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.
Zimbabwe Absurdity 
Loadsa funny money
1 02 2017Funny money and the real stuff
Ok, I wasn’t quite truthful, there’s not LOTS of funny money – there’s just more than we’ve had in the past.
Once upon a time there was just Zimbabwe dollars and we got by. Then they crashed, and people were sad, so we got US dollars because that’s how economics works and everyone was happy again. Now there are not so many US dollars (as notes but there’s plenty in accounts which we can’t use to import anything) because lots, really lots, have been stolen.
So when things started to change again the Zimbabwe Reserve Bank in its unfathomable wisdom saw fit to introduce Bond Notes and everyone panicked and withdrew their cash and mobile (phone) cash became king, dominated by one Ecocash who saw fit to charge extortionate fees so banks saw fit to introduce their version of mobile cash. These are debit cards that can be managed on phones and we got a swipe card machine and people were happy again (but only sort of).
Not many bond notes came across my desk and I was happy too (again only sort of). I did get lots of text messages on my cellphone confirming that people had used their cards to pay direct to my bank so I don’t check messages that much and miss the important ones. Now the funny money (top of the pile in the photo) is coming across my desk in much larger quantities as people try to get rid of it, pass the hot potato if you like. The government has decided to tax potatoes, before they can even get hot, and other basic foodstuffs too so everyone is unhappy again. But nobody is going to do anything about it.
Banks have said that if we deposit cash (the real thing in the photo – not the funny money) then we can import stuff to keep going but I haven’t found out if my cash, assuming I have it, is going to be flown to India to buy more raw materials or it’s just a ruse by the Reserve Bank, that in it’s wisdom (again), wants to mop up all the real money for the government to spend on paying employees or, more likely, on itself (which some people might be suspicious of).
It’s not looking good. Not at all.
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Tags: bond notes, Ecocash, RBZ, Zimbabwe dollars
Categories : Social commentary