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Sat, 07 Dec 2019 08:27 GMT

Zimbabwe Dollar: Once Worthless now Worth a Pretty Penny

Business

Fazila Mohamed - 7Dnews Harare

Sun, 16 Sep 2018 10:10 GMT

During Zimbabwe's economic crisis when inflation hit 23 million per cent, many Zimbabweans were rendered poor trillionaires as bank notes quickly became worthless. Now the billion- and trillion-dollar notes minted in that era can fetch hundreds of dollars, as collectors drive a new form of gold rush.

“The 50 trillion and the 100 trillion dollar notes I sell for about $30 and $85 respectively to collectors, then the billions and the millions go for much less, but we can negotiate,” explains Gerald Humba, a dealer in Zimbabwe’s hyper-inflation notes which were minted by the then Reserve Bank of Zimbabwe (RBZ) Governor Gideon Gono. Most dealers in Harare’s capital are ‘middle men’ who buy on behalf of collectors from America and United Arab Emirates. These notes are then sold for double their cost, for example on eBay the 100 trillion-dollar note is being sold between US$180-250 per note.

Once an underground enterprise, Zimbabwe’s capital of Harare is now filled with dealers who are offering to buy these notes from the public. These buyers prey on unsuspecting Zimbabweans who are happy to get some return on the reminders (notes) of Zimbabwe at its worst.

“You are buying these notes? I have a bunch at home will come back tomorrow,” said Jane Msipa, a Zimbabwean who was surprised that the notes have some value when she spoke to a dealer in the streets of downtown Harare. The dealer proposes to offer $10 for the 100 trillion-dollar notes, almost ten times less than what collectors buy them for.

RBZ converted the billions and trillions of dollars in citizen’s accounts by rounding them off to US$20 when the currency was dumped for the multi-currency system in 2009. The savings of many Zimbabweans were wiped away in one day. During Zimbabwe’s economic slump of 1998-2008, the government resorted to minting more money to meet the demand of cash. Even after removing twelve zeros (000,000,000,000), the galloping inflation forced the printing of the billion- and trillion-dollar notes.

For the notes to sell they have to be clean, uncirculated (not used) and if in a bundle,  they fetch more money if the serial numbers are in sequential order. The hard part is sending the notes from Zimbabwe to other countries. A dealer will have to carry them in person and go to South Africa, from there they can send them via post to other destinations. Zimbabweans have heavy visa restrictions for travel to America and countries in the European Union. Courier service providers are prohibited from sending currency. Tourists usually take this opportunity to buy the precious notes while they are on holiday.

Also sold are replicas and fake versions of these banknotes, popular in Europe, especially the gold replica which is falsely claimed to be from Zimbabwe. The main security feature, found on the right of the note, is the Zimbabwe bird icon, which changes colour when reflected against the sun or light at different angles. Scammers also take advantage of collectors who buy memorabilia online by either sending fake notes, wrong denominations or not delivering them at all.

This vintage note sector is unregulated and efforts to obtain a comment from RBZ on this industry proved fruitless as the Public Relations Officer did not up his phone. Having some of control would actually be beneficial to the government, who could gain revenue from transactions based on selling the notes in its reserve. 
 

Africa