No liquidity

10 07 2011

“There’s just no liquidity” said Phil the Banker, glumly shaking his head. I also blame this lack of cash on the run of poor business we’ve had at the nursery over the last 3 months. Of course, having to rely on diesel power to irrigate one’s crops as the national power grid is so unreliable doesn’t help either.
“Yes”, I replied, “we are just not producing anything”. This is not strictly true, we areproducing lots of diamonds, probably in excess of 1 billion US dollars worth but precious little (excuse the pun) is getting back into the economy.

The retail economy is definitely suffering too. I have been doing a bit of browsing with view to replace at least one of the armchairs I own that probably predate me – they are more than a bit tatty and uncomfortable too. I have been into three outlets that sell furniture this week and in all cases I was the only person in the shop. The cheapest armchair I could find was US$450 which puts replacing the entire suite well into the fantasy realm. Yes, I don’t have the liquidity either! There was not a lot of choice in style either and curiously, just about everything was covered in leather which is obviously targeting the luxury market. Made in Zimbabwe? Just one chair.

Rumours of Rain

13 08 2009

Factmeter (FM) scale: 0 = nonsense, 1 = myth, 2 = dubious rumour, 3 = rumour, 4 = fact 2nd hand, 5 = fact 1st hand

It is August and the rains are not due until mid November. FM = 4

The veld is very dry and fires are everywhere. FM = 5

Richard Branson has been to Zimbabwe several times and has had meetings with Robert. FM = 5 (heard from 2 reliable sources).

Richard Branson is interested in investing in the Victoria Falls area, including the airport in exchange for a “feel good” project, likely fixing up the big Pariranyetwa Hospital in Harare. FM = 4.

The Russians are investing in a new double carriageway from the airport – they are being paid in cash and land for development en route. FM = 5 (I know one of the contractors and have seen the work going on). Why we need a double lane road from the airport is anyone’s guess.

The Russians are buying up a lot of the larger mines in the country. FM = 4

The Marange diamond fields will be returned to their rightful owners in the next 2 weeks. FM = 3 (reliable source but will have to see it happen.)

There is a gradual drift of people back to Zimbabwe in anticipation of a “turnaround”. FM = 3.

This year is an el Niño year which will cause erratic rains and drought. FM = 4 (it’s a weather forecast, how can it be fact?).

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.

Diamond deals

20 08 2008

The senior foreman at work lives in the east of Zimbabwe at a small business centre called Nyanyadzi. Not a lot happens there. There is a small irrigation project and the usual small market. But things have changed since the diamond fields were exploited in the nearby Marange area. Having just got back from a short visit home he told me this morning that anyone can purchase a “pass” to go diamond digging for a day. All it takes is a bribe of R200 to a police guard. Benz’s are around in droves, laden with fat cats and US dollars to mop up the diamonds illicitly mined (no doubt they get the diamonds relatively cheap). Zimbabwe dollars are uncommon in the area; the currencies are the rand and US dollar.

This evening on our way back from a short cycle, Jenni and I passed the spot where Tina died. We’d gone about another 100m when in a display that was pure Tina, Jenni took off after a security guard crossing a field on a bicycle. A ridgeback in full chase mode is quite a sight but there was no malice – she was just after a bit of entertainment. The security guard noticed her as she closed on him, dismounted and shouted “Hey” (or something like that) from the security of the far side of his bicycle. Jenni swerved past and trotted off to sniff something nearby as though that’s what she’d been coming over to check out anyway.