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.





The urban owl

4 02 2022
A bedraggled urban owl

“Did you see the owl?” the office lady asked.

“Owl?” I repeated, envisaging someone dressed as an owl. It was after all three o’clock in the afternoon and not dark not withstanding the downpour in which I’d been caught. I must have looked rather blank because she flapped her arms in a bird imitation and said, clearly enjoying my confusion;

“Yes, an owl. Whoo, whoo”.

I hadn’t see it but given the intensity of the downpour I wasn’t going to step back outside to have a look. Apparently it was a captive-reared owl that had for some reason, that I was not told, taken up residence in the shopping centre not far from where we live. Initially it had tried to cadge food off passing pedestrians and its former keeper had, on occasion, called past to feed it. Now it was independent but still habituated to humans.

I had just been to the bank to see if I could exchange a rather grubby stack of US$5 notes for large denominations and to my surprise they hadn’t balked at the state of the notes and changed the lot. For a price of course. It would be the next day before the deduction of 3% for changing the notes appeared on my statement and of course it was not just a simple exchange as one would expect in a First World country. Oh no.

I had to deposit the cash into my company’s foreign currency account (FCA) whereupon the government took 20% and paid back the equivalent at the official rate to my company’s local currency account. This was done at the official Reserve Bank rate of 105 Zimbabwe dollars to one US dollar. The “street rate”, i.e. what you’d pay anywhere else to buy US dollars, is double that. So yes, just for changing money I’d devalued it by 13%.

However, whilst the teller was counting the money, I spotted a bundle of new USD$1 notes in his drawer. Now small US notes are indeed rare again, just as they were in the halcyon days back in 2009 when we started flirting with the greenbacks and “dollarized” stopping the multi-billion percent inflation in its tracks and ditching the Zimbabwe dollar. At the time we thought it was a permanent solution. Sadly it was not to be. Yes, small denomination dollar notes are sought after again and worth paying for. My business does not do a lot of transactions in cash but having change helps keep the walk-in customers coming and over the month it adds up. So I got the entire bundle.

As I stepped out of the bank it started to rain but it didn’t look like it would amount to much so I started up the slope out of the mall. It soon became intense and I sought shelter under an umbrella by an estate agent. It wasn’t long before I was invited in and offered a cup of tea. The staff were friendly and promised that the tea came without an obligation to buy a house.

After half-an-hour of scanning house prices the rain eased and it was time to go. I stepped out of the office, looked up under the eaves and there was the owl. Bedraggled.





A state of health

16 03 2020

Lots of hardware holding my neck together

This is my neck. It doesn’t look pretty but with this amount of hardware holding it together it’s pretty strong. Quite how it got to be such a mess is a long and convoluted saga but it’s worth telling if only to warn just how badly wrong surgery can go.

In 1977, just before I was to start my compulsory military service, I went on holiday to South Africa with my sister and friend of hers and the friend’s brother. We met up in Pietermaritzburg where my sister was at university and made our way to the east coast of South Africa to a small town called Uvongo. We found the campsite and quickly pitched camp. I made my way to the beach whilst the others went shopping.

The surf on the South African coast can be big as there are no reefs offshore so it helps to be surf-wise. The tide was out and the body-surfers were making their way out to the bigger waves, diving under the breaking waves and surfacing once they’d passed.

A wave broke and tumbled towards me, I dived as stylishly as I could straight into the sand. My head hit the sand, swiveled to the left and bent backwards and I became a quadriplegic. Coughing seawater I somehow got my head back to the surface and legs and arms started to move again. I staggered a few steps then stumbled back to the shore.

That afternoon I went to see a local doctor. He was in an old cottage in a quiet part of the town and was totally bored. I explained what had happened.

“Squeeze my hands” he told me.

I did.

“Here’s a prescription for some pills that should ease the discomfort in your right shoulder”.

“So I’ve pinched some nerves in my neck?” I asked.

“Yes, something like that” came the reply.

And that was it.

20 years later and whiplashes to the neck in a military parachuting jump, a car accident and a mountain bike accident, I was in trouble. I’d had crippling migraines since leaving university. Now I had electrical like nerve pain in my shoulders to boot. It was time to see a neurosurgeon.

The same surgeon who’d fixed my spine after gunshot injury sustained during military service way back in 1979 put the MRI film of my neck up onto the light box. He’d done a good job then so I had a lot of faith in him.

