being arm-twisted into buying using foreign currency.
“There is collusion by business to push the Zim dollar prices of goods and services manifold so that the public opts to use the USD. Government should move in quickly to restore market discipline,” he said.
Mr Milton Murapa of Greenside in Mutare decried the unscrupulous behaviour of business people. He said this market indiscipline is making life unnecessarily difficult for the poor.
“This is a sad development, especially considering that Government is doing all it can to arrest inflation and the runaway exchange rate,” he said.
The Government is working tirelessly to restore macroeconomic stability, amid concerns that the recent exchange rate volatility is being driven by negative sentiments by economic agents as opposed to economic fundamentals.
President Mnangagwa recently announced a raft of measures to restore confidence, preserve value and restore macroeconomic stability in the economy.
He highlighted that the country recently experienced a rise in month-on-month inflation, from a monthly average of 4,5 percent seen in the past twelve months to 15,5 percent seen in April.
The President said if not contained, the continued depreciation of the local currency against the USD may lead to the reversal of the economic stability achieved since the introduction of the foreign exchange system in July 2020.
“These negative sentiments have been propagating adverse expectations on future inflation and exchange rates movements, thus giving rise to artificially high demand for foreign currency as economic agents hedge against expected high inflation,” said President Mnangagwa.
He said the practice had become a self-fulfilling process by becoming the driver of the exchange rate depreciation and inflation in the economy, adding that this vicious cycle needed to be broken.
