The Insider -Residents urged to shop around or demand salaries in rand

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The Insider - May 2009

Residents urged to shop around or demand salaries in rand

Bulawayo residents have been called upon to shop wisely and buy only from those shops that offer them a favourable South African rand-United States dollar exchange rate or negotiate with their employers to pay them in rands.

The call was made by the Bulawayo United Residents Association chairman Winos Dube following growing disgruntlement among Bulawayo consumers that they are being short-changed by shops that convert their United States dollars at rates ranging from R7.50 to R9 to the greenback. Elsewhere in the country and at some outlets in the city such as service stations the rate in US$1 to R10.

Dube said his association told Deputy Prime Minister Arthur Mutambara about the plight of the people of Bulawayo on Thursday last week during his visit to the city but he had only said he would look into it.

Mutambara toured several industries in the city and held a meeting with local business people at a city hotel.

Zimbabwe National Chamber of Commerce President Obert Sibanda said while he sympathised with the public there was nothing business could do because Bulawayo had always used the rand as its reference currency while other cities especially Harare preferred the United States dollar.

Businesses in Bulawayo were not cheating the public but were using the real exchange rate because the South African rand was appreciating against the greenback.

"There may be a few businesses that are taking advantage of the public. I am talking about those that had been charging their goods in US dollars but switched to rands when the rate started appreciating," Sibanda said. "I do not think this is right. I think that those who import their goods in rand should charge in rand and those who pay for their imports in US dollars should charge in US dollars."

Sibanda said the solution to be problem was to have one reference currency so that everyone could charge in that currency.

Under the Short-Term Economic Recovery Programme which is now in force, the government agreed that the South African rand should be the reference currency because of Zimbabwe's proximity to South Africa and to enable local business to compare its prices with their neighbour.

Dube said the people of Bulawayo were being short-changed because most were paid in US dollars on the assumption that US$100 was equivalent to R1 000. But when they went to the shops they were told that their US$100 was R800.

It was therefore important for people to shop around to get the best value for their money.

"The banks are paying even lower rates thus disadvantaging the people," Dube said.

Local business consultant Eric Bloch said on local television that people should shop around and buy only from those shops that gave them the best rate. He said there were now plenty of goods in shops so people could afford to shop around as there was increased competition.

Though Zimbabweans had become used to big numbers they are slowly realising the value of the currency is use.

The R200 that the people of Bulawayo lose under the present system is a lot of money as it is enough for one's transport to and from work for a month.

There are also growing fears that the exchange rate discrepancy could see the resurfacing of "osiphatheleni"- foreign currency dealers- who had disappeared from the city streets following the introduction of multiple currencies.

Some of them now hang out at service stations changing US dollars for rands from motorists intending to buy fuel since most service stations use the US$1 to R10 exchange rate.

Though they may be small players, money changers were partly responsible for the collapse of the local currency and could cause havoc if the situation is not brought under control.

Posted-28 May 2009

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