Inflation in Zimbabwe hits 4,500%
Calcutta News.Net
Saturday 23rd June, 2007
The Zimbabwe dollar has gone into free fall with the supply of hard currency in the country evaporating.
Late this week it took 150,000 Zimbabwe dollars to buy just one U.S. dollar. Last month the cost was 50,000.On informal offshore exchanges the Zimbabwe currency tumbled to Z$300,000 to the greenback in larger financial exchanges usually involving businesses.The Zimbabwean dollar's accelerating depreciation reflects surging inflation, recently estimated at 4,500% over the 12 months through May – the country's Central Statistical Office has not yet released the official version of the data. The currency's steep slide and the soaring inflation rate prompted U.S. Ambassador Christopher Dell, soon to leave Harare for Kabul, Afghanistan – to issue predictions that economic pressures will drive the administration of President Robert Mugabe and the ruling ZANU-PF party out of power sooner than political opponents.He quoted economists as saying inflation could hit 1.5 million percent by year's end. Opposition Movement for Democratic Change founding president Morgan Tsvangirai, in Britain late this week, voiced similar sentiments, saying the collapsing economy would force President Mugabe to allow free and fair elections to be held.Economist Tony Hawkins, a lecturer at the University of Zimbabwe’s Graduate School of Management, told reporter Blessing Zulu of VOA's Studio 7 for Zimbabwe that the economic meltdown can be attributed directly to the policies pursued by Harare.
Sunday, June 24, 2007
Sunday, June 10, 2007
Which way is up
Which way is up
Saturday 9th june 2007
Dear Family and Friends,
This week all semblances of normalcy collapsed in most parts of Zimbabwe. The supply of electricity was negligible for most of the week and we found ourselves behaving in the most absurd fashion in order to remain functional. Going to bed at 7 in the evening in the cold and the dark - and 'waking up' when the lights came on at 11pm.Mostly your body doesn't know which way is up as it struggles to understand your new absurd routine. Doing the ironing at 11 pm; downloading emails and working on the computer at midnight. Getting up again at 4am to cook porridge for breakfast and being thankful for that achievement as the electricity goes off again at 5am and another day of insanity starts.
The eerie silence characterising suburban life was not much better in shopping and business centres - machines not working, lifts not moving, supermarket meat fridges defrosting, butchery saws silent, bakery ovens cold, food going bad and people just sitting out on walls and pavements. The absurditities of the situation kept slapping you in the face all week. One evening, in the cold and dark, Short Wave Radio Africa interviewed a top official in ZESA ( Electricity Supply Authority). Bear in mind this Radio Station is banned from operating in Zimbabwe and it's staff members are prohibited from returning to the country - and yet the ZESA executive speaks openly on the forbidden radio station!
She had a great swathe of excuses in order to apportion blame for this diabolical situation and then uses the opportunity to announce a 50% increase in the price of electricity. Oh really, what electricity is that! On Tuesday it was World Environment Day and again Zimbabwe was in the quiet and the dark - at least we were doing our bit for the world - however unintentionally!
That absurd irony was then punctuated all day by the sound of tree chopping and the sight of people pouring out of the bush carrying sticks, branches and cart loads of newly cut indigenous timber. 60 year old trees felled in minutes - what tragedy for Zimbabwe and what a disgrace for the country whose Minister of Tourism heads the UN body on Sustainable Development. What disgrace too for the world who chose him for the job. The near complete collapse of Zimbabwe's electricity supply is affecting country areas too. In a rural area near me people are walking up to six kilometres to reach the nearest grinding mill.
They arrive to find the mill not able to function without electricity and there is no option but to leave your precious bag of maize and return the next day to collect it - hoping that most of it is still there. The millers are having to work at night or whenever the power comes back on - its all about survival. Perhaps the greatest irony of the power cuts is that at least now we physically don't have the means to listen to or watch the propaganda on ZBC radio and TV - a blessed relief, particularly as the bigwigs have begun positioning themselves for the next round of elections - just eight months away.
