Not everyone can be a business person right? Not when you are in Zimbabwe

There is a debate on the social media currently raging among Zimbabweans regarding the shocking policy announcement by our Cambridge educated Professor Mthuli Ncube our Minister of Finance announcing the return of the Zimbabwean dollar. I have my own views about this and I am remembering the words that my former MD Mr Carlson Chiswo used to constantly tell me during our weekly Client Management meetings at Zimant Lion Insurance company in Harare between 2004 and 2005. Mr Chiswo would tell me, “Mr Kanyoka, you can’t continue doing the same thing and expect to get different results!”. We might have one of the most educated finance ministers who among other things once owned his own asset management company, once taught at Wits Business school, also taught at University of Oxford and previously was the Vice President and Chief Economist at Africa Development Bank. What the government has done fits with the definition of insanity, it will simply not work.

If you are in Zimbabwe and you only rely on your salary, I sympathise with you. We are going back to Mugabe Economics of the period 1997 after the fall of the Zimbabwe dollars up to 2009 when the government was forced to ditch the Zimbabwean dollar. For you to survive in Zimbabwe you need to be doing an income generating venture even something as basic as keeping chicken and selling. The salary will always lag inflation as what is happening now where a civil servant is earning less than US$30 per month. Despite the fact that the government has banned US$ and South African Rand, the prices of almost everything will be pegged to forex. If you have something to sell, you will always be able to increase your price and as time goes on, your venture will be more than your salary.

Those professionals who have a chance to leave the country, please do so. There is no point in being despondent and getting into depression, remember you are not a tree you can move. Eventually the market will prevail as the market is more powerful than even the nuclear Bomb, just look at the once mighty Soviet Union which was brought down by market forces.

The current mess can be traced back to 1997 when the Zimbabwean dollar devalued massively after Robert Mugabe’s government gave in to the demands of the War Veterans and awarded them unbudgeted gratuity of Z$50 000.00 each . That was a lot of money and it was equivalent to my 2 years salary as a temporary teacher then. Some of us who were studying with foreign institutions we saw the changes immediately as we could no longer afford the fees. The government tried to cushion us by subsidising price of fuel for the next 4 years. Some of my friends, workmates and my cousin saw the signs early they left mainly for UK, Canada and New Zealand.

Inflation started to bite and one’s salary could not keep up with inflation. I started to do projects. By 2007 it became worse inflation had entered record books, according to the Cato Institute, Zimbabwe recorded the second ever highest recorded inflation in history in 2008 where inflation topped to 79 billion % an equivalent of 98% daily.

By 2007 many people stopped going to work as it made sense to work for yourself. Professionals skipped the country for mainly South Africa. Many people ended up working as waiters, domestic staff, farm workers, truck drivers. By 2007 I was the Bulawayo Branch Manager for Zimnat Lion what sustained me where benefits such as the use of the company car, subsidised accommodation and the fuel I got from the company. As a middle manager my salary was always an equivalent of R1 000.00. Due to high prices in Zimbabwe the R1 000.00 did not buy as much as R1 000.00 in South Africa. I was being paid less than a farm worker in South Africa. I had been running my own general dealer shops in Macheke and Mutoko where my sales averaged R20 000.00 to R30 000.00 per week. I was driving weekly to Francistown, Musina and Johannesburg to buy stock for my shops. It no longer made sense to continue working. My wife had already resigned beginning of 2007. I started serving my three months notice after the Easter Holidays in 2007.

Then US Ambassador Christopher Dell was quoted having said that with such high inflation levels Robert Mugabe risked being toppled due to the runaway inflation. The government unleashed a price control blitz and arrested shop owners as well as directors of retail and manufacturing companies. I lost tens of thousands of Rands. I remember some of the stock I had bought in Gaborone were sold for less than 20% of our cost price and my manager was also arrested and taken to court. She was charged for trying to bring down the government by way of increasing prices in the shop. Shortages of all goods from meat and groceries became the order of the day and queues became the order of the day. I had always said I would never leave Zimbabwe but this was not the Zimbabwe I had in mind. I applied for a work permit to come to South Africa.

At our shops people started coming asking to pay in forex, we also started to do batter trade for groceries with maize. During the night I would load a tonne of maize drive through Marondera and avoided police road blocks on our way to Mayambara in Chitungwiza where maize was now being sold in Rands (during that time maize was a controlled product). A tonne of maize was paying about R700.00 that was a lot of money then. I did that for weeks and we started to rebuild. On 22 August 2007, I collected my 5 years quota work permit at the South African embassy in Harare. Ma Nyoni and I left travelled for our home in Bulawayo that night. The next morning we travelled to Pretoria and started to looking for a job and I started working on 1 September 2007 and started to rebuild again.

I hope this can work as the government is saying but we have been through this before it is the same script and more or less the same actors so we know how it will end. Right now in boardrooms of companies in Zimbabwe they are busy strategising how they will not only survive but prosper in this economy. We must do so as farmers, small business owners and individuals. You have to deal with what is on the ground. Life goes on, please recover quickly and wake up to the reality.

If you run a business in Zimbabwe you deserve an honorary MBA as you experience in a year what other businesses will never experience in a life time.

I know it is easy to criticise without offering solutions. My suggestion is that Zimbabwe adopts the South African Rand for a few years. We do not need to join the Rand Monetary Union all we need to do is to informally adopt the Rand like we did with the US$ in 2009.

http://kanyokad.blogspot.com/2017/12/why-zimbabwe-needs-to-discard-bond-note.html

God bless our Zimbabwe.