Three Zero Project
I got an email from a friend of mine yesterday, saying that Zimbabwe’s Reserve Bank (RBZ) Governor, Gideon Gono, has announced a new monetary policy for the country. This consists of the RBZ chopping three zeroes off of the currency, recalling all existing “old” notes and bearer cheques, and issuing “new” notes. These new notes are apparently all paper “bearer bonds,” which sounds at least like they are also not notes, but not “bearer cheques” either, which is what the larger denomination paper currency has been for the past few years.
According to economist Eddie Cross, the new “bearer bond” notes will be available in 1 cent, 5 cents, 10 cents, 50 cents, 1 dollar, 5 dollars, 10 dollars etc. up to 100 000 dollars. The first note is worth 10 "old" dollars, the last is worth 100 million "old" dollars. He claims that the cost of printing the smaller notes must have been at least 50 new dollars per note (50 000 "old" dollars) so the loss on this operation must run to many billions of "old" dollars. A complete waste of money as the smaller notes will be virtually worthless.
In the “old” note system, the smallest note that really had any value was the $1,000 dollar bill, and even that was virtually worthless, aside from the formality of giving change. A loaf of bread, for example, was up to $150,000 “old” dollars last month, or will now be $150 “new” dollars—so making any note worth less than one “new” dollar really seems pointless. The “new” $100,000 note will be worth $100,000,000 “old” dollars—worth maybe US$200-US$250 US, so useful for massive transactions and businesses, but obviously will be on the top of the list for forgers.
Are you keeping up? If all of this is confusing you, you’re not alone. As my friend said, “ today gono announced that we have a new monetary system. like even a one cent bearer cheque. now this is all too much for My Brain. but i went along to cabs to ask for 10 000 (not 10 million) and they said that they haven't been issued with the new bearers yet and that their computer programmers hadn't sorted out the software yet. i was going to get 10 000 in 500s and 100s. the mind boggles.”
To top it all off, in typical zanu pf fashion, the government’s decided that, having sat back and watched the currency decline rapidly and dramatically for the past 7 years, they now have to Do Something. And urgently. So people have until 21 August to turn in their “old” notes. They can do this by depositing a maximum of $100 million “old” notes—“$100,000 “new” notes at a time. But the new notes haven’t been released yet. And the next school term is coming up, with parents needing to find new and creative means to pay their children’s school fees—in the “new” notes, no doubt, if and when they can ever find them.
If my friend, a switched on urban professional working in Harare signs her email “losing it,” imagine someone living in the rural areas—who probably still has yet to see the new—now “old!” $100,000 bearer cheque, now being told that that note would be worth $100 “new” bearer bonds, but actually will be worthless if they don’t turn it into the bank, assuming they have a bank account, and can get to the bank, without paying more for the bus fare than they have on them, within the next two weeks.
The whole thing is just absurd. Doubtless it could make for some highly entertaining comedy sketches. Except that it’s the state wreaking havoc, as always, with every day Zimbabweans. And mugabe and his cronies are the only ones laughing all the way to the bank.