One
winter
morning
in
2008,
Epiphnia
Mudehwe
from
Mutare,
a
city
in
the
eastern
part
of
Zimbabwe,
boarded
a
bus
to
town
to
withdraw
her
salary
of
1
billion
Zimbabwe
dollars.
The
amount
sounds
impressive,
but
it
was
worthless
because
of
the
hyperinflation
that
Zimbabwe
was
then
experiencing.
In
July
that
year,
the
exchange
rate
had
reached
ZW$500
billion
to
$1,
making
ZW$1
billion
worth
less
than
a
cent.
Mudehwe’s
notes
devalued
while
she
was
in
line
at
a
supermarket,
and
the
midwife
was
unable
to
purchase
any
groceries.
The
money
could
not
even
cover
her
bus
fare
and
she
had
to
walk
three
hours
to
her
tiny
home
in
Dangamvura,
a
densely
populated
suburb
in
Mutare,
where
she
lived
with
her
family.
Prices
of
basic
commodities
at
the
time
were
changing
every
hour,
increasing
at
a
meteoric
rate.
Mudehwe
has
seen
it
all:
a
strong
Rhodesian
dollar
in
the
colonial
era,
a
highly
sought-after
Zimbabwe
dollar
in
the
1980s
after
independence,
the
hyperinflation
of
2008,
and
now
a
new
currency
introduced
in
April,
called
Zimbabwe
Gold
but
known
by
its
acronym,
ZiG.
At
62,
the
mother
of
four
still
recalls
how
strong
the
Rhodesian
dollar
was
in
the
late
1970s
when
she
undertook
her
midwife
training
in
Fort
Victoria
(now
Masvingo),
a
city
in
southeastern
Zimbabwe.
One
could
buy
a
meal
for
several
people
using
just
coins.
Born
and
raised
in
Mvuma,
a
small
town
in
Midlands
Province,
she
appreciates
her
parents
looking
after
her
and
educating
her.
Her
goal
was
to
finish
her
postgraduate
studies
and
earn
her
own
salary,
as
her
elders
had
done.
With
her
first
salary
in
1980,
Mudehwe
bought
blankets
and
clothes
for
her
parents.
That
same
year
Zimbabwe
became
independent
from
Britain.
“I
felt
like
I
was
dreaming,”
she
tells New
Lines. “My
salary
was
not
much,
but
the
money
had
so
much
value.
I
could
do
a
lot
with
it.
By
merely
looking
at
the
quality
of
the
paper,
you
could
tell
that
it
had
value.”
President
Robert
Mugabe
of
the
ruling
Zimbabwe
African
National
Union-Patriotic
Front
(ZANU-PF)
inherited
a
flourishing
economy
from
Ian
Douglas
Smith,
a
Briton
who
had
been
prime
minister
of
Rhodesia
from
1964
to
1979.
The
country’s
manufacturing
industry
and
efficient
agriculture
helped
to
keep
the
new
Zimbabwe
dollar
strong.
Mudehwe’s
situation
improved,
and
by
1992
she
was
able
to
buy
the
four-room
house
where
she
is
currently
staying
from
the
local
authority
through
a
housing
scheme.
She
worked
at
the
Dangamvura
clinic,
a
few
miles
from
her
home.
Mudehwe
was
excited
and
planned
to
renovate
the
house
for
her
growing
family.
But
her
excitement
did
not
last.
Zimbabwe’s
currency
collapsed
in
November
1997.
This
was
caused
by
a
combination
of
factors.
When
Smith’s
government
separated
from
the
United
Kingdom
through
the
Unilateral
Declaration
of
Independence
in
1965,
it
introduced
measures
that
included
guaranteed
cheap
credit
and
protection
of
domestic
industries
from
foreign
companies
to
sustain
the
economy.
Mugabe
retained
some
of
these
measures,
which
created
problems
for
his
government.
Restrictions
on
foreign
investment
also
contributed
to
a
foreign
exchange
shortage.
In
1990,
inspired
by
the
World
Bank,
Mugabe
introduced
the
market-friendly
Economic
Structural
Adjustment
Programme,
which
liberalized
the
economy.
This
only
exacerbated
the
problems,
says
Paison
Tazvivinga,
a
Zimbabwean
economist
based
in
South
Africa,
leading
to
“high
unemployment,
decreased
access
to
essential
services
and
social
unrest
…
Many
people
ended
up
facing
a
decline
in
living
standards.”
Mugabe
was
forced
to
spend
unbudgeted
millions
that
year
in
payouts
to
veterans
who
had
participated
in
the
anti-colonial
war
against
the
white
minority
government.
