There is a section of Zimbabwe’s beleaguered society that is literally smiling all the way to the bank ahead of Monday’s deadline, under which locals are supposed to have deposited the old currency to pave way for a new set of bearer cheques — and that is the country’s commercial traders.
The looming deadline has provoked panic buying, with people retrieving their last Zim dollars from under the pillow as they feverishly go on an unprecedented shopping spree — come Tuesday the old currency will cease to be legal tender.
The central bank, struggling to keep pace with inflation, was forced to knock off three zeros on the local currency earlier this month to spare computers the nightmare of counting figures in trillions as inflation stormed towards 1 100% two months back.
One of the knock-on effects was that the prices of basic food commodities soared as shops took advantage of the buying frenzy.
Most supermarkets visited by the Mail & Guardian are recording good business. But the boom is coming at a cost. Restive consumers are facing the grim prospect of high prices that are fast eroding their incomes.
The central statistics office reported this week that a family of five now required about Z$68-million (about R4 000) to be classified as poor. Most Zimbabweans earn salaries below R3 500, providing the unfortunate confirmation that the majority of Zimbabweans are now very poor.
”But prices are going up again and it won’t be long before higher denominations are introduced,” says Farayi Dyirakumunda, financial analyst with Interfin Securities. Petrol has gone up by about 100% in just under three months, after central bank boss Gideon Gono devalued the Zim dollar by 60% to Z$250 against the American dollar.
Zimbabweans continue to face price hikes that eat deep into their pockets. While the availability of basic food commodities has slightly improved on the previous year, the United States-based Famine Early Warning Network (Fewsnet) noted in its July report that ”rising cost of living is a likely threat to household food security”.
Economist John Robertson doesn’t rule out humanitarian assistance from aid groups early next year. He noted that despite Fewsnet’s improved harvest figures, this year was ”far from a bumper harvest” and more ”disadvantaged people will need aid” to feed about 40% of the starving population.
”This could be a crisis because we had not provided for this outcome, or alerted aid organisations which need to prepare,” Robertson said.