Zimbabwe Absurdity

“Quadrillion boost for agric” was a headline in today’s government newspaper, The Herald. A couple of days ago I was chatting to my bank manager Colin, about the use of such vague terms. It seems that we have adopted the billion as being a thousand million because I asked him if I could write a cheque for that amount. He seemed to think that nobody would know what it meant. Well here is my best guess on a quadrillion.
Million = 1,000,000
Billion = 1,000,000,000
Trillion = 1,000,000,000,000
Quadrillion = 1,000,000,000,000,000 which is less than a million US dollars.

I should have been pleased that I’d just got a trillion dollar order and looking at the invoice I did notice that the itemized line needed some more spaces to fit in the 12 zeros.  I looked at the cheques again (no, only 500 million allowed per cheque) to see that the first one was missing the “dollars” after the “five hundred million” and was unacceptable to the bank. The second (you can only write cheques to the value of 500 million and they must be banked on separate days) was post-dated by a week and therefore unacceptable to me. I should explain that. Cheques take about 5 days to clear in this country so these were going to devalue by at least 50% before I could access them and then the bank would only allow me to draw 10 billion in cash in any one day. Cheques? Well, few outlets are accepting cheques these days – for the very reason that I was less than impressed. From the customer’s point of view we were just too good to pass up. He was getting rid of money (not a huge asset in Zimbabwe dollars) to get seedlings that were only going to appreciate (in Zimbabwe dollar terms if not real money). We were going to be getting rid of assets in the form of chemicals, fertilizer and other necessities for the growing of seedlings to get nearly useless Zimbabawe dollars. Clearly things were going to have to change. So this morning we have stopped accepting new orders for anything but cash. Preferably real money but therein lies a poisoned chalice. It’s illegal to deal in anything but Zim dollars though just about anyone will accept real money if they think the supplier will not rat on them. The customer in question is coming to see me in an hour or so to sort out his cheques. We will see what happens…

I was talking to a black customer on Tuesday. He farms in the north of the country and though I don’t know him very well he seemed to trust me with his less than flattering opinion of the powers that be. He was telling me that if you are vaguely successful you are seen as being a member of the Opposition (MDC). Likewise if you don’t supply food to the government “agents” or if you don’t supply transport on demand. Last week mobs had descended on his workers’ compound and burnt four houses. The next day they wanted transport to go to a rally. I didn’t ask the obvious question. He admitted that he now slept with a loaded firearm by the bed. When I asked if he wondered if there was any point to all this he gave the now predictable reply: “What else can I do?”

How badly did I want this butter? Obviously badly enough to fork out the equivalent of 10 USD for a kg! I don’t use it that much but sometimes it’s really nice to enjoy a slice of fresh bread and Marmite! I cannot remember what the price was last time I bought but I do know it was much less in real terms. Actually the last butter I bought was in South Africa at the end of March so I reckoned I owed myself this treat.

Last week I had to go and get some inputs for the nursery. I suppose I could have paid in Zim dollars if I’d had them but the truth was I didn’t. I’d even had to “bring in” (I know someone who has cash here and I have money there so an arrangement was made) some of my hard saved USD just to keep the company going long enough to see through some seedlings that I’m pretty sure I can get USD for. It’s a gamble and if it doesn’t pay off I guess we will close. So, I took the figurative deep breath and went for it. On entering the fertilizer into the computer at work I noticed that the real (i.e. USD) price had gone up some 20% since I’d last bought fertilizer in December last year. I know that the onion seed that we use has gone up 25% in the last 6 months and diesel has gone up 50% since last November. We are no longer a cheap 3rd World country; we are instead like Zambia (which is expensive) but without the supporting economy. The catch of course is that most of us are earning Zimbabwe dollars which as of yesterday are worth about a billionth of a US dollar.

Yesterday I also had to make some more space on the invoices at work. Coping for billions is just not enough. I long ago removed the cents and all our prices are rounded up to the nearest million. It’s easily done as I wrote the software but I have not had much luck marketing it. Most companies prefer to just keep knocking 3 zero’s off and putting up a little notice at the checkout to that effect. The banks have had to resort to issuing new accounts once they get into the trillions (1×10 to the power 12). Oh Zimbabwe, when will it end?

