Tuckshop economy thrives on cash
THE three tier pricing system continues to thrive in downtown Harare with prices of basic commodities pegged in United States Dollars remaining stable — if not coming down compared to other major retailers — while marginal increases are being recorded for bond notes purchases.
Worryingly, the usage plastic money which the Reserve Bank of Zimbabwe (RBZ) is pushing for in the midst of crippling paper money shortages, is gradually being phased out with the few retailers and wholesalers that are still accepting the mode of payment charging up to 20 percent more.
Since many groceries are largely imported from neighbouring countries, traders are increasingly shunning plastic money as they encounter problems when attempting to cash it out for purposes of restocking across the Limpopo; hence the switch to mainly United States dollar transactions.
A snap survey conducted by The Herald Business yesterday revealed that most of the small-scale traders who conduct their business south-west of Julius Nyerere Way, are no longer accepting plastic money regardless of the rate offered. Most common in the downtown area are grocery tuckshops, women’s cosmetics and car parts. The shops are mostly being run by Rwandese, Indians, Nigerians, Congolese and Tanzanians who established their presence soon after dollarisation.
For bond notes payments, consumers are paying an extra 10 percent compared to what obtains for those paying in US dollars. A two litre bottle of cooking oil, for example, is going for an average US$3 or $3,30 in bond notes. Boom washing powder (2kg packet) is selling at US$3,50 or $3,90 in bond notes.
Even eggs that are in short supply in mainstream shops mainly due to the effects of the deadly Avian Flu that has depleted Southern Africa’s poultry industry, are available in downtown Harare only on cash purchases at $4,70 per crate against $7,50.
A trader who accepts the three-tier pricing system said he was charging more for plastic money with a 20kg carton of brown sugar going for US$13; $14,50 bond notes and $18 (swipe).
Given the low confidence that citizens have with the banking sector, many people — including the elderly — could be seen making cash purchases in these small-scale shops, indicating that money is now widely circulating in the informal market.
Some of the retailers who spoke to this publication said they make an average $1 500 a day.