Zim cross-border traders annoy hosts

HARARE - Early each morning, groups of bleary-eyed women and men who spent the night sleeping at a bus depot in Johannesburg scramble their blankets and check the condition of their goods.

Others still wrapped in blankets, sit huddled together for warmth in the inclement early morning chill a few blocks away from central Johannesburg’s Park Station, waiting for shops to open.

Four other buses full of Zimbabweans have just arrived at the metropolitan station with fresh loads of shoppers — driven by what they deem to be high prices at home — to buy an assortment of goods and other essential basic commodities.

Soon the yawns and groans of an awakening mass of people turns into noisy discussions as fellow Zimbabweans who have fled economic hardships inquire about the situation back home, while first-time shoppers ask veterans about which shops offer better bargains.

They are joined by a score or so of bus-loaders retailing their services.

“Prices are rising back home. You can get an item here for half the price or less. That is what is driving us here,” explains 38-year-old Cresencia Munetsi from Zimbabwe’s third largest Midlands city of Gweru.

She says she has travelled hundreds of kilometres to the City of Gold to re-stock her family roadside market.

“You have to beat the competition in the flea market business by anticipating demand otherwise nothing works for you. Local Chinese products that are not durable have flooded the market,” volunteered Ntombizodwa Sibanda, 26, a clerical assistant at a steel manufacturer.

Told about the annoyance some working class South Africans feel about the shopping sprees forcing an upswing in prices owing to demand, Munetsi countered: “If it were not for our misfortune which compels us to come here, some of them would become jobless when the shops we buy from close.”

Skewed economic policies have become a boon for South African shop owners.

“It is not of our own making that Zimbabwe has become a supermarket for South African goods,” Munetsi adds.

Zimbabwe has been going through economic hardships over the past two decades triggered chiefly by an unbudgeted pay out to liberation war participants in the 90’s and its involvement in an unwinnable escapade in the Democratic Republic of Congo purportedly to restore sovereignty.

At its height, economists estimated that Zimbabwe was spending at least $1 million daily in hard currency to finance its jingoistic escapade ahead of other more prudent Sadc countries.

Government continued to pursue policies that are out of sync with reality on the ground allowing inflation to gallop while it pursued populist policies.

At one time, inflation soared to 7 300 percent and an enduring shortage of hard currency invented economic hardships for ordinary citizens and constrained industrial production, leading to factory closures and reduced employment opportunities.

Its problems worsened after the governing Zanu PF party initiated a violent takeover of commercial farmland from white farmers on the pretext of remedying past colonial landholding disparities tilted in favour of an estimated 4 000 commercial farmers to placate a restive indigenous population in 2000.

Unexpected showing in general polls by the worker-based opposition Movement for Democratic Change (MDC) alarmed President Robert Mugabe who prodded independence war participants of the liberation war to unleash a wave of violence on the populace to coerce it into voting and retaining the “party that brought independence”.

And appalled by human rights abuses as well as the escalating democratic deficit unfolding before their eyes in a country they had erstwhile perceived as a model in democratic governance, former benefactors in the Western world withdrew support and imposed travel and financial restrictions on the Zanu PF ruling elite.

But the situation deteriorated when government accused industrialists and retailers of profiteering and in a swingeing fashion decreed that they slash prices of goods and services to unprofitable levels.

Other Zimbabweans, who have now become a common feature on Johannesburg’s bustling streets, buy trinkets for re-sale back home.

Walk along any of Johannesburg’s streets and witness Zimbabweans trudging along with bulging hold-alls that have become an unwelcome identity tag. The carrier bags contain basic commodities and trinkets for resale.

Chagrined South Africans marvel at the irony of how nationals of a country touted as mired in economic quagmire can afford to buy goods that are beyond their reach in such large quantities.

They also turn up their noses at the shoppers for driving prices up.

“They push prices up unnecessarily,” complained Mernard Bhule, a shop assistant at an Asian-owned shop along Small Street.

Zimbabweans buy for cash durable goods such as television sets, household furniture and beds that take working class South Africans months to pay for. Each day, Zimbabwean shoppers off-load thousands of rands which could restructure their home country’s currency crunch.

