The Zimbabwe economy beetle

1 12 2018

The economy beetle

The Zimbabwe economy and this beetle have more in common than one might think.

They are both lying flat on their back.  Fuel queues have returned with a vengeance just 2 weeks after the last episode faded away and we breathe a sigh of relief. It turned out to be a temporary respite. Talking to a customer this morning he said that he’d pulled into a local filling station to be told that they were only accepting real US dollars (our local version is now known as “bond”) and that would be as international credit cards not cash, thank you.

The government insists that the local bond and the US dollar are still equal value but anyone, or should I say  everyone, knows that it is around 3:1. In a curious twist the local tax/revenue authority has announced that all taxes on revenue earned in US dollars must be paid in the same – even thought they are both officially valued the same. The accounting sector is flummoxed.

Neither has any idea how to get back on their feet.  President ED Mnangagwa’s international charm offensive prior to the recent general election was “Zimbabwe is open for business”. It drew a lot of interest as Zimbabwe is resource rich and potentially attractive to investors – an obvious way to get the economy going again. That all crashed in a bloody mess this past August when soldiers opened fire on protestors at a rally called by the opposition MDC Alliance to give vent at the blatantly fiddled results.

Both are hoping someone will be kind enough to help.  The beetle is pathetically waving its legs in the air, trying to get some purchase on the cement –  it has little chance of success. I don’t see any solution for the Zimbabwe economy either. The finance minister, Mthuli Ncube, has the dubious distinction of being in charge of the local Barbican Bank which collapsed a few years ago. He is also being advised by local economist Eddie Cross. Cross was a vocal supporter of the opposition MDC but now is a ruling party apologist. I have yet to hear him speak any sense. Back in 2016 when the local bond currency (so called because it was said by the government to be backed by a bond from the Afrexim Bank in Egypt) was introduced he predicted that the supermarket shelves would be empty within 2 weeks. They are not.

Everything is very expensive but Marianne (my wife) found Belgian butter on Tuesday at less the the price of local butter and half the price of a South African brand. At the time the Afrexim Bank would not provide details on the purported bond which was later discovered to be non-existent. The currency is based on an illusion. No-one can fathom why it still has any value at all. Perhaps the government is hoping it will collapse and then they won’t have to bother with it. Those people lucky enough to have an essential business with little or no competition are managing to successfully demand payment in US dollars and will likely survive. They are also taking the opportunity for a bit of price gouging.

My business is not one of these. I have a lot of competitors who are charging less in bond currency than I was charging in real US dollars 8 years ago. Given that fertilizer and chemical costs have more than doubled in the last 2 months I have no idea how they are going to replace them. I have had to slash my prices to compete and hopefully out-last them. I have enough raw materials and inputs for another 6 months or so – it’s going to be a nerve wracking process.

I picked up the beetle and put it on a patch of lawn where it quickly scuttled off. The Zimbabwe economy will not be so lucky.

 

 

 

 





The curse of good health

13 08 2015

My uncle turns 93 or maybe it’s 92 this year. Mentally he’s very sharp but physically he’s frail. Last year he decided he’d had enough of life and decided to end it on his terms. He failed and now he’s condemned to a old age home in rural England, waiting to serve his time amongst the old, frail and demented.

I went to visit him the week before last whilst on an infrequent trip to a family gathering and the wedding of a young friend. We don’t get together much; my brother lives in the UK, my sister in north-western USA and I’m in Zimbabwe. It was my brother’s 60th birthday last weekend and I’d said to my sister-in-law that I’d come over for it if he promised to have a party.

wedding cake

Lucy and Will’s big day

It was pure luck that Lucy was getting married the weekend before and well, I probably won’t see Ant again.

The UK is unlike Zimbabwe in many ways;
Clean
Organised
Good roads
Horrendously heavy traffic but a noticeable absence of bad drivers (ok so it wasn’t a dangerous breach but it’s still a red light!)
Crowded
Green (Zim is very dry right now
In short – First World!

So whilst in London we did the tourist thing, the Science Museum to get my dose of science.

tower bridge

Tower Bridge on the Thames

Dining hall 2

Dining hall at the old Naval Academy.

Cutty Sark

The Cutty Sark

A Thames river cruise to the Cutty Sark and checked out the amazing dining hall at the old Naval Academy. Zimbabwe does not have recorded history going  back that far and we don’t have a navy either. We do however have better weather than the UK though on this trip it wasn’t bad, choosing to rain just when I chose to do some serious photography.

