The Bond Note Is Equivalent to the US$ Zimbabwe's Unending Currency Woes

Monday, 16 July 2018
Distributed Paper
Tapiwa CHAGONDA, University of Johannesburg, South Africa
‘The Bond Note is Equivalent to the US$’: Zimbabwe’s Unending Currency Woes


Tapiwa Chagonda (University of Johannesburg)

The Zimbabwean economy has been in dire straits since the turn of the century when in 2000, the country embarked on a controversial and haphazard land reform programme which resulted in the country’s agricultural sector, which was then the mainstay of the economy, going into comatose and sanctions also being imposed on the country by the West. By 2008, hyper-inflation had ravaged the Zimbabwean economy, peaking at a stupendous 89.7 sextillion (sextillion has 21 zeroes) percent by November 2008. With the unsustainable hyper-inflation, the country decided to shelve the worthless Zimbabwean dollar in 2009 and put in place a multiple currency regime which was largely dominated by the United States Dollar. However, with the country’s key formal sectors such as agriculture, manufacturing and mining failing to produce much for exports, the United States Dollars in circulation where always limited, thereby creating a cash crunch. To ease, the cash squeeze which the country has been facing since the shelving of the Zimbabwean dollar, the Reserve Bank of Zimbabwe decided to introduce a surrogate currency which has been christened, the ‘Bond Note’. This paper argues that these Bond Notes have failed to ease Zimbabwe’s currency woes, as forex barons have been hoarding both the United States dollars and the Bond Notes for speculative purposes, which has resulted in Zimbabwe’s economic situation to remain in the doldrums.


United States Dollars, Bond Notes, Hyper-Inflation, Zimbabwe