Govt Shutting Pharmacies Over Currency
12 July 2023
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Seventeen pharmacies in Zimbabwe are facing the possible revocation of their operating licenses due to their violation of exchange control directives and government policy. These pharmacies have been accused of selling medical drugs at exorbitant exchange rates, ranging from $8,500 to $11,000 for a single US dollar. Such practices not only contravene regulations but also undermine efforts to stabilize the country’s economy and control inflation.

The issue of forward pricing and the selective acceptance of US dollars by retailers and wholesalers has become a prevalent concern in Zimbabwe. While some businesses engage in these practices, others have resorted to hoarding goods, exacerbating the situation. President Mnangagwa, in a recent address, acknowledged that some companies involved in hoarding had paid fines and admitted their wrongdoing. However, others who sought anonymity have promised to rectify their behavior.

If there is no improvement in their operations, these unscrupulous companies will be named and shamed by the ruling party, ZANU PF, during its upcoming star rallies. This move aims to expose those engaging in illegal practices and discourage further misconduct.

The Ministry of Finance and Economic Development has identified the pharmacies involved in the dubious exchange rate practices. Notably, Booties Pharmacy in Gweru and Greenwood Pharmacy in Kwekwe have limited their transactions to US dollars only. Other pharmacies, such as Blessed Pharmacy in Chegutu, Pineal Pharmacy, and Leecare Pharmacy in Kadoma, and Siegmed Pharmacy in Gweru, have charged at a rate of US$1 to $10,000. Several others have implemented rates ranging from $8,500 to $9,500. Greenview Pharmacy in Rusape and Central Pharmacy in Mutare have been identified as the most egregious violators, charging at an exorbitant rate of US$11,000.

The Ministry of Finance highlighted that these practices are not limited to the pharmaceutical sector alone but have become widespread in other sectors of the economy. To stabilize the economy and promote lasting price stability, the government has implemented various fiscal and monetary measures. The wholesale foreign exchange auction system, introduced to allow banks to access foreign currency at market-determined rates, has contributed to the appreciation of the Zimbabwean dollar, the containment of inflation, and the creation of a conducive environment for businesses.

However, the government expresses concern over market players who continue to engage in forward pricing and speculation, disregarding exchange control directives and government guidelines on pricing and the use of domestic currency. In response, the Ministry of Finance has stated that the identified pharmacies may face suspension or cancellation of their trading licenses. The government is committed to encouraging the use of local currency for domestic transactions and will take stern measures against service providers who violate these provisions.

Consumers have generally welcomed the move to name and shame the pharmacies involved in these practices. However, they believe that investigations should extend to top retailers as well, as many of them charge rates ranging from US$9,000 to $10,000. Despite the wholesale forex auction rate being significantly lower, retailers continue to maintain high prices. This discrepancy raises concerns about producers’ involvement in pushing up prices in US dollars, which results in inflated prices when converted at the legal exchange rate.

It is essential for the government to address these issues promptly and effectively to protect consumers and stabilize the economy. Increased monitoring, strict enforcement of regulations, and transparent reporting mechanisms will be crucial in combating unfair pricing practices and ensuring compliance with exchange control directives and government policies. By holding accountable those engaging in illegal practices, the government can foster an environment conducive to sustainable economic growth and stability.-state media