Black market threatens retailers

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THE thriving black market where basic commodities are readily affordable to consumers at cheaper prices is threatening the viability of retailers, Confederation of Zimbabwe Retailers president Denford Mutashu has said.
Mutashu said the retail sector is reeling from the effects of Statutory Instrument 142 which outlawed use of foreign currency for domestic transactions.
Last year, government banned the use of multi-currencies and reintroduced the Zimbabwean dollar as sole legal tender. However, most businesses continue charging in foreign currency despite the ban.
Mutashu said despite the ban, retailers still settle some of their obligations in foreign currency even though they charge in Zim dollars.
“Retailers still pay in foreign currency for the majority of products we find in stores but are charging in local currency.
“This is threatening the survival and viability of bigger value chain supermarkets because it is the informal trader that has the capacity to sell in any currency and pay back the manufacturer in forex.
Mutashu said currently, it is rewarding to trade on the black market as the sector does not pay taxes to the government, adding that the market is indexing prices in the greenback.
Recently, Mutashu confirmed that the country’s retail sector was reeling from unexpectedly large losses due to the influx of relatively cheap goods on the informal sector, usually smuggled from neighbouring countries through the porous borders.
He said over the past few years, the continuous sprouting of informal traders has negatively impacted on formal retail outlets’ sales and profitability.

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