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Black market booms in Zimbabwe
Robyn Dixon, Los Angeles Times
September 03, 2007

http://www.latimes.com/news/nationworld/world/la-fg-blackmarket3sep03,1,3218553.story

Inflation and price controls have made everything scarce, but 'cowboys' like Kuda Shumba are at your service, if you can pay a 500% markup.

Kuda Shumba goes at one speed: fast. He prides himself on being able to get hold of almost anything, and he's open for business day or night. That's what it takes to be one of Zimbabwe's black-market cowboys. Shumba spends his days on a motorbike sniffing out almost- impossible-to-find items such as sugar, cooking oil, bread, margarine or cellphone SIM cards, risking years in a dank prison if caught. His markup: 500%-plus. His cellphone is his lifeline. He gets calls from a couple of dozen contacts who tip him off when a scarce commodity - which nowadays in Zimbabwe includes all basic needs - is about to appear in a store. Then he swoops in. Store supervisors and other staff members sell most of what they have to people such as Shumba, pocketing a cut.

"I get them from the back door. You can't get them straight," he said. "I feel happy because I can get things fast and resell them quickly. That's my advantage: I'm fast. You have to be fast." In this country suffering from hyperinflation, where the black market value of 1 million Zimbabwean dollars is $5.50, the underground dealers are the bane of the government. But President Robert Mugabe's increasingly draconian efforts to control the lurching economy by imposing price controls were a gift to them, triggering severe shortages. Agriculture in Zimbabwe, once southern Africa's breadbasket, with a thriving tobacco industry, has gone into decline since early 2000, when Mugabe allowed the seizure of white-owned farms, most of which ended up in the hands of ruling party cronies. Production plummeted, investors fled, and the country has been struggling with severe shortages since.

Price controls meant some businesses had to run at a loss, so even more goods disappeared from the shelves. Although the government recently has increased some prices, the state-run newspaper Herald reports that widespread shortages persist. "I can make a lot of money because the government is saying people have to sell this at 50,000 [Zimbabwean dollars], so businessmen are no longer buying these things for resale," Shumba said. "I'll make a lot of money, 30 million-plus" a month. On the black market exchange rate, that would be $166. Still, it's a handsome salary compared with the 2 million Zimbabwean dollars a month, or $11, he estimates he would be making in his old job as a clerk, a post he abandoned in disgust several years ago because of the low pay.

Tall, wearing neat jeans and a crisp black jacket, the 34-year-old carries a briefcase and looks like a businessman or shop owner. Sure, he's deeply religious and active in his church, but he has a motto in Zimbabwe's dog-eat-dog economy: Never give anything away for free. When there is no meat in the shops, his wife and children eat meat. He has luxuries that none of his neighbors can afford: a laptop computer, satellite TV, a DVD player. "You can only afford those things if you're a black market guy," he said. "They're not for people on salaries." Most days, there's an air of anxiety in Zimbabwe's supermarkets. The freezer sections, once filled with meat and chicken, yawn emptily. The shelves where cornmeal, rice and bread used to be stacked are bare. But on other shelves, cakes, cookies, dog food and chocolate are piled up, at prices few people can afford. When staples arrive, the anxiety turns to panic, and sometimes violence.

When people see a queue in Zimbabwe, they join it and ask questions later. According to local news reports, a queue to buy sugar snaking for 900 yards erupted into pandemonium in late July in the eastern town of Marondera. A security fence was toppled and a woman sustained a broken leg in the crush, before police with dogs were called. Days earlier, two people were seriously injured when a truck carrying cornmeal was mobbed in Bulawayo. But business has never been so good for Shumba, who sells his goods secretly at night from his home, or delivers to special customers. He might be one of Zimbabwe's economic winners, but he seems wired, constantly on edge. During a clandestine interview, he fingered his cellphone ceaselessly and shifted nervously in his seat at questions about the business. Some months he sells half a ton of sugar, more than 300 gallons of cooking oil and 100 dozen loaves of bread, which he gets from retailers and manufacturers.

