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Zimbabwe Turns the Corner - Food In Stores

The political climate in Zimbabwe remains tenuous to say the least. The opposition MDC party with its Prime Minister have opted to be non-cooperative with the ruling ZANU PF party in certain cabinet portfolios. 

 

While the cholera epidemic is not completely over, the water supply is cleaner and the streets of Harare, the nations capital, have holes and trenches. The holes are from years of city neglect but the trenches show some signs for positive activity as the city lays some new underground piping to carry the water supply.

 

From discussions with senior executives in the hotel and hospitality industry, occupancy at the nations top hotels is on the rise. Typically only 30% of rooms are occupied but this has increased in recent days.

 

One of the most interesting notes on the Zimbabwe economy is the fact that inflation has gone. The super-inflation of millions of percentage points is no longer. This is largely due to the ‘dolarization’ of the nation.  The worthless Zimbabwe dollar has been replaced by the more stable US dollar.  This has had a positive effect on the local economy. It has meant that the local population who can find US dollars, no longer need to shop on the black market or what was commonly known as the parallel market.  Local businesses, although not flush with US dollars, can still use what they have to buy manufactured products from South Africa and beyond or use the dollar for raw materials to supply the population with daily requirements. The result of this is the fact that the stores in Zimbabwe are full of product not seen in years – mealie meal (the local staple) oil, bread, petrol and a mass of other products are now readily available on the store shelves, a great relief for the nation.

 

The suspending of the Zimbabwe dollar has had major impact on the monetary system. Too complicated perhaps to comment in detail in this article, yet interesting enough not to pass without some discourse. The fact that inflation hit Zimbabwe in the millions percentage points per year, made the local currency absolutely worthless and led to price hikes hourly – if you can imagine that.  With inflation like that and the utter collapse of the local dollar, the banking system also collapsed and  so did the loans, mortgages held by these banks.  In other words the loans held by banks and other institutions in Zimbabwe found  the loans  worthless because the money was worthless. So what happened? When the nation changed to the US dollar all loans and mortgages were ‘forgiven’. If you owned a home in Zimbabwe with a mortgage attached, all of a sudden you were DEBT FREE!  You owe nothing on your home. Businesses who owed money to banks were in the same position – you owe nothing. That is the good news. The bad news is the nation has to re-build from scratch…no money to lend and thus the economy will take years to rebound.  With sanctions applied by the European Union and the US, Zimbabwe remains in difficult times, but it is true to say that the nation is turning a corner, albeit rather slowly.