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Defunct currency resurrects barter trade in rural Zimbabwe

Defunct currency resurrects barter trade in rural Zimbabwe
Villagers faced with liquidity woes, fearing defunct currency, have switched to ancient means of exchange

By Jeffrey Moyo

MASVINGO, Zimbabwe (AA) - Munodeyi Muhwandefa, 68, always comes once or twice a month to trade his livestock in return for bags of maize to feed his family in Maranda Township in Zimbabwe’s Masvingo Province.

Muhwandefa said it is hard to get money because his four children, on whom he used to rely, were wiped out by AIDS.

He also has eight orphaned grandchildren to look to raise.

- Barter trade fighting hunger

His wife, Maritha, 60, died from the coronavirus earlier this year, leaving him a widower and with the baggage of having to embark on errands to barter and trade the family’s livestock for food.

“My grandchildren are too young and my remaining children are looking for opportunities in the city and I have to be here at the township to trade off one or two of our goats just to get bags of maize or mealie meal in order to have food at home,” Muhwandefa told Anadolu Agency.

But it is not only hunger that has spurred Zimbabweans like Muhwandefa to switch to barter trade.

The southern African nation is currently experiencing serious liquidity challenges, especially in remote areas villagers have no access to cash because of joblessness.

Even if residents trade amongst themselves, cash is rarely circulated as very few or none have access to it.

“Personally, I have no money at all because my own children who used to support us with my late wife, were killed by AIDS, in fact leaving me with some burden to look after their orphans,” said Muhwandefa.

- Barter trade resurrects

Barter trade, which used be an ancient way of trading here, has resurfaced -- an alternative for many bankrupt residents like Muhwandefa.

In fact, pummeled by economic hardships, many like Muhwandefa are having to exchange goods for goods to surmount the liquidity challenges they face daily as they also avoid the defunct local currency.

- Lack of financial resources

Economists have pinned the blame for the resurfacing of barter trade in Zimbabwe’s remote areas on the absence of financial services.

“The challenge really has to do with lack of access to financial services including also even mobile financial services like Ecocash,” Prosper Chitambara, a lead economist with the Labour and Economic Development Research Institute of Zimbabwe (LEDRIZ), told Anadolu Agency, in reference to a mobile payment solution that enables customers to complete financial transactions directly from mobile phones.

“So, I think that’s the key challenge -- a lot of our districts lack access to financial services like banks, and even mobile connectivity; so, I think that’s a key challenge. Those people staying in those districts have been forced to rely on barter,” he said.

- Gloom everywhere

Yet for political activists like Elvis Mugari from the Movement for Democratic Change Alliance (MDC Alliance), it is gloomy in remote and urban areas in Zimbabwe as far as liquidity matters are concerned.

“There are no industries in villages, meaning very few have real cash on them and the ones in the cities upon which villagers have depended on, have no cash because many industries have shut down, also meaning they have no access to cash to then spare. So, villagers here have no choice except to turn to barter trade because they have to survive,” Mugari told Anadolu Agency.

- Defunct currency problem

Not only has liquidity woes pounded Zimbabwe’s poverty-stricken villagers, but the nation’s currency has been chewed away by runaway inflation and hammered residents who have of late started shunning it, preferring to conduct business using barter trade.

Such are villagers like Muhwandefa in Maranda.

“There is no money of course, but when I say money, I mean the real US dollars to get value for our commodities and surely I can’t take the local Zimbabwean dollar known to everyone that it lost value. Rather, I will opt for barter trade,” said Muhwandefa.

- Bartering labor

People now have to exchange goods for goods while at times some, like 26-year-old Tambudzai Msipa based in Mwenezi, have to pay for goods or services using labor.

“In order to get food to feed myself and my family, I have made sure I don’t accept the local currency as payment. If someone doesn’t have the US dollars, I have opted to be given some food parcels as payment instead, which means I give out my labor and someone either pays with the commodity I need or the US dollar,” Msipa told Anadolu Agency.

At the official exchange rate, the Zimbabwean dollar trades at 1 to 84 against the US dollar.

On the black market, the exchange rate is much higher, with the greenback pegged at 1:150.

But the Zimbabwean dollar, hit by inflation, has for the past three years been swiftly losing buying power, resulting in residents like Msipa avoiding it, preferring to do barter trade.

Yet, even as many Zimbabweans like Msipa shun the local currency, in July, the government introduced a new 50 Zimbabwean dollar note, which the Reserve Bank of Zimbabwe Governor John Mangudya said was meant to cure mounting liquidity woes.​​​​​​​​​​​​​​

source: News Feed
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