By Charles T.M.J. Dube

IN last week’s instalment, I addressed the panic- buying and scare-mongering that arose last weekend but one.
I got into the street to find out more.
I discovered that these young men and their pushers were quite some schemers.
Remember from the article, ‘Analysis from the street’, our street analyst had downplayed the notion that the cash in the parallel market originated from banking and other public sources.
He, however, demonstrated that whenever a big institutional player got into the market, the rates went up.
According to him, the artisanal miners (formal or just makorokoza), tuck-shops and Mbare Musika-related markets were the biggest sources of cash.
In last week’s article, we pointed to the re-emergence of some institutional hands in the parallel market as demonstrated by pictures of fresh Bond notes still wrapped in Treasury bundles and hinted that such could only be straight from the Reserve Bank or commercial banks.
This accounts for the rises witnessed in the parallel market rates.
We have already described how the liquidity crunch came about in previous articles, but then while people had gotten to more or less accept the use of virtual money through mobile money and swiping, the coming in of institutional players floating big monies changed the ball game like it did in the period leading to the 2008 fall.
This was to be the straw that broke the camel’s back.
Our educated lumpens are go-getters and that we must give them.
They say an idle mind is the devil’s workshop, and indeed a very literate unemployed populace, if not correctly harnessed, could be too costly to us all.
I only got to understand the concept of arbitrage at postgraduate level as I took courses in Portfolio Theory and International Money and Banking, but boy, these guys are really practitioners who learnt it on the street!
Once all the cash was in their hands and those of their principals, these lumpens took their cash dealings to higher levels.
Take the case of Tongoona, not his really name, who is a vegetable vendor.
He drives his car to Waterfalls suburb in Harare every morning, parks and starts pushing his push cart selling tomatoes.
He also owns a commuter omnibus, all gotten through his seemingly humble push cart operations, but there is a trail to it.
The other day his commuter omnibus (aka kombi) driver dropped him, leaving him on his humble job while the driver hit the road to collect the Bond notes-carrying passengers at 50 US cents each, per trip.
He loves his job.
He does not make his money from selling tomatoes though and not very much from the kombi either.
He makes his money from accessing the cash through this seemingly very innocent source.
At the end of the day he counts his collections and on the morrow he accesses foreign currency at the Roadport and other forex dealing corners on the parallel market.
With the forex, he then again accesses even more Bond notes at even better premiums as per the period leading to the panic weekend, with his take-home more lucrative as institutional players get into the game.
The trick of the game is to ensure that the cash in circulation does not flow into the more formal channels like banks and merchants where there is closer monitoring by Reserve Bank inspectors.
The banks must get their deposits virtually and Tongoona gets better rates when paid through mobile money and transfers.
Tongoona is a real hustler as it were and next he will get to the wholesale merchants to swipe for popular consumer products.
In the evening, he sits at his stall selling merchandise at even cheaper prices than Mohammed Mussa wholesalers where he bought them from.
He passed O Level mathematics and so knows his objective is to get Bond notes or the green-back by the end of the day and make his money through forex arbitrage deals on the street.
If he bought a bottle of Mazoe Orange crush for US$3 and the Bond to US$ rate on the street is say 10 percent, depending on his intended final profit source on the forex end, that is, whether through bank transfer or Bond to cash exchange, he will play around discounts of his selling prices vis-à-vis his source prices.
He will therefore make his money from sharing the 10 or 50 percent with the final consumer.
The tomatoes, kombi collections, wares at the street stall and forex purchases at the Roadport are all part of his complex costing and input structures in which the final product is the forex.
I sell paper towel dispensers which are used in hotels and surgeries and one young man who drives a not very humble car bought for US$200 and being the good customer that he has always been persuaded me to accept US$100 in cash and the other US$100 through bank transfer.
It has been two months now, with him playing hide and seek, and I know that at the end of the day he will still pay me my US$100 with a very good excuse.
He has probably made over a thousand dollars by now from it.
Some tenant leaves US$200 rent with your nephew.
You will probably not hear about it until you ask and if you do, do not imagine that you will not get it back.
He will probably tell you that he had an emergency and used it and ask you if you do not mind a bank transfer there and then, or at least get it back tomorrow evening.
They call it hustling and these youths specialise in studying the system and looking for money-making loopholes.
It all boils down to controlling, accessing and manipulating the means of transacting by the transacting public.
Their system was working well, even for the consumer who could purchase his groceries at street corners instead of pushing trollies in the supermarket, and they were happy with the small margins they were making until the bigger guys joined the milieu.
These were more interested in turnover and big bucks and so were up to offering even bigger discounts and higher premiums on exchange.
Their entry rendered the whole system comatose as they throttled cash circulation even more with stronger networks in the banking and cash-hoarding merchants.
During the panicky buying week, they wanted to really go for the kill and, without the Reserve Bank and Government intervention, would have managed to ground the whole system to a standstill.
We should not just concentrate on the negative impacts these youngsters’ actions result in, but also on the brighter side.
These young men show ingenious survival skills.
If only these could be tapped or harnessed for national development through production or really tangible goods marketing instead of buying and selling the medium of exchange!
Their survival skills are based on the chikara kununa hudya chimwe (a wild beast gets fat because it feeds on the weaker animal species) principle, which we have always argued against in the parallel agenda series.
They are parasitic.
But then, they are not alone as this is a culture that has sucked in the whole nation, as each of us searches for means to reap where we have not sown, whether through office, connections or privileged position.
All they need is some little fine-tuning in their mindsets so that they will know that they can still be better off by using their creativity in ways that make life better off for everyone.
My mind is disturbed to all the seasonal agricultural produce which goes to waste in the rural areas due to marketing constraints.
I also think of the Zim-ASSET idea of value addition here.
Indeed, they are really smart and it is just a matter of misdirected innovation.