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Zimbabweans react with shock over exchange rate, price madness

by Staff reporter
22 May 2023 at 01:35hrs | Views
CONSUMERS have reacted with shock to the extortionate and unrealistic exchange rates being applied in the pricing of basic goods in local currency by some unscrupulous retail players in Bulawayo and other parts of the country.

One of the retail operators, Basic Supermarkets in Bulawayo had by yesterday pegged its exchange rate at an incredible rate of US$1: $5 500, almost four times the official figure of $1 404.

Irate shoppers said shop attendants at one of the retailers' branches were telling them that management said the motto was, "ongafuniyo kayekele."

A shop attendant who would not be named for fear of victimisation said they were instructed by their employer to harness as much foreign currency as possible hence the stance to peg exorbitant exchange rates to force customers to buy using foreign currency.

The decision is ostensibly meant to frustrate the use of the local dollar which remains a legal tender.

"Our rate is $5 500 today and please note this is for today, we are not sure what it will be tomorrow," said the attendant.

A survey around the city in both the Western and Eastern suburbs as well as the Central Business District, also established that the exchange rate at retail shops varied between US$1: $1 700 and US$1: $3 200.

Oceans Supermarket was using a  rate of US$1:$3 000 while Greens Supermarket had a rate of US$1:$2 600, which most small retail outlets were using. A small shop along Five Street opposite Highlanders clubhouse had however, pegged its rate at US$1: $2 700.

Rates shoot up. A salesperson change prices at a supermarket in Bulawayo yesterday

OK Zimbabwe retail outlets were using the official rate of 1:1 404.

"We are governed by the Government position, meaning we are using the official bank rate, which also allows us to add the legal 10 percent rate difference," said a manager at one of the retail giant's shops in the city.  TM Pick n Pay was also using the official bank rate.

Residents have since appealed to the Government to act and bring the situation under control noting that some retailers were clearly on an extortionist overdrive to frustrate efforts to stabilise the economy.

"The situation is now out of control, these shops are clearly fleecing citizens. Something must be done urgently to stop this tide," said an irate Old Lobengula resident, Mr Hawulani Sibanda.

He said Government should move in quickly and stop the price hike madness.

"I am a pensioner earning a paltry pension so where do I get this kind of money that Basic is charging? Honestly a dollar costing $5 500, how is this allowed? The law must take its course," said Mr Sibanda.

Another shopper who refused to be named said when she raised her concerns when the rate was $4 800 on Saturday before it went up to $5 500 yesterday, she was told in her face by attendants that "ongafuniyo kayekele."

"This is madness at its worst, are we a lawless country? Government must stop this madness," said the consumer.

A Tshabalala resident Ms Ethumetse Ndlovu said the solution probably lies in the Government adopting a one-currency system.

"I think it's now time that we have a one currency system like other countries because as long as we have more than one currency, this madness will always be with us," she said.

Ms Ndlovu said rates are going up every day and most people are as a result failing to cope.

"I am a vendor and I can't even afford to pay rent and school fees at the same time," she said.

Last week Government announced that it will be conducting evidence-based research within seven days with the ultimate goal of ensuring that consumers continue to access basic commodities at affordable prices.

The research is being carried out by the Ministry of Industry and Commerce in collaboration with the National Competitiveness Commission, Competition and Tariff Commission and the Consumer Protection Commission and other relevant stakeholders.

The Minister of Information, Publicity and Broadcasting Services, Senator Monica Mutsvangwa while presenting her post-Cabinet meeting report last Tuesday said Government noted that consumers are being forced to buy goods that they don't need in formal retail outlets when they pay using USD so that they may offset the change balance.

This is because the retail outlets, said Sen Mutsvangwa, are refusing to mix USD and Z$ transactions.

She said from the survey undertaken, most basic commodities are generally available both in formal and informal retail shops, although there are artificial shortages observed of some locally produced goods, especially in formal retail shops, adding that prices in the formal retail sector are relatively high in both USD and ZWL terms when compared to the informal retail sector and are thus indicative of speculative and forward pricing.

In his weekly column carried by our sister publications, Sunday News and Sunday Mail, President Mnangagwa expressed his disappointment at the abuse of the Government's benevolence to go against internationally set standards of making it mandatory for businesses to remit their foreign currency earnings to the Central Bank.

"Let me remind our business of a few facts, some echoed in all jurisdictions globally. At law and by worldwide practice, all foreign currency earnings should be surrendered to Government through the Central Bank as obtained worldwide," he wrote.

President Mnangagwa said worldwide businesses access foreign currency for their needs from Central Bank through cumbersome processes and on the basis of market conditions.

"Here we have waived that position at law and in general practice worldwide, hoping to prop our business sector and for ease of doing business. This act of magnanimity now looks undeserved,"he said.

President Mnangagwa said Zimbabwe was a multi-currency economy after a deliberate Government decision but the position was now being contradicted by business.

"Any business practice, which suppresses the use of any one currency recognised by our laws is illegal and do undermine this unique and most favourable position, which is found nowhere else in the world. The offence gets worse when these illegal practices seek to outlaw the use of the local currency unit, itself our national currency and currency of wage earnings," warned President Mnangagwa.

Source - The Chronicle