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Business sets conditions on ZWL$ pricing

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Captains of the industry have told the Financial Intelligence Unit (FIU) that they will sell in local currency if the companies can access foreign currency easily and the current forex backlog is cleared.

On Tuesday this week, the FIU met with the business leaders to discuss the reasons for charging exclusively in US$ by some retailers and charging above the official rate with latter saying they have US$ loans which need to be paid in same currency of borrowing in terms of Statutory 118 of 2022, huge backlog and accessing forex on parallel market.

The newly-elected Zimbabwe National Chamber of Commerce president told Business Times that the business would want to see all that was agreed to be implemented for them to follow suit.   

“They promised that they were not going to clear the backlog by the end of this month so if that is done we will return to normalcy.

“We hope they deliver on their promise because as a business we are committed to make sure it happens,” Kamungeremu said.

“From the business perspective what needs to be done immediately is to clear the backlog and give the business access to the forex so that they are able to use the official rate and sell in RTGS.

“On the other side, the FIU said they want retailers to sell in RTGS and to sell at an official rate,” he said.

FIU wanted to know the reason some outlets were charging exclusively in US$ and why manufacturers and certain retail outlets are using rates that are higher than the official rates.

“The position of the business across all BMOs was that convergence in terms of the reason why the situation is like that.

“The main reason being forex is difficult to get and when we go to the forex auction system there is a backlog which is taking time to be cleared therefore some are going to other sources of accessing forex which is mainly the black market where the rate is a bit higher.

“Some have said that they have borrowed in US$ and because  of SI 118 of 2022  which states that all loans that were borrowed in US$ need repayments in US$ and for them to do that they use their products to raise that money from customers hence the reason for charging exclusive in US$,” Kamungeremu said.

This comes as retailers have rejected that the US$ charging of some selected basic commodities exclusively in foreign currency is not sabotage but a reflection of the occurrences of the whole value chain where the suppliers need forex.

The Confederation of Zimbabwe Retailers president Denford Mutashu who was part of the discussions told Business Times that the businesses were only activating survival mode.

“The meeting was cordial. It was also one of the reasons it was felt there was need for engagement before such measures were taken because, sometimes measures like when the public woke up to exclusive US$ prices in some shops, probably it was viewed as sabotage but, it wasn’t.

“It was simply a reflection of what was happening along the whole value chain, and it was brought out in the meeting to indicate that formal retailers and wholesalers ended up coming up with such measures to restore value of their stocks and be able to go back to their supplier and manufacturer and procure more goods,” Mutashu said.

The pricing of goods in the ZWL$ has been solidified this week after a meeting between government and key business stakeholders reasserted the need to do so to ensure that there is no shortage of commodities on the market.

For the past weeks, retailers have been on the government’s radar after it was revealed that several major supermarkets had begun to sell key products exclusively in US$.

Mutashu said the meeting was helpful in clearing up misunderstandings.

He added that the meeting clarified that the sale of basic commodities was to be done through the dual pricing model and this would also apply to suppliers and manufacturers. 

“It was agreed that businesses should offer for sale especially key basic commodities in all currencies that are legal tender as opposed to the obtaining environment where there are stickers flying around with exclusive US$ prices.”

“It is in the spirit of the meeting that commitments were made by all sector players and representatives that goods, especially basic goods should be available either to the wholesaler or the retailer in both currencies so that it allows the most predominantly formal players to also then provide access to those goods in both currencies to the consumers,” he said.

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