Zimbabwe unveiled a new currency, ZiG, electronically in April, now in banknotes and coins. Yet, mistrust looms as some entities reject it. The country's economic woes persist, with the ZiG marking the sixth currency attempt since the 2009 Zimbabwe dollar collapse. Hyperinflation hit 5 billion percent then, triggering a tumultuous currency journey. Initially, the U.S. dollar served as legal tender, later banned, then reinstated. Various solutions were proposed, from gold coins to digital currencies, to combat inflation. However, the cycle continues, underscoring Zimbabwe's enduring economic challenges.
A novel "bond note" emerged as legal tender, preceding the reemergence of the Zimbabwe dollar, yet neither brought stability. The U.S. dollar remains the currency of trust among Zimbabweans. With the debut of shiny ZiG banknotes, mistrust looms. Kudzanayi Mande, a vegetable trader at Harare's bustling Mbare market, hesitates to accept ZiG, expressing confusion. "Already, there are official and depreciated black market rates," she explains. "I'll wait to gauge its true value. The U.S. dollar feels safer." Amidst fluctuating currencies, uncertainty grips Zimbabwe's financial landscape, leaving citizens wary of embracing new monetary ventures.
A man uses old Zimbabwean dollar notes to buy groceries in a supermarket in Harare, Thursday, April 25, 2024.
The government's decision to allow select businesses, like gas stations, to reject the ZiG in favor of U.S. dollars contrasts sharply with other mandates. For instance, the passport office exclusively accepts U.S. dollars, while some businesses face penalties for not adopting the ZiG.
Gift Mugano, an economics professor at Durban University of Technology in South Africa, criticizes this inconsistency. He argues that the government should lead by example, accepting the currency it prints. Otherwise, Mugano likens the government's actions to someone demanding others eat their cooking while indulging in takeaways—a behavior he finds suspicious.
A woman uses old Zimbabwean dollar notes to buy groceries in a supermarket in Harare, Thursday, April 25, 2024.
During the height of hyperinflation in 2009, Zimbabweans vividly recall the staggering reality of using a 100 trillion Zimbabwe dollar banknote. Prices skyrocketed to absurd levels, with a loaf of bread costing over 500 million Zimbabwe dollars. In grocery stores, prices could fluctuate between the time customers entered and queued at the cash register. Restaurants abandoned fixed pricing, witnessing increases throughout a single dinner service. Citizens resorted to carrying bags overflowing with worthless banknotes, as savings and pensions evaporated into insignificance.
Throughout the turmoil, the US dollar retained its allure, prized for its stability even on the black market. Despite the official currency being the Zimbabwe dollar, the greenback dominated daily transactions, from rent payments to purchasing essentials. Due to limited access to US dollars through banks, many turned to the informal market to exchange local currency earnings. For security, some opted to store their US dollar reserves within their homes, reflecting the enduring distrust in the local financial system.
A man smiles while holding the new Zimbabwean banknote, called the ZiG, in the streets of Harare, Zimbabwe, Tuesday, April 30, 2024
President Emmerson Mnangagwa's administration has adopted a tough stance, cracking down on black market currency traders who are now languishing in pretrial detention. They stand accused of attempting to undermine the newly introduced ZiG currency. Meanwhile, some businesses find their bank accounts frozen, with the government alleging refusal to embrace the new currency.
Authorities are adamant about the ZiG's reliability, citing the country's gold reserves as its backing. Mnangagwa, in a recent address, emphasized the importance of trusting the ZiG, framing it as integral to national identity and dignity.
A woman shows the new Zimbabwean bank coins called the ZiG, in the streets of Harare, Zimbabwe, Tuesday, April 30, 2024.
Despite the government's assurances, skepticism persists among many Zimbabweans, worn down by decades of instability. While some cautiously ventured to banks to acquire the new currency, others remained hesitant.
In the realm of political commentary, an online news outlet published a satirical cartoon depicting a policeman struggling to support a crumbling house labeled ZiG. The caption wryly remarked on the currency's reliance on police backing.
