The trend that started a week ago has continued this week. Black market rates, to which most retailers in Zimbabwe look for guidance when setting prices, fell slightly again yesterday. On the other hand, major shops continued to increase their prices as some settled attempted to go back to USD era prices.
These prices are well above those being charged in the region to the extent that as things stand, it is cheaper to import these basic commodities even if you factor import duty and transport costs. This is made worse by the fact that some of these basic commodities such as cooking oil are not easy to find in local shops.
An example of washing powder and cooking oil
2 litres of cooking oil retails at R27.00 in South Africa. It cost even less when you buy it in bulk as some cross border traders do. Raha a popular brand of South African cooking oil costs $28 bond Downtown and yet supermarkets are selling theirs at an astounding $60. Yes, that is locally made cooking oil selling for much more than imported cooking oil even if you factor in the cash premium.
Another example is that of washing powder. A kilogram of Surf washing powder is selling for an eye-popping $100.00+ in local supermarkets. Yet 2kg MAQ washing powder costs around $30 bond. This translates to $15 bond per kg. Even ZESA tariffs and fuel cannot explain that gulf!
This explains why Zimbabwe continues to import
One pathetic excuse given as to why we need a weak currency is that it will make our exports cheaper, now we have one of the weakest currencies in the region and still our products are expensive and uncompetitive.
This explains why Zimbabwe is hooked on foreign currency. Its population needs relief from local businesses gone mad. Businesses which are so inefficient even after duty and transport costs they cannot compete. Businesses that cheer at electricity tariff increases because they “can afford it”, when in reality such costs are passed on to the customer.
Sadly it all means our foreign currency situation will not improve as it will be wasted on importing basic commodities as local commodities are unaffordable still. Seriously how can it be cheaper to import potatoes into Zimbabwe than to buy them from a local supermarket?