Zimbabwe Absurdity

On Christmas Day I went out to lunch with friends. Amongst those present was John Robertson, an oft-quoted local economist. Of course amongst the topics of conversation were the usual; who’d bought what where and inflation. John mentioned that he’d got hold of some figures from Germany in 1922-3 when they had experienced their legendary inflation and doing a bit of comparison it seemed that our inflation was not that far off what theirs had been. Of course for them it led to Hitler and the Third Reich but for us the outcome is not likely to be so dramatic; “Bob and the Fourth Chimurenga” is more likely (chimurenga is Shona for “revolution” – and yes there have apparently been three previous ones but who noticed?). John had also had a meeting with some IMF officials who came calling for an update on the Zimbabwe situation. When pressed they’d admitted that their forecast figure of 100,000% (yes, one hundred thousand percent) inflation for Zimbabwe was approaching a bit faster than they’d expected.

The officials who “control” the Zimbabwe economy (put in quotes because they very obviously don’t) have come up with a new strategy called Operation Sunrise 2 which involves revaluing the currency by knocking off an unspecified number of zeros and re-issuing the currency in the form of new notes (see “It’s not real money”). It seems to have gone a little awry. Only the new $750,000 and $500,000  notes have been seen and not in sufficient quantities to alleviate the queues at the banks. Money is deposited and goes straight out again. The banks have taken to giving out the $200,000 notes again even though they are due to expire (yes, expire!) on Tuesday. People are so desperate to have something to spend that the banks have no choice and the Reserve Bank is not supplying enough new notes. Perhaps the printing presses are broken? Nobody knows or they are not telling if they do!

During a pre-Christmas interview, Dr Gideon Gono, the Reserve Bank Governor, was responding to questions on Sunrise 2. When it became apparent that zeros were not going to be removed from the new currency a reporter asked how businesses were going to cope with not being able to have enough “space” on the computer software to deal with all the existing zeros. The reply went along the lines of – well, they will just have to go back to using paper won’t they? And he’s a doctor? Of what exactly?

Also just before Christmas I had a salesman come in and sell me a new toner cartridge for the office printer. He obligingly took a cheque and then took a while to read it. I asked if there was a problem. Oh no, I’m just counting the zeros, he said.

Well, they finally pulled it off – sort of. I did get my wages requisition yesterday but only in the new $500000 notes. The other denominations have yet to appear. Unlike some people I did not have to wait from 07h30 to 12 noon to get the money. Colin, my thoroughly decent bank manager, looking completely unflustered despite the very placid crowd in the bank, let me wait in his office until the money was ready and then I just collected it and walked out. I did have a bit of time to reflect on the differences between South African banks and Zimbabwean ones. I sat opposite the teller with no armour plated glass in between us and chatted pleasantly about Christmas plans and the weather. The crowds were all patient and quiet. Maybe that is our problem here; we are simply too accepting and pacifistic.

Well you saw it here first! Note the expiry date on the back of the note; it ain’t real money! Also notice the words “Bearer Cheque“. The previous link is for those who want to wade through the disaster that is the Zimbabwe dollar. Due to the inflation the conversion figures should be taken with a bucket of salt, but you’ll get the idea.

Giving blood has never been a problem for me; I started when I was 18 and having been drafted into the army we all had to go and give blood. It’s been a regular thing ever since. The local blood transfusion service is run by pleasant staff who actually do remember me when I appear every three months or so. This morning the power was off so they could not use the computer to access my records. Not a problem, we did it the manual way. After the usual checks for blood pressure and density and personal questions about my non-existent sex life it was off to the couch and donate.

With all the scares about HIV in this country I do make a point of checking that nothing is reused and I have never had to quibble. I have almost given up on trying to embarrass the staff when they ask about “girlfriends”. I guess they have heard it all before many times. Curiously I was asked how many “girlfriends” I “have” to which my reply is “none” though I suppose other whites might reply “one”. I pointed out to the nurse that in my book at least, “girlfriend” implies some sort of fidelity i.e. a relationship. She was asking how many sexual partners I might have had since the last donation. I suppose the blacks in this country view the term “girlfriend” a little differently.

Chatting to the sister (that’s a term for SRN here) who took my blood I discovered that the NBTS is only partly government funded and relies on NGO’s and others for funding; it is essentially a welfare organization. Of course the blood products are price-controlled by the government! The usual challenge of power outages requires them to store blood products at various other institutions which causes them some concern as they can no longer guarantee that the cold chain remains unbroken. As a donor I am not paid but I do get some biscuits and tea and a sticker with the title of this post on it!

