Pandora’s Lunchbox: How School Fees Embody the Chaos of Zimbabwe’s Currency System

MUTARE, ZIMBABWE — Mary Mlambo’s daughters were looking forward to the second-term reopening of Zimbabwe’s schools in early May 2023. Clad in their winter uniforms — trousers instead of the usual skirts or dresses — and bundled up in blazers, jerseys and scarves, the two girls resumed classes at their respective schools.

Having bought all required reading and writing materials, Mlambo, a government employee, was comfortable knowing the only thing she still had to pay was their school fees.

Mlambo always pays fees for her children within a few days of schools reopening. On her first visit to the school, she was told the point-of-sale machine used for card payments wasn’t working.

“I went home and came back the next day to be told there were network challenges with the banking system,” says Mlambo, who on her third visit encountered the same hurdles.

This time she was advised by a cashier at the office to change her Zimbabwean dollars to United States dollars and make the payment, “as children whose school fees hadn’t been paid would be sent back home.”

In June 2023, Zimbabwe’s annual inflation rate went up to 175.8% from May’s 86.5%. The inflation rate measures change in the consumer price index, which tracks the costs of a marketbasket of goods and services. Most Zimbabwean workers are paid in the local currency even though goods and services are largely charged in US dollars. Some businesses accept local currency, but at black market rates. Fuel stations and small shops, for instance, take only US dollars and usually charge lower prices than supermarkets. Despite a government directive in 2021 to penalize companies charging for their services in US dollars, companies argue that they need the foreign currency to buy stock.

The second-term schools opening exposed the lack of confidence in the local currency with some schools refusing payment made in Zimbabwean dollars. Schools were allowed by the government to charge fees in US dollars, with an option for parents to pay the Zimbabwean-dollar equivalent. The insistence by some schools to have fees paid only in US dollars, however, resulted in children being sent back home as many parents couldn’t afford it.

By the school’s third term, the situation improved somewhat for Mlambo after she was allowed to pay half the fees in local currency and the other half in US dollars. But uncertainty still lingers for parents who have to contend with unpredictable payment policies.

The matter was even raised in Parliament last May, when lawmakers questioned Edgar Moyo, the then-deputy minister of the Ministry of Primary and Secondary Education, on why schools were refusing fees paid in Zimbabwean dollars. In his response, Moyo said it was illegal and asked affected parents to contact relevant district school inspectors.

Zimbabwean currency evolution

Zimbabweans continue to feel the effects of the country’s weakening dollar, which drastically lost value against the US dollar in the first half of 2023.

From 1980, the official currency of the country was an earlier version of the Zimbabwean dollar that was used till its demonetization in 2009 due to hyperinflation. Demonetization is the process of officially removing the legal status of a currency unit. To try to end the ensuing multicurrency system — that relied on the US dollar and South African rand — and stabilize the economy, the government introduced the new Zimbabwean dollar in early 2019.

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The new Zimbabwean dollar was the only official currency in the country up to March 2020 at the start of the coronavirus pandemic, after which foreign currencies were legalized again, with US dollars and Zimbabwean dollars being the main ones in circulation.

With the weakening of the Zimbabwean dollar, the US dollar has become the preferred currency. In order to promote use of the local currency, a two-currency system was adopted in 2022. That April, the Central Bank introduced the “willing buyer, willing seller” foreign exchange market trading system to establish an official exchange rate. In late October 2023, the government extended the multicurrency tenure to 2030.

Situation for schoolchildren

Mlambo’s school fees were pegged at 110 US dollars for her child in the second class of high school and 35 US dollars for her fourth-grader. “We usually pay the fees in the currency you have: US dollars or Zimbabwean dollar equivalent of the US dollar at the official rate,” she says.

The official rate changes every day and is announced by the Reserve Bank of Zimbabwe. Not wanting her children to miss school, Mlambo made the difficult choice to change her Zimbabwean dollars to US dollars on the black market — where the exchange rate is higher than the official rate. “The rate at which I changed was very high, so I ended paying more than I would have, had I paid in Zimbabwean dollars,” Mlambo says.