Until next week, thanks for reading and please take note of my new website address: www.cathybuckle.com
Love cathy
Speaker and Spectator
Saturday 2nd June 2007
Dear Family and Friends,
As ridiculous as it may sound, little lights of hope are flickering on all the time now in Zimbabwe. They are not practical everyday lights of decreasing prices, increasing food and medical supplies or improved services - quite the contrary in fact. The lights of hope that I am talking about are those that are beginning to illuminate the future direction. Some are from events across the border where it seems there are actually things going on - although no one is saying what! Other signs of hope are coming from within.
One is the blatantly obvious declining interest and support by people in rural areas for overweight politicians in smart clothes and fancy cars who come only at election time - and then shout and threaten people in their bid to garner votes. A prime example is underway at the moment in the run up to a by election about to be held in Zaka East. At last both sides of the MDC have managed to stand together and say they will not contest the seat - what is the point if conditions are not free and fair.
This leaves Zanu PF standing against two virtually unknown parties, the UPP (United People's Party) and the UPDP (United People's Democratic Party). Some of the earlier ZANU PF rallies were shown on ZBC television and it was embarrassing to watch great obese men, shouting and waving their fists at the painfully thin people, sitting barefoot in the dust staring blankly ahead. The contrast between speaker and spectators was so extreme it was a wonder it was shown on national TV at all. A few days later, arriving to whip up support for the ruling party candidate , a former soldier, disappointment was immediate and the rally cancelled. Zanu PF Chairman, John Nkomo, said: "We have to postpone this rally to Thursday next week because we cannot address these few people."
The days of Zanu PF being able to take support for granted - even in remote dusty villages - are gone. Other reasons for hope are coming from people in positions of responsibility who are making courageous decisions and are standing up to do the right thing - politics and propaganda aside.This week High Court Judge Tedious Karwi granted bail to Ian Makone - one of 32 leading opposition officials and activists arrested in late March who have been held without trial for the past 2 months and 2 days. In making the bail ruling Judge Karwi stated a fact which of late is not guaranteed and has been very elusive in Zimbabwe. The Judge said:" Our law presumes people to be innocent until proven guilty." Until next week, thanks for reading, love cathy.
Saturday 9th june 2007
Dear Family and Friends,
This week all semblances of normalcy collapsed in most parts of Zimbabwe. The supply of electricity was negligible for most of the week and we found ourselves behaving in the most absurd fashion in order to remain functional. Going to bed at 7 in the evening in the cold and the dark - and 'waking up' when the lights came on at 11pm.Mostly your body doesn't know which way is up as it struggles to understand your new absurd routine. Doing the ironing at 11 pm; downloading emails and working on the computer at midnight. Getting up again at 4am to cook porridge for breakfast and being thankful for that achievement as the electricity goes off again at 5am and another day of insanity starts.
The eerie silence characterising suburban life was not much better in shopping and business centres - machines not working, lifts not moving, supermarket meat fridges defrosting, butchery saws silent, bakery ovens cold, food going bad and people just sitting out on walls and pavements. The absurditities of the situation kept slapping you in the face all week. One evening, in the cold and dark, Short Wave Radio Africa interviewed a top official in ZESA ( Electricity Supply Authority). Bear in mind this Radio Station is banned from operating in Zimbabwe and it's staff members are prohibited from returning to the country - and yet the ZESA executive speaks openly on the forbidden radio station!
She had a great swathe of excuses in order to apportion blame for this diabolical situation and then uses the opportunity to announce a 50% increase in the price of electricity. Oh really, what electricity is that! On Tuesday it was World Environment Day and again Zimbabwe was in the quiet and the dark - at least we were doing our bit for the world - however unintentionally!
That absurd irony was then punctuated all day by the sound of tree chopping and the sight of people pouring out of the bush carrying sticks, branches and cart loads of newly cut indigenous timber. 60 year old trees felled in minutes - what tragedy for Zimbabwe and what a disgrace for the country whose Minister of Tourism heads the UN body on Sustainable Development. What disgrace too for the world who chose him for the job. The near complete collapse of Zimbabwe's electricity supply is affecting country areas too. In a rural area near me people are walking up to six kilometres to reach the nearest grinding mill.
