Financial illiteracy is our biggest enemy in Zimbabwe

Financial illiteracy is our biggest enemy in Zimbabwe
Published: 12 September 2018 (335 Views)
I found a very interesting letter in one of my old books that I last read in 2004. It is a letter that I received from Barclays Bank (Zimbabwe), offering me a Z$1 million overdraft facility. Three years back in 2001, I had bought a property in Colne Valley for Z$4,5 million, which was then equivalent to US$60 000.

Two years ago in 2016, the real estate agent who sold the house to me in 2001, June Mossdorf of Mossdorf Realty, valued the same property at US$550 000. Yes you read right, from US$60 000 in 2001 to US$550 000 in 2016 - that is a value jump of US$490 000.

I am not sure how much it is worth now, so I am tempted to ask her to do yet another valuation of the property. Just before 2013, June came to see me with a Lebanese businessman who offered to rent the property for US$4 500 per month, which was an annual income of US$48 000.

But here is the story now, in 2001, I could have chosen to buy a brand new Mercedes Benz E Class and it would have cost me $60 000, the same amount that it cost me to buy my home then.

The same car today would be sold here in Harare for a paltry $500 if one is lucky or even less if you are unfortunate. So, this is why white folks here in Harare don't get our fascination with buying expensive cars that make us end up in debt traps, like many have embarrassingly done so often and publicly ending up in newspapers.

I was talking to my old chap and Facebook friend Roger Stringer, and he told me that he is still driving a 1990 Honda Civic. It takes him anywhere that any of the expensive cars can take their owner drivers to. I always speak about political illiteracy in my blog articles.

Our other major downfall as Zimbabweans is financial illiteracy, lack of restrain and failing to have a sensible hierarchy of needs. We have a terrible relationship with money and when we don't do well in life, we start justifying our financial failures and omissions by assuming that the ones who would have done well are doing some other illegal things on the side.

The legendary broadcaster John Matinde was a victim of such petty put downs and jealousies in the UK when I was at university in the 90s. Compatriots would come up with comical and sad narratives of how he made his money with some bordering on the delusional. He took it in his stride as he was a big man with a solid head on his shoulders.

The perpetrators of such pettiness were victims of financial illiteracy.

As Tendai Biti is fond of saying so often, you can only eat what you have killed. This brings me to the second item that came to my mind when I decided to pen this article. Financial literacy is why I am excited about Mthuli Ncube's appointment at the Finance Ministry because he understands money.

A cowboy politician like Ignatius Chombo would have been excited with a $200 million loan facility from the Chinese government to build a Parliament that is in fact a liability and not a business.

Mthuli won't be excited by such small amounts of money for vanity projects because he has been in charge of bigger amounts of funding at the African Development Bank and beyond. He was also a victim of Gideon Gono's frightening reign of voodoo economics when his bank Barbican went down. He is yet to tell the full story, but many bankers were victims of a casino economy during that time because of the terrible economic policies, which shut Zimbabwe out of the world financial lending system.

When I was 26 and still living in London, my mentor Dr Tendai Maboreke, who is now one third of the trio that runs Lancet Laboratories in Harare, stopped me from buying an almost brand new Toyota Supra. Dr Maboreke asked me if I had a house anywhere in the world, we had a heated argument whilst having drinks that resulted in me capitulating. He sort of forced me not to buy the car and I ended up using the money as deposit for a flat in London. The flat was worth £38 000 at the time, today it is valued at £420 000.

So we must teach our children financial literacy in schools at an early age. I grew up in Glen Norah and Murewa and ended up in London and America through my postgraduate studies.

Hopewell Chin'ono is an award winning Zimbabwean international journalist and documentary filmmaker. He is a Harvard University Nieman Fellow and a CNN African Journalist of the year.

- Nehanda Radio.


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