“That’s giving you headaches” he said, pointing to a very distinct constriction in the spinal cord channel. Even to my untrained eye it didn’t look good.

I mentioned that on a recent trip to Cape Town a local neurosurgeon had fitted me in for a quick consult. He’d said that on the strength of the X-rays that I probably needed surgery although a MRI would be necessary to confirm it (I didn’t have the time for a MRI).

“Why didn’t you get it done in Cape Town?” the Zimbabwean surgeon asked.

“He only fitted me in as a favour” I replied.

I only realised years later that the Zimbabwean didn’t want to do the surgery. By the time the surgery was done some months later I’d discovered the surgeon was 74, certainly not in his prime but he assured me that it was routine. When I walked out of the hospital after 6 days I was convinced the problem was fixed.

After 3 months I had a final consult and all the adverse symptoms were gone.

“Thank goodness” the surgeon said with relief, “I don’t need to see you again”.

We discussed other things for a short while and I went on my way. No follow-up X-ray was mentioned.

By the end of 2009 I was dropping things and my left shoulder had become very weak. I was advised to go to Johannesburg in South Africa. I duly sent a stack of MRIs to the recommended surgeon and the reply was; “You need surgery!”.

Early 2010 found me in Milpark Hospital in central Jo’burg.

“These MRIs are terrible” the surgeon commented. “Do you mind if we do them again?”.

I was not surprised. The machine in Harare was old and the collar for the neck MRI was broken. A plan had to be made Zimbabwe style and the results were indistinct. So I agreed. Fortunately it was covered by my medical insurance.

The next day I was being prepped for sugery when the surgeon came past.

“Those MRIs, it’s a good thing we redid them”

“Why’s that?” I asked.

“Because it’s worse than I thought – it means we are doing the right thing!” came the response.

After 5 hours of surgery I woke up in agony. It went from bad to worse after that.

On the 4th night I woke up in the early hours and couldn’t get my right arm off the bed. My left arm was slightly better and I could just reach the handle on the chain over my bed. The nursing staff were puzzled and insisted it could not be swelling on the operation site as that only happened up to the third night. The surgeon was concerned and redid all the MRIs. He told me that he didn’t see anything he wasn’t expecting to see though the report that got back to the referring doctor in Zimbabwe clearly stated there was swelling, and pressure on the spinal cord, at the operation site. Evidently my body hadn’t read the text books.

The pain eventually subsided but I never got the full function back to my right arm and hand and now have had to become left-handed (with limited success). Weakness to my left shoulder resulted in surgery to it to decompress a pinched ligament but that was not wholly successful and I’ve had to give up swimming as a result.

In early 2014 I was in trouble yet again – falling over my own feet and eventually had to admit I needed two walking sticks instead of the one I’d used for the past 35 years. My GP referred me to Dr. V. He put the images up on the light box and could hardly contain his excitement (beware of surgeons who sense a challenge – they love challenges).

New MRIs were ordered and the news, once again, was bad.

“You need to make a decision soon. This degeneration is moving quickly” Dr. V. cautioned. Unfortunately I’d already booked to go to a bucket list event; a World Horticultural Congress in Brisbane Australia. By the time I got back I was in further trouble so hurried up and booked the surgery.

“This is to stop the rot” Dr. V. said from behind his surgical mask as I was wheeled into the operating theatre. “Anything else you get back will be a bonus”. The procedure went well with no complications and the rot was stopped but there were no bonuses. Dr. V. had been as good as his word.

Recently I went back to Dr. V. for a checkup on the neck and to asses a potential problem with my lower back which is starting to show signs of degradation below the original war injury that I sustained in the Rhodesian military in 1979 (this is accounted in https://gonexc.com/reflections-on-the-first-half-abridged-and-mostly-expurgated/). It was well treated by the standards of the day but now if you look at the X-ray on the left it’s possible to see where one disc has collapsed below the L4 vertebra and I felt that my gait and balance had suffered as a result. Dr. V. wasn’t so sure and sent me off to see a neurologist for nerve function testing.

My lower back. Look for the collapsed disc between the 2nd and 3rd vertebrae from the bottom.

I got chatting to the technician who did the actual tests and discovered that he’d tested my hands back in 2009 in the big government run Parirenyatwa hospital. I was curious to know if it was still running as it had closed in 2019 when all the junior doctors had gone on strike over pay so low that they could not afford to feed themselves and get to work. When the government had stone-walled the doctors the senior doctors had also gone on strike in support and they were fired too. A wealthy entrepreneur had offered to pay the junior doctors a useful wage but they replied that even if they could get to work there was nothing in the hospitals to work with – no bandages, syringes, gloves, medication etc.

