Confusion Marks Currency Reforms

By John Mokwetsi

CONFUSION marked the first day of new money on Friday as many found it difficult to understand the value of the old coins, brought back into circulation as part of the central bank’s currency reforms.

The MDC immediately criticised the latest measures, saying they will cause serious confusion among the public.

"We believe that any central bank should know the amount of money that is in circulation and, clearly, allowing people to scrounge for old money from their drawers will make it impossible to know how much currency is on the market," the MDC said in a statement.

"It could further push up inflation. Moreover, the token increase of withdrawal limits from $100 billion (now $10) to $2 trillion (or $200) will not bring any relief to the public at a time when that amount can hardly buy you two bars of soap."

The MDC said no amount of tinkering with currency denominations will address the Zimbabwean crisis.

"As long as there is no production, we will continue to move in circles as a country," the MDC said. "The supply side of the economy should be addressed by confronting Zimbabwe’s real crisis, which is the crisis of governance and legitimacy."

On Wednesday, Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono lopped off 10 zeros from the country’s battered currency in a bid to smoothen the operations of the financial IT system.

He re-introduced the old coins $5, $2, $1, 50 cents, 20 cents and a 10 cents. Two new coins — the $10 and $25 — were also introduced.

But for many people, particularly those who never used the coins as currency, the new changes meant confusion rather than convenience.

For others who had kept the old coins in their homes and store-rooms the reintroduction of the money by the RBZ has meant a small windfall.

A snap survey carried out by The Standard on the day the new currency went into circulation in Harare revealed most banks by midday had long queues because they were still waiting for cash from the Reserve Bank.

The pattern was the same yesterday at banks in Harare’s city centre.
In commuter omnibuses there were heated debates as operators refused to accept the coins or found themselves arguing over how much commuters should fork out.

In supermarkets, till operators confessed the new monetary system was giving them headaches and causing numerous arguments with impatient customers.

On Friday and Saturday many shops and supermarkets were still struggling to update their systems and many swipe machines were not operating.

Shoppers warned that the problems were not by any means over as the authorities were refusing to own up to the current problems facing the economy.

But it was not all gloom. The Standard spotted Chrispen Munyoro from Glen View excitedly purchasing an ice cream from a vendor with his old coins.

"I last ate this long back because I could no longer afford it, but now I am going to use my coins to buy some luxurious things like ice cream to spoil myself."

In Glen View, Budiriro and Highfield there were unconfirmed reports of youths seen digging in their gardens for the coins.

"I remember throwing some coins in this garden but because I can use them now I am going to search till I find them all," said Sekuru Rusere from Gazaland in Highfield.

Reacting to the new measures by the RBZ the Zimbabwe Congress of Trade Unions ZCTU said the change of currency and cutting of zeros was not the panacea to Zimbabwe’s problems.

ZCTU also expressed concern over calls by the RBZ to freeze salaries and wages for workers for a period of six months in order to curb inflation, saying many workers were already struggling to make ends meet with current salaries.

The governor is very much aware that freezing salaries has nothing to do with the spiralling inflation. He is also aware that productivity can only be matched with proper remuneration, which is a living wage for Zimbabwe’s workers," the ZCTU said.

ZCTU president Lovemore Matombo said: "RBZ has caused confusion among people especially with the issue of coins. I also think by that by December 31 the zeros slashed will be back unless there is an urgent economic revival."