Stubborn businesses quote prices in forex

15 Jan, 2020 - 00:01 0 Views
Stubborn businesses quote prices in forex

The Chronicle

Pride Mahlangu, Business Reporter

SOME errant businesses in Bulawayo continue to quote their prices in foreign currency sabotaging the monetary reforms Government is implementing as part of efforts to turn around the economy.

Through Statutory Instrument 142 of 2019, the Government in June outlawed the use of the multi-currency system which the country adopted in February 2009 after inflation had reached exponential levels.

To buttress SI 142/2019, the Government last September promulgated SI 212/2019 to stop unscrupulous businesses from quoting, charging and accepting payments in United States dollars or any kind of foreign currency. 

However, a snap survey carried out by Business Chronicle in the Central Business District (CBD) of Bulawayo last week, revealed that some errant businesses in the formal and informal sectors were still quoting their prices in hard currency.

Shop attendants who refused to be named citing professional reasons, told this paper that they were charging in forex to preserve value of their working capital.

 “We sell our products in foreign currency because where we order them, they are priced in foreign currency or local currency at the prevailing parallel market rate.

“But chances are high that when you sell products in local currency, restocking is likely to be a challenge because the currency is not stable,” said the shop attendant whose outlet is located between 8th and 9th Avenues along Fife Street.

It has also emerged that players in the properties market were demanding rentals for commercial properties in hard currency, a situation which was compelling the tenants to also quote their prices in forex.

An entrepreneur who owns a fast food outlet situated along Fife Street said the rentals for her business were pegged in US dollars.

“Now my rentals are in US dollars, which situation also compels me to charge in foreign currency to make sure that I meet my monthly rental obligations as well as preserve value for working capital to allow continuity of my business,” said the entrepreneur.

In Bulawayo bars and night clubs charge their prices in foreign currency or in local currency equivalent to the quoted forex price of the beverages.

For instance, most bars in the city centre sell a quart of beer from a price ranging between US$1 and US$2.

Some players in the informal sector such as fruit and vegetable vendors were also quoting their prices in foreign currency.

For example, a banana was being sold at 2 rand or the equivalent in local currency.

Analysts have pointed out that transacting in foreign currency by local businesses was retarding Government’s efforts in restoring confidence within the financial services market while also destabilising the monetary system. — @pridesinstincts.

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