“The junior doctors were reinstated – well those that hadn’t emigrated were – but the senior doctors weren’t and now there is no-one to run the departments” said the technician. So the hospital remains dysfunctional. Which applies to many hospitals around the country.

Fortunately for me I can afford the local private healthcare system which is adequate for most things. For the more technical I have an offshore policy that I have used in South Africa. The vast majority of Zimbabweans have no health cover at all and no way to pay for any.

I have been out of Zimbabwe for 10 days now, staying in the USA where my sister is very ill. In that time the unofficial exchange rate for the Zimbabwe dollar to the US dollar has plunged from 30:1 to 40:1. Nobody except the banks and government use the official rate (called the interbank rate) at 18:1. It is illegal to use anything but the interbank rate but even a fuel station chain, part owned by the government, is now openly charging US dollars for fuel. Just before I left Zimbabwe I was in a big hardware store in the industrial sites of Harare buying electrical cable for a borehole pump. The customer next to me asked if he could pay for a car battery in US dollars. The till operator nodded and printed out the relevant invoice. At the end of the counter the man operating the in-store bureau de change was asleep. The electronic notice board for the exchange rates on offer indicated the official interbank rates. Nobody was interested as the store was offering the black market rate. Yet the central Reserve Bank and the finance minister continue to trumpet that the economy is on course to de-dollarize i.e. go back to the Zimbabwe dollar.

I read somewhere that the death toll from the economic impact of the current COVID-19 coronavirus is likely to be higher than the direct death toll from the virus itself. Given the disastrous state of the government health system this is difficult to imagine. Large swaths of the population are malnourished and undernourished. Many are immune compromised with HIV and its effects. Should the virus get to Zimbabwe in any substantial force the impact is going to be massive because those most at risk are the old, infirm, malnourished and immune compromised. It won’t be pretty.

 

 

 





“Bob” notes

14 10 2016

Any currency will do (almost)

Any currency will do (almost)

Here in Zimbabwe we have no currency of our own. It was finally discarded in February 2009 along with all 12 zeros that were commonly attached. Notes are now collected by curious collectors. The US dollar is the currency of choice but even that is running out, hoarded away from banks by a public terrified of the introduction of Bob notes. Oops, I meant BOND notes.

Bond notes you ask? Yup, notes with a US dollar value printed on them but no actual value outside Zimbabwe. An awful lot of people think that they will not have any value inside Zimbabwe too so are hoarding the real currency away from the banks.

So whose bright idea was this? Well, maybe I should explain what a Bob note, sorry it just seems to slip out, I mean BOND note, actually is. Earlier this year, as it became apparent that the government was running out of cash to pay its employees (some 80% of the budget goes on paying wages – the rest is siphoned by other means but maybe the figures are the wrong way around), the Reserve Bank of Zimbabwe (RBZ) came up with this workaround. They would get a bond of $200 million from a reputable external bank and print notes amounting to the same value for use solely in Zimbabwe. They were at pains to point out the last condition. After all, we already had bond coins which had been initially rejected by the public but had become accepted as a means of supplying change once the South African rand had ceased to have a convenient exchange rate of 10:1 to the US dollar. So why not have bond NOTES? Surely the public would understand and anyway, with parity to the dollar and no mention of bond notes being deposited into one’s account the cash crisis would be solved?

Right. Like there is any trust at all for anything this government suggests. Panic ensued. There was a run on the banks which was exacerbated by the restrictions that were imposed on drawing cash and promises from sources that it was NOT a reintroduction of the Zimbabwe dollar just made things worse. Riots ensued and now diesel is short. Point-of-sale (card swipe) machine supplies ran dry and banks couldn’t install what stocks they had fast enough. Predictions of food shortages proved false (well not in the supermarkets) and cash money now commands a premium of up to 15% over transfers and card swipes.

So we’ll accept just about any currency. The bond notes were due to be introduced this month but have now been deferred to next month. Maybe it will be added to the list on the bottom of the till slip but I’m willing to be there will be a few zeros too. Oh, I paid in cash. US dollars.

The term Bob note is a reference to the name of the Zimbabwean president – Robert Mugabe. It’s not my creation but has appeared on the social media recently.