The Sunday News
Dumisani Nsingo, Senior Reporter
THE business community has lobbied the Government to covert RTGS balances into US balances to protect industry and plug the continued distortions of prices that have seen some business clandestinely pushing a re-dollarisation drive.
Most companies, especially in the retail industry, have unofficially re-dollarised demanding customers to pay in US dollars or constantly hiking prices of goods bought through plastic money.
In an interview, Confederation of Zimbabwe Industries (CZI) president Mr Sifelani Jabangwe said the Government has acknowledged the bottlenecks industries are facing in their efforts to attain productivity and profitability culminating from the prevailing chaotic currency market in the country.
“What’s lacking is a system that allows a business that has collected bond to convert it into US (United State) dollar legally because remember it is illegal to convert bond into US dollar, you can get 10 years. We are currently lobbying and we are in discussion with Government about how a system to trade RTGS can be put in place business people will accept any amount that is there. Government has already acknowledged that there is a problem. We hope that something will be set-up very soon to allow us to then be able to do business by accepting all forms of money,” said Mr Jabangwe.
He said owing to the prevailing foreign currency shortages in the country, a number of businesses were struggling to import strategic raw materials used in their lines of production thus most firms have resorted to sourcing it on the parallel market.
“If someone accepts bond in the absence of a system to convert bond to US dollar that business is going to close because they cannot use bond to bring in raw materials. The only reason why some are going for US dollar only is because their businesses have run out of raw materials,” said Mr Jabangwe.
Owing to the shortage of foreign currency some businesses have resorted to accepting transactions only in foreign currency while others have pegged the price of their products at different prices depending on the mode of payment giving rise to a three-tier payment system.
The three-tier or multi-tier pricing system whereby retailers and other businesspeople charge extra for payments made in bond notes or bank cards and less for United States dollar transactions is still rife despite the fact that such practice is in violation of the Bank Use Promotion Act.
The illegal practice by some of the retailers comes against the backdrop of an acute shortage of the US dollar notes, the most dominant transaction currency in the country’s multi-currency system.
“The three-tier pricing system is a symptom of a deeper problem, so we need to deal with the problem because this is how money is being valued (on the parallel market). Now it’s actually more of a two-tier pricing because this is how the market values the RTGS and the USD,” said Mr Jabangwe.
He said some businesses are deliberately charging in three-tier payment system due to the complexity of the country’s law when it comes to forms of payment since the adoption of the multiple currency regime.
“The problem is the complex in policies that the Government has put in place, that’s where corrections need to be made. RTGS is a form of money and we are in a multi-currency it’s very difficult to ask people not accept another form of currency. As business people we know that the form of money the people have is RTGS that is what you want to accept because that way your business can grow,” he said.
Confederation of Zimbabwe Retailers president Mr Denford Mutashu said the organisation had swayed from addressing the three-tier pricing system to its members as it was a result of various economic misalignments.
“What we are focused on as a sector is to help the Government to come with sustainable, viable long term solutions, basically what we are encouraging our members is to also focus on generating foreign currency by exporting goods and services that they have,” he said.
Mr Mutashu said there was a need for Zimbabwean firms to explore the regional market so as to generate the much needed foreign currency.
“We are saying let’s explore strategies to take the Zimbabwean products into the region and to ensure that we earn the foreign currency that would then resolve the multi-tier pricing challenge, which is emanating from the shortage of foreign currency,” he said.
Mr Mutashu said another alternative towards addressing price distortions was to ensure that the Government incentivise value chain players to improve their competitiveness.
“There are so many monetary incentives that can be given or that can be afforded to the value chain players for them to be competitive and be able to sell to the formal means.
If you check most of the formal retailers have been affected by the current situation more than the informal players, for the simple reason that most of the convectional registered retailers and wholesalers can not resort to buying foreign currency from the parallel market but for an informal trader it is quite an easy thing to do because they no serious accountability to the authority,” he said.
