Dollarisation challenges - Riozim

Staff Reporter 01-06-2009

While dollarisation has made things predictable and understandable, it has also brought with it some challenges, the deputy chairperson of RioZim limited Mr Nixon has said.

Speaking during the company’s annual general meeting, Mr Nixon said the cost base had changed with dollarisation.

“We must cope with the fact that real electricity prices are higher than we have been paying for many years and we hope that a rational tariff structure will be developed. Current business and other consumers that paid their bills at the time cannot compensate for the past deficiencies of the tariff especially when most are still struggling to make ends meet,” added the company chairman.

RioZim has several mines in the country and up to 95 percent of its shareholders are Zimbabweans.

Its has interests in nickel and gold mining, two of the metals which unfortunately have been affected by the global recession which has seen prices dropping significantly.

Apart from the challenges which have been brought about by dollarisation, the company also complained that the continued load shedding was affecting them. RioZim said it is still important to note that even though the country was faced with serious power shortage, foreign currency exporting firms were still very vital. As such arbitrarily load shedding them would not increase the amount of United States dollars in the country.

“Likewise, those able to set their prices cannot adopt a zero sum approach to tariffs, as we have joined a real world where productivity is now a determinant of worth. The days of regular inflationary wage reviews are over only through real productivity gains can wages rise. Likewise, prices cannot rise to pass on increased costs, in fact retail prices have declined since dollarisation as competition not monopoly has become the main factor in the marketplace,” added the company chairman.