Finance Minister Professor Mthuli Ncube has said some government suppliers have been inflating prices of their commodities due to the use of parallel market rates with some selling a 2kg pack of chicken at US$30.
He said the government was proceeding with screening and blacklisting such companies but was facing resistance from some government officials and suppliers, reported newZWire. He is quoted as saying:
We have seen supply contracts clearly determined by forward parallel exchange rates, some as high as 2000 to the Zimdollar.
A 2kg pack of chicken was claimed to be worth US$30 when market prices is a maximum US$6 for the same. We have seen a bag of cement being priced at an equivalent of USD18 per bag on some construction projects.
As expected there’s been resistance from various quarters, including accounting officers and suppliers
Ncube says the government has not stopped all payments to contractors, only suspending inflated contracts. Over the past six weeks, the government has paid out a total of Z$184 billion to contractors.
Finance Treasury, George Guvamatanga, says some suppliers that had already charged at inflated prices, using what they had predicted to be the future exchange rate, have since offered “credit notes” to the government to make up for the difference.
This is happening when a US$9 000/Laptop tender that was awarded to Blinart Investments in August torched a storm on social media over the weekend. Ncube says that was just one of several payments that his office has had to reject under measures he announced in August.
Some suppliers have been invoicing the government using higher exchange rates because they expect the Zimbabwe dollar to continue weakening. This has seen the government overpaying in Zimdollars for goods and services.