Spectre of hyperinflation returns to haunt Zimbabwe

HARARE: Driving to work last week, Dennis Zhemi found his usually busy neighbourhood garage in the Zimbabwean capital Harare deserted and a forecourt attendant signalling “no fuel”.

For Zhemi, it was a worrying sign that Zimbabwe’s chronic economic collapse could be heading for another vicious downward spiral of basic shortages, hyperinflation and social chaos.

He left his car at the garage as he did not have enough fuel to reach his office, and caught a bus to work.

A decade ago, hyperinflation in Zimbabwe wiped out personal savings, left shops empty and made it all but impossible to buy a tank of petrol or daily groceries.

Inflation peaked at 500 billion per cent before the national currency was abandoned in favour of the US dollar, and the economy never recovered.

Fears of a repeat of those desperate days have grown in recent weeks in Zimbabwe, and panic-buying has seen prices rocket.

The stockpiling has been driven by a collapse in confidence in the parallel “bond note” currency that was launched by 93-year-old President Robert Mugabe’s government nearly a year ago.

Bond notes dispersed by banks and ATMs are in theory worth the same as the US dollar, but consumers worry the currency could be rendered worthless like the old Zimbabwe dollar that was scrapped in 2009.

“We are already witnessing shortages of basic commodities,” Peter Mutasa, president of the Zimbabwe Congress of Trade Unions, said.

“The situation has been triggered by lack of confidence in the bond notes. We are being driven to barter for goods as there is no hard currency in the banks.”

A 2l bottle of Pure Drop cooking oil sells for US$3.20 (RM13.44), but its price has jumped suddenly to US$4.50 (RM18.90) in bond notes and US$5 (RM21) – or sometimes even US$7 (RM29.40) – when paying by card.

Mugabe, whose land policies are widely blamed for Zimbabwe’s economic collapse since 2000, this week railed against currency “saboteurs” and vowed that the “price hikes would be dealt with”.

With cash so scarce, many Zimbabweans have resorted to bartering – exchanging goods directly – to survive.

Brenda Mpofu, who runs a second-hand clothes stall in Harare, said she now travels to rural areas to swap clothes for maize and later sells the maize or exchanges it for other goods.

“I used to be able to afford to pay rent, buy food and clothes and send my children to school,” she said.

“But these days I am barely managing. There is no money and business is just so low.” — AFP