Each day, Edwin Makotore’s wife and children hit the streets to earn cash so he can pay for the privilege of working.
The 38-year-old father-of-two is the only one in the family with a full-time job, but by the time he has met the soaring cost of travelling to work in a small Harare supermarket, paid out of wages wildly out of step with the 165 000% inflation rate, Makotore is out of pocket.
But with only one-in-five adults in employment, a job is a far more precious commodity than money in Zimbabwe, and Makotore is not going to let it go.
”My wife gives me the money to go to work each day,” he said. ”We can’t afford to send the children to school so they go with her to the streets. She sells some small things, fruit, things like that.
”One day things will get better and then it will be good to have a job. Everyone will want one. It’s like an investment; I pay to keep my job because I will make money out of it one day. Until then someone makes money out of me.”
For now, Makotore is a loser in an economy which is shrinking faster than in any other country. But there are some who are doing well out of hyperinflation.
The winners include those whose mortgages were reduced to less than a single, near-worthless banknote in a matter of months. Among the losers are the elderly, the value of their pensions slashed to nothing.
But the real beneficiaries can be found in Borrowdale Brooke. This upmarket suburb in the north of Harare is a mass of construction sites and newly completed palatial homes. Besides President Robert Mugabe’s own palace, built by the Chinese with a hint of the forbidden city about it, ruling Zanu-PF apparatchiks and generals have set themselves up in homes that none could afford on their official salaries.
Some have become extravagantly rich by manipulating the vast gap between the official and black-market exchange rates to plunder Zimbabwe’s dwindling hard currency, and buy brand new Mercedes Benz cars for $50 (R380) while the country’s manufacturing sector collapses for want of money to produce crucial exports.
The new rich include men such as the Zanu-PF member of Parliament and party powerbroker Philip Chiyanga, who also happens to be one of Mugabe’s cousins. Chiyanga owns a sprawling 30-room mansion in Borrowdale Brooke with three helicopter pads and has been seen driving a Hummer.
The mansions have grown as Zimbabwe’s economy has shrunk by about half over the past decade of crisis. Export earnings have dropped from about $4,56-billion (R35-billion) a year to around $1 487-million (R11,4-million).
The manufacturing sector has halved in size and revenue from the tourist industry, once another big earner, has fallen by 75% over the same period. Many visitors now see Victoria Falls from the Zambian side and those who do cross in to Zimbabwe do not stay as long as they used to.
Over the past week the black-market exchange rate for the Zimbabwe dollar has plummeted against sterling, from about Z$90m to the pound to Z$190m. The largest bank note in the country is worth about 25p (50 US cents). No wonder Zimbabweans call themselves starving billionaires.
The currency has been driven down recently by Zimbabwe’s central bank, which has been turning to the black market in a desperate search for US dollars to pay the bills, not least for electricity from Mozambique.
John Robertson, a highly regarded Zimbabwean economist, said the government had also been plundering hard currency accounts held by businesses to pay off the huge costs of its election campaign, contributing to the spiral of collapse.
”From January, with the election campaign, the government started importing tractors and cars and television sets and all manner of things to give away. That had to be paid for and it was paid for from the foreign currency accounts,” he said.
Any business that exports is obliged to hand over more than 35% of the hard currency it brings back into the country to the government in exchange for Zimbabwe dollars. The rest is held by the central bank and is theoretically available to pay for imports necessary to the business.
But many are finding that they have to wait for up to four months for the money, and some do not receive it at all.
”It got worse and worse,” said Robertson. ”Businesses have incurred debts and they are not paying them. The suppliers, mostly in South Africa, found they can no longer trust people in Zimbabwe to pay, so they’ve stopped supplying.”
That has left some manufacturers unable to produce and export, another blow to the country’s hard currency earnings. Even entirely locally produced commodities such as cotton and tobacco, once big money earners for Zimbabwe, have been hit because they require imported pesticides, fertiliser and fumigants.
Last year the government introduced drastic price cuts and controls to try and curb raging inflation, but the measures proved a miserable failure. Retailers were ordered to slash prices. Buyers surged into the shops to pick up electronic goods and luxury items at a fraction of their value — but when the shelves were empty, products were not restocked.
For a select few all of this is an opportunity. They deal in the official exchange rate of Z$30 000 to the US dollar — meaning they can buy hard currency at one three thousandth of what it costs on the street. Such rates are only available to Zimbabwe’s super elite.
”Only senior people can get that, but those that do make a fortune,” Robertson said. ”They buy dollars at the official exchange rate and then go off and buy a Mercedes in South Africa for what is in reality just a few dollars. They import it, sell it and make a killing.
”These are the same people who are running a lot of the food imports. They take a billion [Zimbabwe] dollars, change it to rand at the official rate and buy in South Africa for next to nothing.”
Some economists trace the start of the economic downturn back to the mass printing of money to pay off war veterans who were threatening Mugabe a decade ago. But Robertson says the most significant blow to the economy was the redistribution of white-owned farms without maintaining productivity.
”Those 4 500 farms were Zimbabwe’s biggest industry,” he said. ”They accounted for 17% of GDP in their own right but more than 50% when you take into account the other industries they were supporting.
”They employed large numbers of people, they accounted for half the export earnings. The farmers were also the biggest users of other industries such as insurance and engineering.”
There is no chance that the land redistribution will be reversed. It has overwhelming support among black Zimbabweans as a policy, if not how it has been handled.
The redistributed farms are now run on feudal lines with Zanu-PF acting as overlord and anyone wanting to stay on the land required to pay suitable political and, in some cases financial, homage. Those who dissent, and that includes overt support for the opposition, are thrown off.
What industry remains is subjected to the ”indigenisation law”. This requires foreign and white-owned public companies to sell or give half of their shares to black Zimbabweans. In the view of some, it is just another form of plunder.
As a result many of the jobs once considered the least desirable are now among the most sought after. There was a time when being a domestic worker was considered close to the bottom of the pile. It was poorly paid and often required women to be away from their families.
But today it is a prized role, as it comes with free accommodation, water, electricity and, crucially, no travel costs.
Robertson wonders how long Zimbabwe’s economy can keep going.
”Everything seems so untenable and so absurd you can’t believe there are people out there trying to keep it on the road. They’re breathing life into a dead horse. You have to admire it I suppose,” he said.
165 000%
The current level of inflation means the income of most Zimbabweans is way out of line with the cost of living
Z$190m
The black-market exchange rate for Zimbabwe dollars to the pound. Last week the rate was Z$90m to the £1
Z$30 000
The amount needed to buy a US dollar under the official exchange rate, only available to the elite
£25
The cost of a Mercedes Benz bought using hard currency from reserves exchanged at the official rate
£750m
The amount Zimbabwe earned from exports last year, which was about a third of the amount a decade ago
35%
The proportion of hard currency from export sales that businesses have to hand over to the government – guardian.co.uk Â