Zimbabwe govt punishes rogue businesses

THE Ministry of Finance and Economic Development has suspended trading licences for 17 pharmacies for violation of the Exchange Control directives and Government policy where they were using speculative exchange rates, which are beyond the set margins.

The Government continues to urge businesses to use the official exchange rates with a recommended 10 percent forward pricing. Ongoing investigations by the Financial Intelligence Unit have revealed that some pharmacies were using parallel market exchange rates ranging from between ZWL8 500 to ZWL11 000 against the US dollar, in complete violation of Government policy and the country's anti-money laundering regulations.

Amongst the suspended pharmacies, six are in Mutare, three in Rusape, three in Gweru, one in Kwekwe, three in Kadoma, and one in Chegutu.

In a statement, the Ministry of Finance and Economic Development said under the National Development Strategy 1 (NDS 1), the Government has made considerable progress in stabilising the economy, the exchange rate, and the general price of goods and services by implementing a variety of fiscal and monetary stabilisation measures.

The ministry said the Government remains committed to the broad use of local currency for domestic transactions and stern measures will be taken against service providers who continue to violate provisions.

"Government is committed to achieving lasting price stability and recently introduced the wholesale foreign exchange auction system, which allows banks to access foreign exchange at market-determined exchange rates for onward transmission to their customers," reads the statement.

"This liberalised trading environment has allowed the market to stabilise and we have seen a market appreciation of the Zimbabwean dollar and the containment of inflation, creating a conducive environment for business to operate.

"However, the Government notes with concern that some market players continue to exhibit highly destabilising forward pricing and speculation in outright violation of exchange control directives as well as standing Government policy guidelines concerning pricing and the use of domestic currency."

The ministry said this practice is particularly rampant but is certainly not limited to the pharmaceutical sector. "The transacting public is encouraged to resist all forms of unfair pricing by retailers and to immediately report violations to the Financial Intelligence Unit," said the Treasury. Following a chain of policy interventions by the Government to stabilize the economy, the Zimbabwean dollar is gradually regaining its strength.

Yesterday it was officially pegged at US$1:$4 998 at the wholesale retail foreign exchange from last week's US$1:$5 291.

This has seen prices of some basic commodities dropping, a development, which has seen consumers gaining their purchasing power. Public institutions have also started reacting positively to the gaining value of the local currency.