The evidence of economic collapse is becoming more and more evident in
Zimbabwe. By the end of this week the pound will be trading at Z$2
to 1 and the US dollar about Z$1 million. The Rand is already well over
Z$100 000 to 1. Inflation is now at dramatic levels with prices and
changing daily. People operating the open market for foreign exchange
cannot get enough local currency for their transactions.
Major firms who must import their raw materials and other key inputs
suspended sales of finished products because they cannot determine a
that would allow them to recover their costs and replace their stock.
Another interesting phenomena are the slowing down of the flow of
remittances into the country because the local recipients can no longer
locally produced food and essentials. People with relatives inside
sending food and numerous systems for such imports are now in place.
The ability of local service providers such as ZESA, the PTC and the
phone companies, together with the Urban Councils and the transport
infrastructure to maintain their activities is now at dangerous levels.
Water supplies are short in almost all urban areas, clean water is
increasingly short and insecure - a recent analysis showed that the
Harare water supply was untreated.
The State brings Sable Chemicals on line and this results in
supplies to all other users dipping to levels where output and services
cannot be maintained. The predictions for the weather this summer are
positive but there is no seed, no fertilizer and no fuel. What fuel
available has to be bought with hard currency or you pay a premium of
40 per cent over the market rate for fuels and oils.
My own estimate of inflation is now at 22 000 percent and rising the
official rate is over
8 000 per cent. This is making it impossible to replace assets or stock
levels and very expensive to import anything. Local currency is
worthless. Price controls remain in force but are totally ineffective
have simply served to bankrupt formal sector firms while driving all
products into the parallel markets where prices are as much as 5 times
Food supplies - bread, oil, sugar, meat, milk, eggs, maize meal and
even pasta, are almost unobtainable. Queues form instantly at any
stores that get deliveries, yesterday I saw a crowd outside a retail
on 9th Avenue that spread out onto the street and impeded traffic. Pet
is scarce and pets are going hungry along with everything else. Stock
is very expensive and in short supply so those who keep poultry, pigs
dairy cows face very serious problems of supply. When we start eating
dairy cows and slaughtering our laying hens, protein shortages will
even more serious.
At our factory in Belmont the staff were idle at their machines
we had orders but no raw materials. The senior staff were all sitting in
reception; the sense of fear was palpable. What on earth are we going
We strategize and came up with one or two suggestions, nothing very
The mills at Kadoma had no water - could not produce fabric, plenty
in the supply dams - Zinwa had failed to maintain the pumps.
Those talks in Pretoria will be overtaken by events if they do not get
with them and come to a conclusion. Then we are going to have to work
transition - without some stabilisation we will never get to an
Bulawayo, 18th October 2007