By Alois Vinga
The Zimbabwe Congress of Trade Unions (ZCTU) criticized what it called corporate greed threatening to derail recent government measures to enforce official Reserve Bank of Zimbabwe (RBZ) exchange rates .
Last week, the government released Statutory Instrument (SI) 127 of 2021, which provides for sanctions to be applied to “double-deducted” companies.
These companies take advantage of the RBZ’s weekly foreign exchange allocations, but price far above the exchange rate of $ 1: 84 for the sole purpose of making huge profits.
The new government directive will penalize the use of foreign currency obtained at the auction for purposes other than those specified in the request, among other punitive measures.
However, in reaction to the SI, the Zimbabwe Confederation of Industries (CZI) warned this week that the immediate impact of the instrument’s application would be that prices in US dollars would be increased.
The group called for the immediate suspension of the regulations, which include jail terms and fines for companies that refuse to comply.
“This means an immediate increase in US dollar inflation, a component of our blended inflation rate. Using the auction rate would force consumers to convert their US dollars to Zim dollars in the parallel market before buying, a practice already prevalent outside large retail chains such as Pick n Pay, OK and Bon. Market. The immediate impact of enforcement would be that prices in US dollars would be increased, ”CZI warned.
The industry lobby group also called for adopting a single economy-wide exchange rate and making the auction platform more efficient.
But speaking to NewZimbabwe.com Business, ZCTU General Secretary Japhet Moyo called the industry’s concerns “greedy” and “reckless and selfish.”
“They have no problem because they have already embraced the auction as progressive. They claimed that the platform brings stability, therefore, they should respect the auction exchange rate when setting prices.
“Businesses have been doing a killing all this time by accessing foreign currencies on the ‘stable auction floor’. Why do they resist the use of the auction rate and display prices in line with the official exchange rate? ” he said.
Moyo said the concerns of the companies were not genuine and accused them of focusing only on “double deductions” and “profiteers.”
“These companies themselves enjoyed the cake. There has been no corresponding increase in wages and foreign exchange allowances in all areas, as workers continue to earn slave wages, which means companies have been making profits all this time, ”he said. he added.