More new currencies for Zimbabwe

[bsa_pro_ad_space id=4]

by Björn Schöpe

May 1, 2014 – Zimbabwe’s economy has been weak for a long time. This lasting economic crisis led to the hyperinflation of the Zimbabwe dollar. Consequently, banknotes were only of interest for collectors: at last, banknotes worth 100 billion dollars were in circulation! On April 12, 2009, the government finally announced that the Zimbabwe dollar would lose legal tender status.
In reality, the country had already found alternatives long before that. Unofficially, foreign currencies had served as substitutes and were officially recognised by the Zimbabwean government in 2009. Even the government had been using the US dollar for official payments. Apart from the US dollar, the euro, the Botswana pula, the pound sterling and the South African rand were being used as well.

In the following years, a severe lack of cash money was noticed repeatedly. Shop owners stopped giving out change and started giving customers all kinds of things instead, from sweets to calling credit for cell phones. Although the latter turned out to be quite popular with customers, the situation was untenable. Especially December 2013 saw a shortage in cash, while at the same time, the number of counterfeits rose disproportionately high.

Zimbabwe’s reaction is to embrace new currencies in the country: it is already possible to open bank accounts in Australian dollars, Chinese yuans, Indian rupees and Japanese yens today. Soon, cash payments in those currencies will be legal, too. However, this most likely will lead to even greater confusion. Many people believe that the average citizen will not be able to recognise all the different legal coins and banknotes by their looks. It is expected that the number of counterfeits will increase considerably. Further, people working in retail will have to familiarise themselves with the different exchange rates. A widespread fear is that people will be queuing longer and longer at tills in the future.

Economic expert Christopher Mugaga already clearly expressed the opinion that ever new currencies will not change the fact that Zimbabwe’s economy is in a state of emergency. The introduced changes do not tackle the problem at its roots. They only make everyday life increasingly complicated.

The BBC recently published an article on the topic.

CoinsWeekly also reported on “airtime instead of change” in summer 2012.