By Dumisani Ndlovu
The Zimbabwean government has accused formal retailers of pegging prices to parallel market rates, prompting the Reserve Bank of Zimbabwe (RBZ) to devalue the Zimbabwean Gold (ZiG) currency by over 40% on September 27. This move aimed to address the widening gap between official and parallel exchange rates, which caused a surge in ZiG-denominated prices.
Information Minister Dr. Jenfan Muswere revealed that a Ministry of Industry and Commerce survey found prices in both ZiG and US dollars remain high in formal retail outlets, indicating speculative pricing and parallel market benchmarking. The survey, conducted from September 27 to October 4, 2024, showed ZiG prices for basic commodities increased following the currency adjustment, while US dollar prices remained stable in both formal and informal outlets.
Dr. Muswere explained that the survey observed limited stock levels of essential goods such as cooking oil, mealie-meal, bread, and sugar in formal outlets, whereas these products were readily available in the informal sector. This disparity is attributed to arbitrage, with informal retailers capitalizing on exchange rate differentials, and reported cases of hoarding in the formal sector for resale to informal outlets.
Furthermore, suppliers have reduced supplies to the formal sector, redirecting goods to the informal market. Despite these challenges, Dr. Muswere assured that there are no major shortages of basic commodities in the formal retail sector.
The government will conduct regular monitoring and stakeholder engagement to ensure market-relevant interventions continue, with measures in place to support the formal sector. This development comes as the informal sector grows, posing challenges to formal retailers.
