Zimbabwe News and Internet Radio

Retailers call for currency reforms

By Dakarai Mashava

The Confederation of Zimbabwe Retailers (CZR) has blamed price distortions on the existence of several de facto currencies in Zimbabwe.

Denford Mutashu
Denford Mutashu

According to the CZR, which held its fourth annual Retailers and Wholesalers Indaba in Harare on Thursday, the de facto currencies being used in the country include treasury bills, EcoCash, Old Mutual shares and RTGS.

CZR president Denford Mutashu told delegates at the Indaba that there was now a multi-tier pricing system in the country because the de facto currencies have different rates relative to the United States dollar.

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“This has unfortunately led to price distortions popularly known as multi-tier pricing. This phenomenon has meant that a product carries more than three prices depending on the method of payment a consumer chooses.

“There is a price for cash (US$), for bond notes, for swipe and another for mobile payment methods. The multi-tier pricing has led to many manufacturers and suppliers demanding cash payments hence causing the price distortion,” said Mutashu.

The former Foodworld Supermarkets general manager added that the general pricing of goods and services in the country has gone beyond the reach of most consumers owing to the uncompetitive environment under which goods are produced in the country.

“Consumers are generally not happy with the prevailing pricing regime in the economy where real disposable incomes have either been stagnant or declining due to growing RTGS balances and the subsequent mismatch with the amount of hard cash in formal circulation.

“The current high government expenditure visa-vis unstructured funding of the budget deficit are areas that have contributed to the prevailing pricing in the economy.

“Some retailers and wholesalers have taken advantage of this scenario to engage in speculative and rent seeking behaviour,” said Mutashu.

Businessman and lawyer Tawanda Nyambirai, who was one of the panelists at the fourth annual Retailers and Wholesalers Indaba, concurred with Mutashu on the urgent need for currency reform.

“The absence of a clear strategy on currency reform has resulted in a situation where the price distortions go beyond the multi-tier pricing system,” said Nyambirai.

Another panelist, Buy Zimbabwe chief executive officer, Munyaradzi Hwengwere, said the government should urgently address issues undermining the country’s competitiveness.

“By and large we are where we were before. We are dealing with symptoms. Why do we as a country lack the courage to boost our competitiveness? We continue to deal with peripheral issues. Pricing is not the issue it is just a symptom,” said Hwengwere. Daily News