Zimbabwe Absurdity

One of the absurdities of employing staff in Zimbabwe is the “system” of allowances. Those earning a wage (as opposed to a salary) are entitled to a host of allowances for lighting, fuel, water, accommodation and transport. This is one of the few countries I know of that does this. I have worked in a number of countries in jobs where I definitely earned a wage and it was a case of; here is your pay, do what you like with it. It was my choice where I wanted to live and how much I wanted to pay for transport etc. Here the allowances are set by often less than amicable agreement between representatives of the employers’ union, the workers’ union(s) and the NEC. The National Employment Council was set up by the government in one of its very few moments of clear thinking to arbitrate between the various unions and facilitate agreement on minimum wages and other issues. In reality it’s just issues pertaining to money.

The wages for agriculture and horticulture (which for some reason is believed to be more lucrative and therefore must pay more) have been increased massively to cope with rampant inflation. Allowances, which were truly pitiful, have also increased but the various unions agreed that the employer must pay the actual cost of transport. This is fine where staff take a bus to work but not very helpful where there is no transport or they choose not to use it. You might think that it would be easy to see what the actual cost is of a bus. Think about that for a bit. What third world bus conductor issues any form of ticket or receipt? My labour force for the most part live about 4km away and have always walked even when there was a semblance of a transport service; transport allowance went straight to the pocket as one would expect!

Today I went with a senior foreman and the workers’ committee to the local NEC offices to try and break the deadlock on what transport allowance I would offer. My initial offer was nil; what is the incurred cost of walking? New shoes? I supply those anyway. No, I did not expect to get away with that but one must always start out as low as possible. Progress was slow until the CE called in and suggested that we go with a proportional system, i.e. find out what a bus elsewhere cost and pay a proportion for the distance walked (this would be fairer on those who actually did some distance compared with those who live very close by). I immediately saw  that with current inflation we would have monthly rows over what the bus was now charging (inflation is about 10000% remember?). So when a fixed value was suggested for all those not living on the premises, increasing by the same percentage as the wage each month, I reluctantly gave in and agreed to it. It will increase by about 35% over the next 4 months. OK, call me heartless, but I am tired of the tail wagging the dog and being told what bonuses they will work for (but that’s another chapter). Anyway, I am not supposed to be increasing my prices (I have anyway) so how am I supposed to cover these increases? This whole system worked much better when the allowances were so low as to be meaningless and I just had to keep increase the wage to keep people working for me.

In the meantime the NEC is going to look for a better definition of incurred actual cost of transport but in an aside the official who was mediating said it was not going to happen as the current situation benefited the employees’ union. So I guess I won that war. Of course next month the labourers will come to me and complain that their wages are insufficient so we will have to up them (which is also illegal) just to keep going. So I could be prosecuted for increasing wages AND prices!

I have it on very good authority that our emails and other electronic communications are now being monitored. I have commented on this elsewhere but now it is a reality but I am still sceptical that the powers that be can do very much with what must be a flood of information containing the key words that they are looking for, most of which will have no bearing on any “security” issue. The logistics of manually reading every email that has been filtered are enormous for any organization. I say this because I am in the process of completing the “Form of an annual return of a company” which is required to do for any companies that you own. On the back page “company” is spelt wrong three times, twice as “comapny” and  once as “Comapnies”. If the spell checker cannot get it right…

The ZIMRA (tax authority) people are out on strike this week. It means that I don’t have to worry too much about doing any tax returns for last month. It also means that if you want to bring back goods from South Africa all you have to do is pay R10 (about Z$400000) to a customs official and you can bring back whatever you like! It’s pretty good money for the customs people too, it certainly beats taking home Z$3m a month!

A BBC World Service radio report this morning said that Zimbabwe was closer than ever to total collapse. That is undoubtedly true, but it did not say how far away the total collapse is; tomorrow, next year? You would not have thought so driving around today. There was still substantial traffic on the roads and nothing to suggest that collapse is imminent which is rather what the newsreader said. I am not at all sure that Zimbabwe will “collapse” whatever that means. Diamonds and platinum are still pouring out of the ground and more people are leaving the country to send back more money. I am still very aware of new building going on and there are still new luxury cars appearing on the road. Of course we are all still making a plan to get food and other essentials. It’s all by word of mouth and casual conversation. You know somebody who can give you the phone number of someone else who has eggs for sale. Etc.

Also in the same report was Mark Malloch-Brown (member of the British cabinet) who seemed to think that if the world got behind Thabo Mbeki’s peace initiative significant pressure could be brought to bear on Robert Mugabe. For those not aware, Mbeki has for some time now been behind talks in Pretoria between the two major political parties in Zimbabwe. The main opposition, the MDC, is hopelessly divided and to show their contempt, the governing ZANU-PF did not even bother showing up for the opening of the discussions. They hold all the cards so what is there to negotiate? I would guess that these talks about talks have been ongoing for at least two months with no noticeable results. I would have expected more from Mr Malloch-Brown who is an old UNDP hand with a lot of African experience.

