SA Dependent Bulawayo Residents Suffer Rand Fall

By Dumisani Nyoni

Bulawayo, March 04, 2016 – Bulawayo residents continue to suffer the massive depreciation of the South African currency against the US dollar as many survive mostly on rand remittances from relatives in the neighbouring country.

The rand is the most dominant currency in Bulawayo and Matabeleland South due to the regions’ proximity to South Africa.

The rand collapsed to over R16 in June 2015 against the US dollar, leaving thousands of Zimbabweans with relatives in South Africa in a dilemma.

This is because salaries earned by people working in South Africa remain unchanged yet families back home, where rand has no value, needed to be looked after.                                  

As of Thursday, the rand was trading at R15,5 against the US$.

According to economic experts, South Africa’s currency lost 26 percent of its value in the six months after turmoil gripped Chinese markets in June 2015.

This after the People’s Bank of China surprised markets by executing a 2 percent devaluation of the yuan and changing the way it traded its currency. The aim was to weaken the yuan to boost its export competitiveness.

This, coupled with slower economic growth, has aggravated the situation for South Africa as well as other African countries that rely on oil and mineral exports to China, experts say.

Emerging markets most exposed to lower growth prospects and subdued commodity prices have seen the sharpest falls.

The rand is expected to remain under pressure with many analysts predicting that it will fall further in 2016.

However, with over three million Zimbabweans based in South Africa, the bulk of them from Bulawayo, are failing to pay rentals to the city council, school fees and fend for their children.

There have been reports that a number of supermarkets and schools in the city are refusing to trade in rand due to its continual depreciation.

Literally, people are suffering in silence.

A survey conducted by RadioVOP on Thursday in Bulawayo suburbs – both eastern and western – proved that indeed people were living in abject poverty.

A 65 year-old Sandi Nkomo of Cowdray Park said her basket of groceries keeps getting smaller every month as the rand fails to find a footing against the US dollar.

Nkomo, with two children in South Africa, said the issue of rand was giving her sleepless nights.

“I have defaulted in my rental payments and I fear the council might disconnect water services,” she said, adding her water bill had skyrocketed to over $900 since last year.

Nokuthula Nkala, 50, of Pumula Old high density suburb also had a sad story to tell.

“Since last year, things have not been easy for me due to rand depreciation. My son who is working in South Africa used to send me R1 000 (now equivalent to $64,5) every month for our upkeep and we had no problem with it because the rand was stronger by then compared to now. However, that money is not enough now,” she said.

Before the fall of the rand, Nkala was able to buy enough groceries for her family and pay school fees but now she could not.

Nkala said the city council has since disconnected water in her house and was now surviving on borehole water. She revealed that a number of residents in the area were using firewood for cooking as they do not have money to buy electricity.

It was the same story with Fortune Tshele, a father of six who takes care of his grandchildren. Tshele said what made it worse was that schools were refusing to take payments in the form of rands, a situation he said also left him with a few dollars after converting the rands to the greenback.

“Due to this, I can’t even send my children to school let alone feeding them. This suburb (8-roomed house) I am staying in has become expensive to live in. I tried to rent out other rooms but there are no takers as people don’t have disposable income,” Tshele who stays in Waterford said.

Tshele said their daily lives have become unbearable day by day.

He said buying a $1 mobile phone recharge card with coins costs R50, and R20 with rand notes – apparently to discourage customers from using rand coins.

Commuter omnibuses are charging between R10 and R15 for a trip to suburbs in the city, a journey that costs US$0.50.

“We’re no longer accepting one rand or two rand coins because they have no value anymore. The rand is killing our businesses,” said a kombi driver Kilton Ndiweni.

Ndiweni said commuters travelling to nearby suburbs like Mpopoma, Nketa and Old Magwegwe were paying R10 while those going as far as Cowdray Park, Pumula South and Emganwini were parting with R15.

Some businesses across the city said they were no longer accepting the rand hence their decision to inflate the rate so as to discourage customers from using it.

Most airtime vendors said they no longer accepted the rand as it was no longer stable.

“Rand has been rendered useless and we are no longer accepting it. We prefer bond coins,” said a vendor who identified herself as Gogo Matshuma.

Bulawayo Progressive Residents’ Association (Bupra) information manager, Zibusiso Dube argued the fall of the rand has negatively affected people of the Matabeleland region, especially those who survive on remittances from their kith and kin in South Africa.


“While the fall of the rand is by no means under the control of the Zimbabwean government, we believe that the government can do more to ensure that citizens transacting using Rand are not fleeced,” Dube said.

“The government could ensure that all shops accept payment in rand, with international exchange rates used. You will note that this is already happening on the ground in most supermarkets; however those shops that are refusing to accept tender in Rand should be compelled by law to do so.”


In the long term, Dube said the government should return to basic economic fundamentals, increase productivity in both primary and secondary industries, allowing people in this part of the country to get jobs and support themselves instead of relying on remittances from South Africa.

“In the final analysis, all problems being faced in Zimbabwe are due to the failure by the government to address Zimbabwe’s economic challenges which are linked to poor policies and proliferation of corruption,” he said.

In its November 2015 survey, the Consumer Council of Zimbabwe noted that the cost of living for a family of six had declined due to weakening of the South African rand which affected consumer spending.

 

Dube said a number of people in the city were vendors and their earnings were paltry.