Traders allege cartels among manufacturers

Source: Traders allege cartels among manufacturers | The Herald

Business Reporter

Zimbabwean traders have raised concern over price differentiation by some manufacturers for certain products, alleging that some foreign entities were accessing the same goods at a lesser price.

This was making it difficult for local traders to compete, especially in regional markets, Zimbabwe Cross Border Traders Association secretary general Mr Augustine Tawanda said last week.

Most of Zimbabwe’s cross border traders are women and rely on cross border trade as their sole source of income. Mr Tawanda said while the traders have managed to secure markets for various products in the Democratic Republic Congo and Zambia, the price differentiation was throwing them out of business.

“We are concerned with continued marginalization of cross border traders,” he said.

“We are finding it difficult to get products like Mazoe, sugar and margarine. The traders have the markets but we are failing to get the products. For example, the export of sugar is the monopoly of Zimbabwe Sugar Sales (ZSS). We have formed a company at the advice of the Reserve Bank of Zimbabwe to handle our exports but they are still not interested in giving us the product. We have now engaged the Government and we will continue doing that,” Mr Tawanda added.

The Zimbabwe Cross Border Traders Association is an apolitical business member organisation formed in 2000 and got registered in 2001 as a trust. The organisation is a representative body of small scale traders’ whose mandate is to promote and defend the interests of its members.”

He said while it has been difficult for the largely informal traders to access certain local products, foreign entities, who were allegedly entering into commercial agreements with the manufacturers, were having access to the products sometimes at lower price.

Informal traders form a significant part of Zimbabwe’s largely informal economy, accounting for about 60 percent of the country’s gross domestic product (GDP), according to a 2020 study commissioned by local firm FinMark with support from the United Nations.

“We are against profiteering orchestrated by the cartels. It is common knowledge that multi-nationals have the capacity to manipulate pricing at both national and regional levels through unfair competition and monopolies designed through self-serving commercial agreements such as franchises. Some companies are refusing to sell their products, preferring to market their goods through foreign entities.”

“This explains why some Zimbabwean products become so cheap in neighboring countries to the extent that they are imported back into the country,” said Mr Tawanda.

“It is important for the Government to promote the participation of its citizens. It must not allow multi nationals to shut out the ordinary Zimbabweans in the retail industry in favor of foreign entities under the guise of franchise or some commercial agreements. This will perpetuate economic exclusion of indigenous people.”

Trader Gwendoline Mlambo said it had become so difficult to access some local products.

“The time you get the product, the price will be higher than the price being charged to foreign traders. So, at the end of the day when we try to sell the products in Zambia, it is difficult to compete if someone should have bought the same product at a lesser price,” said Ms Mlambo.

The allegations come against a number of similar accusations levelled against manufacturing companies in Zimbabwe who have been demanding payment for certain key products exclusively in foreign currency in light of the inflation resurgence and exchange rate volatility that has been rocking the local currency.

In instances the manufacturers accepted payment in local currency, they quoted very steep prices to discourage buyers from using the Zimbabwe dollar, which has since been largely stable over the last few weeks on account of a cocktail of measures instituted by the Government through Treasury and monetary authorities.

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