Open for business – sometimes

12 10 2018

Well I never, photo ops on stamps

The price spike when it came was as sharp and high as it was short. Last week a surprise announcement by the finance Minister triggered a slump in the exchange rate between local currency and the US dollar.

By Wednesday the value of the local dollar was 4 : 1 with the US dollar. Panic  buying spread to the supermarkets and taxi fares jumped 50%. I had managed to squeeze a pre-payment out of the company for whom we grow a large number of gum trees and dashed off to spend it. I was relieved to find that the fertilizer I bought had only doubled in price and I wondered what to do with the rest of it.

Yesterday I went shopping for roofing nails that we needed to finish off a carport for the new tenant in the cottage. The first hardware store I visited was shut. There were notices stuck to the doors but I did not bother getting out of the car to read them. The second store in the same shopping centre as the local Spar supermarket was also “Closed for Stocktaking” but they opened up when they saw me. The didn’t have the nails and were only accepting US dollars cash. The supermarket was closed

Closed for business

Only in Zimbabwe can one get a 90% discount

and Marianne told me that the previous day they were limiting items to one per customer – including toilet rolls. Panic buying was rife at other supermarkets that were said to be struggling with the influx of shoppers – nothing proliferates panic buying like panic buying.

On the way to work I visited another hardware store. They didn’t have quite what I wanted but we made a plan and I was given a 90% discount for using US cash. This is of course not comparable to the comparison between the local currency and US dollars in November 2008 but that had been years in development, not days.

On the way to the Central Sorting Office this morning to collect a parcel I attempted to get past a queue for fuel on Glenara South Avenue. Just as I thought I was making progress cars started to pass on my right and soon there was 4 lanes of traffic going one direction on a road designed for 2. Fortunately there was a road to a field on my right and I managed to get turned around and take the longer, but quieter, route.

The ladies at the sorting office asked me how I was. Resisting a facetious reply I answered in one of the few Zulu words I still know which translates to “I am here”. We agreed it was appropriate.

Getting back to the nursery I contacted Tony who has the keys to the fuel tank where I store the diesel I bought earlier in the year when there was another fuel shortage scare that didn’t develop into much. He told me his son, who follows these things, had told him the rate had dropped to 2 local dollars  to 1 US dollar and the whole spike had been driven by the government buying US dollars to pay off a debt the country owes. By 5 p.m. this afternoon my staff told me that the rate was 1.9 local to 1 US, down from 4.8 yesterday. Perhaps a sense of normality has returned but I suspect rates as reflected in the shops will not be this low – people will be very jittery and will want to maintain a buffer. I strongly suspect that some outlets will continue to demand US dollars.

Zimbabwe’s president, E D Mnangagwa campaigned with the slogan that “Zimbabwe is open for business”. I was unaware that he’d gone so far as to get the slogan put onto stamps with him schmoozing at Davos earlier this year with the likes of Christine Lagarde and the Chinese premier, among others. Investment has been slow in coming, not least because of the violent repression of protestors after the recent general election that was heavily slanted towards the ruling party, ZANU-PF. The past 10 days of chaos are unlikely to convince anyone that now is the time to invest.

On Wednesday there was a small horticultural expo at a local hotel. I went along hoping to pass out business cards and make a few useful contacts. It was a very small affair geared mainly towards the export flower market but I did have an interesting conversation with a French representative of the rose breeding company, Meilland. He recounted a meeting with the local French ambassador the previous day where he was told that there was considerable interest in Zimbabwe but potential investors were not ready to commit just yet. We may be open for business but investors are not convinced.

 


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