News | Analysis of Capitalism - Globalization - Southern Africa Zimbabwe’s Currency Madness

“Blessings” for the money changer: the reintroduction of the Zimbabwean dollar was supposed to restore “normalcy” to the economy, but positive results remain to be seen.

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CC BY-NC-SA 2.0, Kai McGowan, USAID

Loud music, unmarked fancy cars, and bottles of high-end liquor characterize a weekend night on Harare’s version of Wall Street. Trendy clothing, shoes, and the latest gadgets are also a norm at this square, known to many as Ximex Mall. Prior to 2013 a shopping mall, which was later razed to the ground, stood on this square that is now a parking lot. But similar to then, illegal trade has remained the vicinity’s order of the day.

Out of sight but certainly not out of mind, informal traders—mostly black market money changers—have remained with the “Ximex” mentality engraved in their minds, and to them this space is an oasis that continues to discharge life in the midst of economic aridity.

“This is our hunting ground and exactly where all the money is”, says Blessing Chamunorwa (not his real name) while grabbing a bunch of the local $5 bond notes from a sling bag as if to substantiate his point. The 27-year-old’s line of trade is money exchange deals conducted with the frequent human traffic here and currently earning him more than an average formally employed professional. “My profit on very good days can get up to as much as $50, but on average it can be $25 per day”, he says.

Exchanging foreign currency for local money currently fetches more on the black market than what is offered in the official interbank system. On the other hand, those interested in transactions out of the country like buying elusive medication or spare motor parts have to bear the punitive costs charged by these dealers when buying foreign currency, as it has become nearly impossible to get it at the banks, who are also short on it. This is what makes this business relevant and lucrative. “We are helping solve the problem in some way”, claims Chamunorwa.

This is one of many illegal ways Zimbabwe’s general population, largely consisting of youth, is staying economically active at a time when less than ten percent are said to be in formal employment and many more wallow in abject destitution, living below the poverty line. Some operate from other dotted spots within the Central Business District but most can be seen milling around the Ximex area where they grippingly mix work and pleasure.

Judging from Chamunorwa’s daily earnings, people in this business can pocket up to four times more per month than what the average government employee earns. “Someone like me is able to employ a number of them (government workers) if I wanted to, because I can spend more than what they earn on drinks in a single night out”, he boasts.

Apart from his choice of words, the marketing graduate’s appearance spells opulence in the midst of a largely impoverished nation settling for crumbs as a main meal each day. Chamunorwa is not shy to flaunt the benefits of his “hustle” regardless of the fact that it has played a significant role in bringing the country’s economy to its knees. Zimbabwe’s economy is virtually run here, in the street, and when this market sneezes the entire financial markets catch a cold.

Of late, the continued loss of value for the Zimbabwe dollar (rebranded from bond notes to RTGS dollars earlier this year) that is now the sole currency for local transactions has rendered most workers’ wages worthless.

Whenever the US dollar, which was the main currency during the multicurrency system existing since 2009, gains in value against the landlocked country’s parallel currency introduced in 2016, prices of goods and services soar beyond the reach of many. Salaries have largely remained stagnant, prompting the Zimbabwe Congress of Trade Unions (ZCTU) to lobby for all workers to be remunerated in US dollars again. President Mnangagwa’s response to this is that the country “does not print this money” and therefore cannot assist as expected.

But this baffling status quo is good for Chamunorwa’s business, as most people cash in their “banned” US dollar savings to get local money for some formal transactions. Easy as it may seem, the risks of undertaking this business are immense and entail arrests with a possible minimum conviction of ten years or robbery, although the former is usually dealt with through payment of bribes.

“The police and robbers are the biggest risk we face in our business, and so we have to stick together or be discreet most of the time”, he says. However, business would still go on as usual under new faces if Chamunorwa and his peers were all arrested and wiped off the street today, because they are pawns in a corrupt pond where inconspicuous big sharks swim.

“We get the information from those we think are closer to whoever determines the rate and we just deal with what is there”, he explains when questioned about who decides the parallel market exchange rates for the day. “In most cases it is business owners or a powerful public figure somewhere.”

Apparently some of these individuals are usually stationed in parked cars not so far from Ximex, while stashing hordes of new cash in their boots which are used to replenish the supply when the street guys run out. Interestingly, they too are mere middlemen to individuals in even darker suits paradoxically said to be business moguls, high-ranking government officials, or those closely linked to them.

The ruling ZANU-PF party’s youth department recently stunned the nation when they released a list of names of individuals in both the government and corporate hierarchy deemed to be fuelling the foreign currency cartels. The list of “economic saboteurs”, which also contained children of currently serving ministers and high-ranking politicians, also accused Reserve Bank of Zimbabwe governor John Mangudya of involvement in the dirty business.

It remains to be seen if any action will be taken to rein in the corruption, or if this is another of the many rhetorical gimmicks now synonymous with Mnangagwa’s administration since usurping power from the tyrannical Robert Mugabe in November 2017.

Chamunorwa would “not be bothered in any case”, because he is “prepared to work in an office” if the economy is restored. His current work, he says, can be viewed from two perspectives: making an honest living off the prevailing currency madness initiated by bad governance, or being a catalyst to the problem that has caused the bankruptcy and suffering of millions. Both views could be correct, but matter little to a money changer in the quest to secure his next meal. “It’s surviving; it does not feel good or bad, but it is just how things are working for us at the moment.”

Kennedy Nyavaya is a journalist based in Zimbabwe.