Getting legal

5 03 2009

Part of the requirement of being allowed to trade in real money is a FCA (foreign currency account) at one’s local bank. I did that just now and it was surprisingly easy and in theory I can get a REAL VISA CARD!!! which will actually work anywhere. There is a cost of course; the Reserve Bank deducts 5% of any deposits (and yes, ALL cash has to be deposited – right) and there are bank charges but Joyce told me there were not that many. We’ll wait and see on that one. The Reserve Bank has plundered these FCAs in the past so I am not too keen on depositing all my takings, just yet.

I heard this morning that Barack Obama has renewed the sanctions against Zimbabwe (targeting individuals and their companies) for another year. I could not help but notice the new Landcruiser on the way to the cafe this morning. It seems that Toyota has found a way “around” the sanctions along with Benz, BMW, etc…


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Excess

2 03 2009

Bob’s official birthday party took place on the weekend at Chinhoyi, a small agricultural town an hour along the Kariba/Zambia road from Harare. According to the Zimbabwe Independent the whole thing was expected to cost some 200,000 US dollars and included, amongst other things, champagne, lobsters, prawns, caviar and croissants. Talk about pearls before swine. There was none of the traditional fare of meat and sadza (cooked maize meal). I knew there was not a food crisis in Zimbabwe.


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Enforcing corruption

18 02 2009

Having dinner with friends on Monday night one of the other guests commented that the “dollarization” of the economy was just enforcing corruption. The previous week he’d had the electricity cut off for non-payment so he did what we all do. On arriving at the utility’s offices he was ushered in ahead of the queue and a solution was quickly found. For $20 and a lift to his property the power was soon restored. ZESA, the utility, has to accept Zim dollars. As a result the person in the office (others were still on strike) was being paid in local dollars and earning the equivalent $1 a month. No surprise then that he was keen enough to go to work and spot those coming in who were willing to “make a plan”. We were all sympathetic.


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A strange thing

15 02 2009

At 14h30 today I was ripped off outside the Borrowdale post office. They must have been watching. I’d shut the door of the car and activated the alarm but not locked. I was going all of 10m to the post box and would be out of sight of the car for less than a minute. I’d just unlocked the box when the car alarm went off. There was nothing in the box so I shut it quickly and stepped back so that I could see the car. A black Toyota sedan was pulling away from my pickup so I took a look at the registration – it was an old style one starting 27 but that was all I could see. I knew straight away what had happened and sure enough my gym bag was missing off the seat with my wallet inside. Livid I went off to the police station and just managed to cope with the police woman’s ineptitude. Half an hour later I got a call on my cell phone from someone that I know; my bag and all my cards had been left at her gate in another suburb! Strangely it had been placed very carefully at her gate and only the wallet and money were missing, they’d not even taken my Swiss Army knife (fortunately I’d taken the cell phone out). In these cases the unwanted stuff is usually dumped in a bush or a rubbish bin. Very odd.

The knives are out for the white farmers who took their land issues to the SADCC court in Windhoek, Namibia. Last year 77 of them presented their case there and won. The judgement being that the land invasions and evictions were racially motivated and illegal and they should get their land back and be allowed to get on with farming. This morning one of my customers phoned to say that he would not be collecting his order as he’d been kicked off his land yesterday with 6 hours to get everything together. The chief hood admitted that the SADCC ruling was behind the move even though the farmer in question was not represented at the case. And besides there was a sacred grave in the hills on the farm and they wanted to make it a national monument. Crap. The small farm is in an urban area and he was just grabbing to get the crops and probably some future development.


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In the news

7 02 2009

It seems that Barack Obama will get most of his economic rescue package through the Senate. Nobody knows for sure if it will work but they are going to have to give it a try even if it does create a trillion dollar budget deficit. The Zimbabwe Government has not been paying attention and seems determined to kill off the economy before it can even start. In the process they have also removed another 12 zeros off the Zim dollar; that makes it 28 in just over 2 years. How they will ever restore faith in the local currency is beyond me!

Yesterday, chatting to my local pharmacist, I was told that the Reserve Bank officials had been calling to see that businesses in the area were licensed to deal in real money. Most formal outlets will be charged 12000 USD a year, payable as $1000 a month. This is certainly beyond my limits and I gather that a lot of businesses have simply stopped trading. Informal traders (on the street) will be charged $25 a year so perhaps there will be surge of vendors outside more formal outlets.

Italy is all in a tizzy over the ruling by their highest court that the woman who has been in a vegetative state for the last 17 years be allowed to die with Berlusconi trying to halt the process and the president refusing to sign his decree (as unconstitutional). The Vatican, predictably, in some absurd right to “life” issue would like her to carry on in the vegetative state for as long as modern medicine can keep her that way. This would undoubtedly be a very long time. Withholding sustenance until she dies would not be cruel – she essentially died 17 years ago, but it would certainly be a release for her family from a person they no longer know. The chances of a spontaneous recovery are close to zero. I have it written into my will that in case I enter into such a state with no chance of recovery I be allowed to die. A lawyer pointed out a while back that it has to be a living will so I’d better change it sometime.