They arrive to find the mill not able to function without electricity and there is no option but to leave your precious bag of maize and return the next day to collect it - hoping that most of it is still there. The millers are having to work at night or whenever the power comes back on - its all about survival. Perhaps the greatest irony of the power cuts is that at least now we physically don't have the means to listen to or watch the propaganda on ZBC radio and TV - a blessed relief, particularly as the bigwigs have begun positioning themselves for the next round of elections - just eight months away.
Until next week, thanks for reading and please take note of my new website address: www.cathybuckle.com
Love cathy
Speaker and Spectator
Saturday 2nd June 2007
Dear Family and Friends,
As ridiculous as it may sound, little lights of hope are flickering on all the time now in Zimbabwe. They are not practical everyday lights of decreasing prices, increasing food and medical supplies or improved services - quite the contrary in fact. The lights of hope that I am talking about are those that are beginning to illuminate the future direction. Some are from events across the border where it seems there are actually things going on - although no one is saying what! Other signs of hope are coming from within.
One is the blatantly obvious declining interest and support by people in rural areas for overweight politicians in smart clothes and fancy cars who come only at election time - and then shout and threaten people in their bid to garner votes. A prime example is underway at the moment in the run up to a by election about to be held in Zaka East. At last both sides of the MDC have managed to stand together and say they will not contest the seat - what is the point if conditions are not free and fair.
This leaves Zanu PF standing against two virtually unknown parties, the UPP (United People's Party) and the UPDP (United People's Democratic Party). Some of the earlier ZANU PF rallies were shown on ZBC television and it was embarrassing to watch great obese men, shouting and waving their fists at the painfully thin people, sitting barefoot in the dust staring blankly ahead. The contrast between speaker and spectators was so extreme it was a wonder it was shown on national TV at all. A few days later, arriving to whip up support for the ruling party candidate , a former soldier, disappointment was immediate and the rally cancelled. Zanu PF Chairman, John Nkomo, said: "We have to postpone this rally to Thursday next week because we cannot address these few people."
The days of Zanu PF being able to take support for granted - even in remote dusty villages - are gone. Other reasons for hope are coming from people in positions of responsibility who are making courageous decisions and are standing up to do the right thing - politics and propaganda aside.This week High Court Judge Tedious Karwi granted bail to Ian Makone - one of 32 leading opposition officials and activists arrested in late March who have been held without trial for the past 2 months and 2 days. In making the bail ruling Judge Karwi stated a fact which of late is not guaranteed and has been very elusive in Zimbabwe. The Judge said:" Our law presumes people to be innocent until proven guilty." Until next week, thanks for reading, love cathy.
Tuesday, June 05, 2007
Eddie Cross on Zimbabwe - Collapse looms
29th May 2007
Subject: Eddie Cross on Zimbabwe
Collapse looms.
In my own business we passed a milestone today – by our calculations inflation in our business now exceeds 10 000 percent per annum. I was told by my supplier today that flour for the bakery would now cost me Z$250 000 for a 50 kilogram bag and that I have to collect it at my own cost from Harare – 600 kilometers distant, the last time I bought flour from the same supplier it was Z$30 000 a 50 kilogram bag delivered to Bulawayo.
We have given our staff a 100 per cent raise at the month end for two months now – it still leaves them with insufficient funds to cover their basic costs of living. We started today to provide food to them in addition to their wages or they simply will not be able to feed their families and come to work.
One major supplier told me today that they are selling every product in their range below cost. They are headed for bankruptcy and do not know what to do next. Another service provider told me they were not able to replace their stocks of spares and essential inputs. When they had run their stocks down to zero, they would then go onto a hand to mouth basis, asking their clients to source the required spares and raw materials before they could start work.
Fuel is trading at Z$45 000 a litre, the dollar at Z$50 000 to 1 against the US dollar and it has depreciated by 50 per cent in a week. I estimate prices are rising 20 per cent a day and this is putting huge pressure on all firms.
