A nation of poor millionaires


I ALMOST blew my top when the cashier at The Post in Zambia told me she did not have my change.

It was only K200. But that was way back in 1997. I was thinking like a typical Zimbabwean. Two hundred Zim dollars was a lot of money at the time.

I was baffled when the lady gave me K500. I refused to take it because it was much more than she owed me. I backed down when she insisted and told her she could keep the K200 instead.

I felt very stupid when I got to my hotel and started reconciling my expenses. I had been fuming over less than 10 US cents.

Eight years down the line, it has become routine for cashiers at supermarkets here to take my $200 change without any explanation or excuse. And at times it’s no use complaining because the money is not even enough to buy a box of matches. How things have changed!

Way back in 1997, I would have totally refused to accept that we would sink this deep. We had seen how our neighbours had wrecked their economies, so we could not make the same mistake.

After all our leaders had lived or grown up in these countries. We thought they knew better.

Though we were off the International Monetary Fund books, our economy was improving. At least that was what the figures told us. Inflation was going down and had dropped to 18 percent.

That was until what has now been dubbed Black Friday in November 1997, when the Zimbabwe dollar, which had been trading at around 11 to the greenback, suddenly fell to 25.

Several theories have been floated.

Some argue that the crash was due to the disbursement of an unbudgeted-for $4 billion to veterans of Zimbabwe’s war of liberation. That was a lot of money at the time.

Others argue that the Zim dollar’s fall was triggered by the listing of more than 1 500 white-owned farms for compulsory acquisition.

Whatever the reason, the country went on a six-year slide, which saw inflation shoot up to over 600 percent and the dollar slide to more 8 000 to the greenback.

The country had almost become a free-for-all until Gideon Gono was appointed central bank governor and cracked down on the financial sector, which was at the centre of widespread speculative behaviour.

The introduction of bearer’s cheques, following a critical cash shortage that crippled the country for almost six months in 2003 resulting in cash itself becoming tradable, seemed to compound things.

People became millionaires overnight. And you could carry that million in your shirt pocket.

It appears the government was more shocked by the fall of the dollar than the public as it kept an unrealistic tax-free threshold of $200 000 a month for more than nine months after the introduction of bearer’s cheques, yet the bread basket compiled by the Consumer Council of Zimbabwe was more than four times that amount.

Though the government has since reviewed the tax-free threshold to $1 million, this still falls short of the poverty line. The consumer council now says a family needs more than $1.7 million for its basic requirements.

In other words, we now have a ridiculous situation where we have millionaires who are starving.

While we basically have five notes that still function, the $20 000, $10 000 and $5 000 bearer’s cheques as well as the $1 000 and $500 notes, we still have a lot of useless notes in circulation such as the $5, $10, $20, $50 and $100.

To make matters worse, the central bank insists coins are still legal tender, yet no one accepts them now.

The wear and tear on the notes, particularly the $1 000 and $500, is just amazing. They are now the equivalent of a $1 and 50-cent coins.

This has prompted people to argue that when Gono introduces a new currency next year, he must seriously consider giving Zimbabwe’s money some value.

There are suggestions that the country should get rid of the last three zeroes, with the $1 000 becoming a dollar and $1 million becoming $1 000.

We would not need big denominations like the $20 000 bearer’s cheque, or even the $1 000 note. The $100 which ruled supreme in 1997 would once again be the highest-denomination currency.

A lot of things do not make sense as things stand. School fees now run into millions. Some cars are selling for over a billion. Houses are going for billions. Companies are making profits in billions.

Instead of having a millionaires’ list, those with billions are the real rich. Surely, this can be reversed at the stroke of a pen.

I wouldn’t mind earning $2 000 and being able to buy everything I want and send my children to school, rather than earning $5 million and not being able to buy enough groceries for a month.

Let us bring back the respect the word millionaire deserves. We cannot afford to have too many poor millionaires. Very few people, except us, will understand that.

Even children will end up confused if all they can see are seven and 10 figures. They might start thinking: what is the point of starting to count from one? They might as well start at 100 or 1 000 or even one million!



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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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