LUANDA, ANGOLA -- This is the story of Luanda's golden eggs.
It is also a story of a war-battered economy in transition from socialism to a free market that is so scrambled that eggs are far more valuable to a foreign visitor than the local currency, the kwanza.
I arrived in Luanda at the start of a recent weekend after the banks had closed. There was no way to exchange dollars legally into kwanzas, and thus no way to buy gas for a rented car that came with a nearly empty tank.
"No problem," a friend said. "Let's go to the Intermarket."
This is a supermarket that caters to the better-off of Luanda, those who have dollars or other hard currency. The Italian-provisioned supermarket's wide variety of goods -- clothes, household items, food and alcohol -- are priced in kwanzas, but all transactions are made in hard currency. One dollar at the store is worth 30 kwanzas of merchandise at the official exchange rate.
"We need to buy some beer," my friend said.
So my friend suggested that we buy eggs instead. There were newly arrived crates of them on sale.
We bought six dozen.
The eggs were priced by the half-dozen -- 47 kwanzas for that number, or about 26 cents an egg. The total bill came to 564 kwanzas, or $18.80, which seemed a high price to me.
With six dozen eggs in the back seat, my friend set off for a condonga, one of Luanda's many black markets, which is a misnomer since they are very open. Practically the entire city shops at them.
A couple of hours later, he returned to the hotel with a full tank of gas, and 4,600 kwanzas in change.
"What happened?" I asked in no small wonderment.
He explained that he had sold the eggs.
"I found a lady at the market and asked her for 150 kwanzas," he said. "She refused, but she offered 100 kwanzas. So I sold her the eggs at that price."
"One hundred kwanzas for a dozen eggs, or for six?" I asked, remembering that the eggs had been sold in units of six but packaged in cartons of 12.
"No," he laughed, "100 kwanzas for one egg." That's $3.33 for an egg that I had paid 26 cents for.
"How much can she possibly sell them for?" I asked with growing disbelief.
"She told me she would sell them for 150 kwanzas an egg" -- about $5.
In this one transaction, I learned just how out of whack the Angolan economy has become. I had converted $18 dollars into 72 eggs, which then hatched 7,200 kwanzas, or $240 at the official rate -- enough, it turned out, to fill the car with gas and carry me through a week's stay in Luanda, with 3,000 kwanzas left over.
How was this possible? How was it possible that Luandans could afford to purchase eggs at 150 kwanzas apiece when salaries in the government sector range from 5,000 to 35,000 kwanzas a month, about $160 to $1,160 at the official exchange rate?
When I left Luanda, after interviewing Finance Minister Aguinaldo Jaime and talking to scores of residents and diplomats, I still did not understand the price and value of those eggs. But I had a feeling that they had taught me a lot about the sad state of Angola's economy.
In October, Jaime explained, the government carried out Operation Troca, or exchange, obliging everyone to turn in their old kwanzas for new ones. But the banks only gave back five kwanzas in cash for every 100 handed in. For the remainder, each person was given a government IOU.
The idea, said Jaime, was to sop up the mountains of kwanzas the government had printed to finance its deficit over the years and bring the ratio of money supply to the gross domestic product down from 150 percent to 40 percent. The banks took in about 90 billion kwanzas out of an estimated 150 billion in circulation.
"There was too much money around, and people really didn't have a need to work," he said. "We have got to give a real value to people's salaries to energize them to work."
At first, the reform seemed to work, even though the government backed out of an IMF-urged devaluation of the kwanza at the last moment. Prices dropped dramatically because Luandans did not have the kwanzas to purchase even basic food items.
For example, beer, which serves as a major item in barter trade on the condonga, fell in price overnight from 30,000 kwanzas for a case to 6,000 -- $1,000 to $200 at the official rate. In early December, beer prices were still relatively low, at least by Luandan standards, varying anywhere from 150 to 300 kwanzas a can ($5 to $10).
But eggs were up to their old value, apparently indicating that Luandans again had sufficient kwanzas to purchase them at the same outrageous prices as before.
But, as several Luandans stressed, much of the buying and selling on the condonga is not done with kwanzas but through barter -- with beer, cigarettes and precious goods such as eggs serving as prime items for exchange.
On the whole, there was scant evidence that the government was succeeding in instilling any confidence in the kwanza among Luandans two months after the great troca. Most restaurants and all the main hotels would not take kwanzas for payment. About the only need a visitor had for kwanzas was to buy gasoline at state-run stations, or the local party-owned newspaper.
Jaime said the government has big plans for 1991 when the economy will be opened up to the free market and when 200 small- and medium-sized state companies will be privatized. Government expenditures are supposed to be cut way back, forcing even some of Angola's embassies around the world to be closed, and 7,000 government employees are expected to be laid off to pare down the bloated civil service.
The economy is in such disorder, according to Jaime, that no state company -- or the government -- can draw up a budget or make a plan that means anything. "Our national accounts are in a state of disarray," the minister said. "In Angola, it's difficult to give figures for anything."
He attributed much of the mismanagement to the civil war, which after 15 years has been closing in on this capital in the form of sabotage of water lines, power plants and, most recently, the oil refinery. This means that factories, like homes, are often without electricity or water for hours, if not days, resulting in highly erratic production.
As for when the government will take the big jump to devalue the highly overvalued kwanza, Jaime was not saying. Angolan businessmen were betting on early January for an announcement.
But back to the eggs.
The manager of Intermarket later explained how he came by them, thus revealing more about the workings of the Angolan economy. The pricey eggs were not imported from Italy or Portugal, as my friend had surmised, but came from Portuguese-run farms around Lubango in southern Angola.
He bought them for a mere 15 kwanzas per half-dozen, about 50 cents, or eight cents an egg. But he did not pay for them in kwanzas.
Instead, he gave the farmers credit in dollars, calculating the value of each half-dozen eggs at 50 cents. He then allowed the farmers to choose items from a shopping list of goods he was importing -- more barter trade.
As for those eight-cent eggs, they went by truck to the port of Namib and then by boat to Luanda, where eventually someone shelled out $5 for one of them -- not exactly chicken feed.