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Business defies Govt, still trading in forex

12 Oct, 2019 - 00:10 0 Views
Business defies Govt, still trading in forex Mr Mutashu

The Herald

Victor Maphosa Herald Correspondent

IN flagrant violation of Statutory Instrument (SI) 212 of 2019 Exchange Control (Exclusive Use of Zimbabwe dollar for Domestic Transactions), defiant traders in Harare are still charging their products and services in foreign currency.

Despite the promulgation of a new law stipulating a $6 000 fine for anyone found pricing goods and services in foreign currency, some traders still take the law into their own hands.

Investigations by The Herald revealed that the products are being priced in a way that indirectly forces people to buy in foreign currency.

When paying in local currency, charges will be too high, leaving buyers with no other option but to pay in foreign currency.

The SI 212 published last Friday in terms of Section 2 of the Exchange Control Act (Chapter 22:05), makes it illegal for one to pay or to receive payment in foreign currency in any domestic transaction.

It means that it has become a civil offence to pay or receive payment in foreign currency.

The SI further expands the circumstances where such receiving or paying in foreign currency is unlawful.

It also says quoting, displaying, charging, soliciting for payment or receiving payment for goods, services, fees or commission in any other foreign currency is an offence.

The resistance by some traders in the city indirectly seeks to dollarise the economy.

A survey carried out by The Herald recently showed that several clothing shops, particularly boutiques, and some furniture shops are involved in these shenanigans.

A restaurant at the corner of First Street and George Silundika Avenue charges US$1 for a portion of sadza and quarter chicken but demands RTGS$27 for the same.

Some furniture shops in the CBD that sell wardrobes, beds and room dividers among other goods display prices in local currency but the shop keepers would also whisper to customers that they can pay in foreign currency.

In one of the shops along Leopold Takawira Street, a double bed costs $6 400 RTGS but one can folk out just US$250 for the same property.

A two-door wardrobe costs $4 500 RTGS, but using foreign currency, one has to part with $200.

This is the scenario in most of the furniture shops visited by The Herald.

In one of the boutiques along Robert Mugabe Road, a pair of men’s sports shoes is sold for US$20 and one needs to pay $500 in local currency.

A three-piece men’s suit costs US$60 but if one decides to use local currency, he or she is asked to pay $1 000.

Most of the shops demand cash for those who decide to use local currency.

Outlets which sell car parts along Kaguvi road have the guts to publicly demand foreign currency for all their sales except for bigger the shops.

They first inform customers of the US dollar price and only do the calculation to fix a local currency price upon request.

However, US dollar prices appear to be more reasonable that those in local currency.

The charging of exorbitant prices when one is paying in local currency has been described by the public as day light robbery and a clear effort by these elements to force people to pay in foreign currency.

President of the Confederation of Zimbabwe Retailers Denford Mutashu said the law enforcement agencies should act against defiant traders.

“If anyone is breaking the law, the law enforcement agencies of the country should move in. However, it is a market that increasingly is self-dollarising in order to continue lubricating itself as seventy percent of raw materials are imported.

“The challenge by business currently is replacement value and cost of product sourcing by the entire value chain.”

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