RBZ’s FIU, businesses to deal with instability in economy

The Reserve Bank of Zimbabwe (RBZ)’s Financial Intelligence Unit (FIU) on Tuesday met with business community to find common ground on general instability in the economy owing to a number of challenges and agreed with the actors to stop selling goods and services exclusively in foreign currency.

The engagement between the FIU and business was attended by manufacturers, suppliers, retailers, wholesalers, and many other representatives including the Grain Millers Association of Zimbabwe (GMAZ), Zimbabwe National Chamber of Commerce (ZNCC) and the Confederation of Zimbabwe Industries (CZI).

Confederation of Zimbabwe Retailers (CZR) president, Denford Mutashu, said there was an agreement that both government and business seeks stability through efforts to stabilise the exchange rate, inflation, general pricing in the economy and the pricing of goods and services.

“It was agreed that exclusive USD sales especially on basic commodities is outlawed as doing so will exclude the general poor accessing the same,” he said.

He noted that the discussions also focused on government suppliers and their role in participating in the parallel market thereby driving the exchange rate.

“We also agreed that the current parallel market exchange rate is not realistic but it is generally pushed by a few greedy people that would wake up each day and ensure to come up with a particular exchange rate of the day and shape the narrative of the day.

“We are for a stable exchange rate, that is market determined, it was one of the clarion call by business,” said Mutashu.

He indicated that there was also the realisation that there is need to ensure that whatever challenges the businesses face, there is need to assure the public by manufacturers, suppliers, retailers, wholesalers and millers of continuous supply of key basic commodities like mealie meal, sugar, cooking oil, bread and others.

According to Mutashu, the meeting also discussed the general inflationary pressures across the country as well as the impact of the high informalisation of the economy.

He said that it was noted that the procurement of goods and services in USD from suppliers and manufacturers by retailers and selling them to the consumers applying the interbank market exchange rate has proved to be an Achilles’ hill, an area that requires further engagement between business and government.

Mutashu indicated that business asked the government to engage business on policies that govern them, especially those that have a bearing on stability, sustainability of business and affordability of prices.

Confederation of Zimbabwe Industries (CZI) president, Kurai Matshezha, said the major issues raised by the FIU was on why businesses get funds from the auction market pricing at rates above the auction rate.

“The second issue was that in the market there were some products and product lines were selling exclusively in USD terms,” he said.

He added that the CZI also highlighted that even if some members are receiving money from the auction, they are not getting 100 percent of their requirements.

“At most those who are getting money are getting up to 32 percent of their requirement, so it falls far short of what they require to operate,” he said.

He noted that to add to that there is also a backlog on the auction, hence this is forcing companies to also try and raise USD on the domestic market so that they can supplement their USD requirement to continue operating.

Buy Zimbabwe President, Aloiuis Burutsa, said that there is need to relook at the way the auction system is working because many people are getting the foreign currency on the auction market and those who are getting are getting an average of 30 percent of their forex requirements.

He said that from a Buy Zimbabwe perspective, there is a need to push for the preference of locally produced goods and services for the creation of jobs, wealth and pride.

“For that to happen we need to create an environment that enables business to thrive and produce competitively,” he said.

Burutsa noted that as a country, we should come up with a working solution on the issue of foreign currency, because inflation in the country is being driven by the exchange rate.

He said that all the challenges we are facing are due to the volatility of the exchange rate. “It is therefore important that we focus all our efforts to tame inflation and bring stability to our foreign exchange rate. What we require is stability,” he said.

Meanwhile, the FIU director Oliver Chaperesa said that the bottom-line of the meeting was basically to address issues of price and goods that are exclusively sold in USD terms.

“We listened to what they had to say. But we then agreed that they should not be charging USD exclusively for goods and this was agreed on,” he said.

He noted that it is unacceptable because there are consumers who earn only local currency, therefore, there should be an option for anyone.-ebusinessweekly