Zimbabwe has been through a lot in the last few months with rules shifting again in the monetary circles. Suddenly US dollar pricing and quoting is outlawed, transactions are strictly to be done in the local unit, cash in and out of mobile were briefly frozen only to be unfrozen with now ridiculously low transaction limits. I really could go on. While we certainly cannot understate the plight of the average Zimbabwean we simply must pick ourselves up and go on. With that in mind here are a few tips to help in both personal and business finance to make sense of the Zimbabwe situation.
There’s a bit of debate about whether this is a good idea or not, I’m still firmly of the opinion that the US dollar remains our real value unit and therefore it is wise to keep the money as US dollars. It is not an investment for-profit purposes, however. The idea is to maintain the value of your money. Due to volatility, you may experience marginal losses or gains but this is certainly better than losing it all. So if you have excess money at one point in the month or have no better use for money immediately the best idea is to buy US dollars. Fortunately, the rules now allow purchasing foreign currency with no questions asked.
Prepay where possible
Another neat trick that has been advocated though with limited applications is the purchase of things like electricity in bulk. Admittedly the best time to do this was before the great tariff hike as was advocated by Mari Podcasts Kudzai Mubaiwa. None the less this may still be a good time to do it as ZESA announced they would seek a monthly exchange rate linked review. The idea is straightforward, you buy electricity as units and therefore price changes after the fact cannot affect what you have already bought. The same thinking can be applied to fixed payments such as vehicle registration and the like.
Buy in bulk
This tip really varies with your household setup but is still good advice none the less. The idea is to buy non-perishable items you are bound to use in bulk for as far into the future as possible. Here consider items like detergents, toiletries, canned food and such. The rationale is the same as the electricity idea and you basically buy now so you don’t have to buy later where you are pretty much assured that the price will be higher. This especially rings true if you are on a fixed Zimbabwean dollar income.
Consider offshore savings
If you are fortunate enough to have excess income and want to save it but are cautious of our Nostro foreign currency accounts then you may want to consider options available for non-residents in countries like South Africa. You can easily open an account that you can use to keep your savings in. This is a welcome alternative for those who are capable. Terms and conditions do apply on these so please do some research with your bank of choice.
Credit is dead
There’s no other way of looking at this. Credit is a losing proposition. It is presently illegal to denominate your transaction in US dollars and while some can get away with doing this for on the spot transactions you may find yourself in a pickle trying to chase a debt for US dollar-denominated transaction. The downside risk is too great. Extending credit at this point is not a wise move.
Hopefully, these tips will give you a better experience if you haven’t already been employing them. They are not mutually exclusive of course and are best used in combination.