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Wednesday, May 29, 2024

Economic sabotage exposed as locally manufactured goods flood the streets

Story by Stanley James, Business Editor

The influx of locally produced goods on the informal market has confirmed growing concerns over economic sabotage with local manufacturers and retailers being accused of conniving to mop up the US dollar to do away with the local currency.

As the pricing madness continues, the role of manufacturers in the supply value chain has come under immense scrutiny.

A snap survey carried out by ZBC News in Harare this Tuesday revealed that most locally produced basic goods have flooded the informal market, with the manufacturers reportedly using their agents for profiteering purposes.  

Traders in the streets did not want to entertain ZBC News after being quizzed on how the goods are finding their way to the informal sector and being sold exclusively in United States dollars.

It also emerged that the ordinary citizen is bearing the brunt, while formal retailers, most of whom are compliant with the country’s laws, have also been adversely affected.

Monetary Policy Committee member, Mr Persistence Gwanyanwa told the ZBC News, “Such behaviour in the marketplace is contrary to the dictates of the economy by using agents in the supply value chain they are depriving formal markets and when this happens it has negative effects on price stability.”

Of major concern is that some of the manufacturers have access to foreign currency from the Reserve Bank of Zimbabwe (RBZ) auction system, a privilege that they are now abusing by seeking to ditch the local currency.

For economic analysts, it is unacceptable for the local industry to show such indiscipline, considering that rates, taxes, and labour costs are being paid in local currency.

“I think there should be that aspect that seeks to focus on restraining the indiscipline activities within the markets while ensuring that beneficiaries of the auction are committed to stability,” said Pan African Chamber of Commerce board member, Mr Langton Mabhanga.

Government is currently investigating the situation on the ground with businesses and manufacturers being called on to exercise restraint and discipline in the market.          

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