SW Radio Africa (London)
Violet Gonda
1 August 2008
Ten zeros were removed from all monetary values on Friday, resulting in Z$10 billion being re-valued to one dollar.
The measures were announced Wednesday by Reserve Bank Governor Gideon Gono during his 50 page, half year monetary policy statement. The new currency will co-circulate together with the family of bearer cheques currently in use. However the bearer cheques will be scrapped at the end of this year. Cash withdrawal limits were also increased from Z$100 billion to Z$200billion, now re-valued to Z$200.
The move has been seen as significant in terms of convenience for people as the numbers were becoming incredibly difficult to handle but economic analysts say the removal of the zeros will not make much difference to the overall economic problems, especially the availability of foreign currency and shortages of basic commodities.
The Mugabe regime blames the economic crisis on measures imposed by western countries, but economist John Robertson lays the blame squarely on the disastrous policies initiated by the government. He said; "The connection between the politics and economics is that "the politics of the past have totally destroyed investor confidence and have destroyed a lot of the capacity in this country to actually function."
Analysts predict inflation, which has already smashed world records at more than fifteen million percent, will continue to skyrocket as the government fails to balance the new currency measures with meaningful reforms.
But hose who kept their worthless coins, may find they will get something for them as the new currencies kick into place. The 10 cent piece is now worth the equivalent of the old Z$1billion, but Robertson said it won't be long before they're back in the boxes where they have been sitting for the past seven years.
Meanwhile pity the poor supermarket teller who is trying to make sense of the two currencies, which will run side by side until December.
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