Vastavam web: Zimbabwe will introduce a new currency in the next 12 months, the country’s Finance Minister said, as a shortage of U.S. dollars plunges the financial system into disarray, forcing businesses to close and threatening unrest. The southern African nation abandoned its own hyperinflation-wrecked currency in 2009 at the height of an economic recession, adopting the greenback and other currencies including sterling and the South African rand.
Mthuli Ncube told a townhall meeting late on Friday that a new local currency would be introduced in less than twelve months. “On the issue of raising enough foreign currency to introduce the new currency, we are on our way already, give us months, not years,” he said. Locals are haunted by memories of the Zimbabwean dollar, which became worthless as hyperinflation spiralled to reach 500 billion percent in 2008, the highest rate in the world for a country not at war, wiping out pensions and savings. A surrogate bond note currency introduced in 2016 to stem dollar shortages has also collapsed in value.
With less than $400 million in actual cash in Zimbabwe according to central bank figures, there are fuel shortages and companies are struggling to import raw materials and equipment, forcing them to buy greenback notes on the black market at a premium of up to 370 percent.
Zimbabwe’s iconic manufacturer of cooking oil and soap, Olivine Industries said on Saturday it had suspended production and put workers on indefinite leave because it owed foreign suppliers $11 million. A local associate of global brewing giant Anheuser-Busch Inbev said this week it would invest more than $120 million of dividends and fees trapped in Zimbabwe into the central bank’s savings bonds.