Zimbabwe: currency manipulators on the prowl
Daniel Nemukuyu – Survey Editor
CURRENCY manipulation by companies fixing their prices in Zimbabwean dollars at black market exchange rates has reached levels where some stores price their goods and services at illegal rates ranging from $ 1: $ 120 to $ 1 : 200 USD.
In some stores there are even different prices for those who buy with local currency tickets and those who use mobile money or a bank card. Such a three-tier pricing system is done in violation of the country’s banking and financial laws.
This occurs at a time when the auction rate is US $ 1: $ 88.60.
The Reserve Bank of Zimbabwe (RBZ) financial intelligence unit yesterday warned stores against currency manipulation after receiving reports that prices at Bakers Inn and other fast food establishments were now based on parallel market rate of US $ 1: $ 200.
A survey by The Herald showed that most stores’ prices were influenced by black market rates.
This writer visited a number of stores in Harare’s central business district whose employees unsuspectingly cited their products and services in both US dollars and local currency using black market rates.
The Towers Nest Pharmacy, at the corner of Sam Nujoma Street and Jason Moyo Avenue, used the rate of 1: US $ 170. A 100ml bottle of Sophyllex cough syrup cost US $ 5 or $ 850 using EcoCash or Swipe.
At the Word Pharmacy along Jason Moyo Avenue, a 200ml bottle of Benylin 4 Flu, cough syrup costs US $ 9 or $ 1,620, which is the rate of US $ 1: $ 180.
Teecherz Home & Office, a furniture store along Jason Moyo Avenue, was selling a round wooden coffee table for US $ 145 or $ 25,400. A rectangular coffee table of the same quality at this store was US $ 140 or $ 24,500.
The calculation shows that the price of the furniture was calculated using the rate of around US $ 1: $ 175.
Local Food World and Choppies prices were set using the rate of US $ 1: $ 120, a black market rate that attracts more customers using foreign currency.
However, other supermarkets like Pick n Pay and OK used the official auction rate, a development that saw money changers camped outside stores, touting the business, offering to exchange foreign currencies before. that the customer does not enter.
Outside of Pick n Pay Jason Moyo, money changers will offer higher rates to those who intend to buy at the supermarket using foreign currency. Customers end up accepting the offer because the prices will be more attractive than the official supermarket price.
Jet, a clothing store, was trading at the official auction rate.
At the Bakers’ Inn, a Russian sausage and fries cost US $ 1.25 or US $ 200, while a steak pie cost US $ 0.80 or US $ 175.
Chicken Inn’s 2-piece (two pieces and one serving of fries) was selling for US $ 3.50 or $ 560. The president of the Confederation of Zimbabwe Retailers Associations, Mr. Denford Mutashu, confirmed the prevalence of the exchange rate challenge.
The exchange rate challenge is a value chain issue as very few suppliers and manufacturers accept ZWL $ for payment for goods and services.
Raw materials used in the production of goods and services are imported and require foreign exchange. Over 80 percent of clothing sold in the country is imported, as are hardware and electrical products which are largely imported.
Zimbabwe Consumers Council Acting Director Rose Mpofu said the use of black market rates was influenced by the greed of retailers and producers.
“We have always emphasized this. As consumers, we are not satisfied because retailers and manufacturers get currency at auction rates, but they sell their goods and services using black market rates.
“This is pure greed, it all depends on the attitude of our people. Traders are looking for profit and they are not genuine.
“As Zimbabweans, we don’t have a positive attitude towards our currency. That’s why there is inflation and soaring prices.
“Even if the government steps in by offering an auction price, some people will just find ways to make life difficult for the consumer.
“Now people can access at least $ 50 a week at the bureau de change, but for some reason they are trying to make life difficult for the masses,” she said.
However, Meikles Company Secretary Mr. Tabani Mpofu said their outlets will continue to operate legally using fair prices in terms of official auction rates. Pick n Pay is their main brand.
“We are a company that operates in Zimbabwe formally and officially. We operate strictly within the laws of Zimbabwe and we respect the laws as they are, not as we would like them to be.
“As a business entity, we are aware of our responsibility to our customers and the citizens of Zimbabwe in general to engage in practices that do not cause unnecessary suffering and anguish to Zimbabweans.
“Like any other business, we operate for the purpose of making a profit, but this can only be achieved when our customers are treated fairly and responsibly,” he said.
Mr Mpofu said that Meikles deals with suppliers who are paid by wire transfer and there is no need to violate foreign currency regulations.
“As a business operating formally and legally, we adhere to regulations that require us to bank our revenues daily and we do so without fail.
“We have a list of suppliers who are paid by the bank and not in cash and we monitor these suppliers to make sure that the tendency to make a profit does not influence supplier prices,” he said.