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The convulsions and tumult as the Zimbabwe dollar lost value and then climbed back up 22 percent is something that legitimate and ethical businesses had to active to cope with successfully, as almost all in this group managed, so they could both serve their customers and be completely legal.
This meant they have to watch the exchange rates every day, so their pricing continued to offer legal value, that they had to be open and honest with their customers, putting goods on shelves as they arrived, and generally treating their customers and suppliers with total honesty.
This goes with the territory of being a business person who wants to build customer loyalty and have a long-term future. There are no price controls in Zimbabwe, since these were found in past experience to be severely counter-productive, but there are regulations and rules, such as it being the customer’s choice what currency they shop with, that need to be obeyed.
These are not difficult to follow, and many businesses have managed to follow them faithfully and fairly, and consumers need to keep track of those so that when better times roll around and high-levels of stability have returned to the markets and to prices, they know who they can continue to trust.
But as President Mnangagwa noted over the weekend, buried within the business community there are those who see these sort of times as an opportunity to dump ethics, to dump concern for customers and generally just engage in dubious business practices to push up prices, and push them up in real terms, or to create artificial shortages so they can make a lot of money later by selling goods at scarcity prices, or take advantage of consumers who might not be reading the exchange rates daily to engage in illegal conversion factors.
The President mentioned reports of a cartel that has tried to corner the sugar supply, stacking the packets in warehouses.
He has ordered investigations, but if there is evidence of a wholesale or retail cartel, the investigations need to be extended to the producers and suppliers. If some manufacturer suddenly sees huge jumps in orders from a group of businesses, or sudden new and large customers making big orders, they should at least wonder what is going on and be prepared to continue servicing their long-standing customers before diverting their products.
There is fairly good evidence that some manufacturers were ready to move into more direct marketing to small tuckshop businesses that sell purely in foreign currency.
In some cases this would be changing their business model of minimising direct dealing, and in other cases it would be changing delivery routes, to drop off a lot more small orders in odd places rather than have the bulk going to the major supermarket chains and the major wholesalers.
Some shortages during the height of the general attack on the value of the Zimbabwe dollar were generated by some producers diverting their output.
The evidence might be circumstantial, but when major stores and outlets seem to be starved and the product is readily available in small shops and even market stalls that demand pure foreign currency, that is fairly conclusive. We also saw some other unethical behaviour. Some producers pushed up their US dollar prices significantly, and this appears to have been what those producers thought was a smart ploy to get around the law that demands pricing conversions to follow the interbank rate.
In this particularly unpleasant path the producer first works out their price in US dollars, which does have some advantages when exchange rates change rapidly.
They then, however, convert to the local dollar price at the black market rate, producing a higher figure than that produced by the official rate and at one stage a much higher figure although that is no longer the case.
They then convert back to US dollars at the official rate producing a much higher US dollar price, and that is the one they charge. This means when a shopper proffers local currency and the ethical shopkeeper converts at the official rate, the producer is in fact getting the black market rate.
Others were pushing up their process in advance to take into account what they reckoned the black market rate might be in a couple of weeks or months, this forward pricing we have heard people talk about. Sometimes that price was built around a wild guess from an ignorant person over what the exchange rate would be doing. Sometimes it was a major error.
A modest amount of sanity has returned to some markets since the Zimbabwe dollar started climbing in value last week.
The ethical keep posting the new daily exchange rate prominently in front of their tills, and the comparison in prices between local currency and foreign currency amounts follows that official rate, plus their 10 percent premium, exactly. Customers can understand. Others appear to be greedy and do not post rates, and possibly are continuing to use the highest rates we saw a couple of weeks ago. But in any case they are inviting their customers to have suspicions, and that will do the retailer little good in the future.
We are also seeing, suddenly, the US dollar price of some goods starting to fall from some manufacturers.
You can even get a wide range of products in a particular shop moving onto special offer, and when you examine the address on the back of the pack you find they all come from one major manufacturer.
Perhaps it is just coincidence but perhaps a premium on US dollar pricing is being reduced, if not eliminated.
The fact that the President does not wish to guess, and does not wish to judge without evidence, has had the beneficial effect that he has ordered investigations into just what was happening and what could well still be happening.
And as he made clear, if people are playing the fool and are manipulating markets or creating shortages or a forming cartels, the Government does have the powers to take action.
Corruption was too often seen as limited to the public sector, and the major effort to eliminate it in that sector has sent a growing number of people to jail, has created systems that make stealing hard, and is generally cleaning up what was an intolerable mess. But to assume everyone in the private sector wears a halo to work is absurd. The number of dishonest is just as large and also needs to be eliminated.
Many in the private sector whose honesty is dubious prefer to set up systems and the like to enlarge their profits, rather than just raid the tills, but regardless of how they do it they are just as bad as the manipulators in the public sector.
We need to eliminate corruption and unethical behaviour throughout Zimbabwe, and that means we need to recognise that it can occur anywhere and sometimes is a lot more complex than just a straight-forward theft of other people’s money.
Considering the number of businesses that do make honest profits providing honest services, it is difficult to understand, unless sheer greed is taken into account, why some want to cheat, and cheating need not actually break a law but certainly involves dishonesty and a total lack of integrity.
Online Reporter