Zimbabwe Chops Twelve Zeros off Bank Notes
Country’s Hyper-Inflated Currency Reduced to Sweet Nothing
Feb 3, 2009
With the country’s rate of inflation hitting a near incalculable five sextillion percent, Mr Gono has acted with unwonted alacrity in ordering bank notes to be shorn of twelve of their zeros. In short, a one trillion Zimbabwean dollar note (Z$1,000,000,000,000) is now reduced to a more manageable one dollar (Z$1) version. While the move should afford some respite to overworked calculators and computers, transactions are nevertheless increasingly performed in recently sanctioned foreign currencies.
Zimbabwe Today
Until this week anything more expensive than basic food staples required suitcases of cash to purchase. Moreover, a set of circumstances obtained in the blighted country that meant bank notes were massively devalued in any one twenty-four period. Unrest and disquiet have – understandably – spread faster than the cholera that continues to ravage the country. And only last week workers in the public sector – remunerated in native Zimbabwean dollars – struck after their wages were essentially reduced to nothing.
A Total of Twenty-Five Zeros Removed Since 2006
It is into this economic quagmire that Mr Gono has endeavoured to introduce a much needed sense of perspective. His latest attempt at mollification comes in the wake of a similar series of moves begun in August 2006. In the succeeding years bank notes have lost a total of twenty-five zeros. Economists assert that Mr Gono’s efforts are derisory and are fated not to bring succour to Zimbabweans. They protest that the country’s hyper-inflation has wheedled its way into the marrow of the financial system. A blight that will remain incorrigible while the country toils under the present political impasse.
However, Mr Gono – with a complacence that no doubt keeps him sane – asserted that his manoeuvres were not just necessary but prescient. For, indeed, the the ailing economies in the churlish West are now following suit: “I found myself doing extraordinary things that aren’t in the textbooks. Then the IMF asked the US to please print money. The whole world is now practising what they have been saying I should not.”
Mugabe Sanctions Foreign Currencies
Together with the people’s mounting migration to foreign currencies – US dollars, British sterling, the euro, SA rand, and Botswanan pula are now tender – the country’s run-away rate of inflation is bound to encourage a dual economic system. Indeed, experts believe it is only a matter of time before foreign currency reserves become the de jure means of exchange, at the expense of native notes.
Zimbabwe's Public Sector on Strike
Though to Western eyes the situation might smack of a game of monopoly gone horribly awry, the consequences of a two-tier economy are sure to have very real effects for Zimbabweans. Already, the country’s public servants – including the president’s own security force – have downed tools until they are paid in more remunerative foreign currencies. But perhaps the cruellest cut of all is yet to come if doctors and nurses feel compelled to leave their posts with the country still reeling from a cholera epidemic that has claimed over three thousand lives.
Tsvangirai Wants Gono Gone
The only bright spot on the horizon for Zimbabweans is that Mortgan Tsvangirai, head of the oppostion MDC party, has stipulated that a power sharing agreement with Mugababe's incumbent ZANU-PF is only possible without Mr Gono at the Reserve. However, the man who claims ex-President Bush once invited him to be the World Bank's number two will no doubt be difficult to shift. He's foolhardy, no doubt; imperturbable, perhaps; and an optimist without question. Asked by the magazine Newsweek what keeps him going every day, he responded: "[The knowledge] that it can't get any worse."
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