Money

The generator was running all afternoon. Most houses here have back-up generators that are designed to kick in when the electricity cuts out. It is a little unfathomable after living in the U.S., but here, power failures are not just common, they are expected to occur on a regular, even daily, basis. (One of the less intelligent purchases we’ve made since getting here is an electric clock/radio. It blinks 12:00 continually.) This afternoon’s blackout seemed to last much longer than usual and I couldn’t understand why.

Think of those Visa ads – things moving at high speed in perfect synchronicity, transactions blazing along, cash or credit cards being swiped. This concept is a world away from Tanzania. There is no credit. None. And you don’t realize how something as mundane as a credit card, much less very basic credit, facilitates life.

The electricity had cut out as we had run out of money on our prepaid electric meter. One can’t even get a month’s credit on electricity here! Same on a cell phone. You prepay and enter a code into your electric meter or cell phone and it registers the new amount, which you then draw down.

This is a cash society. So for Bodie to go to preschool, we pay 1.1 million Tanzanian schillings per trimester. All in advance in cash. The largest denomination in Tanzanian currency is 10,000 shillings, which is about $8. So we have to bring envelopes of money to the preschool. No credit means that most of the things that we habitually do with a credit card – gym membership, restaurant dining, large appliance purchases, or here, hiring a security guard - require payment of cash in advance. Credit cards are virtually nonexistent, except at some of the large hotels, which will charge you a 5% premium.

No credit means that when you buy a car or a house, you do indeed buy the car or the house with full payment up front. Even renting a house, as we’ve done, requires a full years payment up front. So a $2,000 per month rent means you need to front $24,000.

I’m not an economist by any means, but it seems so intuitive how essential basic credit is to foster any sort of middle class. The basics of car or home ownership are completely out of reach of almost anyone, let alone the basic consumer goods that drive the U.S. economy that are purchased on credit. Transactions we take for granted are greased by credit.

Our next purchase will be modeled on Bolivia in the 1980s or Zimbabwe today. We’ll push our new giant wheelbarrow filled with cash so we can join a gym.