During my trip to Africa, we had a few days out at the magnificent Victoria Falls. An amazing natural wonder of the world, particularly from the Zimbabwean side of the falls where you can walk the 1.8 kilometres opposite the massively flowing waters.
I mention this because I’ve known about Zimbabwe’s currency explosion for a while, but seeing the aftermath of the currency’s implosion it shows how money makes the world go around … or not, as the case may be.
In Zimbabwe’s case, the country has gone through a particularly notable slump.
Back in the day when they changed the name of the country from Rhodesia to Zimbabwe, the Zimbabwe Dollar (ZWE) was worth USD$1.47 … but, by 2006, the ZWE was already becoming worthless, effectively trading at just over half a cent of a US dollar to the Zimbabwe dollar.
Then it got worse, a lot worse, as the economic situation worsened and hyperinflation kicked in.
The result is that the government issued four rounds of currency devaluations ending with the final laughable situation of issuing a 100 trillion dollar note (worth around US$300 when issued).
Now that may be funny, but it actually means in practice that Zimbabwe no longer uses Zimbabwe currency for trade.
They use US dollars mainly. A nice stable currency.
South African rands are welcome too, and even euros and pounds are acceptable in some hotels and situations.
The problem with this is that they don’t have enough of these foreign notes in circulation so you either tip a porter or driver $10 or don’t tip at all.
It also means there’s a massive trade in selling old bank notes.
As we walked the main street of Victoria Falls town which comprises a mere five or so souvenir shops, we were rapidly pounced upon by touts selling everything from wooden carvings to jewellery. More often than not though, they were selling money.
Old Zimbabwe money.
Old Zimbabwe dollars.
Every guy on the street would hold out a wad of notes, many well used notes, and ask for US$20 to take them as a souvenir. You then haggle and barter and pay about US$5 to take the things off their hands.
In some ways, I bought a lot of these notes as I felt sorry for the chaps – one guy hassled me non-stop for about ten minutes and I eventually said that we were leaving that day so could not buy any more stuff.
He said: “You’re leaving today? Well maybe you have some old T-shirts or pants you could give to me? I don’t mind how old sir. I’ll wait outside your hotel.”
Another guy noticed that we had some bread in our bag (to feed the birds) and asked if he could have it to eat.
That’s how poor this economy is today.
So buying a few old dollars with US dollars wasn’t such a big deal.
The big deal is actually made about the 100 trillion dollar note however.
Many were issued, but these are the prized notes of the townsmen who would ask if I wanted ot buy old Zimbabwean dollars.
I’d say not, I’ve got loads of them already and then one or two of them would pipe up: “but do you have this note, the big one?” and would hold up the rarer 100 trillion dollar note in pristine condition.
Sure enough, I got suckered into buying one for US$10 … only to find you can buy them uncirculated in mint condition at the airport.
The airport of all places!
The airport has books of 100 trillion dollar new notes, selling for US$17 - well it is the airport shop and not street seller. Sure enough, I bought another one.
Then I noticed they had an older pristine 50 cent bill. A half a dollar note.
These date back to before the hyperinflationary activity and so now I’m buying a worthless Zimbabwean half dollar bill for US$16.
Hmmm … I guess I just like buying weird bank notes (yes, it’s a hobby of mine – more on this in a follow on blog).
So now I’ve got pockets full of old and new, circulated and uncirculated Zimbabwean dollars and feel good … only to see one final piece of monetary memories sitting in the airport shop that made me stop in my tracks.
Many years ago, friends of mine returned from Rhodesia as it was in the 1970s, with homes and farms lost as the country was taken over by Robert Mugabe and militant African factions, leading to a three decade dictatorship.
That’s my take on things anyway, in case you care to disagree with this summation.
Before 1980, the country was a British colony until 1965, when Ian Smith declared unilateral independence, sparking a long period of sanctions and protests from Britain to the United Nations, and ultimately leading to the conditions that allowed Mugabe to take over.
So I was pretty shocked to find a collection of old Rhodesian coins in the airport shop and even more surprised that they still proudly showed the Queen on the coin.
It’s the sort of thing that you imagine would have been melted down and destroyed years ago and yet there it was, up for sale to excited British tourists passing through the airport.
And yes, guess which tourist bought the set for his weird and wacky money collection.
You got it.
More on weird and wacky money shortly.
Meantime, if you’re interested in more on the hyperinflation and history of Zimbabwe, I recommend you go over to Wikipedia and read about it. It’s interesting stuff.