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Wednesday, January 27, 2016

Money, Money, Money

On the left, Lesotho's Maloti,
on the right, the South African Rand.
Cue the Abba music, “Money, money, money…ain’t it funny..in a rich man’s world…” This post is all about the moolah. 

In Lesotho, there are two types of currency in circulation. Technically speaking, the Maloti is the official currency, however, it is pegged to the South African Rand and as a result, the Rand is used interchangeably with the Maloti throughout the country. 

While I originally struggled to think of these colorful bills are more than Monopoly money, when I visited America in October, I found the uniformly green dollars in my hand to be bland and uninspired. 

At the same time, those dollars would be worth quite a lot in Lesotho. When I arrived in June 2014, the exchange rate was 10 Maloti to every US dollar. Lately, it has been fluctuating a lot and is currently staying above 15 Maloti to every dollar. 

So with that in mind, I’d like to highlight just what I can buy with that single US dollar today, 25 January 2016, with the exchange rate sitting at M16.50 to $1.00 USD. 
Maluti: The local brew.
This "quart" is actually 660ml,
over a pint shy of a quart.
Top Ten Splurges in Lesotho for $1.00 or Less:
  1. 67 cents: A taxi ride to or from my rural village to town
  2. $1: A "quart" of Maluti, the local beer
  3. 25 cents: An ice cream cone in the Botha Bothe
  4. 79 cents: A Mint Crisp Cadbury Bar
  5. 91 cents: One hour of internet café
  6. 97 cents: A half pound of ground beef
  7. 18 cents: A half dozen makoenya (a fried bread similar to donuts but not sweetened as much)
  8. 96 cents: A package of seeds for carrots, greens, tomatoes, or other crops
  9. 42 cents: A deck of cards
  10. 91 cents: Printing three photos
Of course, when looking at these “steals” in US dollars, things seem incredibly inexpensive here. The reality, however, is that many of these things are big indulgences or splurges for people living here, including for Peace Corps Volunteers. 

Earlier this month in my post Constructing Dreams, I shared that the average annual income of a family in Lesotho in 2014 was only $1330 or $3.64 USD each day. This makes each “dollar” spent a big decision as it is hard to justify spending nearly one-third of your daily budget as a family on an hour of internet or a candy bar. In fact, I predict that when the 2015 data is released by the World Bank, it will show that the average income in US Dollars has dropped by one-third to reflect the change in currency value. 

Instead, most rural people only buy the occasional trip to town or the seeds mentioned on my splurge list. They grow the majority of their food, they wear old cloths, and they use things until they are no longer usable. Then, those “unusable” items often become children’s toys for building wire cars or playing house. When something new is purchased, it is treasured and taken care of for much longer than similar items in the United States. 

A typical village shop, this one belonging to my friend Sama.
Trips to town are typically reserved for purchasing in bulk or for appointments, visiting, and church. As a result, when villagers need to buy a food item, they usually will visit one of the small shops in the village. We have seven such shops in my village. Although they range in size from a closet to a typical American bedroom, they all carry similar items and are open pretty much all the time. Typical offerings and pricing in US Dollars are:
2kg Flour: $1.21
A loaf of bread: $0.61
Russians (similar to hot dogs): $0.12 each
30 Eggs: $2.18
  Tomatoes: $0.17 each
Laundry Soap: $1.45
Candles: $0.18 each

One of these shops also serves as the village post office. The owner has a post office box in town and villagers may receive their mail at his box provided they pay 5 Maloti or 30 cents annually.

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