Govt desperate to force local currency on economy amid setbacks
In a desperate move meant to force the Zimbabwean dollar on the economy, the Ministry of Finance has revoked the suspension of duty on imported oranges that Beitbridge Juicing Pvt Limited enjoyed after its parent company Schweppes started charging Mazoe Orange Crush products exclusively in US dollars.
This comes at a time when Zimbabwean manufacturers and retailers are dumping the Zim Dollar as the local currency continues on a free fall. Manufacturers are arguing that their suppliers are pressing for such demands.
Yesterday (Monday) beverage manufacturer Schweppes received a stern warning from the government for charging exclusively in US dollars.
“Treasury however notes that the pricing of your products is now exclusively in foreign currency, notwithstanding Government’s initiative to promote use of the local currency.
“You will be aware that beneficiaries of tax incentives are expected to compliment government’s interventions with responsible pricing models with a view to ensuring affordability of goods which is key to achieving the Government’s developmental objectives.
“In view of the above, I wish to advise that pending conclusion of investigations on your pricing model, the suspension of duty has been revoked.
“In this regard , all new imported consignments will with immediate effect be liable to duty at prescribed rates,” read part of the letter signed by Finance Permanent Secretary George Guvamatanga.
Analyst Pride Mkono blasted the government for giving such exports incentives to big companies while neglecting small producers including smallholder farmers.
“This is the direct consequence of running the economy on nepotism and underhand dealings. Such a scandalous order was preferentially given to a company run by elites who care only about profits through speculative pricing.
“Instead of focusing on big corporations, incentives should be given to producers, especially smallholder farmers to increase their production in the medium to long-term,” he said.
“However, the tone of the letter shows a government also desperate to force the local currency on the economy when it has been rejected. Producing soft drinks requires more than just the fruits and all those ingredients need foreign currency to purchase.
“The reason why the government is clutching straws is that it wants to continue paying workers in the moribund currency and nothing more,” Mkono added.