Tuesday 11 July 2023


Seventeen pharmacies may have their operating licences cancelled for selling medical drugs at the exchange rate of between $8 500 and $11 000 for US$1, in violation of exchange control directives and Government policy.

The development comes at a time when many retailers and wholesalers are engaging in forward pricing while some only accept US dollars.

In his address last Saturday in Magunje, President Mnangagwa said some companies involved in the hoarding of goods had accepted that they were wrong and paid fines while others begged not to be named and shamed after promising to correct their ways.

If there is no change in their operations, unscrupulous companies would be named on Sunday when ZANU PF takes its star rallies to Zaka, in Masvingo Province.

Of the pharmacies named by the Ministry of Finance and Economic Development yesterday, Booties Pharmacy of Gweru and Greenwood Pharmacy of Kwekwe are accepting US dollars only.

The following pharmacies are charging at the rate of US$1 to $10 000; Blessed Pharmacy in Chegutu, Pineal Pharmacy and Leecare Pharmacy in Kadoma, Siegmed Pharmacy in Gweru, Mediplus Pharmacy and Kaizen Pharmacy in Rusape, Grey Pharmacy and Manica Pharmacy in Mutare.

Those charging at a rate of $9 000 are Global Pharmacy of Kadoma, and Lancaster Pharmacy and Murapi Pharmacy, both of Mutare.

Necta Care Pharmacy of Mutare is charging at the rate of $8 500 while Apex Pharmacist in Gweru is charging at $9 500.

Greenview Pharmacy of Rusape and Central Pharmacy of Mutare, are the highest, using the rate of US$11 000, “in complete violation of Government policy and the country’s anti-money laundering regulations”, said the Finance Ministry.

The Finance Ministry said under the National Development Strategy 1, the Government had made considerable progress in stabilising the economy, the exchange rate and general price of goods and services by implementing a variety of fiscal and monetary stabilisation measures.

“Government is committed to achieving lasting price stability and recently introduced the wholesale foreign exchange auction system which allows banks to access foreign exchange at market determined exchange rates for onwards transmission to their customers,” reads the statement.

“This liberalised trading environment has allowed the market to stabilise and we have seen a market appreciation of the Zimbabwean dollar and the containment of inflation, creating a conducive environment for business to operate.

“However, Government notes with concern that some market players continue to exhibit highly destabilising forward pricing and speculation in outright violation of exchange control directives as well as standing Government policy guidelines with respect to pricing and the use of domestic currency.

“This practice is particularly rampant but is certainly not limited to the pharmaceutical sector.”

The Ministry of Finance said the measures that have been instituted against the pharmacies “will result in the suspension or cancellation” of their trading licences.

“Government remains committed to the broad use of local currency for domestic transactions and stern measures will be taken against service providers who continue to violate provisions.

“In the same spirit, Government recently directed all Government agencies including local authorities to collect their fees and levies in local currency if that is what their clients wished to use.

“The transacting public is encouraged to resist all forms of unfair pricing by retailers and to immediately report violations to the Financial Intelligence Unit,” said the ministry.

Consumers yesterday generally welcomed the naming and shaming of the pharmacies but said the same investigation should be extended to top retailers as the bulk of them are charging at rates of between US$9 000 and $10 000.

This is despite the fact that the wholesale forex auction rate was US$1 to $4 998,84 yesterday, allowing with their permitted 10 percent markup any retailer, including a pharmacy, to use $5 498,72 as the legal rate of exchange.

When consumers are paying in forex, most top retailers were using the rate of round about US$1 to between $5 600 and US$5 700, which up to today when the new auction rate comes into effect was roughly the interbank rate plus 10 percent.

A consumer who bought a meat pie from one of the major supermarket chains yesterday said: “I was shocked when the till operator told me that the pie was $9 500.

“I asked if the price had gone up because the last time I checked, the pie was US$1 and knowing the prevailing exchange rate, it was a surprise to me. Duly, the teller said the price had not gone up and remained at US$1. So, the FIU may be interested in talking to these supermarkets so they can bring down the exchange rates.”

This could well be the other problem. A producer pushes up the price in US dollars so that when it is converted at the legal rate it comes out to the old US dollar price but a much higher exchange rate.

Some consumers said it was disturbing that ever since the exchange rate stabilised and started coming down on the auction system from a high of about US$1 to $7 900, retailers just stopped increasing prices but have stoically refrained from reducing prices. Part of the problem is that stocks were often bought at the higher price. Most of the increases were generated by producers, rather than retailers, and the drops now have to come from the producers. Herald


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