The streets of Harare are buzzing with a new kind of hustle, one that’s leaving many Zimbabweans scratching their heads and feeling the pinch of a deepening economic crisis. The culprit?
The popular Proton white bread, a staple in many Zimbabwean households, has become a hot commodity in the hands of savvy traders, allowing them to cash in on the widening gap between the official and black market exchange rates.
The situation is a stark reflection of the complex economic challenges facing Zimbabwe, where the local currency, the Zimbabwe gold (ZiG or ZWG), continues to lose value against the US dollar. This has led to a thriving black market, where the US dollar is king, and many businesses are resorting to unorthodox practices to survive.
A recent survey conducted by H-Metro revealed a worrying trend: many pharmacies and supermarkets are now openly discouraging the use of ZiG, demanding a higher percentage of payment in US dollars. In some pharmacies, the price of medicines has also been hiked, reflecting the inflated exchange rates on the black market.
“Some companies have reclined into a survival mode to preserve the value of their investments as a gap between official and unofficial exchange rates widens,” said Denford Mutashu, president of the Confederation of Zimbabwe Retailers (CZR).
“The supply chain remains largely dollarised while retailers and wholesalers are forced to sell in ZiG and at the official exchange rate.”
The situation is particularly alarming in the case of Proton white bread. This popular loaf, which sells for ZiG 15.30 in supermarkets, is being snapped up by individuals who then resell it at tuckshops for US$1, making a tidy profit in the process. These traders are not accepting ZiG, further highlighting the preference for the US dollar in the informal sector.
The emerging trend is not limited to bread. There are growing reports of butcheries claiming that their ZiG swipe machines are out of service, while many meat outlets are placing a cap on the amount of ZiG that customers can spend, while the US dollar is uncapped.
This blatant disregard for the official exchange rate and the growing preference for the US dollar undermines the Government’s efforts to stabilise the currency and maintain its utility. It also diminishes consumer purchasing power and contributes to economic instability.
“ZiG is legal tender, just like the US dollar hence retailers should comply with the law and accept local currency,” Mutashu said.
“As CZR, we continue to urge retailers and wholesalers to accept ZiG and not inconvenience customers as we continue to work with the Government in addressing the supply chain challenges impacting sector players negatively.”
The recent developments also highlight the need for the Government to address the root causes of the economic crisis, including the lack of confidence in the local currency and the need for a more stable and predictable economic environment.
Without decisive action, the current situation is likely to worsen, further eroding the value of the ZiG and making it increasingly difficult for ordinary Zimbabweans to afford basic necessities.
The Proton bread hustle is just a microcosm of the larger economic challenges facing Zimbabwe.
