Zim economy is about to implode
MUGABE BLAMES ‘SABOTEURS’
Driving to work last week, Dennis Zhemi found his usually busy neighbourhood petrol garage in the Zimbabwean capital Harare deserted and an attendant signalling “no fuel”.
For Zhemi, it was a worrying sign that Zimbabwe’s chronic economic collapse could be heading for another vicious downwards spiral of basic shortages, hyperinflation and social chaos.
Zhemi’s heart sank as he drove on, hoping to refuel at the next station, but at least 40 other cars were queueing.
“Immediately, I was reminded of 2008 when we slept in fuel queues and I prayed silently that we don’t return to those days,” the 43-year-old human resources consultant said.
He left his car at the garage as he did not have enough fuel to reach his office, and caught a bus to work.
A decade ago, hyperinflation in Zimbabwe wiped out personal savings, left shops empty and made it all but impossible to buy a tank of petrol or daily groceries.
Inflation peaked at 500 billion percent before the national currency was abandoned in a favour of the US dollar – and the economy never recovered.
Fears of a repeat of those desperate days have grown in recent weeks in Zimbabwe and panic buying has seen prices rocket.
The stockpiling has been driven by a collapse in confidence in the parallel “bond note” currency that was launched by 93-year-old President Robert Mugabe’s government nearly a year ago.
Bond notes dispersed by banks and ATMs are in theory worth the same as the US dollar, but consumers worry the currency could be rendered worthless like the old Zimbabwe dollar that was scrapped in 2009.
“We are already witnessing shortages of basic commodities,” Peter Mutasa, president of the Zimbabwe Congress of Trade Unions, said.
“The situation has been triggered by lack of confidence in the bond notes. We are being driven to barter for goods as there is no hard currency in the banks.”
Currency traders who gather near the foreign bus terminal in Harare now offer to exchange $1 (R13.50) or $1.37 bond notes – an illegal transaction that underlines the bond note’s weakness.
For noncash bank transfers, the traders offer to pay $1.50 in bond notes for each US dollar, reporters witnessed.
Like many shops in Zimbabwe, one small supermarket in Harare visited by AFP offers several different prices for goods – an illegal but common practice.
A 175g bar of Protex soap costs $1, but $1.30 (R17.50) in bond notes, or if you pay by swipe card.
A two-litre bottle of Pure Drop cooking oil sells for $3.20, but its price has jumped suddenly to $4.50 in bond notes and $5, or sometimes even $7 when paying by card.
Mugabe, whose land policies are widely blamed for Zimbabwe’s economic collapse since 2000, this week railed against currency “saboteurs”.
Further economic breakdown could reignite street protests that shook Mugabe’s regime last year – AFP