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When the going gets tough, the tough turn entrepreneurs
IRIN News
June 22, 2006

http://www.irinnews.org/report.asp?ReportID=54114

HARARE - Just when it seems life could not conceivably get any tougher for Zimbabweans, it invariably does.

The country has been in economic decline for the past eight years, and real crisis for at least the last four. Fuel, electricity and water are now being rationed in the capital, Harare, and most basic household items are in short supply or extortionately priced.

The statistics cataloguing the despair - unemployment at over 80 percent, inflation at close to 1,200 percent, manufacturing levels at their lowest since 1971 - have become numbing.

But one simple calculation goes to the heart of the difficulties ordinary Zimbabweans face. According to the watchdog Consumer Council of Zimbabwe, an average Zimbabwean family requires the equivalent of US$524 a month to just cover the basics. The average worker earns about US$200.

Janet Ncube is a book-keeper in a printing company in downtown Harare. Each working day at noon, one of her unemployed sons comes to the office carrying two huge bags packed with food containers.

Because most workers cannot afford to buy lunch, she hit on the idea of allowing her colleagues to eat cooked meals on credit until the end of each month. She makes some money, but acknowledges she always has problems when it comes time to collect.

"Everybody is going through hardships and collecting payments can be a nightmare because colleagues will just tell you they have no money to pay for the food they ate," said Ncube.

Tariro Moyo, a secretary with a Harare-based law firm, goes without lunch altogether. She instead sits in Harare Gardens park, in the centre of the city, with a book over her break time. "I just cannot afford to buy food and the best way of forgetting the pangs of hunger is to immerse myself in an exciting romance novel."

Brian Chipanga, an office messenger, lives in the dormitory town of Chitungwiza, 35-km southeast of Harare. He earns just US$140 a month. He spends US$50 on rent for a room and US$40 on transport. One meal a day adds up to US$50 a month, exhausting his budget before he's even bought groceries and toiletries.

Chipanga's secret? "In the evenings I sell cigarettes and sweets outside a nightclub in my neighbourhood for several hours before I go to bed."

Chipanga and Ncube may have found a way to cope, but Steve Nhamo regularly comes face to face with those who don't. He's the director of Easy Money, providing "soft loans" to those who need quick finance. Nhamo's business has been doing well, but he's now encountering an alarming number of defaulters. "In most cases we have to seize clients' furniture to settle the debts," he explained.

Skipping meals, walking to work, selling home-grown vegetables away from the gaze of the police, are all survival skills ordinary Zimbabweans are honing - in marked contrast to an ostentatious, well-connected elite. An additional lifeline for many families has been a dutiful relative working abroad remitting money home.

"Close to four million Zimbabweans out of a total of 12 million have migrated to neighbouring South Africa, Botswana and overseas countries like the United Kingdom, the USA and Canada," said James Jowa, a Harare-based economist. "Those who migrated have not forgotten their relatives because they continue to send back remittances which one way or the other also benefits the government."

But the structural problems confronting the country - starved of foreign financial aid, investment, and an agro-export sector in the doldrums - are staggering. To pay its bills, keep a cap on official prices, and buy foreign currency, the government has resorted to printing money, which has fueled the surging inflation rate.

In an interview with a UK-based radio station, economist John Robertson said: "There is every prospect that we will see prices double again in the next three months and double yet again in the following three months. That will take prices to four times what they are today by the end of the year."

Zimbabwe's economy has so far resisted government recovery measures, but in April a new plan was hatched. The National Economic Development Priority Programme (NEDPP) aims to raise US$2.5 billion in cash and investment in mining, manufacturing and agriculture.

China has reportedly signed up to NEDPP with a US$1.3bn finance deal - equivalent to Zimbabwe's total exports - to develop coal mines and three thermal power stations in exchange for chrome and other raw materials.

"It's a very murky area [the details of the deal]. If the Chinese money is actually there, it could sustain the government for a bit longer," said economist Professor Tony Hawkins. "Things are gradually grinding down but you can keep going; [war-torn] Angola and Mozambique kept going for years."

He expects that "what you'll get is more and more informality [in the economy] and more people moving to the rural areas. But African economies don't collapse, they just contract."

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