Everyone in Zimbabwe is well aware of inflation and to some degree, has become savvy with their finances.
The main rule is to spend your money as you receive it – even if it means spending it on items you may not need - because of the rate of depletion of our dollar (or bearer cheques as we no longer have actual dollars and cents). This is the only way to survive.
Then: don’t lend, don’t borrow, don’t purchase on credit, don’t pay in advance or don’t even pay a deposit in advance of delivery. These things just don’t work.
But even for the financially savvy, the rate of inflation during the month of May has been staggering.
The drop has been so hard and fast, prices are just a blur of zeros. Many of my friends have said that they often just trust the cashiers when making payments because adding, subtracting, multiplying, counting out handfuls of cash and then trying to check your change is an impossible task to do on the spur of the moment.
You cannot budget ahead and go into a store with the correct cash – inflation does not allow for this luxury.
Time is money.
Last week I hesitated on the price of a spare part for my car. On Monday 19th May I was quoted $35 billion (which looks like this $35,000,000,000-00). On Friday 23rd May I phoned the supplier again to find the price had now gone to $58 billion ($58,000,000,000-00). I rushed down to the store not realizing that they closed at 4pm. Yesterday morning, Tuesday 27th May, I contacted them again and they quoted me an additional $5.8 billion on Friday’s price. (Remember that this time-delay has been during a weekend and Monday was a public holiday, so store has been closed since the last quoted price).
The value of cash withdrawals is restricted by the banks (as per instruction of Mr Gono). I cannot withdraw enough cash to pay for items like my much-needed spare part.
So in addition to this morning’s increase, the supplier has told me that I must add 20% of the value of my purchase onto the payment as I am paying by cheque.
Are you keeping up?
The part now costs 76 billion, five hundred and sixty million dollars ($76,560,000,000-00).
The supplier is calling this additional charge ‘administration expenses’. They explain that it takes the banks 3 to 4 days to clear a cheque and present it in their account. In that time, they lose money. So much so that they cannot replace their stocks. The supplier either transfers the cost to me or he goes under.
The banks cannot keep up, suppliers cannot keep up, customers cannot keep up, wages cannot keep up! The hole is getting deeper and deeper.
I have used the cost of a spare part to illustrate what is happening in our country.
Food costs are increasing at the same rate.
Gono has totally lost control and as the rate of the dollar literally drops by the minute, the suffering increases by the minute.
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