Breakfast in Pretoria

This morning at the hotel here in Pretoria, I had breakfast with a businessman who is in town from Harare, the capitol of nearby Zimbabwe.

He had a number of fascinating things to say about the present situation in Zimbabwe, which I’ll share below the fold.

Well, it started off a bit strange. I mentioned that I have a friend/colleague in Windhoek (Namibia) who is originally from Harare – and it turns out that they actually know each other. Go figure.

His work brings him to Pretoria several times a year (and his sister lives here now), so he drives back and forth pretty regularly.

He said that being in Pretoria so often reminds him of how even the simple things of life have been lost in Zim.

For example, he said that he hasn’t taken a shower in Harare in about four years – there’s no running water into the residences any more. To wash in the morning, he takes a bucket somewhere (where you can get some water), and then uses that to take a sponge bath. For about as long, there has been no electricity in the residences.

Since their kids happen to be on a school vacation break at this time, he brought the kids down to Pretoria with him on this trip; the kids are going to stay in Pretoria with his sister for the next two weeks, while he flies back to Harare tomorrow – he’ll fly back to Pretoria in a couple weeks, and then after that drive back to Harare with the children.

He said that this was the first trip ever out of Zim for the children – and so they are getting their first real exposure to the outside world. When they got to his sister’s house in Pretoria, he asked them, “Okay, we’ve arrived – what’s the first thing you want to do?” They unanimously cheered that they wanted to take showers. Once they had all had their turn at showering, he asked them what they wanted to do next. The reply to that was also unanimous – “McDonald’s!!” They don’t have a McDonald’s in Zim – “Yet!” I replied to that. 🙂

On the good side, he said that the abandonment (a few months ago) of the totally degraded Zim dollar in favor of making the South African rand and the U.S. dollar legal currency in Zim has had spectacular positive effects. The most prominent is that whereas a year ago the shops in Harare were all barren of goods, now they are well-stocked; and while more items in greater quantities are becoming available, the use of stable outside currencies has broken the hyperinflation problem – the prices are reasonable. He noted that he had some construction to do at his house last year, and the price of cement was the equivalent of $25 a bag; now, the price is $7 a bag. I noted that the general commodity price reduction of the past year has probably helped as well, but this one seems to be working as intended – get a stable currency as the medium of transaction, and inflation disappears very quickly.

He also said that if you travel to the remotest corners of Zim, people have U.S. dollars even there – and have been using them in transactions on their own for some time. He also said that the money-changers in Harare are doing a brisk business – particularly with the South African rand having appreciated considerably against the U.S. dollar over the past year (when I was here last year the exchange rate was about 10 rand to the dollar; now it’s about 8).

Some time back, my Zim-born colleague in Windhoek sent me some of his photos of Harare from back in happier times. I’ve never been there, but it looked lovely – it’s on a high plateau (giving the city a moderate climate), and from the pictures it was very green, florid, and sunny; apparently, Harare is known as “The Sunshine City.” (If you talk to some really old Africa hands, it’s surprising how many of them will tell you that back in the bad old days when Harare was “Salisbury,” they found it to be the most gracious and appealing city in Africa.)

But the upside here is very simple. If you don’t debase the currency and ensure that it retains its value, it’s amazing what positive economic consequences flow just from that.

Maybe soon, we’ll be able to hector the present occupants of Washington with this – that they can learn a lot by looking at Zimbabwe.