Tour operators shortchanging communities

By Nkosilathi Sibanda
Bulawayo Sunday News

Many cash-strapped Rural District Councils (RDCs) are being fleeced of millions of dollars in foreign currency by some unscrupulous safari companies that bring in tourists into the country, but pay paltry Zimbabwe Dollars as payment for their operations on council land, a Reserve Bank of Zimbabwe (RBZ) official, has said.

This was revealed by Mr Phanuel Muringayi, the head of corporate advisory services at RBZ’s Fiscorp Company at a brief meeting on rural funding attended by council chief executive officers in Bulawayo on Wednesday.
“We have realised that rural councils are always seeking foreign currency every now and then. The reality of the matter is that the conservancies they manage are generating huge amounts of foreign currency that is crucial to the development of their areas,†said Mr Muringayi.
He also alleged that some of these cheating companies also default in paying the dues a situation that had worsened the cash shortages for most local authorities.
“We have it on record that these tour operators are not making proper payments as is required of them and that councils are allowing them default payments for certain favours in return,†added Mr Muringayi.
He further advised the rural district councils that there was no need for them to continue to be crybabies who were constantly looking for hard currency from the central bank when there was potential for them to generate forex from their operation.
The bank also advised that there was no need for the rural district councils to put blame on the RBZ for delaying to disburse foreign currency for their operations.
“The bank’s mandate that of disbursing money that is generated from the country’s production and they should be wary of apportioning blame at us, knowing fully well that there is foreign currency generation at their backyard.â€
Upon being confronted by the reserve bank to level their business practices, the tour operators were said to have threatened to pull out of business.
“They threatened to pull out of business and establish them elsewhere, but we simply said that would not be a problem because it gives locals a chance to run their facilities,†said the RBZ official.
A number of people have applied to the central bank to be licensed to operate as tour and safari companies and the pulling out of the current operators would benefit newcomers.
Currently, the councils manage the natural resources in conjunction with the Communal Areas Management Programme For Indigenous Resources (CAMPFIRE).
A call was made for councils and the CAMPFIRE project to have responsibility of managing foreign reserves to their communities, otherwise they risk being labelled as irresponsible.
“There is no doubt that the councils have a mandate to manage the eco- tourism facilities instead of allowing the safari operators to profiteer while development remains lagging behind in rural areas,†said Mr Muringayi.
Some of the rural district councils confirmed that such a development was there, but the problem lied with the fact that there was an agreement entered into by the safari operators to pay bed or overnight fees for every tourist who camps at the sites.
The main contention was that the tour operators in question do not reveal the correct figures on the number of tourists they bring into the conservancies.
“One thing that pins us is that these operators say they are receiving locals only and we do not have the mandate to check in their books to verify the truth,†said Mr Isaac Mackenzie, the chief executive officer Nyaminyami RDC.
“If one can look at the modalities, it would be evident that these businesses are making a lot of money and you tend to wonder how they do it amid the hyper inflationary environment.â€
However, the councils were informed to come up with stringent policies to help them get the foreign currency they deserve in order to retain the money they invested in maintaining the conservancies.
The majority of safari operators are said to be earning close to US$100 000 or more, on a good day, of which a certain percentage should go to the councils and the CAMPFIRE, projects.
The CAMFIRE project was designed to manage natural resources with the focus on wildlife management in all the country’s districts.
This idea came after a realisation that there was gross neglect on conserving natural resources in rural areas.
Importance of this project is to link rural communities with economic and ecological development so as to fund for infrastructure.

Well, I know that when we are in camp the PH does'nt make 100k usd, by any stretch of the imagination

Funny,
They are mad because the PH's are paying the bills in Zim $$ rather than foreign currency....the government dosen't even want its own money....I just left Zim and the US $$ is the only way you can purchase anything of value over there. When it came time to pay for the hunt, the operator would only except US dollars for payment.

Roscoe there is a world of difference between the operator and the PH! PH's are paid in Zim Dollars. Operators, by law, may not accept Zim $ for trophy fees or services, but unless the "land owner" be it national parks, a tribal council or private landowner have Reserve bank permission and a "special Foreign Currency Account" the operator may not legally pay them anything other than Zim Dollars.

The real problem is the exchange rate - which is officially Z$30,000:1 US$. The Council says "we want US$ 19,000 for an elephant, and the operator says fine and gives them 5.7 billion Zim - Which is only worth US$600 on the black market.

