ECONOMY & FINANCE
Zimbabwe's trillion dollar house and billion dollar bed
A newspaper advertisement shows a four-bedroom house with a pool and tennis court in Harare's leafy Glen Lorne suburb selling for just under ZW$1 trillion, a whopping $33 million at the official bank rate but only $667,000 on a widely used black market.
An identical property cost half the price a month ago.
Prices of household furniture, groceries and food and rentals have more than doubled in the past month as businesses seek to eke out a profit and remain afloat, but at a cost to consumers ravaged by the world's fastest rising prices.
Shops which were emptied of basic goods after Mugabe announced a blanket price freeze to tame inflation in June, have started restocking but prices have skyrocketed.
"Prices are increasing but my salary is not and that is a very big problem because it's now difficult to settle my bills," Humphrey Chitovhoro, a trainee with a Harare accounting firm said, a line now recounted many times by Zimbabweans.
Salaries are failing to keep pace with galloping inflation -- the world's highest at nearly 8,000 percent -- which has inflamed tensions in a country with rising unemployment and enduring foreign currency, fuel and food shortages.
Mugabe's government has so far failed to rein in an economic slide, which critics say has been badly hit by the veteran leader's policies, including the seizure of white-owned farms to resettle blacks that has knocked agriculture output.
On Tuesday Zimbabweans jammed banking halls, desperately seeking cash, in short supply, the latest sign of the southern African country's economic free-fall.
Reserve Bank governor Gideon Gono said last month the launch of a new currency was imminent. This has not happened, instead cash shortages have worsened, with banks running out of notes.
Gono accuses foreign currency black market dealers of stashing more than half the total money in circulation and says the bank will not intervene in the cash crisis.
"I came here at five (0300 GMT) and just got ZW$5 million. What can I do with that money," an angry mother of two who identified herself only as Auxilia said as she left a bank where a long queue stretched for a couple of blocks.
The amount is equivalent to three days of bus fare.
Most Zimbabweans use cash for their transactions since most basic goods like cooking oil, sugar and maize meal are purchased on the black market.
In a small vote of confidence for Gono, the Zimbabwe dollar has strengthened against the U.S. dollar on the black market, rising to Z$1.5 million per dollar on Tuesday from a low of ZW$2.4 million.
But businesses are feeling the cash squeeze as sales have dropped, while workers spend more time in bank queues.
"We need to
have more money in circulation but we cannot expect the central bank
to continue pumping in more money if that which is in circulation can
not be accounted for. We are caught up in a vicious cycle," Joseph
Malaba, a local industrialist told the official Herald newspaper. -
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