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Printing money again
May 6, 2016, 7:27 am

 

Dear Family and Friends,

The day that Zimbabweans have been most dreading for the last eight years, arrived this week. Zimbabwe is going to start printing money again.  We all knew that the centre couldn’t hold when the banks started running out of US dollars a few months ago and the problem has got worse with each passing day. Government salary payments to civil servants have been staggered repeatedly; promised Christmas bonuses to some civil servants have still not been made; new demands by war veterans for government money have all added to the demand for US dollars. I’m not an economist or financial expert but you don’t need to be when you see your country importing electricity, fuel and 80% of food on supermarket shelves, while companies close down, mines get nationalized and farmers continue to be largely unproductive on seized commercial farms.       

 

For the last month we’ve seen queues inside and outside the banks that we haven’t seen since 2008 when we were still trading in Zimbabwe dollars and prices were in billions trillions and quadrillions. When the Zim dollar crashed and we started trading in US dollars in February 2009, the mayhem disappeared overnight but it’s rapidly making a come back. For the past week as schools have re-opened for the winter term its been a nightmare for ordinary Mum’s and Dad’s. Queues a couple of hundred strong squash into the banks and more wait outside on the pavements as people desperately try and withdraw their money in order to pay school fees and buy all the things their children need to go back to school: uniforms, shoes, satchels, books, stationery and other supplies. Most banks have dropped the maximum daily withdrawal to US $200 per person, others to even less, but it’s not enough when schools are demanding cash; rent is due, electricity vouchers have to be purchased and then there’s food, transport and all the other burdens of daily life.

 

The Governor of the Reserve Bank blames the cash shortage on people’s reluctance to use credit cards; on individuals and businesses lack of confidence in the banks and on “drought induced import requirements.” He says that to date (this season) US$80 million has been used to import grain but doesn’t explain why we still aren’t growing our own grain on the 6,000 odd commercial farms seized since 2000 despite having always been a regional grain exporter. The Governor of the RBZ doesn’t acknowledge the fact that ordinary Zimbabweans don’t have confidence in the banks because we’ve repeatedly lost our life savings when banks have collapsed in the past sixteen years, not to mention when people’s foreign currency accounts were looted by our own government.

 

The Reserve Bank Governor said that a number of “market friendly policies” are being put in place to deal with the cash shortages. These include the introduction of Zimbabwe’s own version of the US dollar. Zimbabwe Bond notes, apparently worth exactly the same as the US dollar are to be printed in denominations of $2, $5, $10 and $20. The RBZ Governor said these Zim Bond notes will become: “an extension of the current family of Bond coins.”  The word “family” sends cold shivers down all our spines when it relates to money. How can anyone forget previous RBZ Governor Gideon Gono’s “family of bearer cheques” that left us holding sack fulls of worthless million, billion and trillion dollar notes?

 

The RBZ Governor said with immediate effect daily cash withdrawal limits will be US$1,000 which frankly is a complete nonsense to most ordinary people who’ve been standing in queues every day for hours at a time in order to be allowed to draw US$200 or less of their own money. Then there’s the new restriction on how much money individuals can take out of the country. The RBZ Governor says this has been “revised downwards” from US$5,000 to US$1,000. He doesn’t say if that limit will also apply to the large government entourages that jet set on foreign escapades all the time. 

 

To avoid any confusion however, the soon to be released Zimbabwe Bond notes are apparently not going to replace the US dollar but will trade side by side with it and other foreign currencies we use in Zimbabwe. For most people this doesn’t inspire confidence. Everywhere you go people are saying its 2008 all over again.  We haven’t forgotten the hell 2008 was; nor have we forgotten where it led.  Until next time, thanks for reading, love cathy . 6th May 2016.



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