Manufacturers Propose Temporary Restriction On What Shoppers Can Buy
The Confederation of Zimbabwe Industries (CZI) has proposed a temporary restriction on what shoppers can buy in formal shops which are struggling to restock fast enough due to panic buying.
Formal retailers, which sell products in Zimbabwe dollars, are struggling to restock their shelves as manufacturers demand US dollar cash payments.
As a result, CZI has proposed that cooking oil purchases should be limited to two bottles per customer, and there must be a cap on the imports of basic grocery items.
Formal businesses are forced to use the official rate, which overvalues the Zimbabwe dollar, and as a result, they are losing out to informal traders, who use sell in foreign currency.
In its proposals to the Government this week, CZI said:
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Limit importation of basic commodities to households on for domestic use (prescribed monthly quantities)…
The informal sector sells products mainly in the US dollar, and some of the shops are totally rejecting the local currency.
They buy commodities from manufacturers at the official rate and sell very cheaply in USD.
Shrinking formal consumers are making a run-on stock (priced in Zimbabwe dollars) in formal shops, taking advantage of the exchange rate disparities and formal shops are failing to restock.
Manufacturers are demanding cash upfront which also affects restocking.
The Government recently suspended duty on basic grocery items saying this was necessary to counter price increases.
However, critics argue the measure will only hurt the local industry and drain the economy of foreign currency.
CZI said, instead, the Government should produce subsidised goods through Silo Foods, the manufacturing arm of the Grain Marketing Board as well as provide food stamps to vulnerable households.
More: Pindula News
