Inside Zimbabwe's roadside currency trade: The 'World Bank' of Bulawayo

Journal of Southern African Studies

Volumn 36, Issue 2, 2010, Pages 319-337

  Mawowa, Showers ^a   Matongo, Alois ^b  

^a UNIVERSITY OF KWAZULU NATAL   (South Africa)

^b MIDLANDS STATE UNIVERSITY   (Zimbabwe)

Author keywords

[No Author keywords available]

Indexed keywords

CENTRAL BUSINESS DISTRICT; CRISIS MANAGEMENT; CURRENCY MARKET; DIASPORA; FINANCIAL CRISIS; POLITICAL ECONOMY; WORLD BANK;

BULAWAYO [ZIMBABWE]; ZIMBABWE;

EID: 77954168981     PISSN: 03057070     EISSN: 14653893     Source Type: Journal    
DOI: 10.1080/03057070.2010.485787     Document Type: Article

References (69)

1. There are two factions of the MDC in the TIG: the majority MDC-T, led by Morgan Tsvangirai, current Prime Minister, and the breakaway MDC faction led by Arthur Mutambara, current Deputy Prime Minister. However, the two factions will be referred to jointly in this article as the MDC.
2. S.H. Hanke and A.K.F. Kwok, 'On the Measurement of Zimbabwe's Hyperinflation', Cato Journal, 29, 2 (Spring/Summer, 2009), pp. 353-64.
3. Zimbabwe Independent, 21 May 2009.
4. The Zimbabwe Telegraph, 24 August 2009.
5. The Zimbabwean, 24 April 2009.
6. G. Gono, Zimbabwe's Casino Economy: Extraordinary Measures for Extraordinary Challenges (Harare, Zimbabwe Publishing House, 2008).
7. J. MacGaffey, Entrepreneurs and Parasites: The Struggle for Indigenous Capitalism in Zaire (New York, Cambridge University Press, 1987), p. 1.
8. D.B. Moore, 'Marxism and Marxist Intellectuals in Schizophrenic Zimbabwe: How Many Rights for Zimbabwe's Left? A Comment', Historical Materialism, 12, 4 (2004), pp. 405-25.
9. See p. 407.
10. J. McGregor and R. Primorac (eds), Zimbabwe's New Disapora: Displacement and the Cultural Politics of Survival (Oxford and New York, Berghan Books, 2010).
11. S. Bracking and L. Sachikonye, Remittances, Poverty Reduction and the Informalisation of Household Well- Being in Zimbabwe, ESRC Global Poverty Research Group, WP045 (2006).
12. Bloch puts the estimate at one in every three. See A. Bloch, 'Emigration from Zimbabwe: Migrant Perspectives', Social Policy and Administration, 40, 1 (2006), pp. 67-87.
13. Solidarity Peace Trust, "Gone to Egoli" Economic Survival Strategies in Matebeleland: A Preliminary Study, (Port Elizabeth, Solidarity Peace Trust, 2009).
14. G. Gono, 'Promoting Indigenous Economic Empowerment: Address to the Extraordinary Session of ZANU-PF Congress in Harare', 14 December 2007, pp 5-6.
15. For example B.Z. Mavedzenge, J. Mahenehene, F. Murimbarimba, I. Scoones, and W. Wolmer 'The Dynamics of Real Markets: Cattle in Southern Zimbabwe following Land Reform', Development and Change 39, 4 (2008), pp. 613-639.
16. S. Mawowa, 'Tapping into the Chaos: State, Crisis and Accumulation', unpublished MA Thesis (Durban, University of KwaZulu-Natal, 2007).
17. M. Castells and A. Portes, 'World Underneath: The Origins, Dynamics, and Effects of the Informal Economy', in A. Portes, M. Castells and L. Benton (eds), The Informal Economy: Studies in Advanced and Less Developed Countries (Baltimore, John Hopkins University Press, 1989).
18. See also H. de Soto, The Other Path: The Economic Answer to Terrorism (New York, Basic Books, 1989).
19. P. Bond and M. Manyama, Zimbabwe's Plunge: Exhausted Nationalism, Neo-Liberalism And The Search For Social Justice (Harare, Weaver Press, 2002), p. xiii.
20. N. Kriger, 'From Patriotic Memories to 'Patriotic History' in Zimbabwe, 1990-2005', Third World Quarterly, 27, 6 (2006), pp. 1,151-169.
21. Mawowa, Tapping into the Chaos, pp. 69-70.
22. P. Chabal, and J-P. Daloz, Africa Works: Disorder as Political Instrument (Bloomington, Indiana University Press, 1999).
23. Partnership Africa Canada, 'Zimbabwe, Diamonds and the Wrong Side of History', The Diamonds and Human Security Project, Occasional Paper Number 18, March 2009.
24. Castells and Portes, World Underneath, p. 11.
