Poor Billionaires

Even the traders sometimes get confused. One day recently this marketer picked up his cell phone at the house that also serves as his office. "At the moment that'll be 120 million—I mean billion, billion. Let's get it straight, eh?" he said, and chuckled. Afterward he noted the transaction and grimaced. "I have to write it down, one B and 200 M's." The worst part, he says, is that now when he leaves the country he always has the feeling that his pockets are never full of enough cash. "You go to get groceries and you've only got two notes in your pocket and you get this horrible feeling: 'Am I going to have enough money?' You're used to carrying this briefcase around."

When Godfrey, another black marketer, heard about the introduction of the 10 million dollar note last month, his first reaction was "Why only a 10 million?" The value of the 10 million note lasted only a couple of weeks. Soon enough, Zimbabweans were back to carrying wads of them, briefcases full of them, plastic bags of money. It was only two months ago that people started trading in billions, but now, says the first black marketer, "we're just about out of the billions, we're almost into the trillions."

The result is a mafialike system whereby officialdom and the ordinary citizenry have become complicit in the same illegal trade. Around the 26th of each month, one black marketer told me, government officials from the finance ministry appear in the southern town of Bulawayo and rent rooms at the Holiday Inn. Like all governments, Zimbabwe has monthly bills to pay: electricity and fuel bills are owed to South Africa; military weaponry bills are owed to Mozambique. Because the Zimbabwean dollar isn't worth anything, the government has to pay in U.S. dollars. So the government sends "buyers" down to Bulawayo to buy foreign currency on the black market. "These guys will come down, rent a room at the Holiday Inn, and they'll have big suitcases just full of cash. It happens every month when the bills are due," another black marketer told NEWSWEEK. "The dealers come and they sell billions of dollars so the government can pay its bills on time. The black market is very clever. It's like the mafia; it's creative." (Needless to say, the government is not in the habit of commenting on these reports.)

It can also be obscene, says Godfrey. "The other day some people phoned us up and told us to collect these boxes jam-packed with money. They wanted us to convert them into fuel. They had everything: boxes and plastic bags and envelopes stuffed with dollars, about five or six boxes, plus bags filled with 10 million dollar notes, all the way down to 100,000 dollar notes, and all of it was for fuel." Zimbabwe abounds with stories of cunning operators making huge profits off the discrepancy between the official and black market exchange rates. There are stories of people leaving airports with suitcases that never go through security. And there are tales of government officials changing huge amounts of Zimbabwean dollars into U.S. currency at the official rate, ensuring them a profit margin of, literally, millions in real money.

For a time the government tried to crack down on the hyperinflation by imposing price controls on shops across the country. It became illegal to sell anything at any price other than the one mandated by the government. It also became illegal to close shop, which meant that hundreds of store owners were cleaned out within hours once the price controls took effect. "It was total chaos," says the black marketer. "There was nothing left in the shops. The government had people, a task force, that would raid shops and clean them out." For a couple of weeks the whole country was one big blue-light special. Shops were forced to stay open. If they closed, owners risked forfeiting their businesses. Everything had a price tag on it—an official price tag that was worth nothing. Refrigerators were going for 10 million dollars, or around one U.S. cent at today's black market rate. "If these raiders walked in your store and there was no price tag on something, you got locked up," he recalls. "It was only the people with money that benefited. People went in behind the task force and pointed out what they wanted and had it loaded onto trucks. It was organized theft."

These days there's a price on everything. One afternoon a woman comes into the currency trader's office complaining about obtaining a passport for a friend. Zimbabweans are constantly struggling to make sure their identities are intact, their passports valid, their ID documents in order. It's another sign of the failing bureaucracy. But she's done the math and knows how much she has to pay. "It's 24.7 billion dollars to get the paperwork to be legal here," she says. "That's how much it costs to become a person. I used to say I would never pay bribes, or backhand payments, but you have to just to get anything, the smallest thing, done. You have to." That's a problem that's unlikely to be solved by Saturday's vote.

© 2008