The bad news is, among other things, that we’re being played. All that time spent queuing to exchange cash which is still valid? That money spent on transport to get to the banks to exchange the cash? The things people bought that they didn’t really need, but they didn’t want their cash to go to waste? To what end.

And, of course, we’re being played at a much larger scale. This whole cash situation is just one example. The largest denomination in circulation is the $750,000 bearer cheque. Never mind that they’re practically impossible to count – most of us aren’t very comfortable operating in base 75 – they’re also still completely inadequate to our needs. Is it any wonder the cash queues are still just as bad as they’ve been? The (state-run, Zanu PF mouthpiece, propagandising) Herald newspaper costs $900,000. A combi into town from a nearby suburb is $1,500,000. So if all you do is buy the paper and go in and out of town, you already need more than 5 of the largest bills. Granted, not everyone uses cash every day. And hey, with unemployment at 85% and 60% of the population living in the rural areas in a largely subsistence lifestyle, maybe Gono figures we’re all too poor to need pocket money – much less rent money, transport money, school fees money, uniforms money, food money, etc . . . .

But seriously. What self-respecting country has its largest denomination unable to buy a newspaper, or pay for local transport? Imagine if the United States announced tomorrow that all of their bills are out of circulation – it’s a coin only economy now and they’re not minting any larger coins?

Gono’s pleased with himself for ensuring that there’s $100 trillion in circulation. For a population of 12 million Zimbabweans, that works out to just over $8 million per person cash on hand. That’s return bus fare from Harare to Marondera (as of last week’s prices). It’s enough to buy almost three litres of cooking oil (at the newly gazetted prices, if you can find it). It’s a miserable, paltry, insulting amount, and if there’s only $100 trillion in circulation, no wonder we’re having such problems.

The thing is, to fix the problem Gono has to print more money. An increase in money supply spurs inflation – but not having enough money isn’t making prices go down – if anything, prices are going up as cash gets more and more expensive. And it’s not enough to just print more $750,000 bearer cheques. I don’t think there are enough hours in the day to print the volume of cash that would be needed if that’s as large as they get. If they’re not going to take off some zeroes, then it’s time to swallow our national pride and print the $5, $10, $20, $50, and $100 million bearer cheques.

This entry was posted on January 8th, 2008 at 9:45 am by Amanda Atwood and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.