Currency manipulators on the prowl

08 Oct, 2021 - 00:10 0 Views
Currency manipulators on the prowl Consumer Council of Zimbabwe acting director Mrs Rose Mpofu

The Herald

Daniel Nemukuyu-Investigations Editor

CURRENCY manipulation by businesses setting their Zimbabwe dollar prices to black-market exchange rates, has reached levels where some shops are pricing their goods and services using illegal rates ranging from US$1: $120 to US$1: $200.

In some shops, there are even different rates for those buying using local currency notes and those using mobile money or bank card swipe. Such a three tier pricing system is done in violation of the banking and finance laws of the country.

This happens at a time the auction rate is at US$1: $88,60.

The Reserve Bank of Zimbabwe’s (RBZ) Financial Intelligence Unit yesterday warned shops against currency manipulation after receiving information that Bakers Inn and other fastfood outlets pricing was now based on the parallel market rate of US$1: $200.

A survey by The Herald showed that most shops’ prices were influenced by the black market rates.

This writer visited a number of shops in Harare’s central business district whose employees unsuspectingly quoted their goods and services in both US dollar and local currency using black market rates.

Towers Nest Pharmacy, at the corner of Sam Nujoma Street and Jason Moyo Avenue was using the rate of US$1:170. A 100ml bottle of Sophyllex cough syrup was going for US$5 or $850 using EcoCash or swipe.

At Word Pharmacy along Jason Moyo Avenue, a 200ml bottle of Benylin 4 Flu, a cough syrup cost US$9 or $1 620, translating to the rate of US$1:$180.

Teecherz Home & Office, a furniture shop along Jason Moyo Avenue was selling a wooden round coffee table for US$145 or $25 400. A rectangular coffee table of the same quality in that shop was at US$140 or $24 500.

Calculation shows that the furniture was priced using the rate in the region of US$1:$175.

Food World and Choppies’ local prices were set using the rate of US$1:$120, a black-market rate that attracts more customers using foreign currency.

However, other supermarkets like Pick n Pay and OK were using the official auction rate, a development that saw money changers camping outside the shops, touting for business, by offering to exchange foreign currency before the customer goes in.

Outside Pick n Pay Jason Moyo, money changers will be offering higher rates to those intending to buy from the supermarket using foreign currency. Customers end up accepting the offer because the rates will be more attractive than the official rate in the supermarket.

Jet, a clothing shop, was trading using the official auction rate.

At Bakers’ Inn a Russian sausage and chips were going for US$1,25 or $200, while a steak-pie cost US$0,80 or $175.

Chicken Inn’s 2-piecer (two pieces and a portion of chips) was selling at US$3,50 or $560. Confederation of Zimbabwe Retailers Association president Mr Denford Mutashu confirmed the prevalence of the exchange rate challenge. 

The exchange rate challenge is a value chain issue as very few suppliers and manufacturers accept ZWL$ for payment of goods and services.

The raw materials used in production of goods and services are imported and require forex. More than 80 percent of clothing apparel sold in the country is imported, same as hardware and electrical goods that are largely imported.

The Consumer Council of Zimbabwe acting director Mrs Rose Mpofu said the use of black market rates was influenced by greed on the part of retailers and producers.

“We have always been highlighting that. As consumers we are not happy because the retailers and manufacturers are getting forex on the auction rate but they are selling their goods and services using black market rates.

“It’s pure greed, it’s all about the attitude of our people. The traders are after profiteering and they are not genuine.

“As Zimbabweans we don’t have a positive attitude to our currency. That is why there is inflation and skyrocketing prices.

“Even if the Government intervenes, offering an auction rate, some people will just come up with ways of making life difficult for the consumer.

“ Now people can access at least US$50 weekly at bureau de changes, but for some reasons, they try to make life difficult for the masses,” she said.

However, Meikles company secretary Mr Tabani Mpofu said their outlets will continue operating legally using fair pricing in terms of the official auction rate. Pick n Pay is their major brand. 

“We are a company that operates in Zimbabwe formally and officially. We operate strictly within the laws of Zimbabwe and we adhere to the laws as they are, not as we may want them to be. 

“As a business entity, we are cognisant of our responsibility to our customers and the general citizens of Zimbabwe to engage in practices that do not cause unnecessary suffering and anguish to Zimbabweans.

“Like any other business, we operate in order to obtain a profit but this can only be achieved when our customers are dealt with in a fair and responsible manner,” he said. 

Mr Mpofu said Meikles deals with suppliers that are paid through bank transfers and there is no need for violating the foreign currency regulations.

“As a business that operates formally and within the law, we adhere to the regulations that mandate us to bank our takings daily and we do that without fail.

“We have got a list of suppliers who are paid through the bank and not in cash and we monitor these suppliers to ensure that the tendency to profiteer does not influence pricing by suppliers,” he said.

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