HARARE - The Zimbabwe government's move to legalise trade in foreign currency is not benefiting urban consumers, but those shielded elites and barons of the underground market, says economist Caryn Abrahams.All retailers and wholesalers are selling their merchandise in foreign
money, while motorists are allowed to buy fuel exclusively in foreign
currency.
Abrahams, a doctoral researcher at the University of Edinburgh, said in
a discussion paper last week that the supposed aim of the currency
reforms was for the benefit of urban consumers.
"But the truth is that only a certain kind of shielded elites benefit,"
Abrahams said. "Who are the residents who have the means and choice to
buy in US Dollars or travel to South Africa to shop? It’s certainly not
the ordinary urban resident in Harare earning US$100 a month.
"There is no doubt that the winners are those who can access forex, the
supermarkets who front benevolence, and the barons of the underground
market. What emerges is an interesting convergence of formal economic
spaces, legitimate trade, elitist consumption, and extreme economic
stability – a climate perfect for racketeers and extortionists."
Abrahams said the role of foreign retail in Zimbabwe, as elsewhere,
only entrenched unstable conditions. She said the major beneficiary of
this new scheme were foreign governments and companies exporting
products into Zimbabwe and selling them in hard currency.
"South African supermarkets find it easier to stock shelves under this
new forex allowance because they have access to protected financial
stores and thus have less risk," Abrahams said. "Their apolitical
position makes them the perfect vessel for economic transactions that
take advantage of crisis."
Chief reporter
Post published in: Agriculture