25. P. Gibbon, 'Introduction: Structural Adjustment and the Working Poor in Zimbabwe', in P. Gibbon (ed.), Structural Adjustment and the Working Poor in Zimbabwe (Uppsala, Nordiska Afrikainstitut, 1995), pp. 7-34.
26. G. Kanyenze, 'The Zimbabwean Economy 1980-2003: A ZCTU Perspective', in D. Harold-Barry (ed.), Zimbabwe: The Past is the Future (Harare, Weaver Press, 2004), pp. 107-47.
27. For example, in the post-2000 period it was not uncommon for ruling party MPs such as Philip Chiyangwa and Saviour Kasukuwere, who were also business moguls, to storm manufacturing companies and force them to reduce prices, or threaten to 'buy' them out for absurdly reduced sums and turn them into their own personal businesses (The Herald, 3 June, 2001).
28. J.L. Moore, Zimbabwe's Fight to the Finish: The Catalyst of the Free Market (London, Kegan Paul Limited, 2003), p. 6.
29. M. Nest, 'Ambition, Profits and Loss: Zimbabwean Economic Involvement in the DRC', African Affairs, 100 (2001), pp. 469-90.
30. Hanke and Kwok, 'On the Measurement of Zimbabwe's Hyperinflation', p. 355.
31. The Financial Gazette, 16 May 2007.
32. Many have suggested that an explanation for why the unprecedented collapse in living standards in the Commonwealth of Independent States (CIS) has not been accompanied by social explosion is that people have managed to survive by engaging in a multitude of 'informal' undeclared activities such as street trading, subsistence agriculture, and unofficial taxi services.
33. Approximately 4 million working adults
34. This includes both formal and informal employment.
35. CSO 2004 statistics further claimed that only 14 per cent were employed in the informal sector, suggesting that, contrary to public perception, the formal sector still employs more people.
36. For example, the Rand was more commonly used in Southern parts of Zimbabwe, whereas the US dollar was mostly used in central to northern regions of the country. This accounted for regional variations in demand for a specific currency.
37. The phrase 'roadside rate' does not necessarily imply that all trade literally occurs on the street, although very often this is where transactions take place. Other generic terms commonly in use in Zimbabwe include 'parallel rate' or 'black market rate'. While the empirical focus in this article is on actual roadside trade, the term has been used more broadly as a stand-in for illegal foreign currency trade in general.
38. Accessed May 2008 at: http://www.economic.co.zw
39. A study of women vendors in Zimbabwe's capital by Mawowa (2006) revealed that in some (though not all) cases, these dwellings and informal enterprises had been tolerated by local authorities to the extent that the traders and dwellers even paid levies of different sorts to the municipality. See S. Mawowa, 'Coping with Economic Recession: Mbare Women Vendors and Zimbabwe's Economic Decline', Honours Thesis, submitted to the Department of History and Development Studies, Midlands State University, 2006.
40. T. Musara, African Business Journal, 13 February-May 2003.
41. John left the prison services in 1993 and was in the minibus business before he sold his only bus and left in 2003 to go into the 'World Bank'. He subsequently bought a house in the western suburbs and two residential stands in the eastern suburbs.
42. Stanley is a well-fed young man. He had two Toyota Hilux Vigo 300D vehicles for sale, one diesel and one petrol. For each he wanted US$30,000. The researcher indicated that he wanted to buy a Toyota Yaris. Stan phoned a friend who promised to come in a short time. As the researcher waited, Stan received several phone calls and visits in connection with forex.
43. One of the authors of this article (Alois Matongo) was approached by plain clothes police officers during his field research into the roadside currency trade. They showed him their identity cards and ordered him and his companion to drive to the police charge office. After pleading with them the operatives demanded a bribe. After a hard but speedy bargaining process they accepted a bribe of Z$500 million for a transaction involving 100 South African Rand at Z$17million per Rand, and let the two go.
