Statutory instrument 231 of 2019 was published in the government Gazette and it contained details of the features of the incoming Zimbabwean dollar notes which surprisingly will be very similar to the existing bond notes, at least in as much detail as the description gave particularly the colours. A public notice was issued by the Reserve Bank of Zimbabwe that highlighted the features of the additional bond coins which it is said will bear the inscription 2018. This, of course, brought up the question as to why we have had cash all along but not introduced it.
While the images on the new notes will be distinct from existing notes the colours at least as per description will be the same. There are of course good reasons to do so. For one it will make the interchangeability easier. There are many illiterate people in the country. For another, it is also easier for the visually impaired or poorly sighted. However, it also brings up questions as to how new the new notes are. Is this simply an attempt to dump the Bond note as it is soiled beyond repair?
Definitely not new coins.
So the coins will be inscribed 2018, clearly indicating that unless there was a massive clerical at fidelity printers, these coins were minted in 2018. As we are in the 11th month of 2019 it is fair to say that we have gone through a year of dire cash shortages and no action, or at least no right action, was taken to alleviate the crisis. The cash-out percentage was allowed to rampage to levels as high as 60% before any action was taken yet we had coins. This casts serious doubts over any notion there was about caring about the people’s problems. Some were quick to say introducing those coins would’ve lead to money supply growth which is inflationary but money supply grew 80% this year and inflation is extrapolated at 300% year on year based on ZimStat figures, it wouldn’t have made it any worse. Also to that, the same method being used to introduce currency now, essentially swapping electronic balances for cash could have been used then.
Communication is half the job
In the past government departments have communicated poorly or not all. This can be partially forgiven due to issues of cost and access. While online portals have reduced the burden not all of Zimbabwe is online for one reason or another. It is sad that more communication has not translated into better communication. Last week were told the notes and coins are two weeks away, this means they are a week away now. And people are left to dig in government Gazette descriptions and circulars to understand their legal tender. Say what you will about the Zimbabwe of old but those chaps would have adverts on television and those huge posters up in every institution detailing every little feature of the money.
There have also been questions raised over the small denominations that are being introduced. The US dollar, as our legal tender and unit of account for the last 10 years has become our real value unit. Based on the interbank rate the denominations being introduced are US 13 cents (ZWL$2) and US 32 cents (ZWL$5). This is baffling when simple things such as bread sell at the ZWL$15 mark, just under US$1. Asked a question on this Eddie Cross, member of the Monetary Policy Committee who first let slip of the coming notes, said they were keeping denominations low to deter counterfeiters as they were not going heavy on security features. Perhaps examining the market for counterfeit US dollars would reveal that the $10 bill is popular with them because it is not scrutinised as it is a small amount.
With not much time to go before the notes and coins are expected the government has a little work to do in order to assure a smooth landing for this latest project in the monetary space. Let us hope they can cover the ground.