The other topic of conversation was the issue of the new denomination bank notes announced earlier in the week. Nobody had seen any and on my way back to my bank to check out the status of my wages requisition of some ZW$450m I noticed long queues of people waiting outside other banks. I needn’t have bothered – there was nothing available. Now they really are cutting this a bit fine. Saturday is a holiday which only leaves Monday to do shopping and get to where one wants to go. That leaves tomorrow to get all the money out and distributed. The new denominations are even more of a mystery. They are $250000, $500000 and $750000 and all the current $200000 will become invalid at the end of the year. I think the logic may be something like this and I use the term “logic” loosely so please bear with me.

According to the Governor of the Reserve Bank, Gideon Gono, the shortage of cash is due to speculators holding onto mainly $200000 notes in order to drive the rate against the US dollar down so that they can corner the market (the cash rate is very low at the moment – $1.5m to one US$, compared with the transfer rate which is six times that). I find that a bit difficult to believe as the cash rate has never gone much over 1.8m to the US so if speculators were buying local dollars for that in order to cause a shortage of currency so that the price would drop so that they could buy US back at a cheaper rate they would have had to have bought truck loads of the local stuff. Nope, I don’t think so. But I do concede that a number of the supermarkets are not banking their daily cash takings as legally required and are holding them back to buy imported produce “off the street”. Whatever, we spend a fair bit of idle time trying to guess what the next economic antics will be when there is no logic on which to base one’s guesses. It’s a hopeless cause.

Having done the wage calculations for paying this Friday I entertained myself in a small way by plotting the nett wage bills for this year on a chart and then fitting a curve. While the wages definitely do not keep up with inflation the result was nevertheless illuminating. Unfortunately I cannot find out how to display it here but maybe you can envisage this; January it was $881,000, June $13,100,000 and this month it is $504 million. Equation of the curve; y = 294816e to power 0.602x. The fit was 0.9883. Truly exponential!

Lunchtime today I consoled myself with a mug of coffee and a muffin at a local café. I’d phoned a local hardware store to find a kettle element for the urn that perpetually heats water at work for the labourer’s tea. They don’t perpetually drink tea – the urn is just perpetually on. I don’t know the reason. Eventually the element gave up and after a fair bit of searching I was assured that the hardware store in question had one. It did not. Somebody was telling me what I wanted to hear as is so often the case in Africa. Anyway, the muffin was good. And they gave a 30% discount for cash, notes. The Reserve Bank has assured the restive population that they will make up the shortfall of cash i.e. print some more, before Christmas, but I have my doubts. The queues in the banks have gone; there is nothing to queue for. I have put in a requisition to the bank to draw wages on Thursday and have been assured that I will be able to get it. I really hope so. Not that there is much for the labour to spend it on but I will have done my bit.

I have a request. This is for my next lifetime. Amongst other things, like teflon knee joint padding instead of cartilage, I want to be good at maths. This is not just so that I can understand quantum theory but so that I can understand the Zimbabwe monetary system. Perhaps I have used the wrong tense there as I am hoping that the nonsense will be long past by then.

Maths is such an elegant subject; one can prove or disprove so much with the most basic form. Once upon a time I was listening to Radio Caroline on my satellite receiver and being a Sunday, someone had bought some time to do a bit of preaching. He said that contrary to popular belief there had been not one but TWO great floods in the history of the Earth (or rather Bible). Incensed at this affront to my intelligence I gave it the basic maths treatment. I won’t delve far into it here but it centred on dividing the depth of water involved by the amount of days rain and coming up with an INcredible figure! Not to mention barriers, erosion, the fact that the earth IS a sphere (so where did all that water go – think of depth and circle radii?) and how did the koala bears get to the ark without in time and without being eaten? (I have seen koalas move and they are not quick). Then there is the very silly internet myth about Rod Stewart and some boys that I will not go into here.

In 2000 I was living next door to my cousin in the suburbs of Harare. He sold his house then for ZW$5m (m is a million here). Both my current landlord and I were impressed; he was very lucky to get that.

Current value of 5m is 5000 – not worth picking a note of it up off the pavement.

A 1kg bag of coffee beans locally produced is now 40m (about US$10).

A 25kg bag of potassium nitrate fertilizer is $390m.

The daily cash withdrawal limit from corporate bank accounts has now DROPPED to 20m.

Houses are not sold in Zimbabwe dollars any more.

Maths is discovered not invented.