Informal money-changers face challenges but not out

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By Ray Matikinye

BULAWAYO, Zimbabwe. Government’s decision to demonetize a bouquet of foreign currencies rand as forms of legal tender and officially revert to the Zimbabwean “surrogate” bond note valued at a floating interbank market rate has invented challenges to pedestrian informal money-changers who cluttered the city’s pavements.

The basket of currencies included mainly the Pound Sterling, US dollar, Botswana Pula and the South African Rand among others.

This follows a near-rejection by both consumers and retailers of the fiat currency triggering a spectacular collapse of the bond note value pegged at par with the United States dollar.  The central bank has now decreed the erstwhile fiat note as the official local currency.

Money-changers, easily identified by their dome-shaped headdress and ankle-length white ankle-length dresses resembling members of the Apostolic Faith religious sect to mask their illegal activities discreetly prowl the pavements and corners in Bulawayo that had flourished into hunting grounds for customers for more than a decade to evade police raids.

Nothando Simango (30) sits expectantly among a row of other women at the edge of a pavement arranging packets of biscuits into a stack and sweets imported from South Africa in clutches on plastic sheeting spread on the ground.  Occasionally the women outshout one another to advertise their wares to passers-by while surreptitiously asking: “Do you need to exchange currencies?”

“Only one bond and 50 cents for the biscuits or ten cents (bond coin) for two sweets,” they chorus in contrast to the covert approach they were accustomed to, to evade the police while illegally exchanging hard currency.

Zimbabwe’s central bank lost the unwinnable battle of insisting the surrogate currency was equivalent in value to the US dollar and allowed companies and individuals to conduct transactions at interbank managed rate following the volatility of the bond currency.

Business boomed for the illicit trader while the country’s central bank tried to fight pesky currency disparity and shortages by printing money, accelerating the devaluation of the bond currency in relation to other hard currencies.

Brisk business for the currency vendors raised public suspicion that the money-changers were ghosting for both big business and unscrupulous bank officials in the country who the public allege, supplied wads of the valueless bond note to exchange with US dollars.

Informal money changers often offered higher exchange rates than commercial banks without much hassles, driving holders of hard currency, mostly from Diaspora remittances to beat a path to the illegal currency dealers and money changers operating on street corners.  They basked in the glory as arbitrageurs who simultaneously bought at the lower price and sold at the higher price

But the decision by the Ministry of Finance and Economic Development to demonetise a basket of foreign currencies has precipitated hard times for informal money-changers who used to thrive on the back of a volatile bond currency. The daily erosion in value of the bond notes drove most people and commercial business to seek better store of value in foreign currencies.

“I will be lucky to sell ten of these a day,” Hlaca, a single mother said, reluctantly pointing at packets of biscuits stacked near her feet and adding:  “Even if I do, it is hardly enough to sustain me and my children for a week.”

She said it has become an uphill struggle to make ends meet these days compared to the past when she could comfortably fend for herself and her son and daughter from the income she generated from commission as an informal money-changer.

“As you can see for yourself the competition for customers is stiff, with all these other women selling the same products.” Hlaca noted.

She claims she is now struggling to survive and can barely pay for her lodgings.

During their heydays informal money-changers lined up the same pavements clutching handbags bulging with wads of local currency to exchange for hard currency. Most operated as agents for well-heeled cash barons in return for a commission while others, acting on their own, raked in thousands of dollars daily which enabled them to maintain comfortable lifestyles.

“My sister could not withstand her changed circumstances, gave up and returned to our rural home,” said Gladys Mampula (39). 

Both had drifted from rural Gokwe (a small town in Midlands Province) to Bulawayo to join the growing numbers of money changers.

Together, they had shared the rent for lodgings in Njube, a working class suburb west of Bulawayo.

“It was worthwhile staying but if the situation persists as it is, I might follow her decision,” Mampula said.

Hard times have befallen money changers and Mampula says she finds it tough to raise the rent from her new line of business. Some of her former money changers are drifting back to the rural areas after discovering that the going is becoming tougher for the informal trader.

Recently, she pawned her bedside radio in order to raise the rent and pay her share of municipal service charges with other tenants.

Mampula fears she might be forced to sell off other assets she had acquired during her stint as an informal money changer to make ends meet.

But the more intrepid, brazen it out in what has become known as “back seat exchange” where the illegal money changers touts potential customers to hop into the passenger seat of their vehicles to transact the exchanges without being seen by authorities. This happens more often and is classified safer rather than openly changing currencies on the street.

The less unfortunate pavement prowlers engage in cat-and-mouse running battles with the police who often swoop on the illegal money changers and confiscate their wares or seek hefty bribes to look the other way.

And the dwindling number of money-changers particularly along Fort Street in Bulawayo (ironically next to the High Court) has brought mixed reactions from affected businesses on the same street.

A fast-food restaurant manager, Desmond Khetho, said he had experienced a notable slump in business when money-changers deserted the pavements fearing arrests.

“They would linger along the pavement and bring in their clients to negotiate exchange rates over a snack or a packet of fries away from the probing eyes of the police,” Khetho claimed.

“Now they are hard to come by along with the customer they brought in.”

But another businessman welcomed the dwindling number of pedestrian money changers saying they had become a nuisance, driving off potential customers, who steered clear of his shop to avoid harassment.

“Business has picked up somewhat,” Ahmed Silliman, a general dealer told Montage Africa.

Silliman says he is quite unsure whether his change of business fortune has been entirely a result of the departure of informal money changers.

“It is not much but it is better than before,” he added saying customers were trickling into his shop unlike in the past when the shop entrance was crowded out by informal money changers haggling with prospective clients.

“It was bothersome to constantly persuade them to move away. Sometimes we enlisted the police to scare them away,” Silliman said.

 “I often come across some of them sitting in front of the supermarket down the street selling sweets and other odd bits.”

While business has slumped for the hordes of informal hard currency changers, some have not relented and now barter American dollars for South African rands which are still in demand from cross boarder traders.

Despite a temporary lull when government issued the edict, money changers have re-surfaced uptown along a popular eatery and an upmarket hotel.

Thompson Zindopwe canvasses for customers next to a car-showroom. Caressing a ward of American dollars, he says changing currencies is the only means of raising money for rent.

He complains about police raids saying he and a group of others in the same trade are providing a service.

“People are reluctant to go to banks and exchange their money because of petty bureaucracy. They are impatient to follow through all the hassles so they prefer coming here to transact,” Zindopwe says.

Often police swoop on the money changers in an effort to drive them off the pavements.

“They accuse us of obstructing free movement of public on the pavement. In most cases they will be seeking to be bribed because the fine for obstruction is very small,” Zindopwe claimed.

However, Zindopwe denies that illegal money changers con the public by exchanging fake notes.

“If a person or a section is labelled as such, this bad reputation grows and customers do not show up and one’s business dries too,” he argued.