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Zimbabweans suffer cash chaos
BBC News
August 09, 2006

http://news.bbc.co.uk/2/hi/africa/5257766.stm

Zimbabweans are facing chaos and confusion as they try to deposit and spend their cash before it becomes worthless on 21 August.

The central bank decided to lop three zeros off Zimbabwean banknotes in an attempt to help people deal with spiralling inflation which stands at more than 1,000%.

But last week's surprise devaluation has led to a bureaucratic nightmare for businesses and consumers.

"There's not enough cash. You deposit your old money in the bank and then you go to an ATM (cash-machine) and it gives you old notes too. I've only seen two bills of new currency," an accountant in Harare told the BBC News website.

Supermarkets are labelling prices with the new values, but are accepting and mainly dealing with the old currency.

"This is causing a great deal of confusion about the new values. The first day they knocked the three noughts off people went into the supermarket near where I work and were going crazy buying everything," she said.

"Then of course they got to the till and they didn't have enough money."

The move is an attempt by central bank governor Gideon Gono to crack down on those believed to be profiteering on the black market.

Only Z$100m ($400) in old money can be deposited in a bank each week without any questions being asked.

Anyone attempting a larger transaction is subject to an investigation and is liable to have the money confiscated if it is found to be have been acquired illegally.

There are also road blocks across the country as police try to catch those with large amounts of old notes.

"I was stopped at a road block just outside Harare near Norton over the weekend," a business manager told the BBC.

"I was carrying Z$60m ($240) of the old currency for wages; I had to show the wage slips before the police would let me pass."

Another Harare resident said her car was searched thoroughly by the same policeman when she passed through a roadblock twice on one day.

"I even had to open the bonnet and he stuck his gloved hand through all the gaps in the engine to make sure there wasn't cash there," she said.

27-year-old artist admitted that the move has forced her to open her first bank account this week.

"I couldn't see the point of it [a bank account] before. I kept my money under my pillow because by the time you bank it you can't use it because it loses so much value."

Although, unlike some, she said she is not worried about losing her savings.

"I keep an excess in US dollars so that if anything happens I know at least I'll have some money," she said.

But other Zimbabweans with larger wallets have gone on massive spending sprees to dispose of their old banknotes.

"There's a kitchen shop which has sold all its washing machines - all gone, all sold and I saw a woman going in to buy all the double-door fridges," said an office worker, who had just been shopping in a wealthy northern suburb of the capital.  

The cash shortage is also leading to a fuel shortage - as petrol can only be purchased in cash, she said. But like most people she believes these are just teething problems.  

"It's going to be better carrying less notes - you see people carrying money in boxes. So the idea is good, but there has not been enough time to plan the transfer," she said.

At her office, statements are checked daily for mistakes as banks have different rules and regulations.

Cheques accepted after 1 August are supposed to be made out in the new currency with "revalued" written on them; but bank staff often make errors as computer systems have yet to be transferred to the new values.

But many Zimbabweans do not have the luxury of earning Z$69m ($275) a month - the amount of old currency needed to keep above the poverty line.

"People don't have much to spend any more not because of the new currency - just generally. It's terrible," a bottle store manager about 25km north of Harare told the BBC.

The business manager, meanwhile, said many of his workers, although confused about the exact value of the new notes - there is even a one cent bill - have welcomed the devaluation as they feel it will tackle corruption.

But he said as he drove past Mr Gono's farm near Norton (40km east of Harare) on Saturday, it was on fire.

"The whole place was burning. Lots of the big chiefs are angry, really angry, because they're having their little apple carts turned upside down."

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