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Zimbabwe Pledges Action on Landlords' Illegal Demand for Rents in US Dollars - 2003-12-16


The decline in value of the Zimbabwe dollar has led some property owners to demand rent payments in U.S. dollars. Zimbabwe authorities have done little to curb the illegal practice. But as Tendai Maphosa reports from Harare the government says it is going to take action.

The government says it has an obligation to protect the majority of Zimbabwean tenants who do not have the capacity to pay their rents in foreign currency

The state-owned Herald newspaper quotes ruling ZANU-PF member of parliament David Chapfika as saying landlords and other people quoting prices of goods and services in foreign currency are heading for a serious clash with the government.

Mr. Chapfika, who is the chairman of the parliamentary committee on finance, said the government will not sit by and allow the practice to continue. He did not specify what action would be taken against those caught demanding dollars.

A senior police spokesman told the Herald that several homeowners have already been arrested for illegally demanding dollars for rent payments. He did not say what penalties they face.

Zimbabwean law allows only safari operators and those in the hotel and tourism industry to quote fees or prices in foreign currency, and only to foreigners.

A real estate agent, who spoke on condition he is not named, said property owners are asking for rent in foreign currency as a hedge against inflation, which stands at more than 500 percent. The agent says otherwise the landlords would have to raise rents every months in order to be able to pay their expenses.

For months, some landlords have openly demanded rentals in U.S. dollars. Many landlords even advertise in the newspapers asking to be paid in U.S. dollars.

The majority of Zimbabweans who do not have access to foreign currency have been squeezed out of some up-market neighborhoods, resulting in an increase in foreigners taking up residence in those areas.

The practice has not been limited to housing. Cars and electronic goods are among the many items advertised and sold in U.S. dollars.

In addition, some goods sold for Zimbabwe dollars are priced far above government limits. Gasoline is one of the main examples, as private companies, which received permission to import fuel earlier this year, all charge prices far above the government price.

The private importation of fuel was allowed after the government failed to ensure uninterrupted supplies.

Ranking members of the ruling ZANU-PF party have set up some of the oil importing companies, and their prices are among the highest. None of the new oil importers has been prosecuted.

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