Page last updated at 07:11 GMT, Wednesday, 7 May 2008 08:11 UK

Making big money in Zimbabwe

Mercedes car transporter in Harare

By Farai Sevenzo

How do people make money in Zimbabwe - a country believed to have the highest inflation in the world - 165,000%?

The figure is an awesome one by any standards - it means whatever money people make is losing its value overnight.

So is the capital, Harare, bereft of the rich? Hardly.

Are the streets empty of the latest luxury vehicles that are on display at the Paris motor show and elsewhere?

No - every new class of Mercedes Benz is negotiating Harare's potholes with ease.

What about petrol?

"Those who say there is no fuel in this country," a famous politician is reputed to have said, "should try and lie down on the roads and see if they won't get run over."

Frontier economy

The lack of international traders, the scarcity of foreign currency to import basic goods has opened up the markets to anyone with a calculator and the patience to ride the Zimbabwe dollar and its falling value.

Stock market
The black market is the place to make serious money

Like a frontier town 100 years ago, locals have been enriched by the scarcity of fuel, soap, spare parts, and cosmetics.

From the hawker selling you toothpaste by the traffic lights, to the commodity broker importing large consignments of wheat for the bakers, money is available to those who seek it.

George supplies supermarkets with canned beer from Namibia and other neighbouring nations.

He employs people who employ people, the middle-man charges for his introductions and his couriers, the money is calculated by the fortunes of the American greenback, transferred to the parallel market value, and trillions are then paid to those who have crossed the borders to supply the individual and the markets.


Clifford Mugadza has been running his own business for a while, he is a commodity broker and supplies local industries with materials from as far afield as South Africa, Europe and the Far East.

I make my money on the black market rate
M, currency dealer

The thing one notices at once about Mr Mugadza is his immaculate sense of style - hand made shoes, monographed shirts bearing his initials or simply "Cliff".

He deals with tailors who fly over from Hong Kong for his sartorial pleasures.

I ask him if he's a dollar millionaire, in the American sense of the term.

"No I'm not, but there are plenty about. Fuel and its supply has created many dollar millionaires."

And what is the business environment like for him? "It's like everywhere else, but timing is the key thing. With the Zimbabwe dollar in freefall, if someone pays you late, then you may have to start all over again."

But it is cash itself that is the source of much wealth.

In the last three weeks, the Zimbabwe dollar has gone from 45m or so to the US$, to around 120m.

Those who invested in buying the greenback three weeks ago have nearly tripled their investment.

Of course, it goes without saying that this activity is illegal, but the US dollar economy is amongst us to stay.

Everybody knows that the Fourth Street Bus Terminal, with long-haul journeys to Johannesburg, Lusaka and Gaborone starting from there, is the hub of foreign currency deals.

The Reserve Bank is reputed to buy from the streets too, so we can pay South Africa and Mozambique for our electricity, so travellers can afford the restrictive visa fees to South Africa and beyond.

M is 24 years old and has been dealing in foreign currency for the last two years. I ask him how he makes his money.

"I make my money on the black market rate. They are many of us who stand on the corner of Nelson Mandela and Fifth Avenue, with specific instructions from our buyers to buy at a certain rate, say Z$120 million; we buy at Z$110m or Z$100m. We make our money on the difference."

And how much cash does he get from his buyers?

"Businessmen who want to import fuel, agents of the Reserve Bank can leave me with Z$200bn a day and simply say: 'I want to raise US$5,000.'

And I see if I can find that for them by buying from lots of different people until the money is raised."


But this middle-man stuff is not the only source of funds.

In the last eight years, Zimbabwe has seen a new crop of farmers who have been getting a bad ride from the press for their ineptitude at feeding the nation.

The controlled prices of maize meant that many of them have gone into the more lucrative horticultural businesses - selling Valentine's Day flowers to international supermarkets.

Police confiscate bags of salt for sale on the black market at Mbare, Harare.
Police struggle to stem the tide of goods sold without authorisation

Those with large gaming concessions on their new stretches of land can charge up to US$10,000 to idle Americans who have a fantasy about shooting wild animals.

New stocks of diamonds in eastern Zimbabwe created their own millionaires, and mining rights owned by Zimbabweans should mean a steady flow of riches into the country's coffers.

But the Governor of the Reserve Bank, Gideon Gono, has been fighting the illegal exports of Zimbabwe's minerals for some time.

The gold panner will sell to the man with ready cash, he smuggles the stuff to South Africa and tops up his foreign currency account in another city, another country, and another economy.

The rich are not paying their dues, the scarred and raped earth around new mining places attest to the frontier-style gold and diamond rush which has been robbing the state of its share.

Moreover, the evidence of new wealth is all around us. Beverly Hills-style mansions are spouting up, with no shortages of cement or Italian marble for bathrooms.

And if the immigration department were to release the figures, we would learn that the Lebanese have been arriving, that aid workers, whose time is up, are still among us, their children paying billions per term because there is no better place to raise children.

But these are at the top of the ladder.

The workers are scrounging on a meal a day and walking to work, the civil servants are resorting to selling muffins at receptions.

The money is there, but it will take some time to trickle down.


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