“Your Governor” never runs out of new solutions

July 26, 2008

BY Sibangani Sibanda

NOW that all the “excitement” of the presidential run-off has subsided, and the oh-so-fleeting glimpse of change in Zimbabwe has flashed past, things have returned to normal and we are back to the grind of trying to put food on table and send children to school so that they have a chance to look for employment in other shores.

But “normal” in Zimbabwe is like no other normal. On the economic front, we have a situation where on March 29, 2008, one American dollar would buy you about three billion Zimbabwe dollars. On June 27, the same American dollar would have bought you twenty billion Zimbabwe dollars and today, it will buy you ninety billion Zimbabwe dollars! Yet, when we watch international news channels, we are told that the American dollar is weakening!

At the same time, we have a central bank governor, who tries to control the country’s money supply by limiting the amounts that individuals and companies can withdraw from their bank accounts each day. Never mind that he is, on the other hand, seriously increasing money supply by simply printing notes! The withdrawal limit today is one hundred billion dollars – which translates to one American dollar and eleven cents. This limit applies to both individuals and companies, so on a daily basis, a company has just over one American dollar to run its operations! That is too mind-boggling for my simple mind, so I will concentrate on individuals.

A mini bus ride to the bank will cost me fifty billion dollars, which I have to borrow, then when I get to the bank, I get my 100 billion, use fifty billion to ride back home and repay my debt – which means that tomorrow, I have to borrow another fifty billion to go back to the bank. Of course I also need bread for the family, which costs one hundred billion on the street (and it is only available on the street) so, I have to borrow for that too, but as everyone is in the same predicament, there are fewer and fewer friends to borrow from. In fact, there are fewer and fewer friends, period!

What I do about buying my other basics like mealie meal (250 billion for ten kilograms which, admittedly will last a few days), vegetables for relish (30 billion per bunch that will feed a small family for one meal) is anybody’s guess. “Luxuries” like onion and tomato do not even come into the picture! Bath and laundry soap, toilet rolls, sugar, salt, candles and many other such items that are optional extras have to wait for the time when Reserve Bank governor Gideon Gono decides to raise our withdrawal limit – by which time inflation will have made sure that the new limit is as meaningless as the old one.

But if you think my problems are bad, think about the really poor who do not even have the one hundred billion to withdraw every day!

The effects of this withdrawals policy can be quite comical in the wider economy. Supermarkets and other retail outlets for instance are not receiving as much cash as normal because their customers do not have the cash. Point of Sale systems have become the thing. However, it means that however many trillions of dollars in sales they make every day, they can only withdraw one hundred billion! But they need cash to assist their staff with transport fares and to pay their suppliers, many of whom insist on cash because of the problems associated with having money in the bank!

But because there is no cash around, businesses are having to accept cheque payments, transfers and other forms of payment that put their money into the dreaded banks. But they are being careful. With inflation estimates being anything from three million to nine million percent (my mathematician friend tells me that there can be no such figures. At which point I tell him that when you are dealing with matters of defending “National Sovereignty”, anything is possible), they are having to “hedge”. In simple language, they charge three or four times the price that they would charge for cash, just so that the value of their sale stays the same.

Enter the National Incomes and Prices (something) Commission (NIPCC) crying foul over profiteering and other dirty words associated with capitalists and imperialists. All manner of goods disappear from the shelves, reappearing shortly afterwards on the black market. Prices sore to new unprecedented levels, “stakeholders” hold meetings and new prices are agreed at slightly lower unprecedented levels. Everybody goes home happy. Except the one hundred billion dollars buys even less!

Governor Gono, always ready with a new and innovative solution will raise the withdrawal limit to, say, one trillion dollars. Bread will probably be costing that much, then.

Imagine what that will do to us. Already, one of the highlights of my day is going into the bank and watching people filling in their withdrawal slips or cheques. Everybody looks like they are talking to themselves as they mouth silently, one, two, three four, five…………., just to make sure they have got the correct number of zeroes! Well, there is not much other humour around!

There is hope, though. The politicians have just settled around the conference table at some secret location outside Pretoria.

Unfortunately their meeting is out of bounds for the press but they must come up with something in less than two weeks now.

I cannot wait!

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Comments

2 Responses to ““Your Governor” never runs out of new solutions”

1

Kelly says:

July 26, 2008 at 4:15 pm

Gono & Mugabe peddled falsehoods to gaulible Zimbabweans that textbook economics does not work because Gono himself is not an economist. What has happened in Zim since 2003 or thereabouts when Gono came into power shows that textbook economics is the answer. I’m not an economists/economics graduate but the little that I know about economics is that EVENTS PROVE THAT TEXTBOOK ECONOMICS is the answer to Zim’s problems. Where you have sanctions or not an economy is any economy, no amount of innovation can do the trick. Gono has failed & if he were someone else he should resign. Alternatively, the MDC has to ensure that in negotiations for a GNU, the finance minister, & governor of RBZ comes from the MDC.
2

Petina Gappah says:

July 27, 2008 at 9:01 pm

This is a superb article, it captures brilliantly the dark comic tragedy that is Zimbabwe. It should be required reading for every ZPF minister, then again, I suspect they long ago lost any abiding sense of shame.