A nice idea

3 02 2015

Towards the end of last year Zimbabwe was abuzz with the news that bond coins were going to be introduced. The news was not well received and, despite strong denial from the Reserve Bank, rumours abounded that it was an attempt by the government to reintroduce the Zimbabwe dollar. I had seen one or two but up until today had not actually received any as change.

Small change

Small change

Small change is in notoriously short supply in Zimbabwe. South African coins (2 RAND lower right) have been useful in that they are roughly 1/10 the value of a dollar (so the 2 RAND coin is valued at 20c) but obviously they have to be bought at least the face value plus some sort of commission. The bond coins, which are minted in South Africa, are pegged at equal to the US dollar though they have no value outside the country. They certainly cost less to produce than their face value. A nice idea and certainly preferable to receiving ball point pens or sweets as change which was the case. People receiving lots of coins, such as the mini bus drivers, can go and change the coins at the end of the day for paper money at a bank. Except, as Shelton tells me, most refuse to accept them.

Printing real money?

24 01 2009

Some outlets in Zimbabwe are licenced to deal in forex (foreign currency). For them it’s been a boon and although they are pricey at least we have been able to get most things. The price they have to pay is a 7% levy on turnover to the revenue authority, and yes, they had to buy the licence too, often for as much as US$20,000. Now they might be a little worried. The government, in an attempt to placate the civil service, will start paying them in coupons redeemable at the aforementioned outlets. These companies will then be allowed to deduct the value of the coupons from the 7% levy. Does this mean that the government is effectively printing US dollars?

  • If there was enough US dollars coming in the government would be able to pay the civil servants itself.
  • Does this mean that the government does not trust its own collection system?
  • Are they just finding a cheaper way to administer their own wages?
  • I can promise you it will be abused!

The local press has been abuzz with the Reserve Bank governor’s plan to “randify” the economy i.e. link it to the S. African rand. I could never see this happening unless the South African REALLY wanted to devalue their currency though I was told today that it was scuppered by COSATU (Congress of South African Trades Union). They said only if Bob agrees and is seen to share power. That of course will not happen.

I heard most of this today at work from various customers. One said “I’d love to believe this but..” and then recounted how she’d heard that the army was “promising” a coup within the next month. It’s almost certainly just a pressure tactic – I really don’t’ think that even our army would advertise and impending coup!