New token notes no relief for cash-short Zimbabweans

This file photo taken on November 28, 2016 shows a man holding a bond note released by the Reserve Bank Of Zimbabwe in Harare central business centre. PHOTO | AFP 

In Summary

• Zimbabwe abandoned its own currency in 2009 after rampant hyperinflation, which peaked at 500 billion per cent, rendered the local dollar useless.
• The adoption of foreign currencies like the US dollar and the South African rand brought relative economic stability.
• But the gains were soon lost as the government pursued aggressive policies that scared off investors, including indigenisation laws forcing foreign-owned companies to sell majority stakes to local

By AFP
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HARARE

A token currency issued in Zimbabwe this week to ease critical cash shortages has brought little relief as desperate customers queue for hours to withdraw money while some traders reject the new notes.

The central bank on Monday issued $10 million in US dollar-equivalent "bond notes", ignoring resistance from citizens and companies who feared a return to the days of hyperinflation.

But a day later, taxi driver Adrian Nyakusvipa said the new currency had brought no relief to his painfully slow business.

"We thought there would be a difference after the introduction of bond notes but nothing has changed so far," Nyakusvipa told AFP.

"I have been parked here since morning without ferrying a single customer."

"It's lunch time which is supposed to be the busiest time of the day and I am lying here in the car."

Struggling economy

Zimbabwe abandoned its own currency in 2009 after rampant hyperinflation, which peaked at 500 billion per cent, rendered the local dollar useless.

The adoption of foreign currencies like the US dollar and the South African rand brought relative economic stability.

But the gains were soon lost as the government pursued aggressive policies that scared off investors, including indigenisation laws forcing foreign-owned companies to sell majority stakes to locals.

The cash shortage has exacerbated the situation in recent months, with the government unable to pay soldiers and civil servants on time, and customers camping out at bank entrances overnight, desperately hoping to get hold of the little cash available.

It was these shortages that prompted the central bank to introduce the bond notes — officially a parallel currency to the greenback — which the government says is backed by a $200-million dollar facility from the African Export-Import Bank.

But when the plans were announced in May, citizens and pressure groups took to the streets, fearing a return to the days of hyperinflation when shop prices could jump several times in a single day.

Opposition leader Morgan Tsvangirai called the move a desperate attempt by a government that had run out of ideas to tackle an "unprecedented crisis".

We have no choice'

The new currency, which closely resembles the former Zimbabwe dollar, comes in $2 notes and $1 coins.

And so far, its reception has been mixed.

Standing in line outside a bank in the capital, Lynely Mabona worried the new currency could be used to wipe out her US dollar bank balance.

"I have been waiting here for hours and I will only leave when the bank closes," she told AFP.

"All I want is to get as much of my US balance as I can out of the bank."

Some banks had already run out of US dollars and were giving out only bond notes.

An AFP correspondent also found that some fuel stations were refusing payment in bond notes.

But across Harare, a popular saying became the common refrain: "We have no choice but to dance to the tune being played."

A cartoon in the state-run Herald newspaper on Tuesday summed it up as two women regarded a newborn baby before them named 'Bond Note'.

It was "ugly" and "useless", said one woman.
"Cute baby!" remarked the other. "I bet you have a future."