A nod, a wink and some dollars

Changing money on the streets of Yeoville leaves no paper trail. It’s easy if you know who and how to ask. The amounts are small and it is difficult to catch the traders. And the people doing it have some stories to tell about laws and legality.

The popular one-way Rockey Street in Yeoville is always busy during the day, with people hustling to make a living. At night the main road is bright with the yellow hue of street lamps and the colourful blinking of traffic lights. Once the Yeoville Market closes, its image is darker.

Away goes the innocence of a traders’ paradise with fresh vegetables and traditional ingredients. What emerges is a more sinister scene with dark alleys that act as a shield for illicit dealings on the street.

The exchange is flash fast and inconspicuous. You give him the dollars and he in turn gives you the equivalent in rands. And, in no time at all, both parties are parting ways.

Yeoville is more than a century old. It was one of the first suburbs to be built in Johannesburg. Over the years, the area has always been a hub for immigrants from around the world. But more recently it has become a home for people from countries all over Africa – a gateway where more immigrants than South Africans live.

FOREIGN NATIONAL: Many Yeovillites come from all parts of the African continent. After a few months in South Africa, their legal stay in the country expires and they can no longer access formal institutions. Photo: Tendai Dube

Arriving with just enough money to start a new life, they bring in foreign currency and need to find ways to exchange it for rands. Once settled, they need to start sending money to their families at home.

A convenient method of exchange is the trading of currencies on the street, also known as the black market, and money is sent home through the hawala remittance system, which is an informal way to transfer money.

It’s called the black market because the transaction itself is illegal. It is done out of sight and often in the dark. Because the transaction is illegal, the market operates by default outside of the formal economy.

Informal currency trading is a crime in South Africa. According to the South African Reserve Bank (SARB) website: “It is illegal to buy or sell foreign currency to anyone except an authorised dealer.”

Foreign exchange in South Africa is controlled by the SARB and the local market is governed by exchange control regulations that control the flow of money into and out of South Africa.

The South African foreign exchange market is structured in such a way that all money leaving South Africa is controlled by the Reserve Bank, which nominates and licenses a number of authorised dealers or banks.

To send money out of South Africa, all funds have to be directly or indirectly approved by the SARB via exchange control regulations.

Not all of these black market dealings are that mysterious. When you find yourself in urgent need of some US dollars with no questions asked and no paper trail, you can try your luck and take a trip to Yeoville. However be advised – what you are doing is illegal.

From a dealer’s perspective

Vince* is a foreign national who claims to have traded illegally on the other side of the exchange. He would not confirm his identity as a dealer nor his real name, but encouraged Wits Journalism to speak to him about the practice.

“Mostly it’s about a better rate. You get more clients when you have a better rate. People go to these people because there’s not too many questions, no one asks for your ID or your papers, it’s just an agreement.”

According to Vince, illegal traders don’t cheat their clients with counterfeit bills. He says that these traders are “businessmen” who are “established” and won’t sell you fake bills because they want you to return. By the same token, they very rarely receive fake notes.

“For you to be in this business, you need to know paper quality. It’s easy to tell a dollar.”

Traders on the street usually keep amounts low, never more than $1000. If you want to exchange larger amounts, Vince says, they will refer you to other traders in wider Johannesburg.

The US dollar is the most widely used currency in the world, according to popular currency site XE Currency, which explains why it is the most prevalent currency in Yeoville. Vince says that, in his interactions, he has not seen any other currencies traded except for, on rare occasions, British pounds.

DODGY DEALINGS: Residents have access to four authorised forex exchange bureaus along the busy thoroughfare of Rockey and Raleigh streets. After hours, the street is well known as a place where currency is traded. Photo: Tendai Dube

Vince explains that there is a science to getting better rates on the street. An individual with a $100 bill is more appealing than one with loose notes of less value and will therefore be given a better rate.

“It’s a black market thing, it never gets back to the banks. It’s an under-the-carpet thing … and it’s much easier to take your money back [home] if it’s in US [dollars].”

It also eliminates a paper trail. Forex traders in Yeoville don’t worry about being caught by the police because, according to Vince, their business is based on trust.

“When you are stopped by the police you just say: ‘I’m a Zimbabwean and this is my currency in my country’, and they don’t ask you where you got it from.”

Vince says that usually works because they never keep large amounts. “Nobody moves around with thousands, it’s only small denominations.” Besides, most people who buy and sell are “regulars” and that’s why there’s no “snitching”.

The hawala remittance system

Another popular aspect of currency trading is the hawala remittance system, which allows people to transfer money between countries in Africa. According to 2010 research by Frederick Ahwireng-Obeng and David T Mutombo in Real Money, New Frontiers: Case Studies of Financial Innovation in Africa, edited by Mark Napier, the money does not actually physically move between the two parties in the different countries, in this case, between Yeoville in South Africa and other African countries.

It is estimated that more than 25 hawala agents were operating in Johannesburg a few years ago, but with the ever-rising rate of immigration, the number of agents is increasing too.

According to the research, an example is that of a Ghanaian tailor in Johannesburg with a younger cousin in Ghana. He wants to send money to his cousin but, because he lives in South Africa illegally, going to a bank is not an option for him. He also knows how bureaucratic banks are, they charge high commissions, offer poor rates of exchange and can be rather slow.

