Fair Trade Business in Zimbabwe Struggling for Survival

Try to imagine you are running a business and one morning you wake up to discover that the government has declared your national currency as worthless and therefore has withdrawn it from circulation and adopted the US dollar.

Your bank account with trillions of the local currency is non-functional overnight and even if you had a dollar bank account you cannot get hold of currency as the local banks have no dollars to distribute.

All the prices in the shops have been converted to the new currency and utility companies start to demand four figure sums to enable you to retain supplies. Within a week, telephones, internet, electricity and water are all disconnected. You have no communication outside your local domain.

You cannot pay the rent, now also in dollars, so the landlord locks up your factory with your machines inside.

Health insurance cannot be honored by the insurance companies and there is no money to buy medicines so a few of your loyal employees are dying while their families turn to you for help.

It seems an unbelievable situation but this is the reality in Zimbabwe and this is the true story of one of our customers, Dezign Inc.

They have not been able to run their business since April, communicate with their buyers or support their workers. I met the Managing Director of Dezign Inc, Laputa Hwamiridza, at the end of June and he told me about this disturbing situation which they find themselves in, through no fault of their own.

He needs a dollar a day for each worker to travel to the factory so even at the beginning he had to tell everyone to stay at home. Then, without utilities and access to the factory, it was pointless anyway.

He advised them to barter with whatever they had to get food for their families and he had to sell a company motor bike to get some money for funeral expenses.

Recently the government intervened and told the utility companies the charges they had imposed were unauthorized and illegal and so slowly they have been reconnecting everyone.

Laputa now needs to rebuild the business which employed over 120 people and had turnover in excess of $300,000. About a third of the employees have already left Zimbabwe to earn money elsewhere in Africa as they were desperate to feed their families.

There has been little reported in the press in the UK about this crisis and its impact on the business community. Amnesty International has said that Zimbabwe’s unity government has failed to curb human rights abuses and that socio-economic conditions remain desperate.

The churches in Zimbabwe are being overwhelmed by the poverty and desperation all around them. They say that the supermarkets are well stocked but only a small elite group has the dollars to buy anything following the collapse of the Zimbabwean currency in March.

Luckily, if you can use that word in such dire circumstances, the fair trade buyers are still supporting Dezign Inc and they have orders from Traidcraft and some local NGOs for T-shirts to get them started again but they have no working capital. The landlord has allowed them back into their factory provided they can pay their rent in dollars.

They are, of course, desperate for cash and Shared Interest Foundation has launched their Livelihood Security Fund by giving a $30,000 grant to Dezign Inc and the Society will postpone repayments on an existing loan which they have not yet paid back. This working together to support businesses in such difficult circumstances shows the real meaning and value of fair trade and the impact we can make to real lives with your donations and investment.

I am sure everyone connected with Shared Interest wishes Dezign Inc every success in overcoming these difficulties and hopes that the business survives to provide livelihoods for its workers and their families.

By making a donation to Shared Interest Foundation you can help to support the work of Dezign Inc, securing the livelihoods of 120 employees, enabling them to afford the basic necessitates for their families such as food, health care and education.

You can make a donation by sending a cheque (payable to Shared Interest Foundation) to Shared Interest Foundation, FREEPOST NT1 883, Newcastle upon Tyne, NE1 1BR or you can donate online at www.justgiving.com/sif.