Why Zimbabwe's new currency is already causing problems

The new currency released by Zimbabwe's central bank aren't yet accepted everywhere.
The new currency released by Zimbabwe's central bank aren't yet accepted everywhere.

A new currency came into circulation in Zimbabwe on November 28, and it is already causing problems. Videos published on social media show petrol stations and shops refusing to accept the bond notes, as the new currency is called – even though its introduction was supposed to help kickstart the country’s ailing economy.

Zimbabwe hasn’t had a national currency since 2009, when the Zimbabwean dollar collapsed amidst hyperinflation at a rate of 231 million per cent. It was replaced by the South African rand and the US dollar.

The Zimbabwean government decided to inject the equivalent of 12 million US dollars in the form of bond notes into the economy. The first notes to come into circulation on Monday were two-dollar notes and one-dollar coins, although not everyone managed to use them to buy anything.

Two videos published on Facebook the same day show shop-owners refusing the bond notes as payment.

The video below was filmed in a Zuva petrol station and shows an employee explaining to her customers that her manager hasn't authorised her to accept the new currency. To defend herself in the face of her irate customers, she shows the message that she received from her superior, telling her not to accept bond notes.

Another video was shared widely, although FRANCE 24 was not able to determine exactly where it was taken. According to our Observers, the action in the video takes place in a branch of the supermarket chain "Pick'N'Pay". The video shows a customer trying to pay with a bond note, saying that that is the only currency he has on him, but the shop's employees refuse to let him pay with the money.

"Cashiers are saying that they can't check the authenticity of the notes'

According to our Observer Tendai Mbofana, who lives in Kwekwe, this new currency is making everyone worried.

There are some shops that aren't accepting these notes. It happened to me yesterday. The cashiers are telling us that they don't have any way of checking the authenticity of the notes.

Some people are sceptical about the actual value of this currency. The government is saying that a bond note has the same value as an American dollar, but lots of people don't believe that. They're really worried and scared about hyperinflation coming back.

"A black market has started up"

The problem is that lots of people don't have any other choice but to use this new currency, because they don't have any US dollars left. I think that eventually shops will be forced to accept these new notes and that the situation will sort itself out.

But for now, it's still very unclear. There are long queues in front of ATMs because people want to take out as many US dollars as they can to store at home. In the street a black market has already started up; some people are exchanging bond notes for US dollars at fluctuating rates, sometimes it's two US dollars for three bond notes... That's not the exchange rate fixed by the government!

A currency that has already lost its value?

On social media, Internet users have drawn attention to the fact that the new currency has already lost its value compared to the US dollar.

Day one and the bond note is already being exchanged at a weaker value than the US dollar.

Several economists have criticised it as a useless measure. For the economist Anthony Hawkins the country's main problem is that it doesn't get back enough foreign currency because of a lack of exports, and he says that the introduction of a new currency won't change the fundamental problem.

The country's Movement for Democratic Change has criticised the move as a sneaky way of reintroducing the Zimbabwean dollar, and claims the bond notes are illegal. "It's only a matter of time before this kicks off new shortages," said the spokesperson for the opposition party, Obert Gutu. Local opposition media Zimbabwe News wrote, "These new Zimbabwean notes are a huge con."

Backlash against Robert Mugabe

The introduction of the new currency has revived the backlash against Robert Mugabe, who has been the president incumbent for 28 years. Last week, eight activists against the government were beaten up, only a few hours before a planned protest march against the introduction of the new bond notes.

The economic and political crisis seems to be intensifying in a country where nearly three quarters of the population of 16 million live under the poverty line, and 90 percent of the active population isn't in work.