Global IssuesZIMBABWE: Use of Foreign Money Becoming Political Football Again
Dorothy Tembo wears a look that tells a story of years of hard work. She dotes over her grandchildren and enjoys talking about the past. A keen observer of the history happening around her, she easily narrates Zimbabwe's trials and tribulations from the pre-independence years to the present, of which she says she has never seen so much death and suffering.
The 59-year-old grandmother lives in rural Tsholotsho, about 100 km north of Bulawayo in the southern province of Matabeleland, where she looks after her grandchildren. The financial needs of her household are taken care of by her daughters and sons living and working in neighbouring South Africa.
Their remittances, she tells IPS, have become her lifeline. Her children have been sending money for almost a decade now.
But there is a dark cloud on the horizon in the form of President Robert Mugabe, leader of ZANU-PF, who is accused of pressurising his coalition partners from the MDC for a return to the local currency, claiming that allowing the use of foreign exchange is causing suffering in rural areas.
Finance Minister Tendai Biti, who is also the secretary general of the MDC, insists this will not happen as long the country's economy fails to boost local industrial production under the short-term emergency recovery programme (STERP). Last month the tough talking Biti threatened to resign his post if he was forced to re-introduce the local dollar.
It is noticeable that Matabeleland, which is especially benefiting from the lifting of curbs on the use of foreign currency, is dominated by the MDC, Mugabe’s political bane for most of the past decade.
For many rural villagers in Zimbabwe's southern parts and border towns such as Beitbridge and Plumtree, foreign exchange remittances from relatives working across the borders has made it possible to sustain livelihoods in a context where few opportunities exist.
Rural Matebeleland lies in the poorly developed and drought-prone parts of the country and have over the years seen unemployed young men and women making the great trek to South Africa and Botswana.
The money they send home to rural relatives has had a newly positive effect since the formation of the government of national unity between the MDC and ZANU-PF as it has allowed the free use of multiple foreign currencies in the economy. Shop shelves in both urban and rural areas filled up with basic commodities again. Pricing in foreign currency has become common.
Matabeleland villagers who had access to foreign currency in the past few years but were forced to convert the money to the collapsing Zim dollar had to live with empty pantries. 'It was difficult for us who get money from South Africa to use the local dollar,' Tembo tells IPS, explaining that in recent years the money’s value dropped significantly as soon as it was converted to the local currency.
'The local currency became useless as prices of basic commodities went up every day,' she explains. Now, using forex remittances without feeling cheated is a major boon.
Tsholotsho villager Mavis Khumalo says it was always difficult to use foreign currency as she was forced to change it on the illegal foreign currency market.
'The people who changed money actually came all the way from Bulawayo (Zimbabwe's second largest city) to buy foreign currency from us as they knew we got money from outside the country and had no clue about the prevailing exchange rates,' according to Khumalo.
Today, however, 'I use the money as it is without having to lose it to anyone', she confirms.
'Of course we would want to use our own Zim currency but only if it does not become useless the next day. While my sons do send groceries, they feel it is better to send cash as we can now readily get basic commodities from our local stores,' Khumalo explains.
Rural villagers like Khumalo and Tembo can now rely on the shops for products such as cooking oil and soap, unlike during the past few years when they were forced to buy expensive basic commodities on the parallel market using the local dollar.
These developments have been detrimental to someone like trader Johannes Banda. With the unavailability of basic commodities, the collapse of the Zim dollar and the ban on the use of foreign currency, he used to barter in rural areas, exchanging maize-meal for livestock. His business has floundered since the decision to legalise multiple currencies.
'Rural people who have foreign currency say they no longer have use for our business as they can either buy from the shops themselves or engage the services of cross-border transport operators, known as 'omalayitsha', to buy whatever they need -- be it from Botswana or South Africa.'
David Sibanda, an economist with a local bank, says the clash between ZANU-PF and the MDC concerning the use of multiple currencies is 'not at all unexpected'.
'It will be remembered that many people in Matebeleland have relatives working in neighbouring countries, and it is only natural that they have not been affected by the use of multiple currencies as other parts of the country,' Sibanda tells IPS.
'There obviously are differences in that when President Mugabe speaks, he speaks to a constituency that perhaps has no access to foreign currency. But this has to be understood in its broader context. The government must do all it can to fix this economy that has been in free fall for over a decade,' he argues.
Addressing parliament early this year, Economic Development Minister Elton Mangoma said the local dollar would be returned after 12 months but that period has since been extended as Zimbabwe's coalition government battles to attract international investors.
International money-lending institutions, including the International Monetary Fund and the World Bank, and the country's erstwhile trading partners remain reluctant to commit themselves to aiding the country's economic reconstruction while Mugabe is still in power.
© Inter Press Service (2009) — All Rights ReservedOriginal source: Inter Press Service