14 Oct 2021
Top industrialists in Zimbabwe have cautioned the country’s currency is in danger of collapsing as businesses resort to U.S. Dollar transactions.
Over the past few weeks, many foreign traders have been arrested on charges of manipulating the Zimbabwean Dollar by trading on the black market.
Within a letter to members, the Confederation of Zimbabwe Industries (CZI) – local businesses’ largest representative organisation – announced it had warned the government against cracking down on businesses and traders.
“The greatest risk facing the economy right now is an inappropriate policy response to the rising parallel market premium,” CZI said in relation to the broadening gap between the official and black-market currency values.
“Clamping down on informal exchange trading in the absence of a viable formal market will have catastrophic consequences for the economy.”
The lobby group went on to say: “The Zimbabwe dollar is in real peril. “Well-considered policy measures must be implemented by the authorities aimed at bringing back confidence into the currency markets.”
Zimbabwe’s government is attempting to prevent another collapse of the Zimbabwean Dollar, which was only revived in 2019.
The country’s finance minister, Mthuli Ncube said the government was now taking action to punish businesses that took into account parallel market rates when pricing goods and services.
“Businesses who disregard the law and continue to price their goods on the parallel market rates will have their licenses suspended,” Professor Ncube said on Thursday.
Some local firms have been offering discounts to customers who can pay in U.S. Dollars to increase foreign currency for retooling.
Since 2020, Zimbabwe has adopted a dual pricing system allowing businesses to sell goods and services in U.S. Dollars using the official exchange rate and local currency.