Zimbabwe’s currency craziness disadvantaging foreign VISA, MasterCard card holders

With the holiday season having come and gone, the only thing that’s left for most of us to do is to lick our financial wounds. There is something about Christmas that makes us forget that January comes next, with its array of school fees, bills and other commitments. January disease, as they cleverly call it, is an affliction that is brought about by our own folly.

When we meet Kumusha, in the rural areas, or Kwa Mereki, we spent as if there is no tomorrow. Yet, says my brother down there in Botswana; that is not an affliction at all. The people from back home in Buhera are scattered all over the place; most in South Africa, some in Botswana, others in Mozambique, a lot in the United Kingdom, quite a few in the United States and some even in, of all places, Djibouti. It is, therefore, only natural that they make merry and forget everything else whenever we meet.

Currency problems in Zimbabwe

Did I mention that some, yours truly included, are firmly implanted in the soil of the motherland? Although I have been to South Africa, the place scares me. So much crime and so much disregard for human life.

In any case, my stay is not because of some notion of patriotism. Although I am patriotic enough, I do have a certain sideshow that keeps me going in this land of milk and Ngoto (traditional beer).

This website and some freelancing work on the internet have kept me going, where others have long since given up. Yes, you can make a living over the internet, for those who are wondering.

Strange Times

Strange winds have, over the past year or so, been blowing across our land. This has put my little venture in peril.

The currency craziness that is currently being witnessed across the country’s financial system has, for those who are not in the know, one product or service being charged three different prices, depending on whether one is using the Bond, cash US Dollars or virtual US Dollars.

The virtual US Dollars are all in the bank, and although they buy Kwa Mohammed Musa and almost everywhere else, they invite a premium, for the simple reason that people have latched on to the fact that they are not really real dollars.

The Trouble

The trouble for me and other Zimbabwean based Freelancers is that the money that we make over the internet is deposited into our Payoneer MasterCard cards. These cards can be used to buy Kwa OK and in most other shops.

The real issue is that the money that is in the foreign issued cards is real, hard foreign currency, while the money that is in Zimbabwean bank cards is, well, lets just leave it at that.

Price Increases

Things were fine when a 2KG packet of chicken cost $6 in the shops. I would happily use my card all over the place, thus contributing my small share to the development of the country.

See, the one thing that’s in short supply in Zimbabwe is real foreign currency in the country’s nostro accounts, and exporters of all shapes and sizes; from Gold panners, Makorokoza, to tobacco growers, are treated like kings.

Not so, freelancers. Things would have been great had I been able to go to some bank and withdraw hard currency.

As it is, the price of a $2kg packet of chicken cuts has risen to $10 which has contributed immensely to the erosion of my buying power. Now, I complain a little about the high price when using my local bank card.

Daylight Robbery

However, when using the Payoneer MasterCard card, the whole thing becomes daylight robbery. I suspect when the brothers and sisters came from South Africa and Djibouti, they must have felt as I do today.

Their bank cards, which contained hard earned hard currency, could only buy so few goods, comparatively speaking, that it bordered on the criminal.

The Solution

For me, there is no immediate solution to this problem. Perhaps the RBZ could make it such that holders of foreign VISA cards are able to withdraw their hard currency in hard currency from some bank.

Otherwise, the only solution from a patriotic point of view (patriotic to my stomach), is for me to go to South Africa or Botswana and withdraw my money in Rands or Pula. Then I could come back here with the cash and get a fair deal at RoadPort.

But then I would be contributing to the replenishing of nostro accounts in those foreign countries. The financial situation in Zimbabwe, it has to be said, has become something of an intractable cul-de-sac.

Dodging landmines

There is a bother in Iraq, who claims to dodge landmines everyday while working at some oilfield. Although that is probably an exaggeration, it’s a fact that he used to bank his money with Barclays Bank here in Zimbabwe.

Unfortunately, the financial crisis meant that he could now only withdraw $20 a day on a good day, most of which was actually in the form of bond coins.

That’s was hardly practical, and after years of contributing to the development of the country by dodging bullets in a far off land, he was forced to open a bank account in Botswana, or is it South Africa?

The result is that thousands of potential earnings for the country are being lost every month. Now, consider the fact that there are millions of Zimbabweans in Iraq, Somalia and some other troubled countries, and you will realize that, again, our nostro accounts are losing out on millions in potential earnings.

The Other Solution

For the country, the only solution appears to be to drastically cut down on the printing of virtual dollars. That can only be possible if the government stops spending like there is no tomorrow. While the new dispensation promises that, it has not really bitten the bullet as far as spending cuts are concerned.

Salary Cuts

Once the government has shown that it is willing to make the necessary spending cuts, then it can begin talking about cutting salaries for civil servants and other employees to sustainable levels. The issue here is that there is just too much virtual currency floating around, and the government is, each month, forced to print more of this money to fulfil its salary obligations.

Without spending cuts and fiscal discipline, exporters will find that exporting will no longer be worth their while, because a kilogram of meat now costs $10 from around $5 a few months ago. And like the patriots that they are, they will withdraw their money in foreign lands, or, where that is not possible, they will simply stop doing business in the country.