Friday 14 November, 1997 was the day the Zimbabwe dollar
died. That day may not signify anything to many. Yet for Zimbabweans worldwide
it was the day their currency lost value so fast that that there was little
time for the ink to dry on the notes. In fact on that very day very few took
any notice that something was amiss. Citizens went about their business totally
oblivious of what was happening.
If the truth be told, what made the headline news was a two
headed snake that had been discovered in some office. In a part of Africa given
to superstition, one would have speculated that this was an omen, the harbinger
of doom for the ‘Zim-Kwacha’ that lost a record 71.5% against the US dollar starting
a series of cataclysmic events that culminated in the printing of a One hundred
trillion dollar note more than a decade later in 2009.
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| The ground breaking 100 trillion note (Pic: ebay.com) |
It was incredible and it read more like a joke. However,
millions of Zimbabweans discovered it wasn’t when they went to their banks to
withdraw money from their accounts. Let us stop here and rewind a bit.
The real causes of Black Friday, as it came to be known,
pointed straight at the door of government. As with most of the ruling party’s
campaign gimmicks, that have proven to be destructive, President Robert Mugabe
decided to award unbudgeted payments to war veterans of the liberation
struggle. Secondly, the country became involved in a very costly civil war in
the Democratic Republic of the Congo (DRC).
It was the straw that broke the camel’s back when in direct
reaction to fiscal irresponsibility, multilateral organizations such as the
World Bank and the International Monetary Fund cut the apron strings leaving
Zimbabwe’s economy on an unprecedented free-fall.
An ominous sign, if one would call it that, was the gradual
appearance of women from the apostolic faith identifiable by their white frocks
and head scarves in the streets of Harare and Bulawayo and dealing in foreign
currency. It should be noted that prior to this the same women were known more
for selling mangoes and other tropical fruit than hard currency.
Soon an activity that was exclusively conducted in the
secure air conditioned chambers of commercial banks had been moved lock, stock
and barrel into the crowded and littered streets where pound sterling, United
States dollars, South African rand and Botswana pula was bartered and sold the
same way they would roasted groundnuts.
Shockingly, the authorities looked aside as the mass of
commercial banks and foreign exchange bureaus, registered by a government
bitten by the so-called indigenisation bug, legitimised the street trade by
shunting the little that was trickling into the banking system into the
informal system. Companies joined in the fray speculating and playing around
with the exchange rate to gain supra profits.
As this was happening, ordinary Zimbabweans lulled into a
sense of false security, crowded the pubs and churches in veneration of their
gods. That was until they stopped by the banks to withdraw their hard earned
money. The shock of being informed by trusted custodians of their accounts that
‘in principle’ there was something in them but in reality could not withdraw
was hard to bear.
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| A bank queue in Masvingo March 2012 (zimbabwemetro.com) |
There simply was no warning at all nor was there the rare
opportunity to run on the banks like once occurred in Argentina. A free for all
that would clean the vaults out by the lucky ones perhaps. Not in this case.
Clients were confronted with a sign on the door informing them that there would
be no withdrawals ‘until further notice.’
One is reminded of one of those business studies or commerce
lessons where students were warned about the perils of keeping money under a
stone, in a tin in the garden or under the pillow.
There even was a story doing the rounds of a bank robber who
buried his loot in the bush before he was arrested and jailed for his crime.
When he had done his time ten years later he was shocked to find a sprawling
residential suburb on the spot where he had stashed it. ‘It was here!’ he tried
to tell bemused passers-by to no avail. Now the joke was on them.
How they wished they had ignored that advice. Unlike the typical of African economies, that tore the
economic form book to pieces, Zimbabwe was about to rewrite it.
(To be continued)
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