Zimbabwe: Delta Corp to only accept hard currency to fight dollar shortage

Delta Corp Ltd., part owned by Anheuser-Busch InBev SA/NV, told Zimbabwean customers it will only accept hard currency for its beverages as local businesses struggle to cope with foreign-exchange shortages, Bloomberg reported on January 3.

The maker of Castle Lager, Chibuku sorghum beer and a range of soft drinks hasn’t been able to pay some international suppliers for “extended periods,” choking off access to further credit, the Harare-based company told retailers and wholesalers in a letter dated Jan. 2. Delta, which will implement the measure from Friday, January 4, isn’t receiving enough foreign currency from banks to pay for imports, it said.

“Our business has been adversely affected by the prevailing shortages of foreign currency,” wrote Delta, about 23 percent owned by the world’s biggest brewer. This has led to orders not being met or prolonged stock shortages, the company said.

The southern African nation’s biggest company by market value is feeling the effects of a crisis that has its roots in Zimbabwe’s decision to abandon its own currency in 2009 in favor of the dollar. The central bank created electronic money, known as Real Time Gross Settlement dollars, or RTGS$, to lend to the government and introduced bond notes backed the U.S. currency.

“The company doesn’t trade on the parallel or black market and doesn’t subscribe to any exchange rate between the U.S. dollar and the RTGS$ or bond notes, as they’re not currencies,” Delta said.

Zimbabwe is in the throes of its latest economic crisis, just over a year after President Emmerson Mnangagwa came to power following the ouster of Robert Mugabe. Rampant inflation has been exacerbated by the central bank’s decision in October to order lenders to separate dollars and RTGS$ -- effectively recognizing that the country has two currencies and frightening away already wary foreign investors.

Delta’s decision follows a similar move by Simbisa Brands Ltd., a local operator of restaurants such as Nando’s grilled chicken and South African brands like RocoMamas burgers. It’s offering customers discounts to pay in dollars, though will still accept RTGS$, local cards, mobile money and bond notes.

02 January, 2019