‘Triple spending’: Zimbabweans bear cost of changing to new ZiG currency

At a shopping centre in Glenview, a busy working-class suburb of Zimbabwe’s capital, Harare, carpenter Arnold Mutiri stopped to buy a 2-litre (half-gallon) Mazoe Raspberry drink.

The price tag said US$3.70. With Zimbabwe’s volatile currency and years of economic crisis, most goods are priced in more stable United States dollar amounts, with customers receiving their small change in local currency.

Mutiri handed the shopkeeper four US$1 bills and waited for his change. But the shop had none available. The 37-year-old then tried to pay the full amount in ZWL, Zimbabwe’s outgoing currency, which locals call bond notes, but the till operator refused to accept it, telling him to buy something else or forfeit the balance.

The scenario is one many Zimbabweans now face on a daily basis since the country launched its new currency, Zimbabwe Gold, or ZiG, two weeks ago, Mutiri said, lamenting how people have to budget more for basics just to make it through the day.

On April 5, Zimbabwe’s central bank announced the new gold-backed currency, immediately implementing changes on digital platforms with local banks converting ZWL to ZiG amounts on their systems.

However, the new bank notes will become available only at the end of the month after the central bank’s governor put in place a grace period to enable the transition. In the meantime, the central bank made assurances that bond notes would still be in use.

Despite this, many businesses like the shop in Glenview have already ceased trading in ZWL, significantly impacting millions who depend on cash for their daily needs, including people working in the informal economy.

“This comes at a time when we are already struggling with unemployment and the drought. Shops cannot give change, meaning they are rounding up all the transactions,” Mutiri said.

“They are profiteering a lot during this period of poorly coordinated currency transition. One has to double or triple the usual spending,” he told Al Jazeera.

Old notes not accepted

The ZiG is set to replace both existing ZWL bond notes and the Zimbabwean dollar, launched in 2016 and 2019, respectively.