In
1998,
the
Zimbabwe
dollar
lost
half
of
its
value
in
less
than
two
months,
following
the
deployment
of
Zimbabwean
troops
to
the
Congo
to
support
then-President
Laurent-Desire
Kabila,
who
was
facing
a
rebellion.
The
war
cost
Zimbabwe
an
estimated
$1.7
million
a
month
between
1998
and
2002.
This
had
a
heavy
impact
on
the
treasury.
“It
increased
our
debt
levels,”
says
Tazvivinga,
and
“affected
trade
routes
and
regional
economic
relations.”
The
final
nail
in
the
coffin
for
Zimbabwe’s
economy
under
Mugabe
was
the
eviction
of
4,000
white
commercial
farmers
under
the
land
reform
program
introduced
in
the
2000s.
The
farms
that
were
supposed
to
benefit
landless
Black
farmers
ended
up
benefiting
Mugabe,
his
wife
Grace,
his
allies
and
political
supporters.
Grace
acquired
more
than
15
farms,
spanning
at
least
16,000
hectares.
Gideon
Gono,
then
governor
of
the
Reserve
Bank
of
Zimbabwe,
issued
a
ZW$100
trillion
note
in
January
2009,
which
exacerbated
poverty
and
hunger
amid
shortages
of
basic
commodities.
A
month
later,
the
market
dumped
the
Zimbabwe
dollar
in
favor
of
the
U.S.
dollar,
forcing
the
government
to
adopt
the
latter
as
the
main
currency.
The
multicurrency
system
was
maintained
under
the
government
of
national
unity,
a
power-sharing
deal
between
Mugabe
and
the
Movement
for
Democratic
Change
leader
Morgan
Tsvangirai.
On
April
5,
2024,
the
new
central
bank
governor,
John
Mushayavanhu,
introduced
Zimbabwe
Gold,
a
new
currency
to
replace
the
beleaguered
Zimbabwe
dollar,
which
had
lost
80%
of
its
value
against
the
U.S.
dollar.
The
ZiG
at
the
time
was
said
to
be
backed
by
2.5
tons
of
gold
and
$100
million
in
cash
reserves.
Mudehwe
does
not
have
confidence
in
the
new
currency.
The
grandmother
of
seven
says
that
her
granddaughter
showed
her
10
ZiG.
“That’s
the
only
time
I
saw
it,”
she
says.
This
is
the
sixth
attempt
by
Harare
to
introduce
a
local
currency
since
2009,
when
the
multicurrency
system
came
into
effect.
In
2014,
the
central
bank
introduced
bond
coins
to
resolve
change
problems.
This
was
followed
in
2016
by
bond
notes
which
were
at
par
with
the
U.S.
dollar.
In
2019
the
Zimbabwe
dollar
was
reintroduced
along
with
a
ban
on
the
use
of
foreign
currency,
after
a
decade
of
dollarization.
But
the
central
bank
failed
to
win
public
trust
and
in
March
2020,
amid
the
global
pandemic
that
worsened
the
economic
crisis,
the
governor
was
forced
to
bring
back
the
multicurrency
system.
Many
are
struggling
due
to
the
unstable
currency.
The
case
of
Mellisah
Katyora
is
typical.
The
28-year-old
and
mother
of
two
runs
a
small
shop
that
sells
mostly
women’s
clothes
at
a
shopping
complex
in
Dangamvura.
She
accepts
the
local
currency
but
pegs
her
prices
to
U.S.
dollars.
“When
people
want
to
pay
in
ZiG
we
take
it
at
the
day’s
prevailing
rate,”
says
Kutyora.
ZiG
is
not
yet
tradable.
Katyora,
who
buys
her
shop’s
wares
from
neighboring
South
Africa
and
Zambia,
has
to
convert
all
her
currencies
to
U.S.
dollars.
She
says
she
mostly
uses
ZiG
for
change
as
there
are
no
U.S.
coins
in
circulation.
“When
ZiG
started
circulating
in
April,
it
was
hard
to
find.
But
it
is
getting
better
now,”
she
says.
Katyora
is
not
happy
about
the
disparities
in
the
foreign
exchange
rates.
“It
is
confusing.
It
distorts
prices,”
she
says,
anxiously
biting
her
nails
when
speaking.
Consumers
have
to
deal
with
different
foreign
exchange
rates.
There
are
different
rates
for
paying
using
a
debit
card,
mobile
money
and
ZiG
notes
or
coins.
