Some unscrupulous manufacturers and retailers are openly insisting on US dollar payments, while others are pegging Zimbabwe dollar prices to outrageously high exchange rates to force consumers to pay in hard currency, The Sunday Mail Business has established.
Among businesses engaging in these malpractices are large corporations that get foreign currency from the Reserve Bank of Zimbabwe (RBZ) auction.
A leading wholesaler, name withheld, is demanding payments strictly in US dollars for certain products, among them sugar, cooking oil, maheu and dairy products.
Another prominent wholesaler is also accepting payments in both local and foreign currency, but sets its Zimbabwe dollar prices exorbitantly high, which is reportedly designed to force consumers to settle payments in foreign currency.
Confederation of Zimbabwe Industries CZI president Mr Kurai Matsheza said he was not aware of such practices.
“I am not aware; we are not aware as CZI. We have not taken that position, if any companies are doing that, they are doing that in their own interests,” he said.
He, however, indicated he was not dismissing the claims that some producers are putting markedly high margins on their products.
“Again, I am not aware of any such massive price increases, but I am not denying that it may have happened and as CZI we do not sit to set how prices are set by individual firms.”
Market watchers say many producers had recently hiked their Zim-dollar prices by steep margins.
Annual inflation dropped to a two-year low of 50,2 percent in August from a post-dollarisation high of 837 percent in July.
The country continues to use the multi-currency system.
However, the law requires retailers to display prices and accept payments in either local or foreign currency.
The Zimbabwe dollar was reintroduced in 2019 after a 10-year hiatus and is currently trading around $86/US$1.
The parallel market is blamed for causing serious pricing distortions in the market.
RBZ Governor Dr John Mangudya maintains that the auction is now the biggest source of forex for registered importers and key industry players.
Over US$1,7 billion has been disbursed since it began on June 23, 2020.
Confederation of Zimbabwe Retailers president Mr Denford Mutashu confirmed receiving reports of unscrupulous and rent-seeking behaviour from some businesses, including major beneficiaries of the central bank’s weekly auction.
“We have received such reports and we are also engaging various companies that the market has complained about over such practices.
“It is our duty as an association to remain responsible and to ensure that the market is also responsible to protect the interests of the consumers,” Mr Mutashu said.
The practice of demanding payments in US dollars has reportedly become pervasive in business.
“They simply give you a price so high that when you calculate you realise the price in RTGS could be twice the price in US dollars.
“Actually, there has been a wave of price increases by manufacturers as of last week and that wave is quite threatening, and most of those large entities that have increased prices are the biggest players on the auction,” said some market watchers who elected to remain anonymous owing to the sensitivity of the matter.