Shortage of Zimbabwe Dollar hits market, betrays Mnangagwa directives
The decision by government to allegedly manufacture the shortage of the Zimbabwe dollar by removing the bulk of it from the market in order to create an impression that the currency is regaining value has led to a plunge in its use with companies now resorting to increasing the US dollar component of their workers’s salaries.
This betrays President Emmerson Mnangagwa’s recent directive that government institutions and private companies should promote the Zim dollar using it more frequently especially in paying taxes.
In a notice to its employees Hippo Valley Estates Ltd, announced that it would increase the US dollar component on its workers’ salaries citing shortage of the ZWL currency.
Hippo Valley Estates is largely owned (50.35%) by Triangle Sugar, a subsidiary of Tongaat Hulett Sugar.
“We sincerely regret the delay in payment of the ZWL salaries, and the inconveniences and distress this has caused to employees. Due to the recent rapid changes in the economic environment, the company was not in a position to mobilise enough Zimbabwe dollars to accommodate salaries and other related costs,” read the notice by Sylvester Mangani, the company’s chief operations officer.
“Consequently, the company, at its sole discretion, has resolved to increase the proportion of USD payable to each employee, but only for the month of June, 2023. However, the total remuneration to the employee remains unchanged.
“The company will continue to monitor its cash flows in both currencies and will make the necessary adjustments in order to preserve value for employees.
“Payment of the revised USD and ZWL salaries will be done on the 30th of June.”
The Reserve Bank of Zimbabwe (RBZ) on Tuesday claimed success citing that the wholesale foreign exchange auction for banks, out of US$30 million on offer, only US$10 million was purchased by banks for onward sale to banks’ clients.
But investigative journalist Hopewell Chin’ono accused the government of manipulating the exchange rate while creating shortage of the Zim dollar when Mnangagwa directed, recently, the promotion of the ZWL.
“On Tuesday I explained how the exchange rate was being manipulated by the withdrawal of the local Zim Dollar currency after the Government propagandists celebrated when the Zim Dollar artificially strengthened.
“As I said on Tuesday, the removal of the Zim Dollar has now created shortages for businesses. There is no Zim Dollar for local transactions yet the President says we must transact using the local currency.
“This also shows that the Dutch Foreign Exchange Auction is rigged. Our problem is not with the Zim Dollar or the US Dollar, our problem is with a system that is rigged.
“The market should determine the exchange rate. The economy has inevitably dollarised due to the rigged system,” Chin’ono said.