Is Zimbabwe zigzagging into further currency chaos? – BBC.com

Sylvia Dhliwayo, an expert in negotiating the many currencies that have overcome the hurdles of Zimbabwe’s crisis-hit economy, is reeling.

She works hard every day to send her four children to school. She wakes up most mornings at 4 a.m. and heads to the main market in Mbale, Harare, the capital, to buy corn, peanuts, donuts, eggs and bread to sell at nearby stalls.

From tomatoes to avocados, pots to used clothes, Mbale is a commercial hub where traders set prices that change daily in a volatile economy.

What has angered Mr Doliwayo and other traders is the government’s recent move to introduce a new local currency.

“They gave us no warning. We kept saving them useless money, and overnight the notes became worthless,” she fumed. and told me.

The currency, known as Jig, which means “Zimbabwean gold,” was introduced a month ago and replaces digital RTGS currencies and cash “bonds.”

The move is believed to help combat inflation and hyperinflation that has plagued Zimbabwe for the past two decades. Because of this, the government abolished the Zimbabwean dollar in his 2009 and most people have been using the US dollar ever since.

Just before the jig was released, I was able to buy a pack of peanuts from Mr. Dhliwayo for $0.50 (0.40 pounds), or a $2,500 bond.

But when Reserve Bank Governor John Mushayabhanu gave Zimbabweans three weeks to exchange their bonds, they quickly lost what little value they had, with a bag of peanuts worth Z$40,000. But by then, Mr. Doliwayo was only accepting payments in US dollars.

What made Dhliwayo even more furious was that she still only traded in US dollars.

Due to the scarcity of US coins, traders prefer to use the local currency to give change to their customers. Supermarkets often choose to give you change for candy.

Dhliwayo would use Jiggs if he had one, but in a place where most exists digitally and people have little access to charge their phones due to power outages, cash is key.

“The new money is not yet available, it’s just on people’s phones and bank accounts. Everything, absolutely everything, is still denominated in US dollars.”

Mushayabhanu took a defiant stance in early April when he introduced a gold-backed currency, saying it was done on the advice of the World Bank.

“If you’re going to blame me, you’re actually blaming the World Bank,” he said, asking for patience from Zimbabweans who are tired of seeing their money disappearing day by day.

“Maybe they didn’t give us good advice. And if they didn’t give us good advice, that’s okay. Let’s keep refining it.”

But given that this is the sixth time in 20 years that the local currency has been changed, Zimbabweans are understandably unsure.

The Zimbabwe dollar, which once had a maximum value of Z$100 trillion, has been transformed into bearer checks, agricultural checks, RTGS and bonds.

Local independent Sunday newspaper The Standard reported on the lack of publicity surrounding the sudden currency change to Jiggs, as telephone companies, supermarkets and public transport all stopped accepting the previous form of the bond as legal tender. I lamented.

While the readjustment continues, tourists are finding themselves unable to pay with Visa as their cards are no longer accepted due to uncertainty over the true value of the jigs.

“If the jig does not go in the same direction as RTGS, bearer checks, farm checks and bonds before it, it will be a positive for Zimbabweans who have seen their savings wiped out by inflation in the past.” The paper’s editorial speculated.

But I can see why companies are reluctant to address it.

A gardener working in the southern city of Harare told me on Friday morning that he was being offered Jig 12.91 to the dollar on his phone bank account, but he thought the market rate on the street was Jig 13.50 to the dollar. A few hours later, a second-hand clothing seller down the road said he was selling 15 jigs for $1.

It’s business as usual for Maxwell Gombe, who makes a living selling old billion- and trillion-dollar notes, souvenirs of the country’s economic collapse, to tourists visiting the country’s bright spots.

“Old banknotes are US dollars…$500,000. Billions. Trillions,” he calls out in Harare, where he buys old banknotes to sell in Victoria Falls.

“They seem to like to keep billion or trillion dollar bills in their wallets. They buy them for $1 and sell them for $5. If they’re drunk, each I’ll give you $10!” He laughs and walks away.

In Mbale, US dollar traders are shouting and luring customers with torn banknotes. Only crisp banknotes are accepted here, so damaged banknotes are bought at a lower price.

But black market foreign exchange dealers, keen to shore up the new currency that entered official circulation this week, have found themselves at the center of a crackdown by authorities.

Ironically, like everyone on the wrong side of the law in this country, the more than 60 currency dealers arrested last week had to post bail in US dollars.

Do you want a house? You must pay in American currency.

tuition fee? USD. His colleagues said four of his grandchildren, ranging in age from 8 to 18, have not attended school since January because their families have not been able to come up with the funds.

car? Please give me American currency.

rent? New Zimbabwe passport? All American currency.

And how is that possible? Most of the people make a living through remittances.

Daughters and sons who joined the mass brain drain and moved around the world to work and send US dollars to families facing hardship.

“It’s unbelievable. We’re like on a hamster wheel,” one economist told me on condition of anonymity.

“The same mistake was made with another currency that no one knew about before the announcement. And yet this country is not productive.

“Even the gold that they have fixed cannot be mined fast enough because most of it is Because it’s been stolen.”

“This is miracle money, it’s not created just by being printed, so it’s useless,” said the economist, who once worked for the government.

He explained that civil servants’ salaries are partly paid in US dollars and partly in local currency.

“There has been a lot of hardship and confusion. If you show me someone who paid their salary on time, I will buy you a bottle of whiskey,” he added.

Desperate to escape this turmoil, many have entered South Africa illegally in search of an elusive economically sustainable future.

Zimbabwe has two economic realities, but the capital’s more affluent northern suburbs have shopping malls with Belgian chocolates, international wines and really big cheeseburgers – no need for local currency .

For others, Jignote will become a reality. A local ice cream vendor said he received the first note from a customer Friday afternoon.

“I still don’t understand Zig, but if I see it in circulation I’ll use it. It doesn’t help that we all don’t have access to the US dollar,” he said.

But like Mr Dhliwayo, he is dissatisfied and does not believe the banknotes will maintain their value.

The gardener agreed. “It’s like newspaper. It won’t last.”

And some make the inevitable joke about how this name sums up this country’s zigzag economy.

Other Harare residents say Zig stands for “Zimbabwe y Gehenna,” which means “Zimbabwe is hell” in Shona.

Farai Sevenzo is a Harare-based freelance broadcaster and filmmaker.