'Exclusive USD pricing illegal'

PRICING of goods exclusively in US dollars remains completely illegal and businesses not accepting local currency payments for every product should stop the illegal practice forthwith or risk having their operating licences withdrawn, the Government has said.

Some businesses are pegging prices for some of their products exclusively in US dollars, prejudicing ordinary Zimbabweans.

Notices demanding only US dollars have started appearing on shelves in some major supermarkets and shops across the country, a flagrant disregard of the multicurrency regime law.

Legally, prices can be displayed in either just local currency or in both local currency and US dollars, with the interbank exchange rate plus 10 percent being the only lawful exchange rate allowed.

Customers can offer any currency, again with the same legal exchange rate.

The Government's clarification of the law follows incorrect interpretations by some traders that they are allowed to charge only in foreign currency since they import their products and do not benefit from the Reserve Bank of Zimbabwe auction system.

Fielding questions from the media after the weekly Cabinet meeting in Harare last night, Finance and Economic Development Minister Professor Mthuli Ncube clarified the position and law in terms of pricing.

"Some retailers are putting up stickers to say this or that product can only be bought in US dollars. I want to make it clear and categorical that is totally unacceptable. As a Government we will not allow that.

"We will withdraw licences, and will withdraw the duty rebate licences for companies that have been doing this," said Minister Ncube.

"They are breaking the law. The law says the citizens or anyone approaching the shops should offer the currency of their choice.

"We cannot tolerate this kind of nonsense, absolutely not. They are breaking the law."

The Government has issued duty-free certificates for businesses to allow them smooth importation of raw materials, and Minister Ncube explained that no one should charge consumers with a single currency since they are benefiting from the Government's benevolence.

Meanwhile, the Government is implementing measures to ensure that there are no food shortages in the country.

Speaking after yesterday's Cabinet meeting, Information, Publicity and Broadcasting Services Minister, Monica Mutsvangwa, said:

"The importation of mealie-meal will continue in order to ensure that consumers are cushioned from any market distortions which may occur.

"Government calls upon farmers to desist from side-marketing their grain. So far 392 tonnes have been confiscated by the GMB for side marketing in terms of Statutory Instrument 145 of 2019.

"Wheat stocks stand at 54 268 tonnes, which are sufficient to meet local requirements."

Minister Mutsvangwa said Cabinet considered and approved the compensation framework for those who in 2009 were insurance policy holders and pension scheme members, along with supplementary compensation by Government.

She said with the advent of dollarisation in 2009, there was public outcry over loss of value by insurance policy holders and pension fund members.

Public complaints pointed to lack of transparency in the manner in which their long-term contracts were converted from Zimbabwe dollars to US dollars in 2009.

In response to the public complaints, Government commissioned the Justice Smith Commission of Inquiry in 2015, which culminated in a detailed report which was submitted in 2017 and adopted by Cabinet in 2018.

Minister Mutsvangwa said in September 2018, te Government mandated the Insurance and Pensions Commission to implement the recommendations of the Justice Smith Inquiry.

"The compensation framework outlines the processes required to achieve an objective and transparent compensation exercise.

"This ensures that prejudiced members of insurance policies and pension funds get reasonable benefits, while simultaneously maintaining stability and confidence in the industry," said Minister Mutsvangwa.

"In recognising the prejudice suffered by pensioners and policy holders, Cabinet has approved that Government contributes US$175 million towards the pre-2009 compensation to partly cover for the loss of value suffered.

"This will also bring closure to this long outstanding matter."

Cabinet further highlighted that draft regulations to bring legal force to the compensation framework are now in place.

Minister Mutsvangwa said the insurance industry was extensively engaged by the Insurance and Pensions Commission regarding the compensation framework in general and the sources of funding in particular.