HomeCommunity NewsFall in SA rand affects cross border traders

Fall in SA rand affects cross border traders

THE weakening of the South African rand against major currencies has brought mixed feelings among cross border traders, with some enjoying rich pickings, while others are counting the cost in lost business.


The rand has been weakening over the past few months to R10,2 per US dollar from R8 per US dollar.

Small-scale traders, who deal in small items, mostly clothing and electrical goods, say the weakening of the rand meant that most of their customers could now cross the border and shop for themselves.

In an interview with Standardcommunity last week cross-border traders who bring small orders, complained that businesses had drastically declined, forcing them to cut down on the number of trips to South Africa.

“We are now faced with a situation where our former customers are now buying their own stuff, instead of placing orders with us as before.
This is because when one trades the dollar you get more rands, a situation which makes it easier to just cross over to Musina and buy the stuff themselves,” said Grace Maravanyika from Ashdown Park in Harare.

“I’m stuck with goods from my last trip. They are not moving as much, and I have had to reduce the price. We incur so many costs, like paying bribes either to the Zimra guys through the bus drivers or conductors.”

Another cross-border trader from Harare’s Mabelreign suburb, Jane Chokoto said shop owners have also reduced the prices of their goods, as they are buying them cheaper, a situation which has brought on a lot of competition.

“We are now being pushed out of business by shop owners who are pricing down their goods or having sales every week, since they are getting them at a lower price.

“In South Africa, the more you buy, the more you can negotiate for a discount,” she said.

Meanwhile, it has been a windfall for traders who bring in bulkier stuff, as they enjoy larger discounts.

Illegal currency dealers have also experienced a boom in their trade, as most people are exchanging the dollar for the rand.

However, running battles with the police have increased at places like Roadport, where most black market traders operate.

“Most of them [police] come in plain clothes and pretend to be genuine people looking to do business. It is difficult now, even though the demand is high,” said one money changer.

Economists say the weakening of the rand would have a positive impact on Zimbabweans as it makes imports from South Africa cheaper.

Economic analyst, Innocent Makwiramiti said although there were some positive benefits due to the weakening of the rand, there could be adverse effects on local businesses.

“Almost 80% of our products are imported from South Africa, so if the rand continues its free fall in the next three or four months prices in South Africa will obviously rise and that would mean that the importers will also increase their prices in turn,” he said.

He also said in the long run some local companies would suffer, as it would become difficult to compete with cheaper imports.

“Unfortunately, some companies might be forced to close shop, as operational costs will become unbearable.”

Another economist, Chris Magaya said the weakening of the rand meant cheaper goods and more competition.

He said it would slow economic growth, since “our goods will be facing stiffer competition from cheaper South African goods”.



At Ximex Mall the traders were instead buying the rand and holding onto it.

“We are not selling but buying it because we know that the demand is high, so as business people we look ahead.

“There will come a time when the rand will be scarce.
“We are also buying from those who are selling out of fear that if it continues to fall it will be worthless,” said another money changer at Ximex Mall.

But it is proving difficult for those working in South Africa to send money to relatives and friends back home.

“When my husband in South Africa sends me money using the mukuru.com facility or even through Western Union what I eventually receive in US dollar terms will be so little, and I cannot ask for more because his salary is still the same.

I could opt to receive it in rand but now most shops are offering an unfair rate, even on days when the rand is strong,” said Loice Kokero of Kuwadzana.

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