Mugabe hints at bringing back Zimbabwe dollar

By Lance Guma
26 June 2009

Robert Mugabe on Friday said he wanted to bring back the Zimbabwe dollar, in place of the current system of multiple currencies. The ZANU PF leader said the dollarization of the economy has failed to help the plight of ordinary people, who did not have access to foreign currency. Mugabe said although prices have gone down, ‘people should have the money.’ He also gave the example of people in rural areas being forced to trade their livestock.

The Zimbabwe Dollar was dropped from use 4 months ago because it had become worthless after years of economic decay and corruption. At one point inflation ran over a trillion percent, with businesses struggling to supply any goods or services. The new coalition government in February quickly introduced the United States Dollar and the South African Rand as legal tender, and within days shops were full to the rafters with groceries and other supplies.

But the big question was always the issue of the supply of the forex cash notes themselves. On numerous occasions banks witness customer queues after running out of foreign currency to disperse. Economists conceded that although multiple currencies would bring some stability to the economy, the supply of the forex would always be the downside to the strategy.

Cynics say Mugabe’s concerns about dollarization have nothing to do with the plight of ordinary people. They point to the current inability of his henchmen to make the kinds of obscene money they used to get from printing endless amounts of Zimbabwe dollars and using the black market to at least double their cash. It’s also alleged Central Bank governor Gideon Gono produced bank notes with duplicate serial numbers in the system and that this funded ZANU PF’s brutal hold on power, and ended up fuelling the world-record hyper-inflation levels.

But while Mugabe was talking about re-introducing the Zimbabwe Dollar, Economic Planning Minister Elton Mangoma was singing from a different hymn sheet. Mangoma told mining executives in London that the US dollar had helped them revive investor confidence and there were no plans to return to the Zimbabwe Dollar.