Because
of
Zimbabwe’s
high
unemployment
rate,
the
majority
of
its
workforce
is
employed
in
the
informal
sector,
where
these
problems
prevail.
Formal
businesses
are
forced
by
the
government
to
abide
by
the
official
foreign
exchange
rate.
Many
Zimbabweans
prefer
to
buy
cheap
groceries
and
clothes
from
people
who
sell
from
the
trunk
of
their
cars
in
the
streets
and
not
formal
businesses.
Rashweat
Mukundu,
a
social
commentator
and
human
rights
activist
based
in
Harare,
says
that
Zimbabweans
have
lost
confidence
in
the
local
currency
because
of
the
central
bank’s
lack
of
consistency.
“Regardless
of
efforts
by
the
government,
there
is
clarity
that
the
trauma
that
they
went
through
from
2007
when
they
lost
their
savings
when
they
faced
the
total
collapse
of
the
Zimbabwe
dollar
is
still
imprinted
in
the
national
psyche,”
he
says.
These
crises
are
having
a
broader
impact.
The
country’s
health
sector
has
deteriorated,
the
education
sector
is
underfunded
and
people
are
struggling
to
buy
basic
commodities.
The
government
blames
decades
of
sanctions
while
the
U.S.
Embassy
in
Harare
maintains
that
the
sanctions
are
targeted
and
have
no
economic
impact.
The
Zimbabwe
Democracy
and
Economic
Recovery
Act
of
2001
sanctioned
Mugabe
and
some
top
officials
over
gross
human
rights
violations.
After
pressure
from
regional
leaders
and
the
Zimbabwean
government,
President
Joe
Biden
lifted
sanctions
initially
imposed
by
President
George
W.
Bush
in
2003
and,
in
March
this
year,
instead
placing
Magnitsky
Act
sanctions
on
11
Zimbabweans
and
three
entities,
including
President
Emmerson
Mnangagwa,
for
their
involvement
in
corruption
and
human
rights
abuses.
But
while
the
international
sanctions
were
aimed
at
stopping
political
leaders
and
specific
sectors
from
profiting
from
corruption,
they
ended
up
hurting
the
local
economy.
According
to
Tazvivinga,
they
led
to
“a
decline
in
foreign
investment
and
reduced
access
to
the
international
market.”
He
adds:
“They
exacerbated
an
already
struggling
economy
which
also
contributed
to
hyperinflation
in
the
late
2000s
and
widespread
poverty.”
The
instability
of
Zimbabwe’s
currency
remains
a
grave
concern
even
for
the
younger
generations.
Tatenda
Mitchell
Kupara,
18,
a
high
school
student
from
Dangamvura,
says
she
prefers
to
have
her
savings
in
U.S.
dollars.
“I
am
used
to
the
U.S.
dollar
because
I
can
reliably
budget
with
it
unlike
ZiG,”
she
tells New
Lines.
“When
the
ZiG
came,
I
had
some
Zimbabwe
dollar
notes.
They
all
became
worthless
so
I
had
to
throw
them
away.”
She
says
she
often
faces
issues
of
getting
change
when
commuting
to
school.
“I
am
supposed
to
pay
50
cents
but
I
end
up
paying
a
dollar
because
the
bus
driver
does
not
give
you
change,”
she
says.
“The
money
I
am
supposed
to
use
for
the
whole
week
ends
up
lasting
just
half.”
This
frustration
is
common
among
young
people,
reflecting
a
broader
despair
over
the
state
of
the
economy.
Despite
this
frustration,
the
ZiG
remained
stable
from
its
launch
in
April
to
September
on
the
official
market.
It
was
introduced
at
13
ZiG
to
$1
and
officially
it
trades
at
14.
However,
on
the
black
market
the
rate
plummeted
to
24
ZiG
to
the
dollar
in
early
September,
underscoring
the
gap
between
official
figures
and
reality.
This
forced
the
central
bank
to
devalue
the
ZiG
by
43%
on
Sept
27.
But
prices
of
gold,
a
commodity
authorities
claim
is
backing
the
ZiG,
have
been
surging
for
the
past
few
months.
From
Sept.
27,
the
ZiG
has
been
trading
at
24
to
$1.
On
the
black
market
the
rate
has
gone
up
to
50
ZiG
to
$1.
Civil
servants
who
had
just
been
paid
in
local
currency
by
the
government
lost
their
income.
The
devaluation
of
the
ZiG
triggered
panic
buying
and
shortages
of
basic
commodities.