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Nature of the beast

3 02 2009

It made it a little easier after the breakdown on the road to come back to a house that was actually lit up after another 4 day power cut. I dread storms. This one had come through on Thursday and had hit with some force; 20mm of rain in 15 minutes and wind to match. The power lines behind my office had been arcing onto each other but amazingly did not burn through but somewhere else a tree had come down or so I presumed. Anyway, I did get to hear the news before going to sleep and I heard “As Robert Mugabe prepares to share power…” – some chance. After 28 years holding total control he is now going to share? “… SADCC countries are wondering whether to appeal for a complete lifting of sanctions which will make life easier for Zimbabwe’s people” the newsreader continued. I have harped on about this elsewhere and it’s worth repeating; the sanctions are targeted against the ruling party elite and their cronies. A quick trip into town will show that sanctions have little or no effect on the majority of people. Want a Benz? No problem sir! Imported double door fridge with in-the-door ice-maker? Certainly madam! The current financial mess is entirely of the ruling party’s doing.

Also on Thursday there was a budget (we seem to have budgets presented several times a year here). This one was a little different because it was presented in US dollars, probably because no-one understands the words required for the equivalent in local dollars. An uncommon amount of common sense was shown and essentially everyone is allowed to trade in US dollars or any other currency now. This had one of my customers all cock-a-hoop and amazingly optimistic. He seemed to think that it was all but over now and we would see the long promised “turnaround” in six months or so. And yes for a moment I was caught up in his infectious mood. But it still does not answer the question about where the cash is going to come from. We are still a nation of traders and it is going to take a massive cash injection to get us back on our feet. This might be bad timing given what’s going on in the financial world. Yes, he was right on a number of concerns; the money traders will be looking for work, those “farmers” who were benefitting from fuel and fertilizer handouts are unlikely to have much to trade (one was trying to sell him 10t of urea and did not even know what it was for) but we have a very, very long way to go. Forgive me for being sceptical but we have promised this all before.

Austin at the gym is a fairly reliable fellow when it comes to the economic barometer; as well as being a sports doctor he likes to keep abreast of what is going on and the nature of his business keeps him in touch with a lot of opinions. Chatting to him yesterday brought me “up to speed”. Apparently the price for dealing in real money is that we all have to open an FCA (foreign currency account) at the bank and deposit all our takings there. Right. In the past the government has plundered these FCAs regularly and there are still companies owed millions of US dollars – the money is in the account but somehow they just cannot get hold of it. A large proportion of our budget will be funded by a revised Customs and Excise Act. Do they think that the customs officials at the various borders who have been pocketing some R1000 (about $100) a day will now enforce all the necessary duties so that maybe, just maybe, they will get a cheque from the government for say $200 at the end of the day? The list goes on and on – all the incredible lack of forethought that we have come to expect from this government. It gets better though. The MDC with whom ZANU-PF are supposed to be sharing power (it must come about within the next 8 weeks in order for international funds to be released) are supposed to be getting control of the finance ministry and as far as they are concerned this is all just a bit of paper which they may choose to use, adapt or tear up as they see fit! So don’t hold your breath anyone…

Business has picked up quite considerably for me over the past week. Whether this is some sort of optimism in the future I am not sure but it does raise a bit of an issue for me. I will have to spend money that I don’t have in the business for the input costs and to replace worn out equipment. Will I get it back? If this is really a light at the end of the tunnel I don’t mind doing it but is it?


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Printing real money?

24 01 2009

Some outlets in Zimbabwe are licenced to deal in forex (foreign currency). For them it’s been a boon and although they are pricey at least we have been able to get most things. The price they have to pay is a 7% levy on turnover to the revenue authority, and yes, they had to buy the licence too, often for as much as US$20,000. Now they might be a little worried. The government, in an attempt to placate the civil service, will start paying them in coupons redeemable at the aforementioned outlets. These companies will then be allowed to deduct the value of the coupons from the 7% levy. Does this mean that the government is effectively printing US dollars?

  • If there was enough US dollars coming in the government would be able to pay the civil servants itself.
  • Does this mean that the government does not trust its own collection system?
  • Are they just finding a cheaper way to administer their own wages?
  • I can promise you it will be abused!

The local press has been abuzz with the Reserve Bank governor’s plan to “randify” the economy i.e. link it to the S. African rand. I could never see this happening unless the South African REALLY wanted to devalue their currency though I was told today that it was scuppered by COSATU (Congress of South African Trades Union). They said only if Bob agrees and is seen to share power. That of course will not happen.

