Nickel and dime Zimbabwe
With a grim smile on her face the till operator took out the cellphone tucked under her blouse and asked: “In what currency are you paying?”
I held up several $20 notes, to which she responded: “The rate is seven.”
I pay up, silently grumbling about unstable exchange rates. In recent weeks the effects of a strong South African rand against the US dollar have been felt in Zimbabwe, upsetting the country’s multi-currency system.
The rand is pegged at R6,90 to the greenback, a far cry from R10 in February last year, when Zimbabwe abandoned the Zimdollar in favour of foreign currency.
The stronger rand—it has gained 30% against the dollar this year—has driven up the price of groceries and imports from South Africa. Zimbabweans use the US dollar in 90% of transactions.
Recently the Zimbabwe National Statistical Agency announced that year-on-year inflation in September had peaked at 4,4%, from 3,6% in August, on the back of a strong rand.
Public servants, already reeling from a salary freeze and earning $150 a month, are particularly feeling the pinch.
Rural teacher Steven Ngwabi (28) told the Mail & Guardian: “My salary isn’t enough to cover my costs and these new rates mean I have even less money. But what can we do?”
Ronald Chiyangwa (26) compared the salary erosion to Zimbabwe’s hyper-inflationary period. “We might as well bring back the Zimdollar, because this foreign currency thing is not working,” he said.
Fearing economic destabilisation, the authorities are not contemplating the return of the local currency. Nor do they seem committed to adopting a single currency or joining the rand monetary area.
Expectations are high that Finance Minister Tendai Biti will address the issue of currency fluctuations in next month’s budget speech.