On Tuesday afternoon I spent an hour with the labour discussing wage issues. Not surprisingly they wanted more and not surprisingly we resolved nothing; I am not allowed to increase prices so how can I pay them more? So, it came as something of a shock yesterday when a customer asked me if I’d heard anything about the new wage increases. I phoned up the NEC (National Employment Council) who arbitrates wage issues and yes, wages had increased, by 767%! Now I have yet to sit down at a computer and check it all out but I’m pretty sure we cannot absorb that and continue to operate. I can go to the Price Control Commission and apply to be allowed to increase my prices but as my book keeper pointed out, do I really want to draw attention to myself? Will they PCC be quick enough, even if they do approve an increase, to save us? The only thing in our favour is that the increase is not actually 767% for us as we were paying five times the official wage anyway, but in the same time frame I have only put up our prices 20%. I know that other businesses are putting up prices in defiance of the law and just hoping for the best but I’m not sure if I want to chance a 6 month jail term as I deal quite a lot with Joe Public and it just takes one to complain…

A customer came in last week and bought 30 hybrid cabbage seedlings, 20 brinjals (open pollinated) and 10 tomato seedlings (open pollinated). Total cost; less than US$1.

Like just about everything in Zimbabwe at the moment, the price of bus tickets is regulated. Like just about everything that’s price regulated in Zimbabwe at the moment, people have found a way around the price regulations. I have the following information first hand from one of my foremen who went to the Eastern Highlands a couple of weekends ago.

The bus conductor does not sell the tickets but like all bus conductors he will not let you on the bus without a ticket. So on arriving at the bus stop you must make a few enquiries. A bus conductor’s assistant will soon appear and will direct you to another assistant who will sell you the ticket/s. The prices bear little resemblance to the official prices but at least the bus conductor cannot be bust (sorry, I had to do that!) for selling over priced tickets.

In a similar vein, whenever I want to buy agricultural chemicals from a company I use regularly, I am careful to introduce myself by name and company before enquiring after the chemicals or fertilizer that I want. I know the prices I am quoted are following the black market currency rate which is illegal, but I also know that I have to pay these prices or do without. If I don’t introduce myself they will very probably say they have nothing in stock. Of course this does not help me put up my prices as I deal with a substantial number of “Joe Public” who will very likely report me for increasing my prices illegally, but it does mean that I stay in business. For the meantime.

You know that things are getting desperate when laws are introduced to prevent you from paying your staff too much! The most recent,Statutory Instrument 159A of 2007.Presidential Powers (Temporary Measures) (Amendment of National Incomes and Pricing Commission Act and Education Act) Regulations, 2007, attempts to keep inflation in check by making it illegal to increase wages, prices and school fees (amongst other things) above changes in the Consumer Price Index, the Z$ rate on the parallel (black) market VAT or Customs Excise charges. Bear in mind that inflation is officially around 7500% (in actuality it is much higher) and the CPI is notoriously undervalued and late. The penalties are harsh; up to 6 months in jail or not more than a 3 million Z$ fine or both. As I pay my staff more than five times the stipulated minimum I’m not at all sure where I stand. There appears to be a loophole for increasing wages in the form of bonuses but if I cannot offset that against increased prices what do I do? My labour is off course not interested in my problems and if they don’t get what they want will simply not come to work. This is a curious phenomenon; no pay is somehow better than some pay and most are within easy walking distance of work so they cannot use transport costs as an excuse. Maybe they are relying on the WFP (World Food Programme) to bail them out so that they can do nothing. It is not a new concept and agricultural labour is difficult to find in a country where 80% are unemployed!

So today I have to address the issue of transport. The labour are demanding to be picked up or they will not come to work.  The  issue is that they do get a transport allowance (though there is no public transport along that particular route) but it is so little that they would rather be picked up instead. Other farms in the area do collect labour but I do not have a driver on hand and am not prepared to hang around just to take them home and be on call every working day of the year just to do so. It is going to be a stressful day and my life has enough of that for the moment!

Another interesting phenomenon is the absence of senior management on Fridays. Try getting hold of anyone significant on a Friday! It has become standard practice under the current draconian administration to lock up apparently errant managers on a Friday to languish in jail until Monday when the case can go before a magistrate. As one can never predict when somebody is going to finger you for some real or imagined transgression it is better to run you company by remote control on a Friday. A weekend in a Zimbabwe jail could hardly be called relaxation.

I guess I was really naive. The guy in the bakery had said that they would have bread yesterday morning, and a few other pastries too.  I was really tired of getting just rusks and somehow envisaged strolling in and getting, well, just about anything. Be here at eight he’d said. Well, it seemed like about 40 other people had the same idea so a camera would have been more useful than the shopping bag I’d packed. So I’ve resorted to looking up bread recipes on the internet and baking my own, quite successfully too I might add. Well, my supply of flour has run out now so I’m not sure what I’ll do next.

