Zimbabwean Government Halts Payments to Contractors, Discovers Suppliers Are Charging Steep Prices

• The Zimbabwean treasury has called out suppliers for overcharging the government
• The treasury says contractors have been manipulating the exchange rate by charging three times more than what they are supposed to
• Social media users are disheartened that suppliers are charging the Zim government over R160 000 for a laptop

HARARE - Zimbabwean suppliers are being blamed for the increase in the exchange rate after the treasury found out they were charging exorbitant amounts for goods.

The Zimbabwean government has been coughing up around R530 for 2kg packs of chicken, R160 000 for a laptop and a 50kg bag of cement was priced at roughly R320.

The Zim dollar has been in rapid decline, falling to as low as 850 ZWL to the US dollar last month, according to News24 Business.

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Businesses have ignored the government's directive to use the official exchange rate and opted to use the street exchange rate instead. As a result, government contractors are primarily paid in local currency, but pricing is based on "speculative" street exchange rates.

The Zim treasury has now halted these suppliers' payments for charging such steep prices. Suppliers choose to charge the government such high prices because they are aware that government takes a long time to pay them.

Finance Minister Mthuli Ncube says this practice which was condoned for years, has been fueling inflation. Ncube also blamed government tenders for increased inflation, adding that government procurement units are not exercising due diligence regarding the value of money.

According to Bloomberg, government contractors are challenging the treasury's decision to halt payments; however, Ncube says their contracts are not valid because the wrong exchange rate was used.

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Suppliers are being accused of charging the government 2 000 Zimbabwean dollars for 1 US dollar, which is three times higher than the official exchange rate. Ncube stated that a supplier charged the government around $10 000(R160 000) for one laptop, which is above the market price for a high-specification laptop.

Here's what social media users have to say:

@NkueTha said:

"They are stealing like there's no tomorrow."

@JOHNJoh29350949 said:

"I'm yet to understand what's actually going on with African states, how can a commonwealth state use foreign currency to create poverty for their masses, encouraging/boosting the foreign currency..imagine a laptop for a price of a car. How will this help their economy?"

@titirufu said:

"The Zimbabwean government is very corrupt. Citizens are struggling to make a living, poor health conditions, high unemployment, school fees are high, school dropouts, e.t.c. They give a tender to a company to supply 173 laptops at USD 1.6 million. Justice should take place."

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Zimbabwe left in dark for hours due to extreme loadshedding, President Mnangagwa says high demand is cause

Briefly News previously reported that Zimbabwe has been thrust into darkness by its state-owned power utility that increased power cuts in the country.

The Zimbabwe Electricity Transmission and Distribution Company said the extreme loadshedding is due to poor generation on its grid and increased electricity demand.

According to TimesLIVE, the power cuts are expected to continue until Friday, 16 September. The utility said its engineers are working to ensure the complete restoration of its services.

Source: Briefly News