The Zimbabwe economy has seen its fair share of ups and downs. After years of economic decline, the  government of national unity brought a bit of hope. Years later, the November 2017 administrative changes and the recent held elections looked like decent precursors to a better economic performance.  However, the wheels appear to be coming off again. Foreign currency is in short supply and the effects can be felt across the economic spectrum. Below, we look at the groups which are mostly affected by foreign currency challenges in Zimbabwe.


It looks like pensioners are some of the most affected by foreign currency shortages. Back in 2015, a decision was made that anyone who held a Zimdollar bank account and pension during the time prior to the demonetisation of the Zimdollar would be paid a flat fee of US $5. A commission of enquiry to probe the conversion of pensions and insurance benefits after dollarization in 2009 found out that the policy holders and beneficiaries had been heavily prejudiced through paltry pay-outs. To date, the findings and recommendations of that commission of enquiry have not been given proper attention at government level. In the meantime, with the separation of the Nostro Foreign Currency Accounts (FCA) and the RTGS FCA, the pensioners might be faced by another huge loss. Anyone retiring now is in for a shock, they may receive their lump some payment as an RTGS FCA deposit which in real terms is three times (or more) less than its US dollar value.

The working class

Most employers are still paying salaries for their employees via RTGS or Bond. This is despite widespread evidence that such money has lost value. If they decide to buy a vehicle, they need to look for foreign currency for the purchase price, shipping and import duty payments. On the parallel market, this is expensive and illegal. School fees for most schools are quoted in both US dollars and RTGS, yet the conversion rate in not 1:1. It is the frightening parallel market rate of 1: 3.5 or more. DSTV now only accepts payment in foreign currency for its subscriptions. The situation is dire. There are thousands of Non Governmental Organisation employees whose salaries were quoted and paid in real US dollars since 2009. If some of that money was still in their savings accounts right now, they are panicking. That money is no longer straight US dollars and they have to open new Nostro FCA accounts to start receiving real US dollars.

Business community

Across all sectors of the business community the cries are even louder. Shortage of foreign currency is a major stumbling block. The small to medium businesses will suffer more since they do not have huge financial resources saved for a rainy day.  In manufacturing, most players rely on imported raw materials and they are struggling to find foreign currency to buy such raw materials. If this persists, production has to stop. National Foods is one such company and many more might soon follow suit. For the pharmaceutical industry, it is literally  a matter of life and death. While they are lucky to be on top of the intermittent foreign currency allocations by the Reserve Bank of Zimbabwe, such allocations are a drop in the ocean. Fuel supply has also dwindled and this directly affects the transport sector and a lot of other sectors. Again, the government considers this sector an essential one but, the foreign currency allocations are not enough to meet the demand. In the retail sector, some goods are missing in supermarkets and basic commodities sometimes have to be rationed. As a result of the foreign currency problems, pricing models are inconsistent and complicated. In agriculture, tobacco and wheat farmers have already asked government to pay them in foreign currency in order for them to be able to purchase inputs whose prices have shot up as a result of the currency volatility. The list is endless. The future is bleak.

The general public

For the ordinary, unemployed person in the streets, foreign currency problems will not spare them. A one way trip to town using public transport used to cost 50 cents a few weeks ago. Now it has gone up to $1. Their monthly diabetes and hypertension medications have gone up by more than 300%. Sometimes pharmacies require to be paid in US dollars. Price of basic commodities has gone up. Most companies are either scaling down or closing shop altogether. The foreign investors are hesitant. There will be no new employment created for these people.

For many, a low key Christmas beckons. The value of their earnings has already been eroded. Those who are fortunate enough to have relatives who will send money from the diaspora will still struggle with long fuel queues, shortage of basic drugs and a confusing pricing structure. Only the thick skinned will survive.