It was cold this morning at 5. I really did not feel like getting onto the rowing machine but… But I had to. It’s a pact I’ve made with myself not to start something I am not going to finish and this is an ongoing thing. Once on the machine it was a little easier, but not much. There is a star visible in the north-western sky at that time of morning. I have been making a note to find out its name so that we can be on name terms. That’s the sort of thing I think of at that time of day. I could see a few lonely lights of cars on the Mazowe road some 15km away as they come up the hill past the dam wall. It’s piece of road I know well having travelled it many times in the days when we did lots of paragliding at Mtoroshanga. Fuel is too expensive to do much of that these days. I wondered if I was seeing the same vehicles every morning. I was battling. Mentally as much as physically. I pondered the I word. I for insolvency. I have been thinking about it a lot recently as I fail to see any real solution to the countries and my financial problems. Inflation is around 2 million percent and the dollar is losing 2% a minute as I type this. I looked for excuses to get off the rowing machine but my knee was holding up and the twinge in my hip could be ignored. After 20 minutes I was committed to finish and as I was a bit early I’d make some biscuits as I’d totally run out and Jenni gave me a reproachful look as I tried to explain that the metaphorical cupboard (actually a plastic sealable bowl) was empty. I slowed down and stopped at 40 minutes feeling, well, somewhat pleased with myself and relieved at the same time. Jenni knows when my session is over and comes over to remind me that it’s her breakfast time and get a bit of affection. Coffee, make biscuits. I was resigned to the rest of the day.

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Peter is an old boss of mine. Well, I guess I should qualify that; he was an owning director in the company where I worked so we didn’t come into contact that much but he did own the farm where I lived. More of a businessman than a farmer he is retired now and farming! Though it is more market gardening to keep him occupied.

He comes to the nursery on occasion to stock up on vegetables and glean information from me. Being the sharp businessman that he was (and still is I suppose) he is useful to me too. Yesterday he told me that the cash for cash rate (Zim dollars for US dollars) was around 250 million whereas the transfer rate (no “cash” involved) was at least 350 million and climbing as we spoke. I digested this for a while and decided that our pricing was way behind as usual but I needed to do something about it. A Zimbabwe solution was called for! So yesterday evening I pushed our non-cash (which in this country means cheques – cards are not that widely used) to the equivalent of 300 million to the US and put a discount of 20% for cash into the computer. It also helps get cash in as we need to pay wages next week. I must go and see how it is working out…

This morning on BBC radio there was a long topic on the deforestation of the Amazon. I listened to most of it but my mind was on other more local problems. I did here one illegal logger interviewed who said that he knew it was wrong but he had to survive. My mind went back a few days when I was driving to work. In front of me was a pickup truck loaded with fresh firewood. The wood was noticeably smaller than that being gathered a few years back and it was also very obviously green whereas in the past it was inevitably dead and therefore collected dry. And of course it was in a pickup truck, not balanced on someone’s head.

Now I did hear that a quarter of the Amazon has been deforested. While deforestation in this part of the world has always been an issue it has only been exacerbated by the current economic crisis. I do doubt that the owner/driver of the pickup really needed a full load for his own use – surely he was going to sell it. I don’t begrudge people who cannot afford alternative fuels cutting or collecting wood to cook – I just begrudge those who created the economic crisis that necessitates this practice. It’s depressing. I wonder if their children will have to live with the consequences or they will just go elsewhere?

Well, that was the title in The Herald anyway. It seems that the powers that be have had an attack of common sense and floated the currency. I’m not sure what this really means except that the revenue authority is now using a rate of 165 million zim dollars to the US and banks are now trading openly at 192 million. As we are so dependent on imports the price of anything imported is going to be very expensive.

It has not suppressed the black market which is now over 200 million to the US dollar. It is certainly not going to alleviate the shortage of foreign currency so demand is still going to exceed supply. There are new notes out; we now have 50 and 100 million dollar bearer cheques. Yes, like all the others they have an expiry date.