Business Correspondent
The surge in the Zimbabwe Gold (ZiG) premium has raised concerns for businesses, as the gap between the official and parallel market rates continues to widen.
“The foreign exchange market premium, if left unabated, creates arbitrage opportunities in the economy that are distortionary to business operations,” said investment analyst Enock Rukarwa.
Economist Victor Bhoroma added, “The impact of the increase in the ZiG premium is that businesses have seen an increase in the cost of doing business both in US dollars and in ZiG, giving businesses a dilemma in terms of pricing.”
Bhoroma noted that sales have also been impacted, and some businesses have seen viability concerns due to the premium increase. “It becomes a nightmare in terms of forecasting and future planning for businesses as that particular premium makes it difficult to plan on debt receivables, payments, and stocking levels.”
Dr. Prosper Chitambara, an economist, said, “The premium is a major cause of concern in terms of its impact on inflation. This is inflationary and creates inflationary pressures.”
Hippo Valley, a sugar manufacturer, said in its recent financials, “We are witnessing a cash flow mismatch between the two major trading currencies (ZiG and USD), resulting in limited USD-denominated receipts.”
The Government has hinted at the possibility of reintroducing the Zimbabwe dollar as the main currency before 2030, but Equity Axis notes that this would require increased actual gold reserves, US dollars, and an audit of gold to verify the actual reserves.
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