Is the new Zimbabwe dollar bringing back the economic tragedies of 2008 to remind Zimbabweans of some of their worst times?
A pizza from a popular family restaurant in Harare now costs 252 new Zimbabwe dollars. That’s more than half what some government teachers earn per month. Hang on: haven’t we heard that before?
Rewind 11 years, to Zimbabwe in 2008. Wads of worthless money, perpetual school closures because teachers were on strike — and prices (where goods were still available) in millions and billions of Zimbabwe dollars. Little wonder then that locals are asking: is that horrible time coming back to haunt Zimbabwe?
Last week’s surprise announcement that the Zimbabwe dollar was to make an immediate comeback and the US dollar would no longer be permitted for local purchases, sent prices in some places spiralling — and not just for pizzas.
Firewood? From 35 dollars to 50 dollars a stack (50 dollars would have been worth around R700 last year. Now it’s worth around R88). Hot chocolate powder? Sixteen Zimbabwe dollars to 39. Candles? Oh they’ve disappeared (but there’s been a run on them because of the endless power cuts).
We haven’t reached 2008 levels yet when a tin of baked beans cost 30 billion Zimbabwe dollars. At one point, a loaf of bread was 10 million. Bread there is still around 10 Zimbabwe dollars. But it’s getting harder to find bread.
Those on fixed salaries are suffering.
Raymond Majongwe, the head of the Progressive Teachers Union, tweeted a picture of the menu at St Elmo’s Restaurant in Harare, with its latest prices displayed in Zim dollars. A large Napoletana pizza (at 252 dollars), ordered with a Greek salad ($135) would pretty much cost a teacher his or her entire monthly salary.
Is there ANY hope?
The authorities have hiked interest rates in what they say is a bid to constrain money supply. In 2008, the opposite happened. Back then, the printing presses went into overdrive and bearer cheques, a precursor of today’s bond notes, rolled out in ever-increasing denominations.
This time around the authorities promise they’ll be disciplined. On Monday, Finance Minister Mthuli Ncube assured Parliament’s budget and finance committee that “this is not 2008”. He said that year was marked by fiscal indiscipline. “Now we have fiscal discipline. The policies are far different.”
There is, however, that ominous announcement of 400 million Zimbabwe dollars that are about to be printed. If — and no-one seems to have a clear answer on this — that’s extra cash on top of Zimbabwe’s already-circulating electronic money, that won’t go down well.
In my wallet, I keep a receipt from 2008. It’s for 250 billion dollars’ worth of pet food bought from my local branch of the SPCA. For me, it’s a reminder of the hyperinflation we lived through. And that is something Zimbabweans never want to live through again.