This was money that Zimbabwe’s regime could not afford. Since the national currency was abandoned in favour of the US dollar in 2009, Mr Mugabe has been unable to resort to his usual habit of ordering the Reserve Bank to print money to fund overseas trips, refurbish his official residences or pay soldiers and civil servants.
But the 92-year-old dictator has decided to return to the old days when he was free to print banknotes at will. By 2008, he had printed so many that Zimbabwe suffered the worst hyperinflation in history, peaking at about 500 billion per cent and pauperising an entire society.
So Zimbabweans are dreading the imminent return of their national currency, the notorious “Zimbabwe dollar”, which will be renamed the “bond note”. Many fear that Mr Mugabe’s latest decision will trigger economic catastrophe all over again. And they are rushing to withdraw their US dollars from the banks while they still can.
Many cash machines have run dry and people are queuing for days outside banks to retrieve as much of their money as possible. The authorities have responded by imposing withdrawal limits – sometimes as little as $20 per day. The Reserve Bank has also banned anyone selling a house or business from sending the proceeds out of the country.
“The banks are emptying as we speak,” said a member of the board of a foreign bank in Harare. “These new, so-called bond notes are Zimbabwe dollars which went to private school,” he quipped.
The new currency is expected to become worthless almost immediately, creating a black foreign currency market in which desperate people will swap the new “bond notes” for US dollars.
But John Mangudya, the governor of the Reserve Bank, insisted he would not print money on the orders of politicians. “The bond notes are backed by real money which we have borrowed,” he said. The timetable for reintroducing a national currency has been put back and the new notes may not be available until August.
“We don’t know what this bond cash will do,” said a pharmacist in Harare. “Will it mean we won’t have food in the shops, as before? There were no medicines then.”
Empty shelves in Zimbabwe in 2007 when the economy imploded. Many fear those desperate days are likely to return as the country’s notorious national currency prepares a comeback.
Empty shelves in Zimbabwe in 2007 when the economy imploded. Many fear those desperate days are set to return as the country’s notorious national currency prepares a comeback.
An accountant with a hospitality company said he would now make plans to leave Zimbabwe to look for work in South Africa or Dubai. “There is no future here,” he said. “Business is dying and there is so much corruption.”
“I can’t live here,” said Irene, a Zimbabwean who now resides in South Africa and was on a brief visit home. “I wasn’t liberated in Zimbabwe. I have three children in the UK, three in South Africa, and only one in Zimbabwe.”
Irene added that she was glad the British once ruled Zimbabwe. “They made good buildings which are still standing all these years later – not like the Chinese,” she said.
The chief executive of a foreign retailer – who asked to be anonymous – blamed Mr Mugabe for deliberately triggering the new crisis: “There is only one solution,” said the businessman. “He has to go.”