It’s been 23 years since the Zimbabwe dollar crashed on 14 November 1997, aptly named “Black Friday”.
This the day when the currency lost 71.5% against the United States Dollar. The stock market also lost 46% of value. The little recovery made by ordinary Zimbabweans in the subsequent years was again decimated by hyperinflation that peaked a little over a decade on. The years from 2009 had a semblance of stability with multi-currency use. This too came to naught from late 2016. At this time of writing (hyperinflation phase 2), the concept of saving and/or investing is mocked. We started at the bottom and are back there again. People are tired.
Eroded Trust
Without a doubt trust in financial institutions has been severely eroded. Many people blame banks for “allowing government to take their money”. Furthermore banks have maintained an unbelievably wide chasm between what they pay in interest on saving and what they charge on borrowing. There is no reasonable or acceptable explanation for this gap in the eyes of customers. With this and inexplicably high bank charges, mattress banking has become popular again. People are tired, shem.
Desire To Save
The truth is most people desire to save. The motivations are many , and all of them valid. People save to purchase household goods, get better education, marry, build, travel; all of these positive intentions. The options of avenues for saving are few, sadly; and those that do exist – like converting local dollars into foreign currency, present an additional challenge – security. This could have been easily treated – deposit the money in a bank. After the many twists and turns on exchange control in the year from October 2018 to date, what emerges is the matter of confidence. As it stands, the average Zimbabwean trusts their foreign currency more than the local and trusts foreign banking systems more than their own. Sovereignty for who? The people want security and stability in order to save, and later invest. Enter the FNB Non Resident Account.
Here to Save You
The non resident account has been popularized by Zimbabweans who want to save, but fear losing value. As the FNB website says, this is a product that can help you manage your money in South Africa. South African individuals who have formally emigrated as well as individuals not born in South Africa can use the non-resident products to manage their affairs within South Africa. In as much as many Zimbabweans prefer the United States dollar, the Rand is also very acceptable. Many goods and services imported from South Africa. It is also really easy to get this account.
Simply walk into any FNB branch in South Africa and they will only require a valid passport. The account is opened while you wait. You order a card for local use, it will be delivered within two weeks in South Africa. They will set you up on their FNB app in the bank. The app enables you to transact in Rand in South Africa from anywhere as long as you have an internet connection.
Also note these important pointers:
- Your account will be in Rand and can only receive deposits in currency other than Rand. The exception is your initial deposit – not more than R100 to activate. You could also deposit USD10 to start.
- When you receive a deposit you will get an email prompt to confirm the source of funds. A simple clear response e.g. “fees from consulting work in the region” will suffice. You could also open a small business account if you do a lot of local work for easy transacting.
- All amounts deposited in foreign currency e.g. your free funds, will be converted into rand equivalent. You can make local payments, like DSTV on the app or using the ATM card.
- Monthly fees are no more than $4-5 per month, comparable or cheaper than most banks nostro accounts fixed charges in Zimbabwe.
- You can also open a savings account and sweep funds into it when not in use. Returns are tiered but go from as low as 3% per annum on R5,000 up to 5% per annum on over R100,000.
- Non residents can access non resident home loans, provided they have a deposit of 50% value of the property to invest.
- It is useful to have a local South African mobile number to connect the bank account to for SMS alerts, you can put it on roam when in Zimbabwe.
- You can take out USD or other currency but this will entail buying it from your ZAR (rand), a travel itinerary will be required i.e. your ticket. Not every branch has a forex centre though, check first.
- This is not illegal. You can deposit your savings in cash. You can be paid into that account for work done outside Zimbabwe.
- The ATM card is really, really, pretty. (Think Miz)
Our View
What we like most is the ability to save and to invest with relative stability, especially compared to Zimbabwe. This product is quite useful for those who transact a lot with South African services and goods providers. Travellers will enjoy the fact that the same FNB card works in South Africa, Lesotho, Eswatini and Namibia. The downside is not being able to pay for things outside South Africa online. However, this was never an FCA, you can get one separately.
The next time you are in O.R. Tambo airport, or at Messina for some household shopping, pop by an FNB and give yourself the opportunity to save and possibly invest, again. You will need about an hour in the bank for all of this. As the Good Book says, may calamity not visit / strike you a second (or third time). Organize yourself accordingly.
May all Zimbabweans say AMEN! (and share this article widely)
Kudzai is a financial wellness trainer and author of the personal finance book/newsletter CashTalk! Contact her on kudzi@investorsaint.co.zw or twitter @kedukudzi and @maripodcastzw