Peg goods & services prices at official rate, business told Mr George Guvamatanga

Oliver Kazunga, Senior Business Reporter
BUSINESSES should peg the price of their goods and services in line with the official rate as determined by the Foreign Exchange Auction Trading System so as to stabilise the economy, Treasury secretary Mr George Guvamatanga has said.

He warned that the era of black-market pricing would soon be over as monetary authorities are taking action against such malpractices. Government introduced the forex auction trading model in June with a view to improve foreign currency access and availability to importers. The model now covers small to medium enterprises and has excited participation of key industry players. The latest weekly auction has placed official exchange rate at US$1:$82

However, some sections of the private sector stand accused of abusing the facility by pricing goods and services at black market rates despite having accessed hard currency on the official markets.

“We have shown in the past that if we believe that the misbehaviour is severe we will also respond exactly in the same manner. What we are now expecting is that if you get your money at 82 (exchange rate), then price your goods at 82 and get your normal margin,” said Mr Guvamatanga, Permanent Secretary in the Ministry of Finance and Economic Development, in an interview with ZBCtv Wednesday night.

“Don’t go for a foreign exchange margin, you’re not a bank, you’re not a bureau de change.”

He said businesses such as retailers should focus on their core activities and desist from being foreign exchange traders.

“We are simply saying, go back to your core business. Price your goods and services at the auction rate because that’s where you obtained the money. We are watching, we are monitoring. We watch developments over the next two weeks but if there is no improvement . . . don’t say I didn’t warn you,” said Mr Guvamatanga.

He commended President Mnangagwa for backing Treasury in making politically difficult decisions, which are “beneficial” to the country in the long run.

“You need proper leadership to make those calls and a strong understanding of the economy to make the calls. To decide that $1,36 is not the correct price of fuel, this is not the correct price of electricity,” he said.

“And sometimes . . . as technocrats we are taking the position papers to the President, sometimes you are worried because you know the political implications of what you are taking there.

“So, when you go there and he asks you questions, and he asks a lot of questions. Sometimes he asks you questions and he says ‘go back’ then you know that you’re in trouble. But the he eventually gets convinced and says yes, that’s bold and proper leadership and for us as technocrats, that’s the support that has kept us going. That’s one major success, to make politically unpopular decisions but which in the long run are good for Zimbabwe and for the people,” said Mr Guvamatanga. — @okazunga

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