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ZCTU To Protest Against Forex Shops

THE Zimbabwe Congress of Trade Unions (ZCTU) has threatened to protest against the introduction of foreign exchange licenced retailers and wholesalers demanding the Reserve Bank to lift daily cash withdrawals now at $500 000.

Barely a month after the introduction of the Foreign exhange licensed warehouse and retail shops (FOLIWARS), mixed sentiments have been expressed over the modus operandi of the shops.
For business this move was received as a paradigm shift from a “command” type of economy to a more liberalised one.
However, for labour and the National Incomes and Pricing Commission (NIPC), the heralded September 26 decision allowing retailers, wholesalers and fuel importers to sell in foreign currency has not only stoked inflation but also relegated low-income earners to unprecedented levels of penury.
“The Zimbabwe Congress of Trade Unions is perturbed by the current wave of dollarisation or Americanisation of the Zimbabwean economy by the authorities at a time when most workers in Zimbabwe are earning their wages in Zimbabwean dollars,” read the statement.
“The ZCTU says no to dollarisation and the extension of America into  Zimbabwe. If they want the use of the American dollar in all payments to continue, then the ZCTU is demanding that all workers be paid in American dollars, since it seems we are now part of America, despite the veiled denials by our politicians, particularly President Robert Mugabe,” said the ZCTU.
According to Reserve Bank governor Gideon Gono, as of September 25, a total of 600 applications had been submitted and 570 foreign currency licences were issued.
Of the figure 533 licences was issued to FOLIWARS operating retail and wholesale licences, with 37 issued to FELOCS and FELOPADS, being oil companies and service stations who will sell in foreign currency.
NIPC chairman, Goodwills Masimirembwa whose grip on business was clipped by the Reserve Bank recently accused foreign exchange licensees of “shooting” themselves in the foot through price distortions.
At the launch of the economic policy that was ostensibly crafted to preserve foreign currency inflows, Reserve Bank governor Gideon Gono said the move was driven by compassion.
“Before the introduction of the foreign exchange shops, the central bank watched and observed with heavy hearts the suffering of Zimbabweans as they waited at the borders seeking to import basic commodities,” said Gono.
But soaring prices that followed on the back of a record inflation of over 231% could leave the central bank with another “heavy heart”.
 An observation by businessdigest this week indicated that prices charged in foreign currency shops were at least three times higher than those charged in neighbouring countries. Currently enjoying a waiver on food import costs, analysts said transport costs were major costs incurred by business.
A senior manager at a local retail group this week said uncertainty in forming a new government and a “vacuum” in regulating the foreign exchange shops could have necessitated wide pricing disparities between Zimbabwe and regional peers.
“Most retailers are a bit sceptical about this policy,” said a general manager at a retail group.
“ There is a vacuum in governance and things could go either way. Business is coming from a background of a command type of economy and there is need to maximise profits in the duration of this stalemate.” He added that shortages of lower denominations of foreign currency had also resulted in shops charging higher prices.
He said most retailers were caught “unawares” when the Reserve demanded a refundable US$20 000 that was then required to receive the trading licence.
With one month on retailers and wholesalers have also failed to form the Foreign Exchange Licensed Wholesalers and Retail Shops Association mandated with regulating the new shops. –– Staff Writer.

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