Zimbabwe’s Complicated Wage Systems

Friday, October 24, 2008 

By Rejoice Ngwenya, Harare 

Rejoice NgwenyaEsther Temboh is a single mother of two who etches a living from a job as security guard in Msasa, a light industrial area about ten kilometres east of Harare’s central business district. A few years back, hers was among the least paid of jobs in Zimbabwe, meant only for desperate school dropouts caught up in a hopeless cycle of poverty.
 
Local folk musician Ernest Tanga Sando popularised the name ‘Mahobho’, a derogatory and demeaning term for people like Esther whose only claim to fame in the song is to make it difficult for visitors to access company bosses. But now thanks to Zimbabwe’s choking one billion percent hyperinflation, Esther has the last laugh, because despite only being ‘trained’ for one week as a guard, she receives a wage much higher than that of secondary school teachers who invested four years of higher education at college. 
 
There are more reasons than one why this crude distortion has become reality; one such is inter security company competition.
Esther’s compatriots are resigning enmass to join the exodus to South Africa where security guards are paid handsomely for taking up dangerous work in a country riddled with violent crime.
 
A relatively low monthly wage like two thousand South African Rands translates to only two hundred United States Dollars, yet
 when converted in Zimbabwe’s black cash market can yield more than seven million Zimbabwe Dollars – almost one hundred times what a government paid teacher currently earns. Most teachers are now boycotting classrooms in favour of cross-border trading to make ends meet.
 
 However in order to stem the skills haemorrhage to South Africa, companies in Zimbabwe have innovated weekly wages based on a cost of living adjustment rate agreed to with sectoral affiliates of the national employment council. They even compete amongst themselves to bait high school dropouts with fortnightly wages, a daily plate of basic lunch and at times, daily transport allowance – conditions which government teachers can only dream of.
 
Esther is one of the beneficiaries of this competition: "I don’t think it is worthy for me to leave the country any more", she says with a  wry smile, "since I make enough to keep my kids in school without risking my life in South Africa."But there is more tragedy than what meets the eye. Reserve bank governor Gideon Gono’s habitual monetary policy decrees do not allow ordinary people like Esther to withdraw more than fifty thousand Zimbabwe dollars from their accounts per day. This amount is only sufficient for one bus trip to Ruwa, where Esther lives.
 
Security companies prefer duty rosters that do not get the likes of Esther to board more than one bus per day to save on transport fares.  Also, most security companies have contracts for shifting cash in between banks, so their employees can avoid paralysing daily bank queues by requesting privileged colleagues to swipe the fifty thousand cash within banking halls. "My PIN code number is no longer a secret," Esther mourns, "because I have to hand over my bank card and number to colleagues who transport cash to the banks."  Though risky, it is a necessary evil since if she tried to do it herself, she would have to spend at least three hours every day queuing for this paltry sum before spending it on transport to and from the bank!
 
How the security companies cope with such a huge wage bill is more of financial gymnastics than profitability. When Gideon Gono outlawed inter-bank transfers of local currency to prevent what he termed ‘cash barons’ from trading in foreign currency, Zimbabweans discovered ‘currency burning’ to circumvent strict banking laws.  This entails handing over one’s foreign currency to an individual with ‘contacts’ in a bank who in turn writes out a cheque that compounds one United States Dollar by almost three hundred million! Such figures look daunting, but with Zimbabwe’s current annual inflation rate at one billion percent, the number of digits now counts for nothing in local transactions. And so when a security company pays out fourteen million to Esther every month, computed backwards, this amount is no more than four US cents!
 
 Moreover, it is impossible to figure out how Esther is surviving since most grocery shops price their commodities at ‘currency burning’ levels. In simple terms, supermarket owners assume  that customers who purchase by cheque or bank card arebeneficiaries to ‘burnt currency’, so they cost their goods to match the cheque value of the US dollar. Some shops even have three prices for one commodity: a foreign currency price, a Zimbabwe dollar cash price and another for cheque or bank card purchases. It is common to see signs stating ‘only cash’ or ‘US dollar section’ in supermarkets.
 
Either way, Esther can only use her card in ‘proper’ supermarkets: "At the high density suburb where I reside, shop owners demand only cash, so I sometimes resort to barter trade of soap to get a bucket of mealie meal." She has eliminated basics like bread, milk, meat and eggs from her family’s diet. "There is no way I can afford such luxuries since I do not have enough cash to purchase them. I can hardly find them in regular supermarkets where my bank card is accepted."  
 
But with Zimbabwean political leaders embroiled in power-sharing discussions, Esther’s future is uncertain: "I don’t know how long we will keep getting more money than teachers. Once the situation normalises, we security guards will revert to be the poorest paid workers again."  For the time being, Esther Temboh will remain a millionaire ‘Mahobho’!

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