By NewsdzeZimbabwe
The Reserve Bank of Zimbabwe has dismissed claims by registered retailers that the economic environment is the source of their challenges, arguing that gross mismanagement is at the heart of constraints weighing down their businesses, which has seen some of them failing to restock.
RBZ Governor Dr John Mushayavanu said this while presenting the 2025 Monetary Policy Statement, during which he announced the extension of the Traded Finance Facility (TFF) to cushion struggling retailers from working capital challenges. The facility was previously earmarked for productive sectors only.
Dr John Mushayavanhu said although he had extended the TFF to retailers, the challenges facing retailers and wholesalers would not go away as long as they continue mismanaging their enterprises.
His remarks come as several retailers, including the country’s largest store chain, OK Zimbabwe, have indicated plans to close or have already shut down some outlets across the country citing a tough trading environment.
N.Richards and Mahomed Mussa wholesalers have either scaled down operations or reduced trading space while another giant retailer Choppies Zimbabwe has exited the domestic market.
However, well-placed retail industry sources have alleged that the challenges facing some of Zimbabwe’s biggest retailers included bloated management that drives expensive cars and draws huge perks monthly.
Concerns have also been raised about certain decisions taken by some of the retailers’ management, including multiple land acquisitions and dividends declared, which reportedly misallocated cash over the past few years.
Some industry players however claimed the inability to price competitively as being at the centre of challenges faced by most operators in the formal retail sector, which also faces stiff and growing competition from informal traders.
The informal traders trade exclusively in foreign currency while they do not pay any statutory obligations, giving them a huge price advantage as their goods become cheaper.
The industry insiders say manufacturers who prefer to supply informal traders because they pay US dollar cash, have also reduced trading terms, insisting on supplying stock on credit for a maximum of seven days or to be paid cash or in US dollars.
Dr Mushayavanhu however said challenges in the retail sector went deeper than constraints presented by the environment.
“In order to address working capital challenges recently experienced by some wholesalers and retailers, the TFF has been extended to these critical sectors to enable them to restock. Heral