Millions of dollars worth of badly-needed hard currency finds its way into neighbouring countries.

To exacerbate the problems with the advent of adopting the United States dollar to replace its own currency rendered worthless by inflation, Zimbabweans have failed to resist the temptation to import cars from the Orient which now flood its highways.

Punitive import duties imposed by the government have failed to stanch the hard currency outflow.

Government has found it extremely difficult to stem the hard currency flight.

Zimbabwean Finance minister, Patrick Chinamasa, in last year’s $4,4 billion National Budget imposed excise duty on a welter of items ranging from footwear, clothes and underwear which his ministry now deems luxury goods.

An expanded list of what government considers “luxury items” ropes in footwear and undergarments for both men and women as dutiable items to boost cash-inflows into the Treasury.

But the punitive excise duty on an expanded scope of goods has done little to deter Zimbabweans flocking to South Africa and devising ingenious ways of avoiding payment.

Development economists say Zimbabwean shoppers pump billions into the South African economy through these shopping jaunts.

“If there were suitable banking regulations to keep the hard currency, this money would do the major part of humanitarian and reconstruction work urgently needed,” Norman Reynolds, a South African-based former economist in post independent Zimbabwe says.

The shopping sprees belie the deep economic crisis and hardships Zimbabweans face at home as a result of an economy that has shrunk by 70 percent since independence 34 years ago.

At independence in 1980, the Zimbabwe dollar exchanged for two US dollars. At the same time, the South African rand was worth R0,45 to the Zimbabwe dollar.

According to another economist, Eddie Cross, almost three decades ago, Zimbabwe was the largest exporter of tobacco in the world after the USA and the sixth largest producer of gold. It was the second largest economy in the southern African sub-region with the third highest GDP per capita.

Cross, a former executive of Zimbabwe’s sole beef exporter and now an economic advisor to the opposition MDC says in the first two years of independence, the economy grew 24 percent; followed by 15 years of steady growth of about five percent per annum.

Inflation was held at about nine to 12 percent per annum. The budget deficit was large at eight to nine percent of GDP and by 1995 the national debt had reached $5 billion or 60 percent of GDP.

But the economy flew off the handle when government pursued populist policies, introducing a raft of price controls to appease an expectant electorate.

“As long as our manufacturers rip us off, we will continue to come here in order to provide for our families,” insists Sibanda, who says her sister in the UK sends her money which she converts into rand on the black market.

At Beitbridge border post, the bus loads of shoppers “contribute” R10 each to induce customs officials to perform perfunctory inspection of their goods; thus avoid paying duty, despite government’s desperate bids to stem foreign currency outflows.

Close to a dozen heavily-laden buses, creaking under the weight of a variety of items, creep through the gate of the border post at Beitbridge daily, bringing home commodities that are in short supply or priced beyond acceptable price levels.

While Zimbabwean officials thrash their hands about in frustration and seeking solutions to a deepening liquidity crunch, cross-border traders beat a familiar path to towns and cities in neighbouring countries on shopping sprees, hoping to stretch the hard-to-get US dollar a mile further.

Comments (5)

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ORIGINAL - 22 May 2014

I'm not really getting the crux of the matter in this article. The writter's intended conclusion is not clear. I'm left wondering if he implies cross boader trading is bad or something else. The effect of cross boarder trading on South African prices has been way over exaggerated . South Africans have learnt so much to co exist with their neighbour's but however every situation has it's pros and cons. In this case some love to have Zimbabweans around while some don't

Eddy - 22 May 2014

The truth of the matter is that the sorry state that is prevailing in Zimbabwe is of immense benefit to our neighbouring countries especially South Africa and Botswana. Were the economy to improve to ideal levels, most business in Francistown and Musina would close up shop. The government therefore needs to come up with funds for recapitalisation of our local industry to start producing goods in order to reduce all the current loss of hard currency into other countries. Thousands of jobs will be created, prices will become lower and the government will have a broader tax base. Simple as that.

Dr Know - 23 May 2014

My God! Daily News you are shooting yourself in the foot! Do you thing literate and intelligent Zimbos will shallow this trash hook, sink and line?

dungas - 25 May 2014

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