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Political Editor

THE price madness besetting the country can partly be traced to manufacturers who have benefited from foreign currency acquired cheaply from the Reserve Bank of Zimbabwe (RBZ) Auction System to retool and manufacture their products but then channel the output to the informal sector for profiteering purposes.

This comes as prices of commodities have been inexplicably going up seemingly spurred by the equally inexplicable parallel market rate on which shops are now benchmarking their pricing despite receiving favourable foreign currency allotments from the RBZ.

In his weekly column in The Sunday Mail, President Mnangagwa, whose Government has channelled more than US$4 billion towards businesses through the RBZ auction system and has been for the most part pro-business even at the expense of the labour force, noted the abuse of that goodwill.

“Here at home, activities in the black market now go beyond currencies. They now include redirecting basic goods into the informal sector where big companies have created a web of agents who sell such goods exclusively in foreign currency!,” the President said.

“Not only is the consumer hard done by; Government is prejudiced in that taxes are evaded, ironically by the same businesses Government will have foster-cared, funded and grown through the auction system! Formal retail channels are no longer being used to reach the market, in favour of self-created agents who operate in the twilight zone of informality and downright tax evasion. Our multi-currency policy is also undermined as Zimbabwe dollar-earning workers are now being forced to buy basics priced exclusively in foreign currency”.

Further, President Mnangagwa noted that retailers are also withdrawing their points of sale gadgets to force the use of one currency despite the multiple-currency basket currently in use.

“We are even aware of certain businesses which deliberately disable point-of-sale gadgets in order to force the consumer to buy key goods in one currency, contrary to the law of the Land. Maybe the time has now come for Government to insist that such businesses who do such tricks should suspend trading until they are able to technically handle transactions in multi-currency, as is bade by our laws”.

An agent who supplies the black market yesterday told The Herald how they access local currency from banks and then use that money to secure goods like cooking oil, washing powder, and other basic commodities from retail shops then offload them at the black market.

In his column, the President warned such businesses that he will not hesitate to withdraw several concessions extended to them if they continue working against the principles of harmony.

“Let me say that we made all the above concessions in good faith, and in the belief that we have a responsible business sector whose sole purpose is to manufacture and sell goods and services in the marketplace. Yet it is becoming increasingly clear our trust is getting abused and

even betrayed. We even wonder if at all we are dealing with Business anymore, or with politicians disguised as company executives, seeking a political upset. Privileges can be withdrawn; the same way they are granted. Equally, politicians seeking to engineer market failures for definite political outcomes will be dealt with as political opponents, and through rules appropriate to politics”.

Confederation of Zimbabwe Retailers president Mr Denford Mutashu castigated business people who have been abusing the auction system, saying they were driving up the cost of goods in both local and foreign currency.

“All companies that have been accessing foreign currency on the auction system since its inception need to be investigated and account for every cent that they have used because some of them are behind price manipulation.

“As retailers, we are appealing to Government to arrest all the runners, people who are working in cahoots with manufacturers to channel goods to the informal market, such people need to be eliminated because it’s a syndicate.

“We have seen a huge appetite for USD, which is forcing most manufacturers to shun the formal market and channel goods to the informal sector where there are being paid exclusively in foreign currency.

“You will find out that some of the goods are not available in formal retail shops but they are being sold exclusively in foreign currency on the streets,” said Mr Mutashu.

A snap survey by The Herald showed that basic commodities such as sugar, cooking oil, mealie meal, rice, and soap have become more accessible on the black market as compared to supermarkets.

In an interview with The Herald yesterday, retailers in the black market they were earning profits quickly from basic commodities they were selling.