Bond notes declining value hits Zim retail
ZIMBABWEAN retailers are fearing for the worst as rising prices and the shortages of basic commodities emerge at the time when the country’s bond notes continue to lose value.
The notes have fallen between 15 and 30 percent against the dollar, but the country’s government has turned down requests to increase the usage of the South African rand. The shortage of the greenback has led to delayed payments for foreign transactions.
Retail executives said the shortages have impacted on stocks and many have been forced to rely on supplies from South Africa.
“Payments are not going through and we have backlogs for retail stocks,” said Denford Mutashu, president of the Confederation of Zimbabwe Retailers (CZR). “This will lead to shortages of goods in shops as stock will be delayed.”
Among the retailers that have borne the brunt of shortages and pressure from the government to buy from local suppliers are Pick n Pay and Harare-listed OK Zimbabwe. Retail bosses this week met Reserve Bank of Zimbabwe officials to request that payments to suppliers be prioritised or risk food shortages and steep price increases. The bond notes were introduced last year to address food shortages, but they have lost ground with premiums escalating “as high as 35percent,” said Mutashu.
“Payments have not been going through fast enough for both the manufacturing and retailing sectors. We are afraid that shortages challenges have started to creep in driven by this,” Alois Burutsa, an executive with CZR said at the retailers’ indaba with reserve bank officials.
The country’s imports, largely made up of finished goods and products as well as raw materials “remain rather high at $3.1 billion” (R40.08bn) during the 7 months to July 2017. Zimbabwe’s trade deficit for the period, however, narrowed to $1.2bn compared to $1.5bnn in the seven months to July 2016.