Mbare takes hit from currency switch

Astrong stench unsettled my nerves as I weaved my way through rickety push carts and shouting touts at Harare’s Mbare market. The fresh produce market is Zimbabwe’s bastion of informal trade, turning over up to US$1 million a day or US$30 million a month, according to some estimates.

This is much bigger than a half year’s revenue for many of the Zimbabwe Stock Exchange’s counters - which demonstrates Mbare’s growing power and influence in the direction that the country’s mostly informalised economy is taking.

The good thing was, this was not stench from excreta or anything dangerous.

It was being emitted by rotting fruits and vegetables– a confirmation of hard work in a country whose economy revolves around a multibillion agricultural sector.

With formal markets in perpetual turmoil, villagers from across provinces converge at Mbare to sell their produce, helping themselves fend off the pain of prolonged economic troubles.

Yet the smell was also a source of regret.

It was a reminder of a bullish period that gripped Mbare weeks ahead of bold monetary policy changes on April 5, when the Reserve Bank of Zimbabwe (RBZ) phased out the Zimbabwe dollar for the second time in 15 years.

The policy shift is set to impact very badly on the vulnerable of Zimbabwe’s society — in particular women and children.

The shock move sent markets into tailspins.

But given the sheer size of the Mbare agricultural market, it looked like business was brisk.

Touts were wrestling for passengers, informal traders were rummaging through stakes of waste to salvage plastic containers, and black market currency dealers sat in their usual strategic positions.

The sobering reality of a market battling to fend off heavy pressures came to the fore after traders reported daily writedowns had been heavy since the RBZ ditched bond notes.

They were replaced with the Zimbabwe Gold (ZiG), the new currency they blame for their current peril.

The stunning revelations ended with depressing interviews in which traders chronicled how the policy shift had pushed them to the brink.

Truth Diggers’ visit to Mbare was to find out how the latest government monetary policy shift had impacted business at the biggest and most vibrant single market in the country.

Truth Diggers unit.

ZiG’s introduction has precipitated ‘confusion and frustration’.

Physical notes will come into circulation on Tuesday, but electronic transactions are already taking place.

It has been the genesis of their problems.

And for them, Mbare is in crisis.

"Business is down,” said a woman, who identified herself as Mai Titi, a 34-year-old mother of three.

She said her family relies on income from the market. “We have produce starting from US$0,50 going up,” Mai Titi said. “But without a physical currency, I cannot give someone change.

“We are no longer accepting bond notes. Even customers are no longer accepting them. “Everyone is waiting for the ZiG.

“Some customers end up walking away in frustration. "We have lost a lot of clients because of this currency issue. "There is no change and we are confused and frustrated.” Weeks before bond notes crashed, authorities had been livid as they accused black market currency dealers of abating the erosion of a currency that surrendered over 700% of its value last year.

The Zimbabwe dollar had been heavily battered during the first quarter, before under fire authorities moved to combat a potential catastrophe.

Many said the catastrophic black market rates were set at Mbare.

This is why when the new currency was launched, a crackdown ensued, netting over 60 alleged dealers, in efforts by the government to defend the ZiG.

Unemployed, some currency traders have vowed to return to their positions once the new notes arrive.

It is a defiance that continues to unsettle authorities. Traders said they relied on cash transactions for daily business.

With ZiG notes and coins only coming into circulation this Tuesday, it has been difficult.

Mbare traders were among the first to reject bond notes when the ZiG was announced. At the same time, the new currency was not yet in circulation.

Traders said transactions had stalled, hammering profits. Touts and kombi conductors working in Mbare’s commuter omnibuses shared similar concerns.

“Our passenger numbers have declined,” one driver said. “I used to take home about US$140 per day. Now, if I am lucky, I take home US$30,” the driver said.

He shared exciting innovations that have emerged to address the challenges.

“The fare has always been about US0,50 per person, but because of challenges with change, we have resorted to buying groceries and snacks like chips and biscuits to use as change,” he said. is Alpha Media’s investigative journalism

“Instead of giving them the rejected bond notes, those who are comfortable get biscuits, chips, spaghetti and other things as change.

“If we don’t agree, they walk away without paying and we make a loss. Generally, business is down.”

It is an innovation being shared by formal and informal markets across the cities.

In a small community in Norton, reports say residents have cut papers, which they have agreed with retailers to act as change.

They can be redeemed when one returns to make another purchase.

Retail giant, Spar, was among the first to come up with such innovation during the bond notes era, when change ran out.

"We rely on cash to buy fuel and meet our daily needs," the driver said. "The delay in issuing physical notes is crippling our operations."

There has already been debate on whether ZiG will buy fuel. John Mushayavanhu, the central bank governor, said for now; he was focussing on building up confidence. Everything else will fall into place, he said.

Leeroy, a rank marshal, said the currency crisis was huge.

Tawona Zvinyoka from Epworth, another rank marshal, said life was now tough.

“We now live from hand to mouth,” he said. “I am failing to provide for my family because customers don't want to pay US$1 for something we used to charge US$0,50.

“We had to raise prices to avoid change issues, but the clients are resisting.

“I used to make US$6 per day. Now, if I make a mere US$3, I am considered to have worked that day.

“What is painful is that all the money ends up being spent on transport, since there is no change.

“You end up paying US$1, or I have to wait for my colleague so that the two of us can pay US$1. "It is a huge inconvenience,” Chinyoka said.

A lady, who trades in scraps said she has been out of business for a while, a situation that was shared by black market currency traders.

Their pipe was switched off when markets began rejecting bond notes.

They, too, hope fortunes will return when the ZiG arrives.

“I buy scrap metal from US$0,50 going up. "Someone’s scrap can be weighed and be worth US$0,80, the issue starts when the scrap has cents,” she said.

“No one is taking bond notes as payment or change so at the end of the day the customers prefer going elsewhere.

Rosemary Mpofu, chief executive officer at the Consumer Council of Zimbabwe, laid out the headwinds gripping a market that authorities are so desperately trying to lift out of a prolonged quagmire.

“Despite the positives noted in the introduction of the new currency, the release of the new notes and coins has lagged way behind,” Mpofu said.

“This has created some challenges, both to business and consumers in terms of transacting.

“Apparently, a number of suppliers mainly in small retail outlets have been refusing to take any currency other than the US dollar despite the government having pronounced that the old ZWL will continue in circulation until the release of the new notes and coins expected by the end of April 2024.

*Read full article on www.standard.co.zw