ZIMBABWE has been hit by shortages of basic commodities in formal retail chains as the collapse of the local currency triggers hoarding and arbitrage opportunities, The NewsHawks has established.
BERNARD MPOFU
The discrepancy between the official exchange rate and the parallel rate has over the past few weeks widened after stabilising during the last quarter of 2022. The local dollar was this week trading at ZW$1 019:US$1. On the streets of most urban centres, one now requires at least ZW$2 000 to buy a US dollar.
A snap survey by this publication shows that established retail chains like OK Zimbabwe revealed that products like cooking oil and sugar are now in short supply, while readily available in downtown tuckshops and superettes which are predominantly charging products in hard currency.
Alois Burutsa, the Buy Zimbabwe general manager, says the depreciating dollar has created opportunities for the shrewd.
“The reason why this is happening is arbitrage. Some people are cashing on ridiculously low prices in supermarkets,” Burutsa said.
“For instance, one buys a box of cooking oil for an equivalent of US$18 then resells it for US$22 in tuckshops. What is worrying is that some shop managers are now working in cahoots with tuckshop operators. When you talk to suppliers, they say they are adequately stocked.”
Kurai Matsheza, the Confederation of Zimbabwe Industries president, told The NewsHawks that local manufacturers are producing to meet demand.
“We are aware of reports where some retailers are colluding with end users who are demanding paying in United States dollar. I think it is time for authorities and retailers to have a dialogue on the currency situation and pricing,” Matsheza said.
Despite the growing parallel market premium on the dollar, supermarkets and other retailers are required by authorities to put a 10% premium on the official rate. This has, in turn, resulted in some panic buying and hoarding of basic commodities.
Last month, Zimbabwe’s organised manufacturing sector lobby group said the government should consider taking urgent steps to reverse the full dollarisation of the economy, as the domestic currency becomes increasingly elusive.
Rising inflation against the backdrop of a weakening Zimbabwe dollar forced the authorities to adopt a dual monetary system to avoid the collapse of the local currency.
Official statistics show that 70% of domestic expenditure is now in United States dollars, signalling the re-dollarisation of the economy just over a decade after record inflation prompted authorities to ditch the local dollar for the use of a basket of currencies mainly dominated by the greenback.
