The Exchange Rate Crunch and the Myth of Freedom
The concept of money is so easy for children to grasp, as my son pointed out a few years ago - "Just go the ATM and put your card in and get some money Mom" he told me with doe eyed innocence. How I wish it were that simple!
We live in a time of change and uncertainty and I hate to say it, but complete financial niavete. In Africa we are constantly at the mercy of the dreaded ROE (Rate of Exchange) and so few 1st worlders truly understand what that means.
Africa may have riches in terms of gold, diamonds, coal, fruit and veg etc but we do not have our own base to economy which means that what costs x today could cost x AND y tomorrow!
The Bread Line Conundrum
A simple thing really, in South Africa we once had a Rand that was equal to 2 US$ and then it was R1 to $1 and then suddenly it was R4 to $1 and we almost got used to R7 to $1 round about the world cup, but now its escalated to a ridiculous R13 to $1!
So yes, bread may still only cost $1 for us, but its gone from R8 a loaf to R 13 a loaf, or in realistic terms, our buying power has been halved> Our expenses have doubled virtually over night whilst our salaries remain constant and in most cases, cannot be increased due to the pressure on businesses who are forced to trade in USD.
One thing that Africans have gotten really good at, is doing more for less. We are the flexible consumers who learn to eat less, get creative with food stuffs to keep our families fed and ignore our empty pockets.
The crazy thing is, once the rand stabilizes and improves against the dollar, our prices will not go back down, no...our retailers will "cushion" their next blow by keeping prices the same so that the only people who really feel it are the people who go home. In Zimbabwe you could earn enough money in one day to buy a loaf of bread and then not be able to pay for the same loaf the next day with the same wages and I fear something similar is happening here in South Africa.
Africa has no success stories because Africa has sold herself to the highest bidders for convenience and the greed of politicians.
We no longer take pride and making our own goods or farming our own produce. We no longer take pride in our work ethic and culture, instead we have sold out and become consumers at the mercy of nations and banks far bigger than our own.
Educate Yourself - You ARE the Economy!
Apartheid may have been wrong for a lot of reasons, but what was "right" about it was the strength of our economy and our currency!
Why? Because we were self-reliant! We couldn't be dictated to by other economies and buying powers. So, we are in fact a case study of what works!
1. BUY Local: Buy from your nearest farmer, hairdresser, clothing manufacturer etc. It will strengthen the very community you live in!
2. MANUFACTURE local: Yes, I know - its cheaper from China! But have you ever tried to return something made in China? And what good is it if the people in China are well trained and your neighbour is starving and looking to steal from you to survive?
3. TRAIN local: Invest in the people around you, teach the men to fish and the women to sew and you will not only develop a stronger currency and economy but a stronger sense of community!
4. INVEST local:I know there are lots of blue chip companies out there that can earn you money, but what about your neighbour's/ friends/ family's new little business that is cash strapped but really well run? Have you ever considered that you could get far better returns on your investment far quicker if you invested this way? get someone to help you check it all out first of course, but you could be pleasantly surprised!
5. CASH is King: Part of the weakness of our economy is that it is built on debt! STOP buying into it! You do not need 3 pairs of the same shoes, you do not need another loan for another new car. Pay an extra R 500 a month into your bond and pay it off sooner and save MASSIVE amounts on interest.
Don't believe me? Try this BOND EXTRA REPAYMENT CALCULATOR
6. GROW / MAKE YOUR OWN: Growing your own fruit and veg could save you hundreds of Rands every month. You may not be able to grow everything sure and for everything you cant there is the local farmer/ farmers market, but you will no longer be stuck in the hamsterwheel of buying from a supermarket who buys from a corporate farm or imports!
And once you do grow your own - you can SHARE LOCAL :) When there are less hungry, unemployed people, there is less strain on the economy!
7. VOTE!: If you don't agree with how your country/ state / city is being governed, get up and VOTE! It wont change unless you change it!
Small habits can make a BIG Difference!