On Friday, the new Reserve Bank of Zimbabwe governor, Dr John Mushayavanhu, did something we predicted in July last year, he introduced a new Zimbabwean currency called the ZiG. As has become the norm the currency was introduced with immediate effect. Banks have until 12 April 2024 to convert people’s ZWL balances to ZiG. Those with ZWL cash (popularly known as bond notes) have until 26 April to convert their bond notes to ZiG notes. Confusingly the RBZ says that ZiG notes will only start circulating on 30 April. In the meantime, they will start educating people about the security features of the new currency.
Major confusion and service outages
The chaos that ensued the unexpected announcement was immediate. By nightfall, customers were receiving SMS messages from their banks. In order to facilitate the transition from ZWL to ZiG, banks were forced to take their ZWL services offline. This meant that customers across the nation could no longer use online banking or card services to make payments. This was inconvinient to say the least but the worst was still to come.
On Saturday 6 April there were more messages from various service providers including Ecocash who maintain a ZWL wallet which will now be a ZiG wallet I guess. Again those with ZWL balances in Ecocash were told their money would not be available during this transition period. Then came the deluge of similar bad news messages from other service providers like Liquid Telecoms (their ZWL bundles are not available at the moment), TelOne and a host of other service providers.
All these outages are because these systems are being migrated from ZWL to ZiG. The biggest outage of all these is ZESA. The power utility, in typical fashion, never bothered to send an SMS or inform customers about their outage. We just woke up on Saturday to the fact that all ZWL-related system calls to ZESA were failing. Not that it matters, thanks to the bank outage, ZESA transactions would have failed anyway. Scores of houses are in the dark right now because of the ZESA outage.
Even some USD services are down
On paper, and probably in the minds of the RBZ authorities, this is all supposed to be simple. To convert ZWL balances to ZiG balances all one is supposed to do is divide the ZWL balance by a factor of 2498.72. For example, $1 000 000 ZWL now becomes 400.20 ZiG. Very elegant right? Wrong.
Most systems are delicate and interdependent. There are complex relationships between ZWL and USD that had built up over time. The government had mandated that every service be sold in both ZWL and USD at their decreed rates. This means that for most services there was no ZWL or USD-only services. You could convert between them. Some systems are licenced from foreign providers. Also in the Finance world, it is extremely difficult, for a very good reason, to convert one balance to another. The last thing you want is some guy being able to divide or mess with your numbers on a whim.
The result of all this is that even USD services have been negatively impacted by the currency switch. Jut take for example the following services:
- The TelOne online shop was just showing the menu and a blank page the last time we wrote and published this article.
- TelOne’s WhatsApp and USSD services also do not appear to be working as expected. We bought a bundle but could not convert the PIN and so the bundle remains unusable for now.
- The popular Econet Yomix App was also mostly blank and showing an error. At the time of writing you could convert your USD airtime to bundles
- Banking apps from several banks are also down. Most apps expect to be able to pull a ZWL balance and once that fails they just crumble and die.
- Ecocash’s USD services are mostly working but on Saturday they were a hit and miss.
Impact on Business and Users
The impact on businesses and users has been immense and catastrophic. Supermarkets like Pick N Pay used the ZWL as their primary operating currency. That currency was killed in the middle of the day when business was at its peak. Their swipe machines were not working on Saturday resulting in massive business losses. Thanks to them being forced to use the official rate most of their customers use ZWL and swipe. They lost all that.
The biggest outage is that from ZESA. A lot of people are on ZETDC’s prepaid platform which was offline because of the currency switch. These people are now in the dark and have no way to fix this. The government has given Friday 12 April which means there is a possibility that these people will be in the dark until 12 April.
These are all effects of the currency switch that could have been predicted. The government was supposed to have worked with stakeholders to create a smoother transition. We have had multiple currency switches over the past two decades. This is not our first rodeo so to speak. The RBZ and the government remain obsessed with catching economic saboteurs unawares. The truth is if the government is looking for economic saboteurs they only need to look in the mirror.
The solutions
For some services like ZESA, there is no easy solution. This might be the time for you to seriously look into solar. ZESA has been taking the Zimbabwean public for granted for so many years now. We were subjected to 19-hour power cuts as recently as last year. The power utility has stubbornly refused to publish a powercut schedule. You should also consider cooking using LP gas, which at US$1.60 per kg is way cheaper than electricity.
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