I heard most of this today at work from various customers. One said “I’d love to believe this but..” and then recounted how she’d heard that the army was “promising” a coup within the next month. It’s almost certainly just a pressure tactic – I really don’t’ think that even our army would advertise and impending coup!


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The Inauguration

21 01 2009

I have to admit that I watched some of the inauguration last night with my Canadian friends. I was not riveted but the crowd took it seriously. I did not think that Obama’s speech was up to his victory speech, but hell, I wish him well and he can only improve on GW. I wonder when the first nutter will take a pot shot at him.

It occurred to me at the end of it all that he was continually being billed as the “first black president” of the USA. But he is half white so he could just as easily be a “white” president. Why make a distinction? On those grounds Brazil is way ahead – colour matters not a jot to them. Largely because everyone there is thoroughly mixed race.

I wonder if Bob watched the ceremony. Did he take in any of the not so subtle references to democracy and smooth change of power? I doubt it.


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Obama and Us

21 01 2009

For some reason my satellite radio has not been picking up the BBC World Service so I was quite pleased that when I turned it on this evening it was back on the air. World Have Your Say is a popular programme where listeners call in from around the world to discuss various topics. I don’t often listen but this evening it was all about the inauguration tomorrow of Barack Obama. The programme was based in The Mall in Washington DC where it seems that tens of thousands of people have gathered on Martin Luther King Day – the eve of the ceremony. Are we expecting too much of the man – seems to be the topic. Opinion is divided. But why then are so many people there? I don’t recall any of this anticipation for GW’s inauguration. Certainly everyone seems to be expecting change. Call me cynical but I don’t think much IS going to change! I do hope that the appalling environmental policies of the Bush administration will be dumped but as for foreign policy? Obama is first and foremost a politician and will be trying to get re-elected in 4 years so I suspect foreign policies at least will no more than shift. Noticeable change, yes, radical change, no. So why all the excitement? Is it because he is a man of colour – a novelty in American presidential politics? Perhaps. There is no doubt that the man is charismatic but that does not necessarily make a good president. Of course they had to phone a few Kenyans to get their opinion. Apparently the populace is in full party mode but mainly because Obama’s father is of Kenyan birth – reflected glory syndrome.

I have been to several places today and not once did I even hear the name “Obama”. I don’t think that anyone had even realized that tomorrow is his inauguration. We are all too busy surviving and are under no illusion that we have anything that is remotely important to the USA to warrant anything more than a targeted sanctions wrist-slapping of the entrenched kelptocrats that run this country.


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Through the loophole and other stories

17 01 2009

At first glance it looked straight forward; supply a proforma for some 70,000 seedlings. The tricky bit was what currency to use as we are not licenced to deal in anything but Zimbabwe dollars that are becoming increasingly difficult to get rid of – only the electricity authority will take them. I made a few enquiries and soon found out that it was for the setup that were cultivating and planting the land around the nursery and the person behind it all is Grace Mugabe – Bob’s wife. Why she thinks she has to go farming is anyone’s guess as she is certainly not short of money. That aside, it would probably have been unwise to pass on a proforma in real money, she might well have taken umbrage and send the revenue authority along (assuming she even knows what is going on in her own company which is not a given). I could have made it up to a ludicrous amount in Zim dollars in order to either put her off or persuade her to offer real money (which is not illegal) but the risk would be that she would dump the ludicrous amount on me just for amusement or because she could.

The solution came on a visit to the gym where they were selling diaries in “units” – a unit being the equivalent to a US dollar or some other type of barter trade to be negotiated. Apparently it is illegal to sell in currencies other than the official one (Zim dollars) but using a “unit” for barter trading is not. The unit can be anything you like except money. That afternoon I programmed my computer to be able to sell in units of fuel coupons or anything else for that matter. The idea was not to get a lot of fuel coupons (one does not go to a filling station with cash; it is necessary to buy a coupon for say 20 litres at another outlet first) but to prompt people to offer to pay in something else, like US dollars! I cannot see this loophole lasting but we’ll see. Even before I’d implemented it a customer had asked to pay in coupons and I agreed before seeing them. I ended up with the equivalent of 260 litres of petrol for which I have minimal use (my vehicles are diesel). Not to worry, I used 3 to pay my monthly internet subscription!

Chatting to my landlord this morning he asked me if I’d heard that Gideon Gono, the governor of the Reserve Bank and prime architect of the financial debacle – from which he and his cronies profit immensely – wanted to stop the US dollar trading and revert to the Zim dollar because there was not enough (real) money to pay the army whereas they could always print Zim dollars. If they stopped stealing it all there would be plenty of money to go around from the diamonds alone. Anyway, that’s one genie that is well out of the bottle; it cannot often happen that the official currency of a country is not even wanted by the country.


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