Prime real estate
WE are living in abnormal times. The abnormality stems from poverty which unfortunately has triggered weird survival tactics and outlandish entrepreneuria
l skills in many among us.
Zimbabwe has abundant human capital but most of it today is being employed negatively or is being wasted.
There are doctors I know of who have stopped practising in order to sell fuel. There are architects who find the lure of a quick buck from selling cement more attractive than draughtsmanship. Senior bankers have left executive offices to run lodges and brothels in the avenues and suburbia.
This is where the money is.
It is no longer just people selling foreign currency at Roadport or fuel in front of Noczim House in Harare or the now common cheque fraudsters constituting the parallel economy also known as the black or grey economy (depending on one’s colour sensitivities). The new economy outside glass and mortar structures has created billionaires who can never thrive in a properly-run economy. When ordinary rural folk in Mberengwa can harness donkeys to pull a cart packed with $8,4 billion, then it’s time to reflect seriously on the parlous state of our economy.
The new entrepreneurs go about their business with stunning efficiency. Purveyors of the parallel economy can easily claim to be more efficient and effective than those running the formal economy. They see opportunities where many cannot envisage any. This week the Harare commission’s $33 trillion gargantuan budget presented a break for some. A youngster I met this week was rubbing his hands with glee at the announcement that the cost of burial space was going to increase from the current $750 000 to $8,5 million in January and then to $17 million in July.
That is prime real estate with returns unmatched by any property investment in the city, he mused. This is just over three square metres set to fetch $8,5 million. Prime residential land in Harare’s leafy suburbs is selling for $500 000 a square metre. The youngster was planning to buy hundreds of graves in city cemeteries for resale next year. There is always a ready market.
This is not a greenfield venture because there are others already in the business. No wonder Warren Hills cemetery is said to be full but burials still take place in the graveyard. There are graves available on the black market. Competition in this area is set to increase as more “estate agents” join the fray.
The challenging economic environment has brought with it a measure of cunning and opportunism which borders on the criminal. The smart middleman making billions on the street is thriving because of criminals performing the less honourable tasks of providing merchandise.
The merchants of the ill-gotten products then drive the illegality in the country. There is a ready market for cheap oil for commuter omnibus drivers and its source, Zesa transformers, which when drained of oil, switch off whole suburbs for weeks. Backyard foundries provide a ready market for felons stealing Zesa copper and aluminum cables every night. Enterprising hawkers are loading water onto bus carriers from Harare for resale in Chitungwiza.
The government does not deny the existence of a black market but has popularised the belief that the black economy is rooted only in fuel and foreign currency shortages despite more facets of the economy becoming black.
It encompasses all sorts of pilferage, adulteration and evasion, which have become the hallmark of this economy.
While everybody acknowledges the existence of a black market the government appears at a loss over how to tame it.
The vibrancy of the parallel economy is a sign that the official economy is not providing enough goods and services, and that a norm of illegality exists in a country. The land reform programme gave illegality fresh impetus as those who looted farm implements, stole cattle and harvested crops they did not grow appeared immune to prosecution.
They were stealing from white farmers four years ago and today, black resettled farmers are victims. Their loss is feeding the “other” economy.
Zimbabwe has become a haven for counterfeit goods manufactured here and across borders. Recently there have been adverts by beverage manufacturers warning of cheap bottled drinks on the market packaged under their trademarks. Glue manufacturers have also warned of imitation products being sold in hardware shops. Be careful when buying padlocks for your doors. One imitation brand is packaged in exactly the same box as the genuine product. Manufacturers of the counterfeit product have replaced the “U” on the brand name of the proper product with an “O”. This gives the cheap product the name of a vegetable and that is exactly what it is.
There is all the evidence that the illegal economy has drained talent and initiative from the official economy, deprived the government of tax revenues, and led to inefficient use of resources. The government cannot manage key resources like fuel and foreign currency because these are not in the hands of the state. Those in charge of the key resources would rather use them for self-enrichment and not national development because they do not want to support a system they abhor.
The net effect of all this is that the parallel market has become a major source of inflation and currency instability.
It has made nonsense of hard work and genuine business acumen. And there is no sign that the government knows what should be done. Indeed, it is part of the problem.