Getting back to Harare we encountered some decidedly Third World air service with all the luggage being left in Johannesburg because there was no Jet A1 fuel in Harare. Well, that was the official story. It is certainly symptomatic of the state of the economy here and meant that we had to go back to the airport the next day to collect our luggage (don’t they deliver it elsewhere?). So my Saturday visit to the Gallery Delta had to wait a week.

The current exhibition there is From Line to Form where Wallen Mapondera’s string picture Everyone is a Vendor neatly caught the dire state of the economy; we just don’t produce much anymore.

Everyone is a vendor

Everyone is a vendor

Not at all like the market we visited in the curiously named Bury St Edmond where it was very hip to buy local produce. Not sure if these tomatoes were local but they are certainly better quality than the ones we get here!

Good quality produce

Good quality produce

When I left Ant I shook his hand. His grip was firm by any standard. He just laughed when I mentioned it. Handshake strength is one of the criteria used to asses old people’s health. I winced inwardly at the irony of it.





Hope on Heroes’ Day

13 08 2012

It’s a public holiday today; Heroes’ Day when we are expected to remember the heroes who fought for Zimbabwe (against me) and are buried in Heroes’ Acre. From what I could see going into town precious few of Harare’s residents were giving the afore-mentioned heroes much thought as they participated in football clinics or just generally relaxed. It’s not that surprising – most Zimbabweans are too young to remember the war. I was on my way to a French lesson with Shelton. Half the way through there was a roar and we looked up to see a formation of 4 training jets go over on their way to the National Stadium where Bob was addressing the crowds. Shelton cynically commented (in French) that the crowds where mostly there to see the high profile football match after the ceremony.

It is true that we have little left to celebrate in Zimbabwe. The economy is in tatters and shows little sign of rejuvenation. We have extremely bad press worldwide and tourism is moribund despite the mostly friendly population and great weather. Then on the way back home I noticed a bundle of fibre optic cable casings lying on a manhole cover and thought; no, there IS still some hope! Somebody is still investing in Zimbabwe regardless of the apparently dismal future. Actually fibre optic cables have been going in all around town for at least the last 18 months but at least they are continuingto be put in.

Tech spaghetti too – I got some funny looks from passers by whilst photographing a pile of piping!

Tech Spaghetti – fibre optic cable casings





The economic perspective

31 01 2012

It was not an auspicious start.
“What are you looking for?” asked the attendant in the very dim interior of CBZ bank in Borrowdale.
“The withdrawal slips” I replied.
“Here you are” he said, handing me a photocopy of the usual slip.
I wondered if they were photocopied because that was the only way they could keep up with demand or maybe there was a more prosaic reason. I filled it in to draw the estimated $3000 that I needed to buy seed and various other inputs for the remainder of the month and moved to the queue. There were no lights and the TV (yes, Zimbabwe banks have a TV on to entertain those in the queues) kept turning on and off and then gave up. A fan at the other end of the counter put up a valiant attempt and then gave up too. The lights remained off.

“Hello Mr Roberts” the teller greeted me in her usual cheery fashion. I looked over at the blank computer monitor and gave her the withdrawal slip.
“Oh, we are only giving out $1000 per person” she said on seeing the amount. “You will have to speak to the manager if you want more”.

I exchanged the standard “how are you” greetings with the manager and to my surprise she said “Actually I am not happy, the generator has packed up” and proceeded to phone around to get someone to come and help. She also told me that I could only draw $1000 a day. I applied a bit of pressure and made no move to leave her office. She tried another tactic: “By this weekend you will be able to draw as much as you like”. I said yes, but I had to get inputs NOW! She eventually gave up and I handed over the cash withdrawal slip and left her office.

Now the stock market listings may not be everyone’s idea of light entertainment but most people have not seen the ZSE (Zimbabwe Stock Exchange) listings. I turned to the back page of The Herald business section on the bank manager’s desk. I would think most countries list share prices in “whole” currency units but in Zimbabwe we list them in US cents! All of 4 companies were listed as trading shares at over $1 and though some were not trading at all (not sure why) some were trading at a lot less than 1c. Gulliver 0.01c, Celsys 0.04c, Cairns Foods 0.07c. The vast majority showed negative growth with Gulliver – once a top construction company – nearly leading the pack at -63% for this month (that has to take some doing!) and Ariston at the other end of the spectrum up 56% for the month with a share price at around 1.30c.

“I guess this puts the economy in perspective” I said to the manager as she came back into her office with my money. She just shook her head.





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.