By Ray Ndlovu
BULAWAYO — Zimbabweans living in South Africa who have returned home for the festive season, have come face to face with the country’s latest economic downturn.
They were greeted by long queues at banks and found businesses had closed during their absence, putting a damper on the merrymaking.
President Robert Mugabe won elections held in July against archrival Morgan Tsvangirai, the Movement for Democratic Change (MDC-T) leader, and in his new term in office is struggling to prevent what to many looks like an imminent economic collapse.
In a festive season message to his MDC-T supporters Mr Tsvangirai accused Mr Mugabe and his Zanu (PF)-led government of “stealing Christmas” from the people.
A weak rand against the US dollar, at R10.50/$ in Bulawayo, the country’s second-largest city, has eroded the buying power of many who have been unable to keep up with the price fluctuations of dollar-pegged goods.
During hyperinflationary times in 2008, the buying power of the more affluent citizens was unaffected, and one could exchange R100 for millions of Zimbabwean dollars to buy food and drink.
“It’s absolute daylight robbery,” says Portia Ndiweni, who has been living in Johannesburg for the past four years.
“The rates are not the same from shop to shop, there is no standardised system at all which is in place.”
Unlike the southern part of the country, the capital Harare and its hinterland rarely make use of the South African rand and have a fixed exchange rate of R10/$.
Finance Minister Patrick Chinamasa indicated in his budget statement two weeks ago that he would consider introducing more currencies in 2014 into the existing multicurrency basket in use.
Economic observers view this as an attempt to shield the country from the risk of relying on a single currency, especially those of the emerging markets, which have had a bumpy ride this year. The US dollar, the rand and Botswana’s pula are the currencies most traded in Zimbabwe.
“There is food in the shops, but the quality of life is deteriorating and I am not sure what the future holds for this country,” says 24-year-old Nhlanhla Dube. He has ruled out the possibility of returning home, despite not doing very well in South Africa, where he has a minimum-wage job in a Chinese shop.
Eddie Cross, an MDC-T legislator, estimates that nearly three-quarters of the population are now living in poverty since the elections in July.
“Mr Chinamasa has just presented a budget that graphically illustrates the straitjacket he is in and the very limited options available to him…. The banking industry is in a state of collapse with a quarter of all banks facing liquidation and closure with the near total loss of the deposits lodged with them. It is not a pretty sight at all and there is very little to celebrate,” says Mr Cross. Business Day