It has been weeks since the Finance Minister caused a stir by announcing that civil servants would be paid in Nostro USD which would be loaded to their cards. The announcement also included a directive that said all shops were supposed to introduce dual pricing. Specifically shops were supposed to display prices in both USD and Zimbabwean dollars. Most shops have not done so.
Two kinds of shops
There are two kinds of shops in Zimbabwe. The large supermarkets chains that are for the most part law abiding and accept all currencies presented to them albeit at a steep cost. Then there are the so-called “tuckshops” that will only take US dollars and specific denominations of Zimbabwean dollars. Both types of shops have not introduced dual pricing according to our multiple surveys.
Buying using USD in supermarkets makes little sense
In the large retail chains such as OK and Pick N Pay prices are still being quoted in Zimbabwean dollars. None of the shelves had dual prices at all. When we inquired at the tills we were told that USD was being accepted at the current official rate of the week. The problem is that using this rate to accept foreign currency is a bit strange. A quick comparison of prices shows that shops are using a rate north of $105 ZWL to compute their prices. Why would these shops then accept foreign currency at such a low rate?
This means for example that 2kg of flour which is selling for $220 will cost you about US$3.30 at the current official rate of $65. In comparison the same 2kg of flour sells for $1.60 in the tuckshops that only accept USD. In fact this pattern holds for most of the products within supermarkets, they are much cheaper when you buy them using USD in tuckshops. Why would a sane person buy using USD in these supermarkets when they can get better prices from the tuckshops?
Maybe this will change
Apart from Texas Meats and a few other shops a lot of shops really have no incentive to list both USD and ZWL prices because:
- This might get them in trouble if they are not using the official rate
- Using the official rate might dissuade people from paying using USD even if that is what most shops prefer
- Civil servants are yet to get their USD allowances, it will be interesting to see how shops react to this. Maybe things will change then.