Delta Zimbabwe withdraws plan to start charging customers in U.S. dollars only

Delta Beverages Limited, Zimbabwe’s largest brewer and a subsidiary of AB InBev has withdrawn plans to exclusively start charging its wholesale and retail customers in U.S. dollars following an intervention by the government and the country’s Central Bank.

Zimbabwe’s Commerce Minister said on Thursday that the government was against such a move following a meeting with the country’s Acting President, Constantino Chiwenga, Delta management and officials of the Reserve Bank, the country’s Central Bank.

The company has been having trouble accessing foreign exchange to pay its international suppliers for “extended periods” leading to further credit cut-off from suppliers.

Zimbabwe authorities said that Delta’s refusal to accept other forms of payment that are pegged to the dollar was illegal.

In a joint statement released by Delta on Thursday and signed by the country’s Central Bank Governor, John Mangudya and Delta’s CEO, Pearson Gowero, it said that “Delta withdraws the notice to sell its products exclusively in hard currency.

“The Reserve Bank of Zimbabwe will endeavor to provide the foreign currency required to ensure that Delta continues to trade on the current basis,” the statement read.

Zimbabwe’s problem with foreign exchange shortages dates back to the previous Government of President Robert Mugabe, whose government fell out with Western Governments over its management and seizure of white owned farms. The country fell under economic sanctions leading to hyper-inflation. In 2009, the country abandoned its own currency in favour of the U.S. dollar and other major currencies. The Reserve Bank created electronic money known as Real Time Gross settlement dollars (RTGS$) or “Zollars” in local parlance. It also introduced bond notes that it said are at equal value with the U.S. dollar. However, a thriving black market has reduced the value of both instruments when compared to the hard currency.

In October, the Reserve Bank ordered lenders to separate dollars and RTGS$, which effectively recognized that the country has two currencies, further alienating already wary foreign investors.

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