In a bid to usurp Malawi as the most oft-mentioned African country on our page, Zimbabwe today introduced a new $100,000 bank note. With just one such note wealthy Zimbabweans will be able to conveniently purchase high end luxury items such as a loaf of bread, 3 bars of soap, 4 tomatos, or even a cabbage. Read on...
Its introduction comes as the economy buckles under the highest rate of inflation in the world, currently at 1,042 per cent. The note makes its debut barely four months after the Reserve Bank introduced the $50,000 note, the highest denomination at the time. In only two weeks the Zimbabwe dollar has lost half of its value.
Despite the hyperinflation, mass unemployment and crippling shortages of fuel and foreign currency, Zimbabwe is a country of millionaires. Shoppers have to carry huge wads of cash to buy the basic foodstuffs available in most shops.
“Last week I filled a single trolley with $30 million of groceries, and I had to count out 600 notes of $20,000 at the checkout counter,” John Robertson, an economist, said.
Despite the economic gloom, he said that at least the new note “means when we go shopping, we don’t have to take a suitcase of money: we can carry it in a shoulder bag”.
As the Government announced the introduction of the note, queues were forming outside banks that had begun to limit withdrawals because of the latest shortage of currency. All coins disappeared from circulation two years ago.
Gideon Gono, governor of the central bank, said that the note was being introduced “to ensure convenience to the public”. Although he predicted that inflation would be down to 50 per cent in a year’s time, he held out the prospect of even bigger denominations if the new note failed to ease the banking problems.
Zimbabwe used to boast one of Africa’s most robust economies, but eight years of recession and a radical programme of land redistribution has left millions in poverty.
In its relentless search for cash to fill its empty treasury, the Government last week imposed a punishing new tax on the stock market. Brokers immediately halted trading, losing the state tax revenue equal to £17,000 a day.
On Monday the Government declared potatoes a “strategic crop” after realising that “the country cannot continue depending on maize alone for its food security”.
All sales of potatoes, which cost ten times as much as maize meal, can now be handled only by the Government.