THE country's top retailers have raised grave concerns about the rising tide of ZWG-induced losses, warning if the exchange rate policy is not fixed several companies in the sector will be left with no choice but to fold operations.
The outcry comes as the ZWG has lost most of its value since its inception on April 5 2024. The local unit first traded at US$13,68 against the greenback with the parallel market rates maintaining almost a similar range during the early days.
Reserve Bank of Zimbabwe (RBZ) governor, Dr John Mushayavanhu maintained the ZWG was not going to depreciate for a record 13 times on the day of its launch arguing it was a Structured Currency supported by a host of minerals.
Within the first quarter of its inception, the ZWG has steadily begun to fall by the wayside with parallel market exchange rates now hovering around US$1:ZWG32 on the parallel market.
Last week the central bank unveiled a cocktail of measures aimed at supporting the local currency on the back of announcements that US$64 million was injected in September alone on the Interbank Market to mop up excess ZWG liquidity and ultimately nip the spiralling exchange rates in the bud.
But in its submission Monday, the Retailers Association of Zimbabwe which includes OK, TM Pick n Pay and Halsteads bemoaned the higher than ZWG13,80 official exchange rate peg being imposed by suppliers.
The grouping on their part said the suppliers were also blaming acute foreign currency shortages on the official market.
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The association said Schweppes for instance was selling Mazoe Orange Crush at US$3,48 or ZWG74,70 equivalent to a rate of US$1:ZWG21,45. Willowton is selling D'Lite Cooking Oil 2 litres at US$2,89 or ZWG67,08 equivalent to an implied rate of ZWG23,21.
Colcom Countrystyle 500g pegged at US$3,98 is being sold at ZWG119,85 or an implied rate of ZWG30,11.
Resultantly, the retailers said they are selling such products at a loss margin ranging between 10% to 48%.
"Suppliers of goods and services into the formal retail sector are now maintaining two-tier price lists for local currency and another for foreign currency- whose implied rates are way higher than the obtaining Official Exchange rate based on the banking systems Willing Seller Willing Buyer platform.
"Manufacturers and distributorship suppliers are using variable exchange rates depending on their source of foreign currency while suppliers have the flexibility of adopting variable exchange rates, formal retailers are mandated to use WBWS official exchange rate currently pegged at ZiG14,80to USD, thereby exposing retailers to massive losses," the retailers' group said.
A visit by our news crew to several supermarkets in the capital also revealed that products such as Sugar and Mealie Meal among others are no longer in stock in the ZWG-dominated retail outlets but readily available in the informal sector tuckshops where the US$ is readily available.
Some experts have blamed the authorities for injecting the ZWG into the economy without a proper mechanism to install easy access to the much-needed greenback in the high-import country.
Before its disbandment, the RBZ Foreign Exchange Auction went a long way to support local companies with their foreign currency needs.
