Since I sent out that initial brief on Monday, things have gone from
worse. This morning one filling station in Bulawayo is asking Z$1 165
for a litre of fuel! That is up 100 per cent in 7 days. Yesterday the
Reserve Bank clearing system rejected all cheques made out in the old
currency. The banks also say now they were not consulted by the Reserve
prior to the changes announced by Gono on Monday - they say his
was the first intimation they had apart from rumors the previous week.
they asked the Bank about the rumors they were told to wait for a
Major firms across the country have been closed for trading for some
now. At our own factory we have run out of materials and this morning
staff were simply seated at their machines. We have had to close our
accounts as at the 31st July and open a new set of accounts with zero
opening balances. When we are able to wrap up the period ending the
July (a process that will take weeks) we will then be able to open our
set of accounts with balances calculated manually. Our accountant was
a fistful of returned cheques for today - she expected more as time
throwing our cash flow into a complete mess.
Till operators in stores are being asked to deal in cheques at the new
currency values, old prices on the goods, mixed new and old currencies
customers and all electronic banking systems are still in the old
ATM's are closed down as are all point of sale equipment. Just to
the problems, no bank is yet able to handle the new currency on its
and they are adding three zeros to all figures being credited to
the new form! So I wrote a cheque last week in the old currency - the
rejects this and I now write a new one in the new currency and the bank
round up what I have rounded down, in order to credit or debit my
On top of this the authorities have thrown up roadblocks across the
country - yesterday it took one of our drivers 15 hours to travel from
Beitbridge to Harare through 21 roadblocks. Gwanda to Bulawayo, a short
of 137 kilometers has 9 roadblocks. I am sure that some of the
the capacity to loot travelers on the road - they are arbitrarily
confiscating cash from people. The limit for cash coming across the
is Z$5 million per person - anything over that is confiscated and the
runs the risk of being detained. Internally you can only carry Z$100
and even this small sum (10 litres of petrol) can get you into trouble
pastors were arrested and held for two nights and their funds
(they were each carrying the domestic limit of Z$100 million). It took
lawyer to get them out and to recover their money.
One major wholesaler in Harare was raided and they found nearly Z$40
in cash at his home. He was arrested and the money taken. The legal
for this is not apparent, as we have seen no actual notices in the
Government Gazette. Anyway, a load of flour for a bakery costs Z$3,8
and many firms will not accept Cheques or any other form of payment.
The limit a company can draw per day is Z$750 million - when it comes
wages, let alone creditor payments or fuel purchases that will go
Then finally there is the new currency itself - we have seen very
drew cash from my bank for fuel and they gave me the old currency -
now I am trying to draw out Z$780 million and they tell me that I need
Reserve Bank clearance and are not sure they can give me new currency -
refuse to take the old as it is just too bulky. In 15 days time the old
will cease to be of value and I simply cannot believe that they have
of the new notes to meet demand. We will stop accepting the old notes
about the 18th as that then gives us two working days to deposit the
in a bank. 7 days later we will need Z$40 million in the new notes to
staff - if that is not available, we will have riots.
I said on Monday that the stock market would take off into the
stratosphere - in fact equities rose 56 per cent in a week!! Parallel
rates are impossible to ascertain, as they are moving by the hour.
it is clear they are not going down! The new official rates and rules
the use of funds from exports and service charges will exacerbate this
further increase domestic inflationary pressures as the price of
imported rises rapidly.
At present inflation rates I estimate 8 months before we are back to
we were 5 days ago - piles of useless money to do anything with and
looking again at chopping three zero's off our currency. In fact Gono
said as much - he has promised a new currency altogether - and said
week that we would get no notice of the change and only 7 days to swap
old for the new. I guess he really thinks that practice makes each
easier! I hope that they will learn something from this complete
but if our recent experience is anything to go by - they will not learn
anything at all.
Finally fuel is again very short in the City - in fact today we could
find a fuel station with fuel except for one selling at that monstrous
price. I suspect traders simply do not know what to sell fuel at and
holding their stocks in the ground until the dust clears.
Bulawayo 4th August 2006.