Debbie DeVoe, CRS’ regional information officer for eastern and southern Africa, is visiting projects in Zimbabwe.
Until the beginning of 2009, every Zimbabwean was a trillionaire. The largest denomination of 10 trillion Zimbabwean dollars was worth about US$3, with one trillion Zimbabwean dollars worth about 30 cents. But these millions and trillions made no difference.
Inflation of more than 230 million percent a year coupled with controlled government pricing made it impossible for shop owners to make a profit. As a result, most shops went out of business years ago. The few that stayed open had almost nothing on their shelves to sell. It wasn’t that Zimbabweans didn’t have money to buy bread. There simply wasn’t any available to buy—at least legally with Zim dollars. This was also the case for gas and other supplies needed to implement and support our programs, greatly hampering service delivery.
This January, Zimbabwe shifted to a multi-currency system led by U.S. dollars, with South African rand, British pounds, and Botswana pula also being widely accepted. I walked into a supermarket in the capital of Harare and was stunned by the mass of products now being sold. Shelves are packed with vegetables, deli products, toiletries and multiple varieties of bread. Pretty much anything I could have wanted I could have bought. This abundance was also available in towns much further away.
The problem for Zimbabweans now is finding the U.S. dollars needed to buy these products. The fortunate 10 percent employed here receive their salaries in foreign currency. But scant government coffers mean that civil servants are receiving monthly allowances of just $100 and not their full salaries. And for the millions of rural farmers who don’t receive salaries, it is nearly impossible to find buyers able to pay dollars for their crops. In any case, after many difficult years, a large number of these farmers simply don’t have the seeds and fertilizers needed to grow a good harvest.
In addition, because people are just learning the value of the U.S. dollar, many products are overpriced. For example, before “dollarization,” it cost the equivalent of about $1 to send a high school student to a rural government school for one term, and even less for a primary school student. After dollarization, the fee for each student was set at $20 per primary student and $100 per secondary student—exorbitant amounts only a few could afford. Now it has been lowered to $5 per term for each primary student and $10 for each secondary student—more affordable prices but still much higher than before.
U.S. coins are also unavailable in Zimbabwe. At times, change is given using coins from South Africa, but these aren’t widely available. Most often, customers are given a credit slip or the customer is encouraged to take a small packet of gum or cookies to make up the difference—or to go back into the store to find another item to round off the total.
Overall, people I talked with are pleased that dollarization has stabilized prices but are anxious for prices to shake out to better reflect the true value of goods. They also need jobs that pay in foreign currency. This will increase access to U.S. dollars and South African rand and—most importantly—enable Zimbabweans to once again make a living.
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