The tailor decides to approach a hawala agent, who offers him a negotiable commission of less than 5%, and a promise that the delivery will be made within 24 hours. The hawala agent offers an exchange rate of nearly R1 less than what the banks were charging to the dollar at the time, increasing its appeal.

The agent then liaises with his partner in Ghana to arrange for him to give the tailor’s cousin the equivalent of the money in either dollars or Ghanaian cedi. The partner is then reimbursed by the agent in Johannesburg, either financially or in goods and services. Sometimes there is reverse hawala, where the agent in Johannesburg gives money to an individual on behalf of someone outside the country.

In Yeoville, Malawian transporter Ndale* is also a hawala agent. Many people with family in Malawi use him and the hawala remittance system to send money home. Ndale spends his days delivering goods with his bakkie to traders in the market for a fee while his side business is dealing between Malawians in South Africa and their families back home. He only deals in interactions between South Africa and Malawi as that is his established network and he has people he can trust back home.

MONEY CHANGES: People find it more convenient to exchange money informally on the street as the trade is speedy and leaves no paper trail. Photo: Tendai Dube

These are the methods used by many African refugees and immigrants who have been granted asylum in South Africa, with the expectation of living a better life away from their politically unstable countries.

Limited options for some

Adroa*, who wanted to remain anonymous for fear of deportation or arrest, is an immigrant who has exchanged dollars before.  The Ugandan national struggled on his journey to South Africa. He chose South Africa because, according to him, it is considered a land of opportunity and democracy. “Where all dreams come true.” He travelled from Uganda through Kenya with $300 and then to Tanzania where he lost his money.

“When I reached Tanzania they robbed me of all my money, they conned me. They said I must pay for a bus straight from Tanzania to South Africa. I didn’t know that there is no bus.”

Adroa found himself in Mozambique without any money and holding on to the hope that his uncle living in South Africa would come and fetch him. He stayed with a “kind” woman for two weeks before his uncle managed to come to his aid.

On his journey from the Equator to South Africa, Adroa says he noticed that most of the countries he travelled through operated currency exchanges outside the formal economy.

“In Mozambique there are always people on the street and their job is to buy and sell.”

When Adroa arrived in Johannesburg, there were people waiting for the buses who offered to change his money on the very street where his bus stopped.

Adroa has been in the country for a little over six months, trying to become a businessman as he works for his uncle selling shoes. His uncle travels to Mozambique every few months to buy shoes and they both sell them here in Johannesburg.

When Adroa was new to the country, he remembers being naïve and lacking an understanding of rands. He recalls that he would sell shoes for his uncle by placing the box of money on the counter so people could take change for themselves. One day he received a counterfeit R200 note. He still has the bill so that he will never forget what a fake note looks like and will never make that mistake again.

Adroa’s legal stay in the country ended three months ago when his asylum period expired, halting his dreams to study in South Africa.

“When I finished school, I thought I would become an engineer, but I found I can’t be because it was too hard for me, so I became a business person. Being an engineer will take me more years.”

But formal education is impossible for refugees like Adroa who now live in South Africa illegally. He has been trying to renew his asylum status since June this year with the Home Affairs head office in Pretoria.

“Uganda is part of East Africa, East Africa goes there [to Home Affairs] on Thursday. I go there on Wednesday to be in the queue for the next day. But I won’t get asylum, as I enter the gate they say: ‘No, today is busy we are ending here [stopping the queue at this point] until next week.’ The last time I went there it was the same thing.”

Because of his illegal status in the country, he has been arrested about five times but never charged. He stays in the police cells overnight and then his uncle gets him out the next morning.

Adroa has no valid documentation and cannot use formal institutions. One of the authorised dealers based in Yeoville says that, in order to buy or sell other currencies, an individual needs to provide a valid passport with a valid permit, recent proof of residential address, proof of income and an airline ticket.

“You can even end up sleeping hungry when you’ve got money because you can’t change it.”

WESTERN WASTE: According to the people in Yeoville, the rates and the conditions at authorised bureaus are too high and inconvenient for people in the market. Trading illegally also eliminates any paper trail for people who may be involved in illicit dealings. Photo: Tendai Dube

Farai* is a Zimbabwean national staying in South Africa legally who sells vegetables inside the Yeoville Market.

Farai says she usually goes to Rockey Street to get her dollars exchanged and refers her friends there too. “It’s simple, they don’t need papers to change the dollars, you just give them the dollars and they give you the rands back.”

She knows of a few traders on that street but won’t use just anyone. “Sometimes you have to be careful, you can get fake money, so you have to know where you’re going in Rockey Street. You have to know the signs of money.”

When Faria exchanges money, she goes with small amounts to avoid being robbed or giving illegal traders any reason to follow her home. “If I change [money] today, I wait another week and then go back.”

Black market dealers aren’t known to just anyone, according to both Adroa and Farai. If you want to exchange any money illegally you need to know someone who can introduce you to a trader.

It’s a street rule known to all that if you want to exchange, you need to go through someone you know so that the trader knows you’re “safe”. This is mainly how they avoid arrest.

I nzara [it’s hunger],” says Vince in Shona, explaining what motivates some to go into illegal dealings. And then sometimes it’s just business and looking to earn a profit.

*Not their real names

The market in Yeoville is a prime trading location but many traders have remained on a waiting list for the past nine years. By: Tendai Dube

FEATURED IMAGE:  People find it more convenient to exchange money informally on the street as the trade is speedy and leaves no paper trail. Photo: Tendai Dube

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