10 trillion Zimbabwe dollars!
Posted Monday, August 31 2009 at 00:00
THE CHEQUE HAD SPACES FOR NOT ONLY BILL-ions, but trillions, quadrillions, quintillions and hexatillions: the last three being words I had never encountered before.
One hears of Zimbabwe’s problems, but it is not until you actually see its cheques and bank notes, that reality strikes home. What seems like an awful lot of money is worth nothing. The 10 trillion dollar note above was offered to a hawker on a Harare street for one avocado and he refused to accept it.
What madness led Zimbabwe to even print such worthless currency? Now, of course, its government has given up and the only acceptable currency is the US dollar. How the man in the street is expected to obtain American dollars is a mystery.
There was a time when the Zimbabwe dollar was nearly as strong as the US dollar, and, just as Kenyans are confident in their shilling, so Zimbabweans were happy to measure wealth in their national dollar.
The majority who once held robust bank accounts watched with amazement and horror as their dollars became ever smaller until, as is the case now, they are worth zero. Akiba ni mali? Wacha Bwana. Akiba ni upuzi! (Savings is wealth? No way. Savings is nonsense!)
MONEY RUNS AWAY FROM BAD POLICY. AT independence, the three East African nations shared a common currency. Politicians didn’t like this because if they made bad policy, their citizens could quickly move their money across the nearest border.
Mwalimu Nyerere wanted to experiment with socialism, but knew that while his country shared a common currency with Kenya and Uganda, money would run away from his policies over the borders into his two neighbours. Only after having achieved a national currency, was he free to experiment.
If money cannot run away (that is, you cannot move it where you want to), it shrinks in value.
So it was not long before the Tanzanian shilling, which started at parity with Kenya’s shilling, was only 10 per cent of the latter currency’s value. Money held in Tanzanian banks bought less and less and less.
That was the product of bad political decisions.
Interestingly, the Maasai were among the least affected because they did not trust money and preferred their traditional criterion of wealth — cattle.
Because cows did not have Nyerere’s head stamped on them like coins and bank notes, they held the same value as cattle in Kenya, where they could be traded for Kenya shillings. In the circumstances, Maasai conservatism was not so much backward as common sense.
Other Tanzanians followed suit. During research in 1980, I was amazed at the volume of potatoes coming out of Kenya’s Kajiado district — where the Maasai were not farmers, needless to say.
Of course, the potatoes were being produced by the Chagga on Kilimanjaro, and it was easy for them to market their produce across into Kenya. Like cattle, potatoes were not stamped with the national emblems and were freely negotiable in Kenya.
In times of monetary instability, it is sensible to buy things whose value cannot be controlled by politicians — like gold and land.