Businesses in Harare are yet to adhere to the gazetted regulations directing all providers of goods and services to display prices in both the local (ZWL) and the American dollar (USD) using the ruling exchange rate, 263Chat Business has established.
The amended Statutory Instrument 185 of 2020 was meant to address price distortions on the market which have seen most retailers quoting ZWL prices at an inflated exchange rate.
A snap survey carried out by this publication this morning revealed that small and medium businesses in the Central Business District are still using parallel market rates when quoting prices.
The ruling exchange rate is at ZWL$ 72/USD yet most clothing boutiques are using an exchange of ZWL$ 130/ USD.
Moreover, these businesses have not displayed the prices to avoid detection.
“I bought these shoes for my child for US$ 10 at this boutique. They had told me in local currency they costs ZWL$ 1 300. So we are still being charged exorbitantly in bond notes or RTGS,’ one elderly lady who spoke on conditions of anonymity said.
Last week government indicated that those businesses that fail to display and quote prices in both currencies at ruling exchange rate face civil penalties.
Big formal businesses particularly in the furniture and food retail sector seem to have taken heed of the directive as they had been using the official exchange rate for USD purchases long before the latest Statutory Instrument came into effect.
However enforcing compliance in the small and medium businesses remains the biggest challenge authorities are failing to undertake and worse still, when it comes monitoring compliance in the informal sector.
Retailers lobby body, the Confederation of Zimbabwe Retailers (CZR) has since conceded that the process of ensuring compliance faces challenges, in a recent comment with the state broadcaster, ZBC.
“We need to just comply although we also have our own challenges that we think should be addressed,” CZR president, Denford Mutashu said.
Analysts say while government’s motives are sincere in trying to curb price distortions on the market, the decision is likely to meet resistance from retailers who are using a higher exchange rate for local currency prices to hedge against inflation and the price movements in the foreign currency market.
Zimbabwe’s own currency has failed to stabilize since being reinstated as the sole medium of exchange last year in June prompting authorities to make a U-turn on the decision and allow the USD to be used concurrently under a dual currency system.
The country estimates to complete the gradual phasing out of the USD by 2024 under its five-year de-dollarisation strategy.