The Sunday News
Judith Phiri, Business Reporter
THERE is a wave of consumer excitement in the country as businesses have started responding positively to the raft of measures put in place by the Government to tame inflation which was stoked by unscrupulous business tendencies, rent-seeking behaviour and speculative forward pricing.
This comes at a time the demand for the Zimbabwean dollar continues to soar as more businesses and individuals seek to transact using the local currency. That has seen retailers and service providers lowering prices of basic goods and services while those that have not done so have maintained a semblance of price stability.
The Zimbabwean dollar continues to regain its lost value and last week for the third consecutive time at the wholesale foreign currency auction it settled at US$1 for ZWL$5 395 from US$1 for ZWL$5 739 in the previous week. The black-market rate which had gone as high as US$1 for ZWL$9 000 in the past few weeks is now ranging from ZWL$7 000 to ZWL$ 8000 for US$1.
As part of measures put in place by the Government to stabilise the price increases that had been taking place in the past three months, the Reserve Bank of Zimbabwe’s Financial Intelligence Unit (FIU) had to order some retailers and manufacturers who were exclusively charging certain goods in foreign currency and using the black-market rate for currency conversion to revert to ethical business practices. A number of businesses were also fined for unethical conduct
A snap survey carried out by Sunday News in Bulawayo yesterday revealed that most supermarkets and businesses had started to use the official bank rate with an accepted margin of 10 percent of the interbank rate, while also reducing prices of basic commodities in local currency. Bread in some retail shops which was being sold for as high as ZWL$7 500 to ZWL$9 000 was now down to a range of ZWL$6 000. The price of a 2kg of sugar which had gone to between ZWL$25 000 and ZWL$30 000 is now ranging between ZWL$18 000 and ZWL$20 000, among other reductions in prices of basic commodities.
Confederation of Zimbabwe Retailers (CZR) president Mr Denford Mutashu called on businesses to continue responding to the stability in the exchange rate by reducing prices in Zimbabwean dollars.
Mr Denford Mutashu
“The expectation is to see prices continue falling in line with key economic indicators like stability in exchange rates, improved power supply and other Government measures,” he said.
Responding to the firming of the local currency, the Zimbabwe National Roads Administration (Zinara) has also reduced the prices of goods and services. The road agency has taken the lead in aligning its charges with prevailing exchange rates. Last Wednesday, it reviewed downwards both toll and vehicle licensing fees with for example, the toll fee for light motor vehicles going down to ZWL$10 800 from ZWL$11 960.
Among other key measures, the Government recently said taxpayers must settle all local currency tax obligations in local currency and must also settle 50 percent of the foreign currency portion of their corporate tax obligations in local currency.
To ensure compliance with the latest regulations, Treasury said statutory penalties for late payment of taxes will be vigorously applied. This has resulted in a number of businesses that had previously pegged prices exclusively in forex, now enticing customers to transact in local currency. Economic analysts and commentators have said the developments in the economy were evidence that the interventions put in place by the Government were effective in stemming inflation which they said was no longer economic but political.
