Zimbabwe Central Bank unleashes currency monitors on retailers

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THE Reserve Bank of Zimbabwe (RBZ) has dispatched a monitoring team to knock down the last bastions of unscrupulous businesses that are still transacting in foreign currency.

Last month, the Government repealed the use of  the basket of multi-currencies that had been in place since 2009 and said all local transactions are now being done in the local dollar.

However, some businesses have remained adamant and are still openly transacting in foreign currency in defiance of the law.

In an interview on Friday, Reserve Bank of Zimbabwe Governor, Dr John Mangudya said there was a need for businesses to comply with the Statutory Instrument 142/2019, which stipulates the Zimbabwe dollar as the sole currency for legal tender purposes further stating that failure to abide with the new law was tantamount to sabotage. 

“Our request is for them (businesses) to respect consumers by complying with the country’s laws. We need to cherish discipline for the national good. Our teams are now on the ground to foster compliance by all businesses,” said Dr Mangudya.

The move by the Central Bank comes after police issued a statement warning retailers to desist from charging their goods and services in foreign currency.

As of 24 June, the Government banned the use of the British pound, United States dollar, South African rand, Botswana pula and any other foreign currency as a legal tender.

The Zimbabwean dollar (bond notes, coins and RTGS) was made the sole legal tender and those with foreign currency could change the money before using it for local transactions.

However, a survey by Sunday News in some shops in Bulawayo discovered that some businesses are still clandestinely defying the order.

It was also observed that some fuel service stations are still charging in foreign currency with some openly displaying US dollar prices.

Shops in Matabeleland South Province in rural areas bordering the country with neighbouring countries of South Africa and Botswana are said to be still transacting using foreign currency especially the South African rand.

Contacted for a comment Plumtree-Mangwe Business Association chairman Mr Golden Sibanda confirmed communities living along the border  were still transacting in foreign currency.

“In essence most rural people in Matabeleland use foreign currency especially the rand when selling their livestock. It’s difficult to convince them to accept the bond and as such because most people are based in South Africa, so you find that other shops have no option but to transact in the rand. As business we have accepted the new currency reforms but for some it’s proving to be difficult,” said Mr Sibanda.

He said the use of local currency was also proving to be a challenge as most elderly people in the rural areas were not conversant with modern electronic payment methods. 

Confederation of Zimbabwe Retailers president Mr Denford Mutashu said the association was not in a position to defend any business found liable to contravening the new policy. 

“Anyone found selling goods in forex, which is outlawed, is breaking the Exchange Control Act and laws of the country. As you may have heard from the President, Government will soon crack the whip as an association, we will not stand in the way,” he said.

He, however, said there was a need to curb the existing price distortions across the value chain. 

“The pricing regime in the country has got to be investigated right through the value chain in view of the unjustified price increases obtaining across general economy,” said Mr Mutashu.

Meanwhile, the fruits of the banning of the use of foreign currency have continued to manifest with prices either remaining stable or going down in the past two weeks.

Prices of some basic commodities such as bread, cooking oil, mealie-meal and Mazoe Orange Crsu, have slightly gone down this past week.

A survey in major shops in Bulawayo revealed that a bread now costs $4.20 from $5, cooking oil went down from $30 to $20 while Mazoe has gone down from $23 to $16 in most shops.

Consumer Council of Zimbabwe executive director Ms Rosemary Siyachitema said her oragnsiation was expecting prices of more goods to go down.

 “We are happy that there are changes being seen in formal shops but we expect prices to go down even further than that and we want to see reduction of all prices not certain prices. Retailers were saying they are buying foreign currency from the black market at high rates but the black market is almost most dead so the prices must fall,” she said.