The
macroeconomic
conditions
the
ZiG
is
being
introduced
under
are
no
more
favorable
than
in
the
past.
Dilapidated
infrastructure,
food
insecurity,
unproductive
factories,
underperforming
agriculture,
extreme
poverty
and
chronic
unemployment
all
contribute
to
the
economic
malaise.
And
the
government
itself
does
not
have
confidence
in
its
currency.
Most
of
its
services,
including
passports
and
customs
duty
taxes,
are
charged
for
in
U.S.
dollars.
Victor
Bhoroma,
an
economist
based
in
Harare,
tells Three
Generations,
One
Crisis that
the
viability
of
the
ZiG,
just
like
all
other
currencies,
largely
depends
on
whether
the
central
bank
can
stop
quasi-fiscal
operations,
like
lending
to
commercial
banks
for
onward
lending
at
artificially
low
rates,
lending
to
state
entities
and
funding
particular
economic
activities
like
gold
and
tobacco
production.
There
is
no
efficient
foreign
exchange
market
through
which
suppliers
and
customers
can
approach
commercial
banks
to
buy
and
sell
foreign
currency.
Businesses
and
individuals
have
been
struggling
to
access
foreign
currency
in
commercial
banks
since
the
introduction
of
ZiG
in
April.
Bhoroma
says
that
for
the
new
currency
to
be
sustainable,
“there
have
to
be
reforms
in
order
to
ensure
that
there
is
a
market-driven
foreign
exchange
system
where
banks
are
the
matchmakers.”
A
national
debt
of
around
$22bn
is
also
a
threat
to
Zimbabwe’s
economy.
The
country
owes
over
$14
billion
to
international
creditors
including
the
World
Bank,
according
to
the
African
Development
Bank.
Creditors
stopped
lending
to
Zimbabwe
after
it
failed
to
service
its
debts
in
the
late
1990s.
Efforts
to
restructure
the
debt
are
likely
to
collapse
following
a
flawed
2023
election.
The
U.S.
pulled
out
of
the
debt
restructuring
process
early
in
January
citing
election
irregularities.
The
situation
is
not
sustainable,
says
Bhoroma.
Not
while
Zimbabwe
has
“economic
growth
of
probably
3%,
whilst
money
supply
is
growing
at
a
rate
of
over
500%
per
annum,”
he
says.
Because
half
of
the
government
budget
is
funded
by
the
central
bank
and
the
overdraft
facility
is
abused,
the
source
for
ZiG
is
a
bottomless
pit,
creating
artificial
demand
for
foreign
currency.
“There
is
no
way
ZiG
can
be
stable
or
the
foreign
exchange
rate
can
be
stable.”
Many
people
in
the
informal
sector
like
Katyora
do
not
bank
their
money
but
prefer
to
keep
it
under
their
pillow.
If
there
is
no
confidence
in
the
banking
system,
then
ZiG
has
no
viability,
says
Bhoroma.
After
the
release
of
ZiG,
the
government
pressured
people
to
accept
the
local
currency.
It
crafted
laws
forcing
businesses
to
use
the
official
foreign
exchange
rate
while
the
bank’s
officials
and
ZANU-PF
politicians
intimidated
individuals
and
companies
to
embrace
it.
Authorities
arrested
illegal
money
changers
who
control
the
black
market,
charging
them
with
money
laundering.
But
such
heavy-handed
tactics
have
further
eroded
trust
in
the
new
currency,
says
Mukundu.
Kupara
struggles
to
understand
finance
at
school
and
at
home
because
of
the
confusion
and
disorder
caused
by
Zimbabwe’s
currency
crisis.
She
wishes
for
a
stable
local
currency.
“Consistency
is
key,”
she
says,
adding
that
she
will
study
information
technology
at
university.
Mudehwe,
on
the
other
hand,
has
abandoned
her
house
renovations
after
the
country’s
currency
ruined
her
plans.
“My
children
will
complete
it,”
she
says.
Zimbabweans
have
shown
remarkable
resilience
but
an
unstable
currency
has
left
a
deep
and
lasting
impact
across
generations.
It
has
shattered
the
plans
of
older
citizens
like
Mudehwe,
forcing
them
to
leave
the
future
in
the
hands
of
their
children.
It
has
made
it
impossible
for
the
likes
of
Katyora
to
earn
a
decent
livelihood.
Even
youth
like
Kupara
feel
defeated
and
confused.
Unless
Zimbabwe
succeeds
in
restoring
confidence
in
the
local
currency,
these
struggles
may
yet
be
passed
on
to
future
generations.
–
New
Lines
Magazine