How a profiteer works one of the world’s worst economies
Dave Mphele, a black marketeer in Zimbabwe, uses a combination of cunning and coercion to thrive in a nation with 231 million percent inflation. In his own bizarre way, he’s helping the country function.
Dave Mphele stands tall and proud in front of his sprawling three-story mansion. He is giving us a tour of his newest real estate acquisition (he already owns seven other houses). This place will be worth US$8 million when completed. He waves his arms excitedly at the roof. “Look at the quality of the tiling,” he says with pride.
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Then his phone rings. His friend needs to borrow $100. And, as Mr. Mphele soon makes clear, the friend wants to borrow the money from us. Reporters.
“It’s impossible to get cash around here,” Mphele explains, referring to the rapid dollarization of Zimbabwe’s basket-case economy. The plea for pocket money from two journalists seems perplexing coming from a man who has his own swimming pool and tennis court, plainly visible through the window of his new house.
Like many of the nouveau riche in Zimbabwe, Mphele (whose name, like everyone’s in this piece, has been changed for security reasons) is a man of contradictions. He goes to church every Sunday, but he has a team of eight thugs who enforce his deals.
He delivers firewood to needy homes, and an hour later bribes a local police official. He takes his daughter to France to visit Disneyland, but he admits to having shot a man, though not fatally. He’s a one-man NGO, a mafia king, a doting father, a shrewd businessman, and, potentially, the future president of Zimbabwe (or so he claims).
In reality, Mphele, 33, is a middleman in one of the worst economies in the world. He is part of an underground network of black marketeers, foreign-exchange dealers, import-export merchants, and just plain street-savvy capitalists who dabble in anything that turns a profit. They are opportunists and entrepreneurs who, in their own perverse way, help a destitute country function.
“There are very shady guys, but there are also teachers selling things on the side because they don’t make enough,” says a Western diplomat. “If people are making serious money, they have a protector in ZANU-PF [President Robert Mugabe’s political party].”
It isn’t easy to survive, let alone thrive, amid Zimbabwe’s continuing economic collapse. With a seemingly endless stream of billion-dollar notes printed daily, the country has faced some of the worst hyperinflation in history: The official rate is 231 million percent per year.
Upwards of 80 percent of the people are unemployed, and those who still work are paid largely in Zimbabwean dollars, though the government is now allowing businesses to charge in foreign currencies to help check inflation. Not surprisingly, 7 in 10 people eat only one meal per day, or none at all. Millions are in need of food aid.
Loud, boisterous, and unafraid to get his hands dirty, Mphele is representative of an often overlooked sphere of wheeler-dealers who have prospered as disease and famine ravage the country. These new titans of commerce – hundreds exist in Harare alone – skirt traditional routes to business success.
Ironically, they get richer as the poor become poorer. But they also serve important functions in Zimbabwe’s bizarre economy, in which basic institutions like banks or exchange bureaus have essentially stopped functioning.
Mphele himself owns part of a mine, a wholesale grocery outlet, a beverage distribution center, an electrical company, a sports bar, an investment bank, a security firm, and a house-painting service. Suffice it to say that a week with him can lead to anything.
The car we approach is a beat-up old Nissan. It’s painted canary-yellow, sounds like a lawn mower, and reeks of gasoline. Parked in front of his McMansion, it looks like either a modern art piece or a bad joke (Mphele insists his new Mercedes CLK 63 is on its way from Germany).