The slide and fall of the Zimbabwe dollar

8 09 2022
Clean cash but I paid for it!

Last month I finally had to throw in the towel. I called together the workers’ committee who represent the labour force and told them that I couldn’t find enough local dollars to pay them and from now on it would have to be US dollars. They tried hard not to show their delight and failed, dismally.

The government likes to claim it has stabilized the Zimbabwe dollar that had officially slumped to about 530 to one US dollar last month. They have even gone so far as to issue punitive fines on those organizations trading at unofficial rates which can be around 800:1 or higher. Indeed, local dollars can now be bought for as little as 700:1, if they can be found at all. That very little needs to be paid for in Zimbabwe dollars is no doubt preventing the local dollars gaining more. My business has steadily been taking in more and more US cash over the last 6 months to the extent that my time spent going through the bank statements at the end of the month is now only a couple of hours.

The government also displays considerable ambiguity to the currency it is supposedly supporting. Imports are taxed at a rate of 700 local dollars to the US dollar, no doubt to encourage importers to use the US currency. Export remittances paid back to Zimbabwe are “taxed” by the government which takes 40% of the hard cash and then pays the exporter back in local money at the official rate which means the exporter is losing 25% of the hard-earned forex. Internal foreign currency transactions are deducted 20% under the same system, and yes, the money I withdrew from my account shown above was taxed 3%. Curiously the small denomination notes are all issued new. I’d been hoping to get some 1s but my bank didn’t have any in stock.

Marianne and I are going to the UK on Sunday for three weeks. It’s always a bit of an exercise in anxiety in what can go wrong whilst I’m away but it’s been four years since we got to the UK and the break is needed.

Yesterday I got a call from one of the foremen saying that one of the borehole pumps wasn’t working. Fortunately there’s a business park some 10 minutes from my work that has an irrigation company and three visits later with an unnecessary purchase of a pump controller, it was determined that the motor was burned out (the pump controller should have protected it but failed to do so) and it was pulled out the ground and changed. Marianne remarked drily that “at least it didn’t happen next week”. Indeed.

A friend has the estimated wages, in US dollars of course, which he will drop off when the clerk tells him an updated breakdown. The wages package was written by me and although I’m not and exceptional programmer I do take pride in designing software that’s intuitive to use. Emergency phone numbers have been listed and fingers will be crossed. We will be taking our full currency allowance of 2,000 US dollars each with us – nobody outside Zimbabwe has use for our currency either.





Perspective

4 08 2011

It’s official; Apple has more cash than the US government. $76.4bn vs $73.7bn. Zimbabwe has a GDP of $7.474bn.

On the way home at lunchtime I passed by a neighbour’s recently combined maize crop. The transporter must have spilt some kernels outside the fence because a man had dropped his bicycle by the road and was gathering up what he could find. I saw a dirty pile of some 3 or 4kg. I guess he didn’t really care that and American tech company has cash worth many times our GDP – his problems were far more immediate.