Business executive Charlene Domwe shakes her head in disbelief on receiving the bill after hosting three friends for dinner at a local hotel.
The price on the invoice was the local equivalent of US$500, a fortune to spend on dinner, even in an upmarket hotel, and she does not have that amount with cash in short supply and banks imposing stringent withdrawal limits.
Alternatively, she could settle the bill with her debit card but it would mean paying six times the amount on the bill, or in foreign currency.
After juggling her options, she pays in US dollars in cash and the amount is just below US$80.
Zimbabwe’s economy has been on a downturn for a nearly decade with high unemployment, food shortages and at least 80 % of the population living below the poverty line.
This has been accompanied by dizzying inflation — now officially at 11,2-million percent.
With prices rising rapidly, even more than once in one day, shopping is a mathematical proficiency test for Zimbabweans.
To ensure their survival in an unpredictable environment, shops and service providers quote three different prices for the same item for shoppers buying in cash in the local currency, cash in foreign currency and those using credit cards.
A two-piece chicken dinner at a fast-food outlet in the capital costs Z$4 000 in cash, but when using a credit card the same chicken costs Z$310 000.
Businessman Tendai Makombe, who runs an engineering firm, justifies the different pricing system, saying that was the reason he has managed to keep his business afloat at a time many were throwing in the towel.
”There is no cash, so we have to charge a 30% or 35% premium for payments done with credit cards,” Makombe said.
”The other alternative is you pay in foreign currency for all the purchases or you do an interbank transfer at a 15% premium. How else would we survive?”
Serious crisis
Calisto Jokonya, president of the Confederation of Zimbabwe Industries, blamed the different pricing structures on widespread cash shortages that have led to long meandering queues becoming a common sight outside banking halls.
”The issue of the different pricing is a serious crisis for us,” Jokonya said.
”Unless the cash situation is solved, this problem will continue.”
Two weeks ago, the central bank allowed selected shops and wholesalers to quote prices in foreign currency, in a bid to curb the burgeoning black-market trade in basic commodities.
”We hope that by charging goods in forex this will stabilise the prices, unlike the other way round where prices are different because of the paying structure,” Jokonya said.
In the lastest bid to ease the cash shortages, central bank chief Gideon Gono introduced a Z$1 000 note on Wednesday, which could only buy a loaf of bread.
The daily cash withdrawal limit for both individuals and organisations is Z$1 000.
Goodwills Masimirembwa, chairperson of the government-run price and income watchdog, the National Incomes Pricing Commission, said a foreign-exchange crunch fuelling the black market was to blame for the pricing discrepancies.
”These pricing distortions are a result of forex being traded outside the banking system, where you have a cash rate and transfer rate,” he said.
”This problem is right across the board, supermarket or hotels, its everywhere. This is also a banking problem because of cash shortages which the central bank has to address.” — AFP
