Some unscrupulous manufacturers and retailers openly insist on payments in U.S. dollars, while others set prices in Zimbabwean dollars at shockingly high exchange rates to force consumers to pay in hard currency, The Sunday Mail Business has established.
Among the companies that engage in these abusive practices are large companies that obtain foreign currency from the Reserve Bank of Zimbabwe (RBZ) auction.
A leading wholesaler, whose name has not been released, demands payments strictly in US dollars for certain products, including sugar, cooking oil, maheu and dairy products.
Another prominent wholesaler also accepts payments in local and foreign currencies, but sets its prices in Zimbabwean dollars at exorbitant levels, which is said to be forcing consumers to settle their payments in foreign currencies.
Zimbabwe Confederation of Industries CZI President Kurai Matsheza said he was not aware of such practices.
“I’m not aware; we are not aware as CZI. We have not taken this position, if companies are doing it, they are doing it in their own interest,” he said.
He said, however, that he did not reject claims that some producers put markedly high margins on their products.
“Again, I’m not aware of such massive price increases, but I’m not denying that it may have happened and as CZI we are not sitting down to define how prices are set by sole proprietorships. “
Market watchers say many producers have recently increased their Zim-dollar prices with significant margins.
Annual inflation fell to a two-year low of 50.2 percent in August from a post-dollarization high of 837 percent in July.
The country continues to use the multi-currency system.
However, the law requires retailers to display prices and accept payment in local or foreign currency.
The Zimbabwe dollar was reintroduced in 2019 after a 10-year hiatus and is currently trading around $ 86 / US $ 1.
The parallel market is accused of causing serious price distortions in the market.
RBZ Governor Dr John Mangudya maintains that the auction is now the largest source of foreign exchange for registered importers and major industry players.
Over US $ 1.7 billion has been disbursed since its launch on June 23, 2020.
Zimbabwe Retail Confederation President Denford Mutashu confirmed receiving reports of unscrupulous and rent-seeking behavior from some companies, including the main beneficiaries of the weekly auctions of the central bank.
“We have received such reports and we also engage various companies whose market has complained about such practices.
“It is our duty as an association to remain responsible and ensure that the market is also responsible for protecting the interests of consumers,” said Mr. Mutashu.
The practice of demanding payments in US dollars has reportedly become ubiquitous in business.
“They just give you such a high price that when you calculate, you realize that the price in RTGS could be double the price in US dollars.
“In fact, there has been a wave of price increases by manufacturers since last week and this wave is quite threatening, and most of these big entities that have raised prices are the biggest players in selling to auction, “said some market watchers who have chosen to remain anonymous due to the sensitivity of the matter.