Again, no one wanted to spend the Zimbabwe dollar. They knew that next year or even next month, it would be worth a fraction of its current value. At a 55 percent annual inflation rate during March, the Zimbabwean dollar (RTGS) had lost 75 percent of its value.
Below, a man’s Zimbabwe dollars occupired more space than the groceries they would pay for:
For the sixth time, the government had a new solution.
Zimbabwe’s Inflation Battles
In restaurants, the price of a meal went up as you ate. A loaf of bread could have cost 500 million Zimbabwe dollars. In 2009, they had to print a 100 trillion banknote. So, after inflation had been as much as 5 billion percent. Zimbabwe proclaimed the US dollar as the national currency, then banned it, and changed its mind again. Since 2009, they also experimented with a digital currency, gold coins, an RTGS dollar. In addition, the South African rand is also circulating.
Now it’s the ZiG.
However, the message is mixed. The government office that issues passports will only accept US dollars. While gas stations have been told they can refuse the ZiG and accept the US dollar, other businesses are required to take ZiG payments.
As you might expect, although they are backed by gold, the new ZiGs might not be the answer. Predictably, people still prefer the US dollar. Also legal temder, the US dollar has its problems. Because coins are scarce, businesses give chocolates, other sweets and pens as change.
In the past, reflecting an inadequate supply, people even had to wash worn-out dollars. Literally, they had laundered money:
Our Bottom Line: Zimbabwe’s Economy
Asked by Gallup, the Zimbabwean consumer was gloomy. Correspondingly, according to a November 2023 Reuters article, the Zimbabwean economy will be dealing with lower crop yields because of an El Nino drought and lower commodities prices. Reflecting its autocratic leadership, Zimbabwe’s had a 178 rank in the Index of Economic Freedom.
These are the numbers:
In addition…
- 14.3 million: cell phone subscriptions (Statista, 2022)
- 16.3 million: population (World Bank 2024)
- 59 years: Life expectancy at birth (World Bank 2021)
- 90 percent: Adult literacy rate (World Bank 2024)
- 9.1 percent: Unemployment rate (World Bank 2023)
My sources and more: Again, a BBC story grabbed me. This time it was Zimbabwe’s inflation. From there, the AP had more detail and the images. And finally, Reuters and Gallup had the summary of the Zimbabwe economy.
