Pandora’s lunchbox: How school fees embody Zim’s currency system chaos

MARY Mlambo’s daughters were looking forward to the reopening of Zimbabwe’s schools second-term in early May 2023. Clad in their winter uniforms — trousers instead of the usual skirts or dresses — and bundled up in blazers, jerseys and scarves, the two girls resumed classes at their respective schools.

Having bought all required reading and writing materials, Mlambo, a government employee, was comfortable knowing the only thing she was owing was school fees.

Mlambo always paid fees for her children within a few days of schools reopening. On her first visit to the school, she was told the point-of-sale machine used for card payments was not working.

“I went home and came back the next day to be told there were network challenges with the banking system,” said Mlambo, who on her third visit encountered the same hurdles.

This time she was advised by a cashier at the office to change her Zimdollars to US dollars and make the payment, “as children whose school fees had not been paid would be sent back home.”

In June 2023, Zimbabwe’s annual inflation rate went up to 175,8% from May’s 86,5%. The inflation rate measures change in the consumer price index, which tracks the costs of a market basket of goods and services. Most Zimbabwean workers are paid in the local currency even though goods and services are largely charged in US dollars.

Some businesses accept local currency, but at black market rates. Fuel stations and small shops, for instance, take US dollars only and usually charge lower prices than supermarkets. Despite a government directive in 2021 to penalise companies charging for their services in US dollars, companies argue that they need the foreign currency to buy stock.

The second-term schools opening exposed the lack of confidence in the local currency with some schools refusing payment made in Zimdollars. Schools were allowed by government to charge fees in US dollars, with an option for parents to pay the Zimdollar equivalent. The insistence by some schools to have fees paid only in US dollars, however, resulted in children being sent back home as many parents could not afford it.

By the third term, the situation improved somewhat for Mlambo after she was allowed to pay half the fees in local currency and the other half in US dollars. But uncertainty still lingers for parents who must contend with unpredictable payment policies.

The matter was raised in Parliament last May, when lawmakers questioned Edgar Moyo, the then deputy minister in the Primary and Secondary Education ministry, on why schools were refusing fees paid in Zimdollars. In his response, Moyo said it was illegal and asked affected parents to contact relevant district school inspectors.

Zimbabwean currency evolution

Zimbabweans continue to feel the effects of the country’s weakening dollar, which drastically lost value against the US dollar in the first half of 2023.

From 1980, the official currency of the country was an earlier version of the Zimdollar that was used till its demonetisation in 2009 due to hyperinflation. Demonetisation is the process of officially removing the legal status of a currency unit. To try to end the ensuing multicurrency system — that relied on the US dollar and South African rand — and stabilise the economy, the government introduced the new Zimdollar in early 2019.

The new Zimdollar was the only official currency in the country up to March 2020 at the start of the coronavirus pandemic, after which foreign currencies were legalised again, with US dollar and Zimdollar being the main currencies in circulation.

With the weakening of the Zimdollar, the US dollar has become the preferred currency. To promote use of the local currency, a two-currency system was adopted in 2022. That April, the central bank introduced the “willing buyer, willing seller” foreign exchange market trading system to establish an official exchange rate. In late October 2023, the government extended the multicurrency tenure to 2030.

Situation for schoolchildren

Mlambo’s school fees were pegged at US$110 for her child in the second class of high school and US$35 for her fourth grader. “We usually pay the fees in the currency you have: US dollars or its Zimdollar equivalent at the official rate,” she said.