CCZ slams 'record breaking' super-profits in sea of poverty

THE Consumer Council of Zimbabwe (CCZ) yesterday slammed business for abetting hardships, saying a significant number of firms accessing cheap foreign currency at the auction market were indexing prices at black market rates.

Reserve Bank of Zimbabwe (RBZ) governor John Mangudya last week said the auction system paid out US$1,97 billion to companies seeking foreign currency in 2021.

He said the auction system managed to calm market jitters during the period, as this amount represented 30% of foreign payments processed by banks.

In the past week, the Zimbabwe dollar has been trading at US$1:$118 on the official market, compared to US$1:$240 on the punitive black market.

This means companies accessing foreign currency on the official market are buying it at half the price those purchasing from the black market are paying.

Consumers want this difference to be reflected in prices.

In remarks made during a post monetary policy statement (MPS) discussion organised by the Zimbabwe Independent and the Bankers Association of Zimbabwe, CCZ acting executive director, Rosemary Mpofu said the RBZ's intervention had been barely felt by consumers due to market manipulation by manufacturers.

"We have noted with concern and we have complained to authorities including the RBZ that most manufacturers have been accessing foreign currency from the auction system but as consumers we are not benefiting," Mpofu told the webinar.

"We continue to see prices going up using the parallel market rate. We are seeing that in a lot of products particularly food and other commodities, governor. We ask you to engage to make sure that whoever is given foreign currency on the auction system should also reflect that in their prices," noted Mpofu.

She demanded that businesses should charge prices that reflect their costs.

"We need to see manufacturers who are responsible because for goodness sake the world over no company is making profits as huge as those that are being made in Zimbabwe," the CCZ chief said.

The RBZ chief announced in the February 2022 MPS that he would continue whittling down reserve money to bring inflation under control.

His hawkish monetary policy stance has helped push inflation down from 837,53% in July 2020 to 60,61%.

But Mpofu said the annual inflation rate was not decelerating at a pace that brought relief to consumers.

"Of concern is fuel and bread among other basic goods prices, which have increased in the past few weeks. As consumers we still continue to suffer. We are saying if inflation could go down a little bit faster than what it is today, that will be the language that consumers understand. We thank you for the effort but we think inflation should go down a lot more faster than what it is now because prices continue to bite consumers and a lot of consumers are not getting enough on the table," she said.

She demanded explanations from manufacturers as to why they were charging extortionate prices when they were accessing cheap forex.

She said the breadbasket had almost trebled from just over $25 000 in January last year to more than $73 000 currently, an indication of the devastating impact of inflation.

Mpofu's remarks come hard on the heels of teacher's relentless pressure to have a salary hike as their earnings have been eroded by inflation.

According to the Zimbabwe National Statistics Agency, the poverty datum line for January stood at $42 475.