Zimbabwe dispatches: what economy?
Updated on 28 April 2009
When the question came up about whether or not the global financial crisis would affect Zimbabwe's economy, we all collapsed into laughter, writes Helen.
"What economy?" was the unanimous reaction.
Zimbabwe hardly has an economy to speak of anymore and the country doesn't even operate with its own currency. Zimbabwe dollars and cents have been suspended from use and everything is charged in US dollars, from utilities bills to food in supermarkets and fruit sold by vendors on the side of the road.
The country is operating on a completely cash based economy and banks have suddenly found themselves and their services superfluous.
"What's going to happen to us and our jobs," one bank accountant whined dejectedly the other day.
There's not a lot of public sympathy for bank executives who did nothing to reassure customers, or stand up for our rights, a few months ago when there weren't enough bank notes to go around.
It was a terrifying time when people queued in their thousands for hours at a time outside the banks but were only allowed to draw out limited amounts of their own money. So limited in fact, was that the maximum daily withdrawal that it wasn't even enough to buy a single loaf of bread.
The US dollarisation of the Zimbabwean economy has left all banks virtually deserted, car parks empty, and managers and accountants "on leave". Banks are being manned by bored security guards, and one or sometimes two yawning counter tellers.
Overnight nine trillion dollars was reduced to nine dollars and this, the bored counter clerk told me, was lower than the banks allowed minimum balance to keep an account open.
When I enquired from one international bank how much money I had in my bank account I was told that I wasn't in their system anymore. My current account has been closed, without warning or notice, "due to insufficient funds".
Despite the fact that I had nine trillion Zimbabwe dollars in my account a few months ago, and hadn't spent a cent of it, all my money evaporated when twelve zeroes were removed from the currency.
Overnight nine trillion dollars was reduced to nine dollars and this, the bored counter clerk told me, was lower than the banks allowed minimum balance to keep an account open.
Even though this big name international bank had stopped sending out statements over a year ago, stopped paying interest over three years ago, this sudden lack of official credibility came as a big shock.
It's a bank account I've held since I left school 35 years ago and for the first time in my life I have no ATM card, no credit or debit cards and no cheque book.
It's a chillingly impotent feeling being felt by hundreds of thousands of Zimbabweans who been robbed of their savings and left entirely dependent on cash under the bed.
Banks are now trying to persuade individuals and companies to open "foreign currency" bank accounts where we can deposit our US dollars but not write cheques or withdraw cash from ATM machines.
For the first time in my life I have no ATM card, no credit or debit cards and no cheque book. It's a chillingly impotent feeling.
To date there is a serious lack of trust on the part of depositors who aren't 100 per cent sure that once they put their money in the bank that they'll be able to get it out again or if it will even be there.
This latter fear is related to the shocking and absurd admission by Reserve Bank Governor Gideon Gono recently that he had removed funds from private bank accounts in order to pay for electricity and grain imports.
Even more unrest came this weekend with news reports that scores of depositors had gathered in an angry mob at one bank to try and withdraw their own US dollars.
Bank workers told the customers they did not have any money to meet the withdrawal requests and some customers said they'd been trying for over a week to withdraw their US dollars.
When the mob proceeded to another branch of the same bank, the senior executive took refuge in another building and refused to meet the desperate customers saying they should go to the bank's head office.
While Zimbabwe continues to owes the IMF US$130m and the World Bank $600m, and with the Reserve Bank Governor admitting to looting private bank accounts, it's little wonder that depositor confidence is at an all time low.