44. Given the extreme levels of hyperinflation, new 'banknotes' - or rather 'bearer checks' - of ever increasing denominations were constantly being printed and introduced by the Reserve Bank.
45. Batsi is a first-year Occupational Therapy student at the University of Zimbabwe who deals in foreign currency in the 'World Bank' during her vacation.
46. S. Mawowa, 'Diamond Mining in Marange Zimbabwe', Research Report for the Netherlands Institute of Southern Africa, 15 May 2008.
47. Thembinkosi left the police force in 2005 and has not looked back ever since. She is a single mother of two. At the time of the research, she owned her own house from trading in currencies in the western suburbs and vowed never to go back to the police force even when normalcy is restored in the economy.
48. See Mawowa, MA Thesis, 2007.
49. Castells and Portes, World Underneath.
50. The Reserve Bank of Zimbabwe, First Half 2006 Monetary Policy Review Statement, July 2006, p 20.
51. C. Felsman, '(JOC) keying for Power - The Joint Operations Command and the Viability of a Transitional Arrangement in Zimbabwe', IDASA Report (accessed at www.idasa.org.za August 7, 2008).
52. Zimbabwe's army chiefs are on record as having refused to salute Zimbabwe's new Prime Minister Morgan Tsvangirai because he lacks liberation war credentials.
53. Accessed at http://www.mmawere.com/article/43
54. Gono, Zimbabwe's Casino Economy.
55. Gono, interviewed in New African, August-September 2007, No. 465.
56. See for example The Zimbabwe Times, June 20, 2008.
57. A. Chimora, 'Gideon Gono engulfed in another embarrassing scandal', Afrik.com, Friday 30 January 2009.
58. Gideon Gono's address to ZANU(PF), 2007, Extraordinary Session, 14 December 2007.
59. Ministry of Finance, Zimbabwe's 2007 Budget Statement, delivered by Minister Samuel Mumbengegwi, 30 November 2007.
60. Examples of this include the arrest of Philip Chiyangwa (Mugabe's nephew and former MP) after accusations of spying for South Africa, Christopher Kuruneri (former Minister of Finance and Economic Development) for externalising foreign currency, Charles Nherera (Vice-Chancellor of Chinhoyi University and former board member of Zimbabwe United Passenger Company - ZUPCO) for alleged corruption at ZUPCO. Also implicated were Vice President Joyce Mujuru, Local Government Minister Ignatius Chombo and Deputy Information Minister Bright Matonga, who were never arrested. (See various reports in The Financial Gazette, online edition: 13 January 2005, 29 April 2004, 22 September 2005).
61. Gono himself was not beyond suspicion. (See NewZimbabwe.com, 18 February 2008.)
62. Former liberation war commander Solomon Mujuru's house arrest in 2008, though linked to ZANU(PF) succession politics, has also been accompanied with threats of bringing fraud charges against his vast business empire. (See The Zimbabwean, 13 February 2008, accessed at www.thezimbabwean.co.uk).
63. The Standard, 8 July 2008.
64. A. Moyo, 'Come easy, go easy: Getting money is not their problem but spending it is', The Sunday Mail, July 15-21, 2007 pg 5.
65. B. Raftopoulos, 'The Zimbabwean Crisis and the Challenges for the Left', Journal of Southern African Studies, 32,2 (June 2006), pp. 203-19.
66. See p. 203.
67. Here one needs to compare RBZ policy and financial statements on the one hand, with ministers and presidential speeches on the other. See for example April Monetary Policy Interim Review, Financial Statement, 27 April, 2007, and President Mugabe's birthday speech, 21 February 2007.
68. See allAfrica.com, 28 November 2008, and 'Soldiers Assault Traders Selling Wares in Forex', Zim Online (SA), 13 January 2009 (accessed at http://www.zwnews.com/issuefull.cfm?ArticleID=20052).
69. Castells and Portes, World Underneath, p. 12.