By Leopold MunhendeMain correspondent
An explosive crisis meeting between the Reserve Bank of Zimbabwe (RBZ) and business leaders held on Tuesday over escalating commodity prices ended in deadlock after the two sides maintained tough stances, NewZimbabwe.com can exclusively reveal.
The RBZ’s Financial Intelligence Unit (FIU) had called for an unrestricted meeting with manufacturers and retailers to discuss ways to curb the spiraling crisis.
However, the situation fell apart after the central bank accused the companies of unfairly setting their Zimbabwean dollar prices too high and using the parallel market.
The CRF team was led by its Managing Director Oliver Chiperesa while the Confederation of Zimbabwe Industries (CZI) was represented by its President Kurai Matsheza, the Zimbabwe National Chamber of Commerce (ZNCC) was represented by its President Mike Kamurengemu .
The Grain Millers Association of Zimbabwe (GMAZ) was represented by its President Tafadzwa Musarara while Denford Mutashu presented on behalf of the Confederation of Retailers of Zimbabwe (CZR).
RBZ sources who attended the meeting said Chiperesa started the meeting by accusing manufacturers and retailers of using the parallel market rate to price their products despite the fact that they were buying foreign currencies at the official interbank rate which is significantly lower.
He reportedly said it was the main driver of inflation.
According to the sources, Musarara was the first to respond, detailing the challenges regarding the availability of foreign currencies on the auction system.
“He indicated that companies were having a very difficult time accessing forex on the interbank rate, as evidenced by the fact that offers from more than a month ago had not been funded. For example, he said said wheat millers like National Foods don’t get foreign exchange and can’t access imported wheat that is already in the country but held on bail He said this has led to the shortage of bread that the country has experienced recently,” the source said.
“He went further by suggesting that millers should be allowed to sell flour exclusively in US dollars, but the general manager (Chiperesa) couldn’t have had any of that,” the source added.
“He instead said he was going to launch a nationwide blitz starting Friday, stopping all manufacturers and retailers using the dual-pricing model based on the parallel market rate, but that drew fire from CZI chairman Matsheza. , who said the crackdown would be disastrous.”
“Matsheza warned that such a bombardment would lead to severe commodity shortages and the economy would scream. He also warned that there would be a repeat of the 2008 shortages soon after the blitz,” the source said.
According to the sources, ZNCC Chairman Kamurengemu came in with a hard-hitting presentation, calling the interbank rate a “big fail”.
“He gave a detailed synopsis of the current situation and called for a convergence of the interbank rate and the parallel market rate,” a source said.
Mutashu reportedly called for an urgent convention to discuss the issue and urged the RBZ to put the planned blitz on hold and give dialogue a chance.
“Mutashu was unequivocal in his response. He said the central bank should reconsider its decision to clamp down on businesses and instead ensure there is a convention on the matter. He accused some ministers of making matters worse as they are completely inaccessible in an apparent dig on Finance Minister Mthuli Ncube, saying President Emmerson Mnangagwa was more accessible than him.
“Basically, the business was very clear and required that the fuel pricing model (selling exclusively in US dollars) be replicated in the other critical sectors,” the source said.
After the submissions, the sources said, Chiperesa promised he would look into the issue of rate convergence within three weeks or step down, much to the stun of the meeting.