Unfortunately things like fuel are only available for US$ or the full black market eqivalent. ie from the price of one seriously overpriced elephant the council can just afford three drums of diesel.

This is not to say that the ball is entirely in the operators court. As he banks the money, government takes 35% (so for every dollar he banks he actually only sees 65 cents - on which he then owes company tax on any proffit).

We basically have 6 exchange rates at the moment.

1) transfer for tranfer 1.4 million Z$:1 US$
2) Cash for Cash 950,000:1
3) Tourism rate (what safari operators actually get in their pockets) 850,000:1
4) gold rate 400,000:1 ( which is why gold dental work is so cheep here)
5) Agricultural rate $320,000:1
6) Official exchange rate 30,000:1 ( yup thirty thousand to 1)

Ganyana is spot on.

Might I add that officialdom in Zimbabwe has a woeful lack of understanding of the extreme difficulties and complexities of running a safari operation in this country. Witness the number of hunting areas held by such people and their "relatives" but which are leased to the established operators - who just happen to be mostly white Zimbabweans.

The safari business depends hugely on "branding" and very few foreign clients would book with anyone other than a reputable, established outfitter with experienced, reputable PH's on the payroll.

This sniping at the safari industry by the reserve bank officials is nothing new!

Richard.

Author of: The Hunting Imperative; African Epic; Ndlovu - The Art of Hunting the African Elephant. (Available from Rowland Ward and Safari Press).

I knew there were multiple exchange rates but not 6 of them. That can get quite complicated. I know some of them barter quite a bit for hard goods, etc.

Let me tell you who is getting fleeced in my humble opinion...how would you like to work for a certain wage and be paid that wage at a later point when it is worth less? PHs are paid after the hunt (sometimes WELL after) and the inflation rate has changed dramatically but the wage is locked at the rate occuring during the hunt.

Then if they don't spend it immediately it continues to devalue. It's not that they are getting "fleeced" exactly and it's not really the operators fault (many of whom are PHs themselves) but I sure hate it that their wages flucuate so drastically. It's a crazy system.

Ganyanna,
Please don't take my comments wrong. I don't blame any of the operators in Zim. My comments were directed more to the government. I should have been more specific. While in Zim I was told about how the Reserve bank is fleecing the hunting industry. It is a sad state of affairs. I hope things will get better in future years. There is a lot of optimism that things will begin to change in December.

quote:

Originally posted by ROSCOE:
Ganyanna,
Please don't take my comments wrong. I don't blame any of the operators in Zim. My comments were directed more to the government. I should have been more specific. While in Zim I was told about how the Reserve bank is fleecing the hunting industry. It is a sad state of affairs. I hope things will get better in future years. There is a lot of optimism that things will begin to change in December.

just WHO is optimistic that things will change in one month?- you are probably right; they will get worse!! until the black population realizes just who is screwing them and do something about it, the ONLY change will be for the worse.

Reading between the lines, the ZRB is out of forex (no wonder, they have effectively shut down the agricultural, mining and mfg sectors) and so they don't have any left (after the Harare mob pays themselves of course) to distribute to the District Councils. And the to the extent that the District Councils have made deals with the safari companies based on what the Zim $ was worth in the past, they are getting precious little in purchasing power from those deals because the money has devalued so much....it's not the Operators' fault, it's (oops) the ZRB and ZANU who have brought about this situation.

Of course, every time a lease comes up it is renogotiated (or rebid) in real money.

I don't think the District Councils are fooled. Even the cook in camp could see through the political BS emanating from Harare.

There is and has always been a huge disparity between the black-market and the local bank-rates of foreign currency exchange in Zim. There will also always be a black market, as long as there is demand for forex, and especially imported necessities, such as fuel. The drying up of most forex from everything that has gone on lately, has only made forex more appealing to everyone. Unfortunately, for most Zimbos, they would feel happier dealing with Zim bucks, as, they could end up in prison pretty quickly if things went wrong and they got caught with US$ that they shouldnt have, etc. If you happen to lay your hands on some green backs, would you prefer to go to the bank and change it, or would you go to the thriving black-market where you would get a much, much better rate? It is illegal to have forex in most cases, so people would go straight to the black market anyway!

Unfortunately, I dont think people are worried about the local communities getting short-changed on forex, it is more of a case of targetting any extra foreign cash that can be grabbed, especially since forex from farming, etc has taken a bit of a dive, but then that is just my thought, I may be wrong.