Taungana Ndoro, the education ministry spokesman, says it is illegal for schools to peg fees exclusively in US dollars. He says it is the ministry’s policy that fees be paid in either currency at the official rate of the day. “There is no school that is allowed to refuse Zimbabwean dollars. All schools that provide primary and secondary education fall under the authority of the [ministry] and should comply,” he says.

Ndoro adds no child should be turned away from school for non-payment of fees as there is a constitutional policy deterring this.

Plight of schools

Former Education Minister David Coltart says the treasury department only causes suffering by trying to hold on to Zimbabwean dollars no one wants and few accept because the currency easily loses value in a hyperinflationary economy. “It is particularly problematic in the education sector because you get payment of fees at the beginning of the term, but not all expenses are incurred then but spread over three or four months,” he says.

Given volatility that can see a Zimbabwean dollar’s value plummet within a few days, “that money paid at the beginning of the term will be worthless by end of the term,” he says.

The situation forces parents to pay additional fees because what has already been paid cannot cover school materials, Coltart says. He faults the government for inadequate funding of education. “Funding priorities are skewed. Judges were given 400,000 US dollars [for] housing loans and cabinet ministers 500,000 US dollars. Put that in the education context — this money would pay for thousands of young children to go to school. So budget priorities have to be revised.”

Ngara, who heads a school just outside Mutare and asked to be referred to only by his clan’s totem for fear of retribution, says getting fees in Zimbabwean dollars makes it difficult to manage a school. “In my case, the school is in a rural setting and everyone then tends to pay in the local currency as most don’t have access to US dollars,” he says. He says the school, through the school development committee which helps run school affairs, convinced parents that a portion of the fees be paid in US dollars. “We explained to the parents that there will not be any meaningful development if all fees came in local currency, and they understood,” he says.

Teacher salaries are affected too

Coltart says the currency situation affects the quality of education. Aside from trying to maintain the physical fabric of schools, he adds, the government also should try to maintain teacher morale as teachers are the most important element of any education system. “Teachers are paid in Zimbabwean dollars and that rarely goes up in accordance with the rate. Converted into hard currency [US dollars], you come up with a ridiculous figure.”

Progressive Teachers Union Zimbabwe — the biggest union representing teachers in the country — says inflation has eroded teacher salaries. “The salaries that are trickling in induce a sense of shock,” the union wrote in a June 2023 post on X, formerly known as Twitter. Most teachers received about 240,000 Zimbabwean dollars, which translated to just 27 US dollars on the black market, they said. The union called on the government to ditch the local currency when issuing paychecks.

Economist Prosper Chitambara says in order to control inflation, its drivers have to be identified first. In the case of Zimbabwe, “to address inflation you then have to control money supply through monetary policy reforms.” He says a dual-currency system is necessary until confidence is restored in the country’s fiscal and monetary policies.

Meanwhile, schools are getting innovative to stay within their budgets.

Lee Chihwa, a parent with a child in fourth grade at a local primary school in Sakubva, a suburb of Mutare, says he’s no longer asked to pay additional fees since the school came up with a chicken-rearing project. “Once matured, the chickens are sold in US dollars only, meaning the school has a guaranteed US dollar income,” Chihwa says.

Many schools in the urban area are adopting such ideas, he adds. “I know of piggery, fishery projects. Some schools are even hiring out buses, school facilities like halls to churches on Sundays for extra income in US dollars.”

Tadiwanashe Moyo, a parent leader at her child’s primary school in Mutare, says parents agreed to pay fees in US dollars at the school. “We pay [the equivalent of] 35 US dollars per child and we agreed as parents that 20 US dollars has to come as cash in US dollars and the remainder in Zimbabwean dollars at the prevailing bank rate.”

She says the school runs sustainability projects such as rearing chicken that require US dollars in expenses but also generate profit in the same currency. Where possible they get goods that can be bought in the local currency from shops in the neighborhood that charge the official rate.

Mlambo says the government should monitor and remind schools about the dual-currency payment requirement. She says it is difficult to simply “report it’’ because, without hard evidence, schools can deny they are only accepting US dollars. Parents also fear how their children would be treated should they protest.

“Children may be treated badly at school after this. It will damage a child mentally and their concentration at school may suffer, so parents choose to suffer in silence,” she says.