As almost predicted, most businesses in Zimbabwe have ignored calls by the central government demanding that all businesses must charge in both USD and RTGS, a move that was meant to save general people from inflationary pressure.
The Statutory Instrument 127 of 2021 demands
A natural or legal person shall be guilty of a civil infringement if he or she, being a seller of goods or services not authorised by law to charge for them exclusively in foreign currency, refuses to allow any buyer thereof to tender payment for them in
Zimbabwe dollars at the ruling exchange rate.
The move however while great on paper was not only weak but very stupid and absurd as most government-led enterprises are currently charging exclusively in USD.
Fuel service stations, a key player in the Zimbabwe industry as energy providers, have all been pricing exclusively in RTGS, signaling the death of RTGS fuel sales in Zimbabwe.
With such a scenario preceding, it would be senseless and impractical for traders who are bearing the brunt of foreign currency costs to then be expected to oblige with a regulation that demands RTGS pricing at bank rates, which is way too lower than the parallel market.
The Reserve Bank Governor for some months now has been on a reactive trajectory, announcing policies and statutory Instruments that are technically inapplicable, senseless and hence been ignored by business at large.
While during the day the government governor preaches freeing of the market, at night they are busy promulgating statutes and crafting laws that are battling to control the runaway inflation.
This is in violation of the basic financial fundamentals that demand freeing of the market and allowing market forces to determine pricing.
Recently the same governor has been mentioned as the worst central bank governors according to Global Finance magazine, these are some of the reasons why the world at large can not have confidence in our systems when we selectively introduce and apply laws.
The selective application of statutes only diminish confidence in the system and allow speculative tendencies that drive inflation in a nation.