Home » Industry » New Coins Will Ensure Competitive Pricing [editorial]

THE new bond coins enter circulation today, filling a vital and neglected gap and allowing far more normal pricing and shopping, particularly of small items and items bought singularly, and allowing everyone to at long last give exact change, down to the nearest cent. The new denominations are 1c, 5c, 10c and 25c, the same values as the four widely circulating coins in the United States.

They should be acceptable without question. Although they are strictly for circulation within Zimbabwe and have no value outside the country they are freely exchangeable within the country for US dollars. Businesses and individuals can collect them from banks using the equivalent in US dollars and can deposit them back into banks and have the US dollar equivalent credited. This automatic convertibility is what will make them acceptable.

We expect that it will take at least a few days, and possibly a few weeks, for the optimum number of coins to be in circulation. The supermarket chains and department stores will obviously be ready from today, but it is unlikely, for example, that all who sell vegetables at the side of the road will have adequate coins at the beginning of the process. A minor problem will be all those South African coins now circulating unofficially and used as change at the arbitrary rate of R1 to 10c. These have helped to alleviate the change problem since the US dollar became the currency of choice in the multi-currency changeover but it has never really been satisfactory.

For a start the rand has only rarely been worth exactly 10c and when it has been worth more coins vanished as people took them out of circulation. At the moment a rand coin is worth around 8,5c which is presumably why they have been left in circulation and even imported as tokens.

But the problem will only be minor. Few individuals ever have rand coins worth more than US$1 in their possession and even businesses have only modest sums available. So if they just end up at the back of drawers it will not be a significant loss.

But we assume that while there will be nothing official done in exchanging these coins for the bond coins, some enterprising Zimbabweans will be able to place a value on them.

What a return to a normal coinage will now allow is for people to benefit from competitive pricing. Many items in supermarkets, for example, are not priced in whole dollars and the only people who have benefited from 99c special offers have been those buying a trolley load of groceries or those who do not mind carrying around a wallet of credit notes. Even vendors will benefit being able to sell single small items without a problem.

Items normally sold singularly, from bus tickets to loaves of bread and bottles of beer or cool drinks, can now be more precisely priced and different qualities and sizes are now also possible. It has been a long time since Zimbabwe last saw normal pricing with change down to the last cent being possible and it will be interesting to see how businesses react to boost their own sales.

Without shortages and with competition, pricing for some items will have to be carefully calculated and there are opportunities for astute businesses to either cut a price and compete there or boost quality with a tiny price rise.

It is a pity that these coins were not introduced a lot earlier, but their introduction today does return normality to the retail sector and does reinforce the repeated assurances that the present multi-currency system will be in operation for a long time to come.

Source : The Herald