Wheels are coming off

ZIMBABWEAN retailers say they are struggling to procure from manufacturers who are giving preference to those buying in United States dollar. The scenario, the retailers say, threatens the supply of mostly locally-produced products. They have warned that some of local products like sugar will disappear from the shop shelves. The disappearance of basic commodities from the shelves of major retailers will expose consumers to fake products on the streets.

Already there are some fake products flooding our streets, exposing consumers to potential health hazards.

Last month, listed consumer staples concern MedTech Holding had to warn its consumers after unravelling that some unscrupulous people were manufacturing the company’s foam bath Satiskin look-a-like and selling it to the unsuspecting public.

It reported to the police and a raid in Mbare saw the seizure of fake Satiskin products.

Manufacturers' major gripe with retailers is that they pay in local currency and after a grace period like a month in an environment in which the Zimbabwe dollar is fast depreciating.

The International Monetary Fund recently said that the Zimbabwe dollar had depreciated by 95% from January this year.

On Friday, the local was trading at 1: 19 142 against the dollar, and if we add an extra 10% margin it effectively means we are on 20 000 per dollar.

While the local products are disappearing from shelves of major retailers, the same products are awash in tuckshops in downtown Harare where they are sold exclusively in foreign currency. The dual currency regime, which the government has been preaching about, does not exist in these markets where a “take it or leave it” rule applies.

It will be a sad day if retailers run out of products as they are the only ones that sell in local currency in an economy that is over 90% dollarised.

We are in this mess despite the Treasury decreeing that manufacturers can only sell to those operators that are tax compliant.

It is as if there are no tax authorities to launch a blitz on these unscrupulous manufacturers.

Yet, a producer has a right to sell to any customer so long as the customer pays. The so-called tuckshops pay in hard cash which the manufacturers can use to negotiate for friendly terms with raw material suppliers.

These retailers that are struggling to procure goods are the ones that religiously pay taxes to the Zimbabwe Revenue Authority.

The government must intervene in the value chain to ensure that local products are readily available in our supermarkets. The support must be availed to raw material suppliers and manufacturers so that they accommodate retailers that pay in local currency to support the continued use of the Zimbabwe dollar.