People are always arguing when it comes to the state of Zimbabwe’s dollarisation. If you believe the state then you buy their de-dollarisation is on track mantra although evidence says otherwise. On the other hand, there is the dollar or nothing school who fervently argue that bond notes and RTGS dollars are just used to express USD prices at black market rates in a bid to assuage the wrath of the authorities. The truth is probably somewhere in the middle although right now it is moving more and more towards the dollarisation camp’s favour.
In a lot of Zimbabwe’s rural areas, however, there is no doubt: dollarisation is now complete. According to our sources in various rural areas such as Odzi, Honde Valley, Murehwa and so on Zimbabwean dollars are no longer considered legal tender by many. Traders, from these, who sell at Mbare Musika have to compromise and are therefore forced to accept Zimbabwean dollars. Before boarding those banana, tomato or onion trucks back to their rural abode however, these traders quickly change it all to US dollars.
There are several reasons why everything is now priced in US dollars in rural areas:
- These Zimbabwean dollar is losing value all the time, I mean when was the time it gained on the greenback?
- Limited mobility brought about by the lockdown means a lot of people don’t have access to banks. A lot of them fear their money will become worthless whilst still in their hands. Look at what has already happened with the $2 and $5 bond notes. A lot of people who had stashes of these have had their fingers burnt.
- To add to the above point most people still remember the infamous Gono era when they were left with piles of worthless money
- Rural people use the USD to save. People often live frugal lives and when they say, sell a cow or an ox, they want that money to last as long as possible. With bond notes, they are pressured into spending it as soon as possible due to inflation. Naturally, everything from cows to vegetables is thus sold in USD because after all, if I give you USD, I want my change in USD
- The government seems to be leaning more and more towards dollarisation despite hollow protestations to the contrary. Nobody is buying the de-dollarisation stories for a second. Not when the government wants USD for passports and a whole lot of other things.
- Those with USD can easily access basics such as cooking oil while those with Zimbabwean dollars have to contend with shortages