Supermarkets, Councils, Chocking Under "Artificial" ZiG Rate
Bulawayo Mayor Councillor David Coltart has called for Zimbabwe to either abandon the ZiG or exclusively adopt the US dollar and the Rand, citing significant losses incurred by local authorities and supermarkets due to exchange rate disparities.
In a post on his X page, Coltart highlighted the issues stemming from the use of an official exchange rate (US$1: ZiG13.80) compared to a street rate (US$1: ZiG24), which has led to financial losses for businesses forced to operate under the official rate.
The CCC councillor added that aside from abandoning the ZiG in favour of the USD and ZAR, the only viable alternative for Zimbabwe is to allow the ZiG to float freely without artificial rate manipulation.
Coltart’s remarks follow reports that TM Pick n Pay has permanently closed its Harare Street branch. He wrote:
Last night I had dinner with a Bulawayo supermarket owner and he told me of his inability to compete with the informal sector – unlike the informal sector he has to pay taxes, rates and his staff – but most of all he is compelled to sell his goods at the official ZIG rate.
He is buying the same goods he has to sell at the official ZIG from manufacturers who sell to him with impunity at the ZIG parallel rate.
Informal traders can come to his supermarket and buy the same goods in ZIG having burned their US$ and who then sell the same for US$ at a lower price in US$ than the supermarket can sell it for, thus totally undercutting the supermarket, right outside its doors.
He doesn’t know whether he can continue – and at the root of this all is the government’s insistence that the ZIG be artificially kept at a value which bears no relation to its actual value. Tied to this is seemingly one law for retailers and another for manufacturers.
The City of Bulawayo isn’t exempt from this either. The City is forced to accept payment of rates at 13.80 at present when the real rate in the streets is 24. This is further undermining the balance sheet and general finances of Bulawayo.
Zimbabwe has been down this path created by insane policies far too often.
I have said repeatedly that a new Zimbabwean currency should only be introduced when trust in the RBZ and Ministry of Finance has been restored. It had not been when ZIG was introduced and trust has been further undermined since its introduction.
We have no choice but to abandon the ZIG again and revert to either the US$ or Rand. If we do not entire swathes of industry and the retail sector will be destroyed. The only other option is to allow the ZIG to float freely without artificial manipulation of its rate.
More: Pindula News
