By Beverly Bizeki
Retail outlets popularly known as ‘China shops’ that often supply cheap goods varying from kitchenware, clothing, electrical gadgets, and detergents among other things are only accepting US$ cash payments, with no other multicurrency payment method being accepted.
Analysts have attributed the proliferation of illegal forex dealers to these shops, as the general populace patronizes them very often because of the availability of a variety of modestly priced goods.
A survey conducted by TellZim News in Masvingo city revealed that out of nine of these shops in town, none of them accepts swipe or Ecocash transfers be it USD or local currency (ZiG) with some of them even refusing payments in the South African Rand or local hard cash payments.
The practice is against Statutory Instrument (S.I) 85 of 2020 states that payment for goods may be done electronically through a foreign currency account or in cash or through any electric payment platform but the retailers have been on record for taking cash payments only.
Economic Analyst Collen Jonas said the issue had long been in existence and blamed the reluctance of monetary authorities and law enforcement agencies
“The issue is nothing new and is widespread with Chinese, Indians, and other nationals who have always refused to accept local currency as a method of payment. The issue is on law enforcement agencies applying the law selectively. Other giant retailers such as OK, and PnP are forced to accept local currency payments for their goods but those small traders always get away with it. It really brings into question the role that the police are playing in enforcing our policies and regulations and our laws as well as the role that the Financial Intelligence Unit (FIU) plays in managing the financial services and retail sector on issues related to our money.
“There is a lot that has to be done by our monetary authorities as well as the police working hand in hand to ensure that our local currency, the ZiG in this place is fully embraced as a means to transact,” said Jonas.
Jonas said there was need for policy makers to put effort in building confidence of local currency
“Economic agencies need to have confidence in our currency, policy makers so if our monetary authorities are inconsistent in policy implementation if they are deceptive and are not able to build confidence we will end up having such situations where local currencies are not being accepted for payment of goods and services.
“Confidence cannot be built by making a policy pronouncement or overnight but is something that is built over a long period of time and is also built through consistency and honesty in as far as policy formulation and implementation is concerned,” said Jonas.
Another analyst who preferred to be anonymous said it was illegal for shops to refuse other forms of payment since the country’s monetary policy stipulates that the country is in a multi-currency system and it should be up to the buyer to choose the payment method he or she requires amongst the legal ones.
“Zimbabwe has a multi-currency system which is in place up to 2030, so if other shops refuse other forms of payment and accepts one it becomes problematic. It should be up to the buyer to decide which currency to use not the seller,” said the analyst.
The analyst went on to say if there is evidence then the ordinary citizens should take up the matter with relevant authorities who may not be aware of the practice and further said there was need for investigations to establish whether the shops were remitting taxes in US$.
“People should take the matter to the relevant authorities because they may not be aware of the practice. Investigations should be done to establish if these shops are remitting in US$ and where they were taking all the US$ cash sums they were getting,” said the analyst.
Masvingo Urban ward 10 Councillor Sengerayi Manyanga said the shops should accept all forms of payment legal in the country if they are operating in Zimbabwe saying people are paid in different currencies so they should all get equal opportunities to buy in these shops.
“These shops should accept all payment methods including the recently introduced ZiG, people are paid in different currencies and forms at workplaces so everyone should be allowed to use the payment method he or she wants depending on how they get the money,” said Manyanga.
Human rights activist Thomas Mbetu weighed in and said Zimbabwe currently operates under a multicurrency regime, allowing for the use of various currencies in its financial system. Therefore, it was advisable for these retailers not to insist on immediate payment in USD when conducting transactions in Zimbabwe.
“By embracing a multicurrency system, Zimbabwe has recognized the importance of accommodating different currencies to facilitate economic transactions. This approach has been implemented to alleviate the challenges associated with the country’s own currency, which has experienced significant instability in the past.
“Given this context, it would be prudent for these retailers to be cognizant of the prevailing financial landscape in Zimbabwe. While the USD is widely accepted, it is not the sole currency in use, and other currencies are also considered legal tender. Consequently, it is recommended that the retailers be open to accepting alternative forms of payment, such as the local currency or other internationally recognized currencies.
“Adapting to the multicurrency regime in Zimbabwe can help foster smoother business transactions and promote economic cooperation between international and Zimbabwean markets. By acknowledging and respecting the financial policies in place, the retailers can contribute to a mutually beneficial environment that supports trade and economic growth,” said Mbetu.
Announcing the Monetary Policy Statement (MPS) recently, RBZ Governor John Mushayavanhu said the multi-currency system is to stay up until 2030 as per the law and ZiG is circulate alongside other currencies.
