LIVINGSTONE MARUFU
An unprecedented crisis has left retailers on the edge amid revelations manufacturers have cut supplies of basic commodities to those paying in local currency.
Manufacturers now favour tuck shops that pay in hard currency.
“We fear that with the way the supply chains are disrupted or broken we may see the resurfacing of basic commodities black market which is not a desirable thing for the economy,” the president of the Confederation of Zimbabwe Retailers, Denford Mutashu, told Business Times.
“We are given a 30 tonne truck per month. We sell it within three days of delivery. But, the tuck shops are given as many trucks as they want depending on the cash they have.”
Retailers said they are in a catch 22 after the central bank directed formal shops to sell their goods at a premium of 10% above the official rate.
The official rate is at around ZWL$403: US$1 with shops allowed to trade at around ZWL$435 per US$1.
With the parallel market rate galloping to ZWL$850: US1, most manufacturers now prefer tuck shops who pay in hard currency, leaving the formal shops struggling to restock.
“The charging of goods using the official rate has a serious knock to our businesses as suppliers and manufacturers are not supplying us on a regular basis as they don’t want the local currency. We are struggling to re-stock as they go for informal traders who have hard currency,” Mutashu said.
“If we may want to sell in US$, very few customers would come with the hard currency to buy in formal shops instead the money changers are swiping for the customers at a better rate. With the pricing conundrum at play, reduced stock and a subdued US$ rate, retailers are in a catch 22 situation which needs dialogue between us and other stakeholders.
Added Mutashu: “It is very difficult for a supplier or manufacturer to give me a product where I am paying in ZWL$ understandably because they would also want to use their product to generate foreign currency from their own internal source.”
