Wise-guys and small-frys
September 10th, 2008
Following on from Chipo’s post earlier today (which you will need to read to understand the context of this one), I heard a story from a friend who told me about a guy selling airtime phone-cards for well below the normal retail price. In fact, this guy was selling them for 80 dollars each when he should have been selling them for about 200 dollars.
As you can imagine, he has a queue around the block of people lining up to buy his cards, clutching their scarce zim dollars in their hands and glad to get a really, really good deal.
Mr Wise-Guy takes their cash and, rather than using it to replenish his stock, he uses it to buy forex on the street. Everyone wants zim dollars so he has no problem finding people to sell him forex.
He then takes the forex to the bank, because Gideon Gono the bank is desperate for forex – are you with me? – and sells it to them at the bank RTGS rate which is higher than the street rate. This nets him more income than he would have received if he had sold his airtime cards at their proper value.
How does he manage this? Because the place where he buys his cards from to sell on to his customers was still accepting cheques and he didn’t need to pay them with cash. This will come to an end (if it hasn’t already) when the street rate matches the bank rate, and when the supplier wakes up and starts refusing to accept cheques like so many other businesses have.
Regardless, the wise-guy will soon become just another small-fry if inflation strips the value of the dollars sitting in his bank account. Especially since he can’t get them out fast enough to spend properly.
When that happens, I am sure he’ll make another plan. Such is life in Zimbabwe.
