Zimbabwe shops shelves fill up but the country runs out of money

HARARE (IRIN) – The demise of Zimbabwe's local currency, the Zimbabwe dollar, and the reappearance of goods on the recently barren shop shelves is an equation that ensures the status quo: ordinary people are unable to feed themselves.

Foreign currency, whether US dollars, South African rands or Botswana pula, is the price paid for stocked shops, but at the Domboshava shopping centre, a rural outpost about 40km northeast of the capital, Harare, there are few customers.

Tendai Shava moves from shelf to shelf admiring the goods, mostly imported from neighbouring South Africa, holding a soiled R20 note (worth about US$2) as she weighs her options.

"I need to buy cooking oil and sugar but I do not have enough money; I only have enough money to buy sugar or cooking oil. I have no idea where the government thinks we ordinary people in rural areas can get foreign currency, since all goods are now sold using this money from South Africa and America." In the end, she settles on cooking oil and shuffles from the shop.

Next door there is a small store selling a variety of goods, but the two assistants spend their time playing board games. "The use of foreign currencies as legal tender has really affected the local people because they have no access to foreign currency," one of the assistants, Dudzai, told IRIN. "Where does the government expect the villagers to get foreign money when it is battling to pay its own civil servants?"

''The use of foreign currencies as legal tender has really affected the local people because they have no access to foreign currency''

Zimbabwe’s unity government has suspended the use of the local currency for a year, but its death knell was sounded long before with an inflation rate estimated at trillions of percent ensuring its demise.

The Zimbabwe dollar became a symbol of President Robert Mugabe’s rule: an ailing economy, unemployment estimated at 94 percent, collapsed infrastructure and social services, and more than half the 12 million population relying on emergency food aid.

The official sanctioning of foreign currency meant the Zimbabwe dollar was on borrowed time, but now an even older method of determining the value of goods and services is fast becoming the favoured currency in rural areas.

The barter economy

"What we have experienced over the last few months is an increase in barter trade. For example, a villager with many goats can swap a goat in exchange for several packets of sugar and salt or any other commodities that they may need," Dudzai said.

But the practice of bartering in rural communities is being undermined by those with access to foreign currency. "The biggest culprits are people from urban areas, who are exploiting the rural farmers by paying them very little foreign currency for grain and livestock," she said.

''The Zimbabwe dollar will be out for at least a year. We resolved that there will be no immediate plans to introduce the money because there is nothing to support and hold its value''

The economics minister in the new unity government, Elton Mangoma, noted while announcing the suspension of the local currency: "The Zimbabwe dollar will be out for at least a year. We resolved that there will be no immediate plans to introduce the money because there is nothing to support and hold its value."

In Harare’s affluent suburbs, access to US dollars and South African rands have brought supermarkets that stay open for 24 hours to serve meandering queues of shoppers, mainly NGOs and government employees.

"Some of our regular clients spend as much as US$300 on their weekly shopping trips and they don’t seem to worry about how much they spend," a supervisor at one of the Harare supermarkets told IRIN.

Wellington Chibhebhe, secretary-general of the Zimbabwe Congress of Trade Unions, told IRIN the union federation was demanding that all workers be paid a Poverty Datum Line (PDL) wage of US$454 a month.

As part of the unity government’s attempts to resuscitate the economy, public servants are paid a monthly wage of US$100, or its equivalent in vouchers. "We campaigned to have all employers, including the government, pay workers in foreign currency, and now we want them to peg salaries against the PDL," he said.

"Through our campaigns, pensions will now be paid in foreign currency. We are aware that for the non-working rural citizens, it is taking long for foreign currency to trickle down to them. The fact of the matter is that under the current slave wages, people are scrounging for food in both rural and urban areas."