Of Goat To Be Kidding Me

Once upon a time…. we used to settle our debts with a handshake and an agreement that you had in excess something I needed and I had more of something you needed, so we shook on it and a bargain was struck ..… wait; it is not a folk tale, it just might be the future….

Our crazy economy and its surrogate bond currency might be in for quite some change…. (no pun intended)

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I kid you not

A High Court judge made headlines for offering to goats as settlement in divorce proceedings….Newsday.jpg

….and the goat drama begun because shortly after;

The Ministry of Education was featured in the Sunday paper saying how schools must be flexible in matters of tuition fees and not just turn away pupils.  Parents and guardians can pay for their wards’ fees using livestock or do chores for the school in lieu of tuition.

The Newspaper article carried the headline Pay Fees With Goats:

And as you can imagine goats have broken Zimbabwean internet, people have way too much free time on their hands….

Oh yeah and so far its only schools that have been mandated to accept goats so don’t get carried away…

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To be honest though having parents selling their livestock to raise school fees is nothing groundbreaking but now it seems is somewhat implied that you just walk to the school leading your goat by the leash and hand it to the school headmaster.

What the ministry is proposing makes sense but then it’s not the kind of thing one wakes up and casually announces like “oh yeah, if you don’t have money you can bring in your goats as fees” and it does not really solve the root problem. Anyway how are the goats going to be converted into actual cash for the schools? I am guessing some livestock auction will have to happen; sounds simple enough but if people sell their goats because of not having money, whom oh whom is going to buy them? Some schools are probably going to end up with goats they cant find buyers for or selling them at less than market value, and another thing how exactly is the price of livestock going to be evaluated there’s bound to be lot of chicanery going on, people being the way they are; and in the interim where would the goats be kept, and what would happen if a goat dies? So many questions….

Imagine the unlikely event of every parent bringing a goat, cow or chicken; what a circus act schools would turn out to be and small wonder goat jokes are trending….

If the ministry has everything figured out they ought to say as much and explain how everything ought to work instead of vague newspaper quotes with room to a whole of misinterpretation.

Maybe our future currency is livestock; a legal framework to allow movable assets to be used as collateral or security when acquiring a bank loan, is on its way to being passed into law.

Banks only consider immovable property as collateral and if you don’t got none you won’t get a loan hun; no matter how lucrative the venture you need financing. The logic behind it doesn’t need any economist to figure out; you use immovable property as security because it guarantees one doesn’t up run away with it because hellooo immovable.

Enter The Movable Property Security Interest Bill; which seeks to make movable assets such as livestock, motor vehicles, furniture as collateral for bank loans. If the bill passes for a law this will make it a somewhat easier to get a loan but I am curious though who gets to keep the collateral, the thing with movable property, it can be lost, stolen, it depreciates and possibly dies, I’m no legal expert but I foresee an increase in civil and criminal lawsuits….

Banks best be using the super profits they made to build kraals and pens to hold their loan repayment securities.

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I had a dream of the future and it kinda smells like dung…..

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~B

Of Bond Age

Welcome to the Bond-Age…. You are supposed to read that as Bond Era, like the year of the Bond, and no, its not a new instalment in the James Bond movie franchise but one ought to be forgiven for thinking bondage and not of the kinky kind…

We have survived this long after the introduction of the Bond Notes surrogate currency, late last year, longer than some pessimists had pegged till collapse of our economy. Bond Notes are a surrogate currency, trading at a rate of 1:1 with the United States Dollar, introduced into the system to help ease the cash crisis. According to the Reserve Bank of Zimbabwe they are backed by a $200 million dollar facility by the African Export-Import (Afrexim) Bank, and to date $102 million worth of bond notes are in circulation.

(confession: I really have no idea what exactly that means if it is a loan or something else and its terms, I worry a little because this is how countries get economically colonised  I’ve read The Confession Of  An Economic Hitman had I heard of said bank before this… and I had never heard of the Afrexim bank before all this; well Google says it is a real financial institution  but I wouldn’t put it past responsible authorities to take creative liberties with the truth and claim to have financial backing so as to instil confidence in their surrogate currency )

The release of the Bond Notes was shrouded in quite the mist of mystery and vaguely phrased terminology like a stimulus package for Export Incentives and Cash Shortage alleviation and I remember a bank even got fined for breach of some confidentiality clause by circulating pictures of the bond notes prior to their release. Even the security features of the Bond Notes were only made public after the notes had been already introduced into the system.

An sms from the RBZ sent as part of their public awareness campaign:

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Who can even make sense of that?

Strangely enough though these notes were supposed to ease cash shortages trading at a value of 1:1 with the USD (easily making the Bond Currency the strongest currency in Africa) it seems to have worsened the crisis and bank queues are even longer than they used to be, and people struggle to withdraw the weekly banking limit, of their own money. The rumour mill has abuzz with talk of introduction of  even higher denominations of the Bond Currency which are currently trading in bond coins, $2 and $5 bond notes; although the Reserve Bank has gone on record to dispel this saying they won’t do so, as that could fuel inflation.

Plastic money, is the order of the day, but it’s still the standard operating procedure to first ask the cashier if the swipe Point of Sale machines are working and if they accept your particular bank, because some banks apparently don’t play with others, and local banks are suspending MasterCard and VISA transactions outside the country or placing limits on transactions.

How about doing RTGS …one would think that something called a Real Time Transfer should be instantaneous yet they take anything from 24hrs to 14 days, where does the money disappear to? Instead of just whizzing digitally from one account to another at the click of a button like magic? What if it disappears there and never comes back, what if maybe that’s how all the cash disappeared ??? You would think is a terrible time to invest in banking, but you would be wrong, banks are making a killing, your money in the bank doesn’t earn any interest and it will probably get eroded in transactional charges every time you swipe your card, or transfer money and other hidden costs, you might even get billed for enquiring your balance… and meanwhile some banks are making double digit million dollar profits…What a time to own a bank

If you figured you could runaway from the Bank Queues and try to make a withdrawal from some unscrupulous mobile money agents, you would find they charge a “commission” on top of the transaction fees and people desperate for their cash have no choice but to pay and that’s how it starts. Mobile Money Operators say such practices are illegal and should be reported, but desperation breeds strange bed fellows; once one person is willing to pay a premium for their cash then someone else will, and then another and another and soon chaos and the parallel market thrive….

Fuel supply is quite sporadic and one can’t just waltz or rather drive to a fuel service station without checking if they have fuel cause they just might not, and you ought not be surprised to find separate queues at the same service station, one for US Dollar fuel and another for Bond Currency fuel.

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Oh yeah, it also shouldn’t further surprise you to see that they are most likely to run out of Bond Currency fuel first too. They blame the Reserve Bank for not clearing their foreign currency payments to suppliers and in return the RBZ says it works on some priority list where not all foreign currency payments are equal; some payments are more important than others….

The RBZ FOREX Priority list

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Officially there is no parallel rate though in effect there is, by offering discounts for cash transactions as opposed to using plastic money which basically translates to cash being worth more. Unofficially there is a multi-tier pricing where there same product has a different pricing depending whether you are using plastic money, United States Dollars or Bond Currency. This is illegal and an RBZ amendment act was passed into effect  which will see perpetrators being jailed for “devaluing” the Bond Currency.

That’s some Bondage for you

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