Has Gono’s new money run out already?

The newly re-introduced old coins caused a wave of delight last week as everyone dug around, gathering up all their ‘old money’ from the bottom of tins that had been sitting in the cupboard for years, purses and wallets that had become archaic, and from the taps that they were placed in as a cheap alternative to washers.

The old money, previously discarded, had now become valuable.  A friend told me that her family laughed at her for keeping a shoebox of these old coins under her wardrobe, but those same coins, re-introduced and re-valued, now amounted to over 10 times her normal monthly wage, and a ‘gazillion‘ times more than their original intended face value.It seemed incredible that Gono would be unconcerned about all the money already on the market from previous years, but he was.  Shake off the dust, and go shopping!!!

And that’s exactly what happened.

On Friday 1 August there was a frenzy of spending on the few items that were available in the shops and the already sparse shelves were soon stripped.  In the morning, bread cost $150,000,000,000-00 ($15.00 revalued) but by mid-day the price had increased to $280,000,000,000-00 ($28.00 revalued).   Transport costs doubled from $50 billion to $100 billion overnight.

Gono’s latest financial decision was like putting a stick of dynamite under inflation.  Prices have once again rocketed.

The foreign currency exchange rate (black market of course) has also risen as there was suddenly cash available to trade with.  And in turn, the imported commodities that we have all come to rely on have also increased in price.

Someone told me that a bottle of body lotion apparently costs $65 trillion dollars in the infamous Borrowdale Brook store.  That same lotion retails for about R20 in South Africa – converted at the black market rate, that equals approx $500 billion dollars.  How it gets to $65 trillion is beyond me, but if you are within easy reach of the printing machine or an easy, cheap supply of foreign currency then I guess it’s irrelevant. While this example is an extreme case, all imported items are being sold at premium prices to cover transport, duties and commission.

I was quoted R48 for a block of margarine.  The same costs R28 in South Africa.  This is the norm.

Government price controls seem imminent although from experience this will only cause more shortages, more suffering and result in even more business closures.

And now, just 8 days after the introduction of new money (and the re-introduction of the old), it looks like there may already be a cash shortage. The queues at the banks are as long as ever.  Another friend told me that their weekly wage bill was supplied to them in one dollar coins.  The bag was so heavy, it had to be carried out of the bank by two people.

Are we already scraping the bottom of the coin barrel?  Where are all the new higher denomination notes and coins that are supposed to ease our pain?

Yesterday I was told that the ZIMRA (Zimbabwe Revenue Authority) at Beitbridge border post were refusing to accept payments if the old and new money were mixed.  Both are legal tender.  So, you have to pay for your bridge fees, duties, and road tax (carbon tax) in either coins or notes.  Failing that, you pay in forex.  This is clearly just another ploy that is making someone rich.

Corruption, corruption and more corruption.  That is life in Zimbabwe.

This entry was posted by Chipo on Sunday, August 10th, 2008 at 7:09 am. You can follow any comments on this entry through the RSS 2.0 feed. Both comments and pings are currently closed.