Published by the government of Zimbabwe
31 December 2008
editorial
Harare — THE idea behind the Foreign Exchange Licensed Warehouses and Shops was to make goods available in the shops at affordable prices to consumers since hard currency is not susceptible to the inflationary pressures negatively impacting on the Zimbabwe dollar.
The supply side constraints were to be solved through importation of foreign products for sale in Zimbabwean shops, with retailers putting a 30 percent mark-up on what the product costs outside our borders.
Even though only imported products were to be sold in forex, many hoped the forex regimen would translate into increased availability of locally manufactured goods that producers were smuggling to neighbouring countries.
In no time many shops began to fill shelves with imported products and consumers believed they had a reprieve.
Their joy was, however, short-lived as some retailers, so sold on profiteering, began abusing the system to the extent that foreign products were priced three to five times higher than their normal price outside Zimbabwe.
As such, all that most consumers can do now is watch the goods on the shelves, as they do not have the money to buy the products.
For instance, a survey by the Consumer Council of Zimbabwe, last month, found that a family of six required 80 rand per month to purchase basic goods in South Africa compared to 290 rand in Zimbabwe.
This means a Zimbabwean consumer has to spend up to four times as much as his/her South African counterpart for the same product.
This wanton profiteering prompted CCZ executive director Ms Rosemary Siyachitema to urge consumers to form buying groups and send representatives to South Africa to buy basic commodities there to counter profiteering.
We fully endorse the proposal, as a short-term measure, but in the long term we feel there is need for the Reserve Bank of Zimbabwe and the National Incomes and Pricing Commission to clamp down on profiteering businesses.
The FOLIWARS licences are a privilege, not a right, hence they can be withdrawn from those businesses abusing the privilege.
More so, profiteering is an economic crime that should be ruthlessly punished to dissuade would-be offenders. To this end, we urge the responsible authorities to have more bite and less bark in dealing with offenders.
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