DELTA Corporation yesterday said it would start selling all its products in foreign currency with effect from tomorrow, a decision described by the Government as unacceptable and illegal. Analysts also warned that the decision by Delta could backfire as most Zimbabweans were paid in Bond notes or RTGS.
In an interview yesterday following a statement released by Delta earlier on, the beverage manufacturer’s company secretary Mr Alex Makamure said selling its products in “multiple foreign currencies” such as the rand, pula, Euro, British pound and US dollars would also enable it to access key raw materials.
Responding to the announcement by Delta yesterday, Industry and Commerce Minister Nqobizitha Mangaliso Ndlovu said business must “stop forthwith” dollarising the economy.
“We have noted with concern a proliferation in the number of companies and businesses engaging in preferential currency practices. This is not only against the spirit of fairness, but it is also an illegal practice. Government is very clear that this practice is unacceptable and has to stop forthwith and if not, the law will take it’s course.”
Minister Ndlovu said Government had tried to ensure businesses operate in a free atmosphere, but companies were now acting in bad faith.
“The Government has supported business to operate liberally within the economy without interference but giving an intervening hand whenever it has been called upon to assist. In return, Government has expectations that business will operate in good faith and responsibly,” the minister said.
“At the centre of the relationship between Government and business is the spirit of engagement and a two-way communication between all parties. That spirit is defeated when one of the parties decides to unilaterally pronounce decisions against both the text and spirit of agreed principles,” he said.
Delta said in a statement yesterday its business had been “adversely affected” by shortages of foreign currency, which had resulted in the company failing to meet orders, and “in the case of soft drinks, being out of stock for prolonged periods”.
It said the fiscal and monetary policy frameworks announced by the Government in October last year did not provide for “easy access to foreign currency by non-exporters”.
“The company has only received limited foreign currency allocations from the banking channels, which have not been adequate to fund the import requirements,” said the statement.
“Resultantly, all our foreign suppliers are unable to continue providing credit or meet new orders as some of them have not been paid for extended periods.
“In order to sustain its operations, the company advises the retail and wholesale customers that its products will be charged in hard currency with effect from Friday 4th January 2019,” reads the statement.
Mr Makamure said Delta stopped making some of its products, particularly soft drinks, in November.
He said no deliveries were made throughout November last year while it released some soft drinks on December 24.