Zimbabwe (2016) – Cash crisis

Please note that all accounts below are my own personal interpretations and experiences in Zimbabwe. Any mis-interpretations or inaccuracies are mine only. I only try to provide some background to those who have not heard of the past cash crisis or of the current economic cash-crisis situation in Zimbabwe. This will explain some of the situations that I have experienced, related in Bee the Solution Newsletter, dated November 2016. I am not taking any position and do not wish to do so.


Some of the legacy Zimbabwean Dollar notes

Zimbabwe has had economical challenges for some time now. And the current situation seems to be even worse (not having known the previous crisis, I am only relating what people are feeling).

In the last couple of months (October-November 2016), the cash situation in the country has been a difficult one. There is no cash… and it is not a figurative way of speaking.
We are not talking about the economy itself going down (even though it does), but really a lack of physical cash in the country. Regardless of the money you might have in the bank, you cannot get cash.

Which makes things difficult as most payments have to be done in cash (and even more so for foreigners). I have met people who struggled to leave Zimbabwe, being unable to gather the USD in cash necessary to pay for the next visa at the border post. Thankfully custom officers on the other side agreed to let them in and escorted them to a bank so that they could get money and change it to USD.

The “kind of official currency” of Zimbabwe has been the US Dollar following the 2007/8 economic crash (officially, there are a number of official currencies, but the dominant one, used by Government, has been the USD). The Government has now (2016) been talking about introducing Bond Notes as the Zimbabwean currency, in an attempt to provide incentive for exports. The Bond Notes should eligibly be used in conjunction with the US Dollar.

A short account of the economical state of the past 10 years might help to understand the current uneasiness that the introduction of the Bond Notes and the current cash-less situation is bringing.

From independence to 2009, Zimbabwe currency was the Zimbabwean Dollar.

Economic crisis started in late 1990s and from 2006/7, the economy in the country went down so much that the inflation rocketed through the roof. The final hyperinflation rate has never been officially recorded but mention has been made of the peak being as high as 79.6 billion % (percent) in 2008…. (in essence… massive…. regardless of the real number!). The Zimbabwean Dollar was losing its value at lightning speed. The cost of any commodity would increase nearly every hour at some point. The rising prices were being so steep that the Government had to print higher figures notes (up to 100’000’000’000 [one hundred trillions]).

220px-zimbabwe_100_trillion_2009_obverse (wikipedia)

In 2009, the country abandoned the Zimbabwean Dollar, which lost all value (well… the exchange was so bad that it was as if) and the country used multiple currencies. Within Zimbabwe, all currencies from neighbouring countries were used locally: regions bordering Zambia would use the Zambian Kwatcha, those near Botswana would use the Botswana Pula, etc… But those currencies were not necessarily accepted/used country-wide. To streamline the economy, the US Dollar was the main traded currency.

Even though it seems that officially most neighbouring currencies are still traded, my experience in Zimbabwe over the last 3 years has been the use of the USD. Withdrawals at any ATM is in USD only. All prices are given in USD only. Even the neighbouring Zambian Kwatcha cannot be obtained at the bank located at the border with Zambia.

Up to December 2014, the “official” currency that I used/saw throughout the country was the US Dollar for amount above 1 USD, and the South African Rand (ZAR) for amounts below 1 USD. This was primarily because the US Dollars in circulation were only the bank notes and not the coins. So the Rand was substituted to the US cents coins (along with change in sweets, if no coins available….). Most time, the exchange was easy as the Rand was trading at around R10 for 1USD. And so R1 was 0.1 USD. Bigger denominations were also accepted and for example we could use the Rand instead of USD to pay for Visa at the border (but no other currencies).

In December 2014, in an effort to “use only one currency”, and be free of the Rand, the Zimbabwean government introduced the “Bond coins” as the official Zimbabwe division of the USD dollar: 100 Bond Coins = 1 USD. (Personal thought: this is still 2 currencies…., but at least one is local I suppose…). And from Jan/Feb 2015, the Rand was no longer accepted for trading in shops, not even at the border.

In the past few months, the Government has been talking about introducing Bond Notes, at a 1:1 parity with the USD. At the same time, the availability of USD cash has decreased…
From Government official position, the lack of cash is due to high import and low export to the country. However, fears amongst the population is that the USD will simply be replaced by the Bond Notes, leaving them unable to trade/shop in other countries and decreasing even further their buying power. A repeat of the 2006/8 crash…

In the past couple of months, the situation is changing nearly every day, with different stories circulating as to when the Bond Notes will be introduced, if it will be introduced, whether all money in the bank will be changed from current USD to Bond Notes… you hear a lot of different things… but in essence, no-one knows what is really happening. The only certainty is that people cannot access their money. Paying is getting more and more difficult. Time spent in queue is adding a strain on the workforce. Withdrawals have been limited. First to $100, then to $50 and this week to $20.


Patient queue in Kariba – Nov 2016

In my view, the one thing that has helped the population to still be able to buy food is the Ecocash system (introduced in 2015 I believe), which allows to make virtual payment in many places, similar to a Visa card, but also allowing individual transfers between people.

After refusing to join the Rand Zone (common monetary area: South Africa, Namibia, Swaziland and Lesotho) at the time of the previous crisis, the latest news this week is that Zimbabwe will now be using the Rand and not the Bond notes after all. People around feel more comfortable with the thought, but nothing is yet confirmed…

Something to follow in the next few weeks/months….

For quick information on the past hyperinflation and the economy of Zimbabwe , you can have a read of the Wikipedia pages:



5 responses to “Zimbabwe (2016) – Cash crisis

    • It is indeed. Tourists who know about it would have come with enough dollars in cash… otherwise, they are stuck like everyone else… there was one who was allowed to cross to Zambia for example and get cash there to pay for his Visa. But we are in the same situation than the general population as the bank notes are not available… We can still pay for shopping in main shops with the VISA card, but fuel is most times in cash. And buying at local markets is obviously cash only. Actually… many places are cash only or the local Ecocash system (which we don’t have as tourists….). It has been a very interesting experience… a true “live like the locals” one 🙂

      Liked by 1 person

    • Just to add another example… just happened… went for farewell drinks as I am leaving tomorrow morning after 6 weeks in the same place.
      Bill = $4
      Paid with a $5 note… and the bar does not have $1 dollar change… in a tourist lodge 🙂
      Thankfully for me, my friends who live here have a $1 credit for their next drinks, but as a tourist, I would have had to leave $1 tip, to the lodge, not the staff, just because they dont have change. And this is not a scam from the staff… unfortunately, as a ‘normal’ tourist, one might not appreciate the extend of the issue and think that this was on purpose…

      Liked by 1 person

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