Telecoms tycoon Strive Masiyiwa has called on businesses to price their good in rands as this may ease the serious price instability in the country so far.
Zimlive wrote:
“Let me put the proverbial cat among the pigeons,” Masiyiwa said, writing on Facebook.
“A loaf of bread in South Africa costs R9.50. It costs R30 in Zimbabwe. 3x!!! Eighty percent of imported goods in Zimbabwe come from South Africa. It’s not uncommon to find those same goods costing anything above three times the cost.
“The people who pay for a lot of goods are Zimbabweans living in South Africa, through their remittances. The cost structure – labour and goods – in Zimbabwe is distorted by the arbitrage of the United States dollar as a currency of settlement for rand imports.”
Masiyiwa said if every business in Zimbabwe quoted their customers for goods and services in the SA rand, “it would go some way to eliminating the dollar arbitrage.”
“This is not the same thing as joining a rand monetary area, or customs union, which is a much more complex process. This one can be done overnight, and even voluntarily.”
A similar call was previously made by former finance minister Tendai Biti who said, Zim should adopt the Rand as a currency for Zimbabwe. Strive who resides out of Zimbabwe, admits that the move “is not what you have to do to fix Zimbabwe’s economic woes,”
More: ZimLive
Economically that is very difficult. Facebook talk is far from practical economics. The general assumption would be that Zimbabweans are earning in SAR and are earning equivalent salaries to those being earned in SA. Which is very far from reality. Principles of economics are basically the supply and demand theories and pricing factors are dependent on various factors which may not be “Rich people’s Facebook Rhetoric”. If people put SAR price tags overnight, there should be overnight remittances and reality says there are no SAR to remit for the Masiiwa Price tags unless people starts earning in SAR in Zimbabwe at equivalent salary ranges of those in SA because as it is SA goods are more expensive than Zim goods.
a loaf costs 3.45 rtgs dollars. You divide 3.45 rtgs dollars by 4.6 the buying price of the us dollar = .75 cents us dollars.
You multiply 0.75 us dollars by 14 the exchange rate of the rand to the us dollar = 10.5 rands. So it’s not quite different from south Africa.