Making big money in Zimbabwe
- From: Bill <williamgates@xxxxxxxxxxxxx>
- Date: Thu, 08 May 2008 18:40:57 +0100
From the BBC.
Making big money in Zimbabwe
By Farai Sevenzo Harare
How do people make money in Zimbabwe - a country believed to have the
highest inflation in the world - 165,000%?
The figure is an awesome one by any standards - it means whatever money
people make is losing its value overnight.
So is the capital, Harare, bereft of the rich? Hardly.
Are the streets empty of the latest luxury vehicles that are on display
at the Paris motor show and elsewhere?
No - every new class of Mercedes Benz is negotiating Harare's potholes
What about petrol?
"Those who say there is no fuel in this country," a famous politician
is reputed to have said, "should try and lie down on the roads and see
if they won't get run over."
The lack of international traders, the scarcity of foreign currency to
import basic goods has opened up the markets to anyone with a
calculator and the patience to ride the Zimbabwe dollar and its falling
Like a frontier town 100 years ago, locals have been enriched by the
scarcity of fuel, soap, spare parts, and cosmetics.
From the hawker selling you toothpaste by the traffic lights, to thecommodity broker importing large consignments of wheat for the bakers,
money is available to those who seek it.
George supplies supermarkets with canned beer from Namibia and other
He employs people who employ people, the middle-man charges for his
introductions and his couriers, the money is calculated by the fortunes
of the American greenback, transferred to the parallel market value,
and trillions are then paid to those who have crossed the borders to
supply the individual and the markets.
Clifford Mugadza has been running his own business for a while, he is a
commodity broker and supplies local industries with materials from as
far afield as South Africa, Europe and the Far East.
The thing one notices at once about Mr Mugadza is his immaculate sense
of style - hand made shoes, monographed shirts bearing his initials or
He deals with tailors who fly over from Hong Kong for his sartorial
I ask him if he's a dollar millionaire, in the American sense of the
"No I'm not, but there are plenty about. Fuel and its supply has
created many dollar millionaires."
And what is the business environment like for him? "It's like
everywhere else, but timing is the key thing. With the Zimbabwe dollar
in freefall, if someone pays you late, then you may have to start all
But it is cash itself that is the source of much wealth.
In the last three weeks, the Zimbabwe dollar has gone from 45m or so to
the US$, to around 120m.
Those who invested in buying the greenback three weeks ago have nearly
tripled their investment.
Of course, it goes without saying that this activity is illegal, but
the US dollar economy is amongst us to stay.
Everybody knows that the Fourth Street Bus Terminal, with long-haul
journeys to Johannesburg, Lusaka and Gaborone starting from there, is
the hub of foreign currency deals.
The Reserve Bank is reputed to buy from the streets too, so we can pay
South Africa and Mozambique for our electricity, so travellers can
afford the restrictive visa fees to South Africa and beyond.
M is 24 years old and has been dealing in foreign currency for the last
two years. I ask him how he makes his money.
"I make my money on the black market rate. They are many of us who
stand on the corner of Nelson Mandela and Fifth Avenue, with specific
instructions from our buyers to buy at a certain rate, say Z$120
million; we buy at Z$110m or Z$100m. We make our money on the
And how much cash does he get from his buyers?
"Businessmen who want to import fuel, agents of the Reserve Bank can
leave me with Z$200bn a day and simply say: 'I want to raise US$5,000.'
And I see if I can find that for them by buying from lots of different
people until the money is raised."
But this middle-man stuff is not the only source of funds.
In the last eight years, Zimbabwe has seen a new crop of farmers who
have been getting a bad ride from the press for their ineptitude at
feeding the nation.
The controlled prices of maize meant that many of them have gone into
the more lucrative horticultural businesses - selling Valentine's Day
flowers to international supermarkets.
Those with large gaming concessions on their new stretches of land can
charge up to US$10,000 to idle Americans who have a fantasy about
shooting wild animals.
New stocks of diamonds in eastern Zimbabwe created their own
millionaires, and mining rights owned by Zimbabweans should mean a
steady flow of riches into the country's coffers.
But the Governor of the Reserve Bank, Gideon Gono, has been fighting
the illegal exports of Zimbabwe's minerals for some time.
The gold panner will sell to the man with ready cash, he smuggles the
stuff to South Africa and tops up his foreign currency account in
another city, another country, and another economy.
The rich are not paying their dues, the scarred and raped earth around
new mining places attest to the frontier-style gold and diamond rush
which has been robbing the state of its share.
Moreover, the evidence of new wealth is all around us. Beverly
Hills-style mansions are spouting up, with no shortages of cement or
Italian marble for bathrooms.
And if the immigration department were to release the figures, we would
learn that the Lebanese have been arriving, that aid workers, whose
time is up, are still among us, their children paying billions per term
because there is no better place to raise children.
But these are at the top of the ladder.
The workers are scrounging on a meal a day and walking to work, the
civil servants are resorting to selling muffins at receptions.
The money is there, but it will take some time to trickle down.