While discussing holiday destinations with friends of mine, Zimbabwe came up and someone mentioned that it was expensive and that we could not afford to go there. This reminded me of the Sandwich I purchased in Bulawayo at the Joshua Mqabuko Nkomo International Airport. The menu read $12 but I did not think much of it until I had to pay. I asked the waiter to give me the amount in Rands because I didn’t have US Dollars, when he told me I was so shocked I literally took the calculator from him and calculated it myself. From then on, I made sure to convert amounts to Rands before purchasing anything. My mother also visited Zimbabwe recently and she came back complaining about the high cost of food. It’s not only the cost of food though, it seems like everything is too expensive in Zimbabwe.
We all remember how back in 2008, Zimbabwe faced hyperinflation (231 150 888.87% in July 2008) and their economy basically crashed. The Zimbabwean dollar became obsolete and was replaced by the US dollar in 2015 (Other currencies such as the South African Rand also remained in circulation but the official currency is the US Dollar). This helped stabilize the economy for a while but then came the shortage of US Dollars and the reduction of cash withdrawal limits which then led to the introduction of bond notes by the Reserve Bank of Zimbabwe. These managed to ease liquidity shortages however due to their scarcity, the demand is high meaning the cost also increases so the country remains in a financial crises. I think it would have made more sense to adopt the South African Rand because firstly there are thousands of Zimbabweans working in South Africa and sending money back home, with the current value of the Rand against the Dollar, the amount of money they are working for here is not worth much when it gets to Zimbabwe. Second, there is a fair amount of trading that occurs between South Africa and Zimbabwe. Added to the financial crisis is the high unemployment rate (estimated at 90%), poor salaries, increasing domestic debt and the reluctance of banks to lend money.
Zimbabwe relies on imported goods and does not produce much and due to foreign currency shortages retail shops are now running out of essential goods. So things are scarce in Zimbabwe, which leads to increased demand which then leads to an increase in prices. Add to that the cost of importing goods which ultimately has to be recovered from the consumer.
If we cannot afford to visit Zimbabwe, I wonder how people who live there manage to survive.