Zimbabwe Business Watch - Week 31
Zimbabwean industry and commerce is on its knees as inflation accelerates at an alarming pace with some pundits placing the figure as high as 30 million percent per annum.
Industrial capacity utilisation continues to decline and may well have reached single digits expressed as a percentage if the available economic data production is keeping keep up with events.
A large fertiliser organisation is operating at between 1 and 2% of capacity.
Businesses struggle to pay their employees as they are only allowed to draw 100 billion cash a day to fund their household expenses and this is not enough to even buy a loaf of bread. By the time the salary is drawn from the account much of it is eroded by inflation of around 20% per day further compounding the crisis.
Real income for many people is now as low as 10 – 14% of what it was 3 years ago and salaries and wages, expressed in Rand, would ensure that virtually everyone is now earning at the lowest legal level in neighbouring South Africa.
The banking system is being crushed by the massive figures associated with hyperinflation and transactions are being slowed down even further, raising again the spectre of further losses to business as money loses its value whilst trapped in the system.
Many companies are paying up to 40% premium for cash and cheques a 50% premium to cover the period of time up to the point the cheque is transacted from the account.
The Old Mutual Implied Rate sits at 498 billion to 1 and the hard Boiled Egg Index Fair Value Rate, 210 billion.
July 30th, 2008 01:32
While on the subject of inflation, cash and banknotes [bearer cheques, special agro notes, or whatever else Gono might decide to next call his Monopoly money],Jura JSP state that it is de facto impossible to prevent Fidelity Printers and Refiners (Pvt)Ltd from using their software, since this was installed locally and cannot be invalidated by
de-licencing or otherwise remotely immobilised or removed. Gono can therefore continue to produce banknotes anytime but without Jura’s high security features.
Can I suggest that the brilliant hacker that recently wreaked havoc with the Herald’s website and others, be persuaded/encouraged to hack into Fidelity’s system and produce some mayhem there?
If Gono does have to lose his currency’s high security features,can you imagine the fun that enterprising forgery experts are going to have producing their own parallel currency!