There is no sign of this process slowing down and with the government simply spending wildly in anticipation of an election in 2008, we cannot expect inflation to slow – we are headed for super inflation in the near future. It will then be impossible to hold money – people will have to consider barter and the widespread use of another currency. In Mozambique when they were experiencing similar conditions the common currency was the US dollar. The same situation existed in Angola but because of the shortage of actual foreign currency notes there, they also used things such as canned beer and coca cola as currency.
The difficulty in Zimbabwe is that we have a relatively sophisticated economy and strict currency controls. The use of either the Rand or the US dollar for exchange would actually be illegal at present.
From other countries experience this situation will be bound to escalate the collapse of the formal sector, exacerbate human and capital flight, destroy the value of savings in any form except property and the stock market and plunge civil servants, whose conditions of service are less flexible, into a state of crisis.
In the face of these critical concerns, neither the government nor the Reserve Bank exhibits any concern or understanding of just what they are doing. Their remedies suggest they have little understanding of the complexities of macro economic management policy or how the economy and business actually functions. Virtually every prescription they have trundled out in recent weeks has simply made things worse.
Food is scarce and unaffordable and a real humanitarian crisis is building up – one that might still threaten national stability and put the lives of millions are at stake. There is plenty of evidence that Zimbabweans living in the Diaspora are pouring money into the country to try and keep their families afloat. With some 4,5 million adult Zimbabweans abroad, this carries quite a punch and is probably the single most important factor in helping keep things stable.
Eddie Cross Bulawayo, 29th May 2007
Subject: Eddie Cross on Zimbabwe
Collapse looms.
In my own business we passed a milestone today – by our calculations inflation in our business now exceeds 10 000 percent per annum. I was told by my supplier today that flour for the bakery would now cost me Z$250 000 for a 50 kilogram bag and that I have to collect it at my own cost from Harare – 600 kilometers distant, the last time I bought flour from the same supplier it was Z$30 000 a 50 kilogram bag delivered to Bulawayo.
We have given our staff a 100 per cent raise at the month end for two months now – it still leaves them with insufficient funds to cover their basic costs of living. We started today to provide food to them in addition to their wages or they simply will not be able to feed their families and come to work.
One major supplier told me today that they are selling every product in their range below cost. They are headed for bankruptcy and do not know what to do next. Another service provider told me they were not able to replace their stocks of spares and essential inputs. When they had run their stocks down to zero, they would then go onto a hand to mouth basis, asking their clients to source the required spares and raw materials before they could start work.
Fuel is trading at Z$45 000 a litre, the dollar at Z$50 000 to 1 against the US dollar and it has depreciated by 50 per cent in a week. I estimate prices are rising 20 per cent a day and this is putting huge pressure on all firms.
There is no sign of this process slowing down and with the government simply spending wildly in anticipation of an election in 2008, we cannot expect inflation to slow – we are headed for super inflation in the near future. It will then be impossible to hold money – people will have to consider barter and the widespread use of another currency. In Mozambique when they were experiencing similar conditions the common currency was the US dollar. The same situation existed in Angola but because of the shortage of actual foreign currency notes there, they also used things such as canned beer and coca cola as currency.
The difficulty in Zimbabwe is that we have a relatively sophisticated economy and strict currency controls. The use of either the Rand or the US dollar for exchange would actually be illegal at present.
From other countries experience this situation will be bound to escalate the collapse of the formal sector, exacerbate human and capital flight, destroy the value of savings in any form except property and the stock market and plunge civil servants, whose conditions of service are less flexible, into a state of crisis.
In the face of these critical concerns, neither the government nor the Reserve Bank exhibits any concern or understanding of just what they are doing. Their remedies suggest they have little understanding of the complexities of macro economic management policy or how the economy and business actually functions. Virtually every prescription they have trundled out in recent weeks has simply made things worse.
Food is scarce and unaffordable and a real humanitarian crisis is building up – one that might still threaten national stability and put the lives of millions are at stake. There is plenty of evidence that Zimbabweans living in the Diaspora are pouring money into the country to try and keep their families afloat. With some 4,5 million adult Zimbabweans abroad, this carries quite a punch and is probably the single most important factor in helping keep things stable.
Eddie Cross Bulawayo, 29th May 2007
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