Financial Gazette (Harare)
Synodia Bhasera
25 October 2008
Harare — THE introduction of shops selling groceries and other commodities in foreign currency might have come as a welcome relief to companies that were battling to restock, but it has actually worsened the plight of the Zimbabwean worker, still being paid salaries in the fast-depreciating local currency.
Trade union leaders interviewed by The Financial Gazette, said this week the scheme has done little to alleviate the suffering among workers who now need hard currency, which they are not earning, to buy basic commodities.
Gideon Gono, the Reserve Bank of Zimbabwe (RBZ) governor, last month legalised foreign currency transactions involving groceries and fuel. The facility is however, limited to companies licenced by the RBZ.
This was meant to enable manufacturers of various goods to generate foreign cash needed to import raw materials, increase capacity utilisation and improve the availability of goods on market, leading to a marked reduction in prices as competition intensifies.
But most basic commodities have vanished from the supermarkets shelves only to appear in shops licensed to retail in foreign currency.
"The situation is making it difficult for us to survive. How are we supposed to transact using foreign currency yet we are paid in local currency? Even those prices in Zimbabwe dollars are also very high. Our members are quite unhappy with that arrangement," said Joseph Chinotimba, president of the Zimbabwe Federation of Trade Unions.
Chinotimba, who doubles up as the vice chairman of the combative Zimbabwe National Liberation War Veterans Association, said it was contradictory that shops licensed to sell goods in foreign currency were not paying their workers in that currency.
"It is painful that they are not paying their workers using the same currency. Where do they expect them to get it?" he asked.
A survey conducted by The Financial Gazette showed that most licenced outlets have demarcated their supermarkets into two sections -- an almost empty section selling in local currency and a well-stocked one that sells in hard currency.
Cynics are poking fun at the scheme, saying all it has helped achieve is to worsen the informal currency exchange markets. Consumers are now being forced to buy foreign currency using their salaries at "the cheque rate" or to moonlight in order to raise the hard currency needed to make ends meet.
It also emerged during the survey that even locally produced commodities were being sold in foreign currency.
A pint of sterilised milk was selling at US$5, which could easily translate into R40 yet the same product fetches about R9 in South Africa.
Lovemore Matombo, secretary general of the Zimbabwe Congress of Trade Unions, said the situation had become unbearable for the workers.
He said the union could have mobilised workers to protest, but shelved the idea in order to give a chance to the inter-party dialogue between ZANU-PF and the Movement for Democratic Change to succeed.
"We could have engaged ourselves in protest but because there is this discussion between the political parties, we didn't want to be seen as sabotaging the power-sharing agreement," Matombo said.
"The whole process does not benefit workers but the business people. This is purely an economic failure, which requires political solution."
Economist John Robertson said more workers were going hungry because the shops that had stocks were trading in foreign currency.
"It's regrettable that the shops that have reasonable stocks are asking for foreign currency and it causes further shrinkage in consumption and increases hardships," he said.
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