Zimbabwe keeps going thanks to remittances
According to a press release from the International Association of Money Transfer Networks, Zimbabwe's economy keeps going thanks to mobile remittances, even with an economy where inflation is
currently running at two million percent and is expected to reach six million percent by the end of June.
Less than 10% of the population is employed and a huge food
crisis looms ahead.
The answer is that the remittance market has been the
lifeline for thousands in Zimbabwe.
A remittance company operating in Zimbabwe says that up to US$1.5m a day moves into
the country in remittances. Western
Union is the principal company but can only operate with the blessing of the
Reserve Bank. The rest operate on the
'parallel' market, meaning the financial market running at the true value of
the Zimbabwean dollar, rather than the declared Government rate of exchange,
which today is running at 50% of the market rate.
The parallel market has been allowed informally by the
Government to function being a useful source of badly needed foreign
exchange. Remittance operators sell
their foreign exchange to the Reserve Bank in exchange for Zimbabwe dollars at
exceptionally good rates - in effect colluding with those who seek to destroy
them.
Not surprisingly normal money transfer channels have
suffered - as huge swathes of regular clients have moved to the unregulated
systems. Apart from the fact they get a
better rate of exchange, under the normal KYC rules they have also been fearful
that their identities would be passed to the Government which at a time of
intimidation and retribution could bring danger to themselves and their
families.
The minimum wage was Z$3.9 billion last month in Zimbabwe with the average worker earning Z$15 billion.
Sounds good until you realise that Z$10 billion is just US$1.
Last week, you would need to spend 20% of your earnings to buy a pint of milk (Z$3 billion) and over that to buy an egg (Z$4 billion).
Meanwhile, cookies were way out of your league at Z$19 billion for a pack of ten.
Oh, and with inflation, this stuff has shot up again this week.
Meanwhile, the so-called election sham takes place with people forced to vote under threat of death.
Mugabe?
Mugab?
Muga?
Mug?
Whichever way you look at it, the guy is killing the country, their people, their economy and their spirit.
The sooner he goes, the better.
Posted by: Chris Skinner | June 27, 2008 at 10:36 PM