THAT the introduction of higher denomination banknotes, as mooted last week by Finance minister Mthuli Ncube, is long overdue is an understatement. The seemingly reluctant decision by Ncube and company to introduce $10 and $20 notes into the hard cash-starved economy, several months after the country’s monetary authorities steadfastly refused to heed to market calls to introduce higher note denominations — ostensibly to control inflation, speaks to either a people who are slow to read situations, or are just downright arrogant.
“You can imagine that if it is $2 and $5 notes, you have to pack quite a lot of them into the automated teller machines (ATMs) to make withdrawals and so high denominations like $10 or $20 notes are needed going forward and we will be doing that,” so has Ncube come to realise.
It is, however, quite astounding, if not embarrassing, for Ncube to appear and sound as if the introduction of the higher denomination notes is a masterstroke of a decision when, in fact, it looks more like a subtle way of admitting that inflation is taking its toll and government can no longer hide behind a finger. Ncube appears convinced that by drip-feeding into the market, the inflation-hit Zimbabwe dollar will gain strength against other major currencies.
Since June, when Ncube decided to stop publishing annual inflation figures, rabid price rises have not relented and for someone with such a mouthful resume, it is quite awkward for him to sound as if Zimbabwe has never been through this kind of phenomenon. Many wonder where Ncube was when the original Zimdollar was rendered useless by hyperinflation. The last note, which became the world’s largest ever printed in history: The famous $100 trillion note, effectively destroyed the once powerful currency.
Given that the country had printed banknotes ranging from $10 to $100 billion in a space of 12 months during which several zeros were slashed off the currency, the defunct Zimdollar note could have topped $1 zillion.
When things came to a head, the ATMs Ncube is talking about turned into rat- breeding enclosures because of the sheer amounts of banknotes one needed just to buy a sweet.
So what Ncube is telling the long-suffering Zimbabweans is far from being good news at all. It merely sadly reminds them of their horrible past. As things stand, the 25c and 50c coins are largely no longer being accepted, meaning that by the time the $10 and $20 banknotes land on the streets the $1 and $2 coins will most likely no longer be accepted in an economy which is 80% informal.