Earlier this week there was a supplementary budget, brought out  to tackle the world’s highest inflation. It did not of course do anything particularly imaginative but at least nobody that I know was expecting anything else. Most notably the “official” exchange rate went from 250 Zim dollars to 1 US dollar to 30000:1. It is still off the black market rate by a factor  of 10 so it is not going to do much but at least those getting obscenely rich off their connections at the Reserve Bank will have to spend a little bit more for the privilege.

On Friday I again fell foul of the daft cheque deposit regulations handed down by the Reserve Bank. You might recall from a previous post that one cannot deposit cheques of $50 million or more, but there is no limit on electronic transfers. So, a customer gave me two cheques totalling  56m. Not a problem I thought, I’d just go ahead and deposit them. Wrong. I was informed that I would have to deposit them on different days. If I deposited one at 4.30pm and the other at 8 the next morning they would both be banked at the same time, that’s OK, but even using different deposit slips on the same day is not acceptable. No, they could not just keep one slip separate and stamp it for me the next day.

It’s a legal requirement in Zimbabwe to supply the staff with safety clothing appropriate for the job to be done. The labourers that I employ occasionally take this to an extreme and request that they want lime green dustcoats and not the navy blue ones. These requests for fashion statements don’t get a very sympathetic hearing from me and nowadays just getting the required clothing (including shoes) is something of a challenge. I’d heard first hand that the local shoe shop was not stocking any shoes so it was with more than a bit of trepidation that I started phoning around. Amazingly I hit luck on the first attempt and the wholesaler had nearly everything I wanted. No time to waste! As an added bonus they also stocked my favourite brand of local coffee, which I am led to believe, is as good as any in Africa. I know the owner from the days when I used to frequent my gym in the early hours of the day. Harry is a genial and very successful businessman. The conversation tended, as I mentioned in another post, to a good grumble. Sometimes grumbles do actually yield a few interesting observations and are more than just another whine. So, I thought I’d make a few notes of the current most popular topic; the price halving and controls.

• VAT (as mentioned earlier) has been massively reduced due to the lack of trading.
• companies that have been forced to trade at or below cost price (or even close down) are no longer posting profits and are not paying any income tax. Most companies fall into this category.
• few cattle are being slaughtered so meat trading has gone underground and there are few if any hides being tanned for leather products. Hence (to the most part) the absence of shoes on the market.
• gumboots are no longer being manufactured as it is no longer profitable to import the PVC to make them.

This list is of course partial  but it is a start.

Fuel is for the most part available if you have hard currency. It is illegal to trade in cash foreign currency in Zimbabwe but the more desperate people get, the more inventive they become (and tolerant to the demands of the sellers). On the way out of town I stopped in at a small restaurant/cafe to chat to Gille the owner, whom I knew was desperate to buy fuel. I mentioned that I’d found an outlet that would sell any amount for a dollar (US) a litre, traded externally and apparently quite legally. He replied that he’d managed to source fuel from one of the major fuel companies for 76c litre but with the condition that he buy a minimum of 2000 litres. At lunch chatting to my friend Trevor, he mentioned that a potential buyer for his company admitted to selling fuel for $1.30 a litre. No small surprise that she was driving a very new Benz ML350!  This calls for a business plan. Whilst I am not that interested in becoming a fuel trader, I am interested in not being perpetually ripped off!

It’s depressing enough living here without the grumbling but we all persist at it. It’s a curious phenomenon; we grumble to the same people about the same things, day in and day out. I suppose that if we had a huge variety of things to grumble about we would not be able to grumble. Walking into the gym at lunchtime I stopped to grumble to Lucina (she’s Welsh but married to an Italian). It was a satisfying grumble. She grumbled about their water tank that had sprung a leak and emptied in the night. I grumbled about not being able to go places because of the expense of fuel (that’s my favourite grumble). When people ask “How’s it going?”, I don’t lie any more. “Grim” is the standard reply. Too few customers. Then the future, or absence thereof is mentioned and agreed upon. A few “I dunno”s are exchanged and we move on to the next grumble, somehow satisfied at the last grumble.  Excessively happy people are regarded with suspicion – have they discovered a source of milk? Why is their life so good that they cannot grumble?

The next grumble was with Brian on the way out of the gym. It was just a variation on a theme really. The theme is quite popular, how the amazing short sightedness of the government is killing the country financially. It’s worth mentioning. The latest price controls have caused all the supermarkets to become mostly empty resulting in massive VAT losses to the country. But a solution is at hand – just print more money. It’s slash-and-burn subsistence economics at its most explicit, don’t worry about tomorrow.

I am tired. Like most people I know I worry about money. Just existing is draining. I tasted some of Jenni’s dog food this evening (just in case I have to share when mine runs out). It was OK I suppose but I think I’d get bored of it quickly. I have not had a break for a year and though there is not much work to keep me occupied I still need to get away. But that costs money and where would I get the fuel…?