"If you want to be a dealer, you have to know a lot of guys in different sectors. If you want something from supermarkets, you go and see the manager there. You give him something so that when he gets in some sugar or cooking oil, he'll phone you." Among his customers are white businessmen who rely on him for cellphone SIM cards, which are difficult to procure. He splits the 14 million dollars, or $77, a month in SIM card profit with a friend who works in a phone shop. With shortages, black market prices are way up, reflecting the real inflation rate here. The risks have increased as well. "Yeah, it's dangerous," he said. "It's not allowed. If they caught me probably I'd go straight to jail." So Shumba has a little insurance policy. He bribes the police chief in his area 500,000 to 1 million Zimbabwean dollars - about $2.70 to $5.50 - every few weeks and offers him a gift of sugar, oil or cornmeal from every delivery. Zimbabweans privately curse the black marketeers, but no one is ever rude to Shumba's face. "People know what I do," he said. "They don't comment on it because they all want something from me."

In the black market area in the Mbare neighborhood of Harare one recent warm winter morning, dozens of traders stood warily behind the upturned cardboard cartons that serve as their stalls. One woman slowly wandered by, carrying two loaves of bread she had managed to find, but buyers were scarce. Police had raided the area hours earlier and the usual throng and bustle was absent. Later that day in another part of Mbare, a 23-year-old black-marketeer named Tendai Tafadze waited, bored, for a sugar delivery outside a wholesaler's warehouse. "It could be coming in anytime," drawled Tafadze, the sole breadwinner in a family of six. "I'm waiting for a call from my friend." He and his partner will sell the sugar at double the state price of 30,000 dollars, or 16 cents, for a 44-pound bag. Tafadze has about five contacts and gets 20 or 30 calls a day, though many are false leads. "It's nerve-racking because maybe you won't get the product, or maybe the quantity will be limited."

A dealer who gave his name only as Joseph works in another Harare neighborhood to bring in money for his family of seven. Joseph, 42, likes to portray himself as someone committed to helping people, even if his prices are so high that the poor can't afford them. The government set the price for cooking oil at 40,000 dollars, or 22 cents, but he charges six times that. "The good part of it is you're your own boss," he said. "You can work hard and your energy can sustain you. You don't have someone to bully or boss you." With salaries losing value and the unemployment rate high, many here want to pile into the black market game, to be a winner. But for every trader buying from the back door of a supermarket, there's a crowd of losers in a long line out front.

Sometimes Daina Banda, 75, of Bulawayo joins the lines, but usually she has no money. She spends most of her days rummaging through garbage for old cabbage leaves and scraps to feed her four children and three grandchildren. Other times, Banda wanders the streets looking for scrap metal to sell, but competition is so stiff that she has seen people brawl over a piece of discarded tin. She recalls with a sad nostalgia a time 15 years ago, when she worked as a maid. "It's a painful situation when I think of yesteryear when I was a maid and when I used to be able to feed my family and clothe them and pay their school fees," she said. "I never thought I would end up in this state. I didn't think I would get to this point in life." Her dream as a young woman was to have her own shop. Now she lies awake at night worrying about survival. "I am just lying thinking about this life I'm in and saying to myself, 'In the morning I'll wake up and look for cabbage leaves to feed my family,' " she said.

Like Banda, the black-marketeers have their own broken dreams. Joseph wanted to be a policeman or a teacher. Shumba was a bright mathematics student who had hopes of becoming a doctor. "There's no cash these days, man. There's no money. Buying and selling on the black market, it's OK for me," Shumba said. "I'm helping my family. That's the only thing I think about." For him, the thought that the country might one day return to normal is slightly alarming. Normality: That would take a big adjustment. How would he survive? "I'd try something. I'd do something different." His thought was only half finished when a call came through, and he jumped up restlessly. Somewhere, sugar had come in.

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