The past 10 years wouldn't have been possible without you. Thank you!
Though it’s almost 10 years ago the memories of 2008 are as clear as day to me. I was in a technical college at the time and needed to sit for my National Diploma that I assumed would be the key to opening many doors for me. Sadly, due to the ferocious economy at the time I failed to write my final exams and my view of local education went on a downhill spiral from there…
However, one of the key reasons that I didn’t make it to class that year was due to my quest for fortunes that I perceived to be the gateway to ‘happily ever after’.
As our calendars rapidly roll back to pre-dollarisation and the heywire days of failing to buy an egg with $1 billion dollars, a number of people are calling what we are going through as “Zimbabwe 2008 Season 2”.
As I’ve replayed those crazy moments in my head, reminiscing, I share 8 experiences that I went through for those who were either not in Zimbabwe at the time or were too young and have no recollection of events, probably sparking moments of deja vu in the rest of us, I’d be interested to read what your experiences were like then:
1. Bank Queues
The few that had bank accounts back then would want to get a hold of their money in order to use it for day to day transactions. Banks did not have cash (or so they made us believe, while surprisingly you’d see wads of notes on the streets at 5 pm on a working day) and so people would queue for hours, often needing to join the queue the night before and sleeping in it in order to be one of the first to be served the following day.
2. Queues In General
It would not be surprising to see people sleep in a queue on behalf of others and be paid for it. In fact ‘queue sleeping’ became a mini-industry, as there were queues for just about everything. There were fuel queues, sugar queues, cooking oil queues, passport application queues, passport submission queues, passport collection queues, heck we even queued for beer!
A story is told of how in Chitungwiza, a satellite town 27 km out of the capital Harare, one was able to place a stone in the queue on their behalf at night and in the morning you’d pitch up and take the position of the stone that you’d have placed. If your stone had been moved you’d speedily put up your dukes towards any alleged perpetrator.
3. “Can I Swipe For You”
Cash was hard to come by back then. People needed it to perform a number of transactions, key among them were purchasing on the informal market, as the prices of goods were cheaper than what it was in a supermarket.
When someone approached you asking if they could swipe for your purchase, it was not a generous act of kindness or an early Christmas, but they’d be asking to pay for your purchase where you might have used cash and in exchange, you’d exchange the cash you’d intended to use at the till point. Often as the bearer of cash, the exchange would see a discount being offered to you to incentivise the transaction.
I remember one night, going to Chicken Inn with a friend, and we’d be in the queue asking people to swipe on their behalf, offering a discount and all and at 2am going home with US$600. In perspective, my salary as a civil servant at the time was worth US$3.
2 + 2 is 4. Minus 1 dat’s 3. Quick maths.
4. Price Controls
The government was always ‘pro-people’ and would step to the pulpit and preach that there were detractors that were bent on destabilising the economy through price increases and as such it was stepping in to bring sanity. This sanity came in the form of price controls.Retailers were compelled to sell certain goods and services at a price that a ‘National Incomes and Pricing Commission’ would set. Anyone found to charge higher than this price would be threatened with their licence being withdrawn. June 18, 2008, can be remembered for the slashing of prices and how people stormed shops to get items, like electricals, for less than US$0.10 equivalent.
5. Empty Shelves
Retailers, who were compelled to sell their goods at stipulated prices dug their feet into the ground and would not restock. In order to replenish stock, the supermarkets would need to either get forex from the Reserve Bank of Zimbabwe (RBZ) or to source it on the black market. The RBZ was not issuing any and for a retailer to go to the streets to buy hard currency at black market rates would see them buying their goods way above the gazetted prices and so it would be uneconomical.
As such, soya chunks were just about the only thing one could find on the shelves and when shops did receive stock, the queues quickly formed (often with police and soldiers making their way to the front as they “controlled” the queue) and as quick as it came, it would disappear.
6. Commodity Arbitrage
During the 2007-2008 era, there were 3 different pricing structures. RTGS/bank transfers, bearer cheques and US dollars. Though there were huge differentials between what was trading on the black market and what the Government stated was true. For a long period of time the rate was fixed at US$1 : ZW$250, even though it would trade for as much as ZW$260,000 on the street. That’s 1,040 times more!As such, if one had to take US$1 and go ‘burn it’ on the street (burning was a term commonly used to refer to the selling of money of money on the black market at a higher rate) they would be able to get ZW$260,000. And because retailers were forced to keep their prices pegged at the official rate of the USD arbitrage was widespread.
People would go to places like Delta and buy drinks at an equivalent to US$1, getting as many as 50 crates of cokes, and go sell this stock at a low cash price. The shelves were empty so the average person on the street would buy the drinks at the low price but in cash. Once all the stock would be sold, they’d take that cash, about ZW$130,000 worth of it and go purchase about US$50.Remember they started with US$1? Yeah, this was way before cryptocurrency ICO’s where people make x50 profits. Zimbabweans saw it first.
7. Stock Market Broke Records
Our Stock Exchange broke worldwide records, as institutions and individuals looked to safeguard themselves from hyper-inflation. Stocks were one of the methods that many relied on and at the time there was the possibility for people to but certain stocks in Zimbabwe and sell these on other stock exchanges out the country. This particularly happened with Old Mutual shares.
As this was a way of moving money out the country, one could buy Old Mutual shares in Zimbabwe and dispose of them on the London Stock Exchange, while collecting payment out the country.
This term was used in just about every sentence that came out of the mouth of a Government employee as the bemoaned how both individuals and corporates would export goods and receive payment out the country, then fail to bring that money back home, ultimately terming it ‘externalisation’.
Many feared that should they remit that money they’d get paid out at the nonsensical official exchange rate and not be able to fund their local operations.You’d find people storing their funds out the country using those said funds to pay for off-shore expenses, a means of transactions that the Government was not too happy with.
As we look back at 2008, what is surprisingly worrying, is that if you didn’t know any better and hadn’t experienced what we went through almost 10 years ago, you’d think I was commenting on whats going on right now…
Yes, we’re reliving it all over again.
Where you in Zimbabwe during the 2007 – 2008 period? What were the highlights for you? What do you remember from then that looks a whole lot similar to what’s playing out now?
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