Entrades
No change in Zimbabwe
JASON MOYO | HARARE, ZIMBABWE - Aug 02 2010 14:09
We always knew a unity government would bring change to Zimbabwe -- but perhaps not in the form of eggs and toffees.
Early last year, Zimbabwe, the world's last bulwark against imperialism, ditched its own Zimbabwe dollar for United States dollars and other foreign currencies.
Almost overnight, the currency reforms brought some stability. Inflation, which was last measured at 500-billion percent, has slowed to 5,3%, supermarkets are full, we no longer have to carry clumps of near-worthless notes -- and robbers again find it worthwhile to hit banks and mug people.
But, for all the joys of finally using a currency of some value, we have to contend with a shortage of small change.
For your 37c change after handing over $2 for a carton of milk, you are asked to choose between a candle, seven toffees, two eggs or matches. Or you can get the people at the stores' deli section to surgically cut up slices of ham for the exact amount. Or get the fruit and veg section to weigh a banana for the amount.
Either that or they hand you a "credit note", a slip of paper saying how much the supermarket owes you. The slip is as good as money, at the same store.
And so Finance Minister Tendai Biti has come up with an idea. Zimbabwe will import currency in smaller notes and coins, he says.
"Under the current multicurrency regime, the inadequacy of smaller denominations has posed a number of challenges in transactions. Treasury will facilitate in 2010 the importation of foreign smaller denominations and coins," he told Parliament recently.
This week his South African counterpart, Pravin Gordhan, said he was yet to receive a request for rands from Zimbabwe.
The debate over small change in Zimbabwe has spiralled into a wider emotive debate about whether the country should adopt the rand.
The International Monetary Fund (IMF) has been nudging Zimbabwe towards the Southern African Customs Union. A "hard peg" to the rand would help end currency fluctuations, the IMF says in its latest report on Zimbabwe's economy.
"The rand would also offer more appropriate small denominations and bank note and coin-handling costs would be lower than with the United States dollar," it says.
According to Gordhan, the impact on South Africa of Zimbabwe doing this would be minimal.
But although we have surrendered our sovereignty to the US, submitting ourselves to South Africa would be hard for many Zimbabweans to swallow. Among politicians South Africa is seen as that smug, wealthy cousin you go to only grudgingly. On Harare's streets, unlike in Bulawayo, the rand is rare, with the preferred currency being the US dollar.
Use of valuable currency has made stingy bean-counters out of Zimbabweans and businesses, especially supermarkets, are under pressure to find solutions.
John Mushayavanhu, head of Zimbabwe's bankers' association, says banks have loads of rand coins. But beady-eyed retailers appear reluctant to take them.
"Right now we are sitting on thousands of rands in coins, but retailers are not coming to collect," he said.
CBZ, the country's largest bank by deposits, has taken out advertisements offering "South African coins, R1, R2, R5, in exchange for South African bank notes at a rate of one-to-one or US dollars at the rate of the day".
NewsDay, the country's newest daily paper, sells on the streets for 50c, or R5. But this kind of money is hard to come by, so you pay the dollar and get a special token you can use to buy the paper's next edition.
Other service providers still resort to old Zimbabwe dollar bills to get by. But in taxis the $50-billion notes are good only as change.
At the Avondale market in Harare, wily traders make good money selling the iconic $100-trillion notes to collectors from around the world.
Still able to bargain at the tills and even rustle up a few coins, city folk have it easy. But rural life under the hard-currency regime is a great deal tougher.
A story is often told of the rural woman who paid for a bus ride with a chicken -- and got an egg as change.
It is most probably a tall Harare tale, but it tells the story of how barter trade has taken over the rural economy.
According to Biti, our beloved Zimbabwe dollar will not be back in circulation before 2012. Maybe then, when our sovereignty is finally restored, the economy will have undergone real change.
Almost overnight, the currency reforms brought some stability. Inflation, which was last measured at 500-billion percent, has slowed to 5,3%, supermarkets are full, we no longer have to carry clumps of near-worthless notes -- and robbers again find it worthwhile to hit banks and mug people.
But, for all the joys of finally using a currency of some value, we have to contend with a shortage of small change.
For your 37c change after handing over $2 for a carton of milk, you are asked to choose between a candle, seven toffees, two eggs or matches. Or you can get the people at the stores' deli section to surgically cut up slices of ham for the exact amount. Or get the fruit and veg section to weigh a banana for the amount.
Either that or they hand you a "credit note", a slip of paper saying how much the supermarket owes you. The slip is as good as money, at the same store.
And so Finance Minister Tendai Biti has come up with an idea. Zimbabwe will import currency in smaller notes and coins, he says.
"Under the current multicurrency regime, the inadequacy of smaller denominations has posed a number of challenges in transactions. Treasury will facilitate in 2010 the importation of foreign smaller denominations and coins," he told Parliament recently.
This week his South African counterpart, Pravin Gordhan, said he was yet to receive a request for rands from Zimbabwe.
The debate over small change in Zimbabwe has spiralled into a wider emotive debate about whether the country should adopt the rand.
The International Monetary Fund (IMF) has been nudging Zimbabwe towards the Southern African Customs Union. A "hard peg" to the rand would help end currency fluctuations, the IMF says in its latest report on Zimbabwe's economy.
"The rand would also offer more appropriate small denominations and bank note and coin-handling costs would be lower than with the United States dollar," it says.
According to Gordhan, the impact on South Africa of Zimbabwe doing this would be minimal.
But although we have surrendered our sovereignty to the US, submitting ourselves to South Africa would be hard for many Zimbabweans to swallow. Among politicians South Africa is seen as that smug, wealthy cousin you go to only grudgingly. On Harare's streets, unlike in Bulawayo, the rand is rare, with the preferred currency being the US dollar.
Use of valuable currency has made stingy bean-counters out of Zimbabweans and businesses, especially supermarkets, are under pressure to find solutions.
John Mushayavanhu, head of Zimbabwe's bankers' association, says banks have loads of rand coins. But beady-eyed retailers appear reluctant to take them.
"Right now we are sitting on thousands of rands in coins, but retailers are not coming to collect," he said.
CBZ, the country's largest bank by deposits, has taken out advertisements offering "South African coins, R1, R2, R5, in exchange for South African bank notes at a rate of one-to-one or US dollars at the rate of the day".
NewsDay, the country's newest daily paper, sells on the streets for 50c, or R5. But this kind of money is hard to come by, so you pay the dollar and get a special token you can use to buy the paper's next edition.
Other service providers still resort to old Zimbabwe dollar bills to get by. But in taxis the $50-billion notes are good only as change.
At the Avondale market in Harare, wily traders make good money selling the iconic $100-trillion notes to collectors from around the world.
Still able to bargain at the tills and even rustle up a few coins, city folk have it easy. But rural life under the hard-currency regime is a great deal tougher.
A story is often told of the rural woman who paid for a bus ride with a chicken -- and got an egg as change.
It is most probably a tall Harare tale, but it tells the story of how barter trade has taken over the rural economy.
According to Biti, our beloved Zimbabwe dollar will not be back in circulation before 2012. Maybe then, when our sovereignty is finally restored, the economy will have undergone real change.
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