Zimbabwe's new currency struggles amid old problems

DW (English)

Nine months after Zimbabwe introduced a new currency, the country can't shake off its economic ways. A complete lack of stability made people weary of the official tender and even a grandiose name didn't help it.

Transcript

00:00Life starts at dusk in Harare. It's only after dark that pop-up stores open up on sidewalks,

00:07verandas and in car parking lots, turning the street into open-air bazaars.

00:13Here, fresh fruit and vegetables, rice, beverages, it's all available.

00:18Even clothes and pharmaceuticals are on offer.

00:22It's really affordable. It's something you can work with.

00:28I actually managed to buy a hand-pull from just $200.

00:34I think I will do this more often.

00:39Everything is much less affordable in regular stores open during daytime.

00:44That's after Zimbabwe's government introduced the ZIG last April.

00:48The new currency's name is short for Zimbabwe Gold, but it is far less stable.

00:53Fears of high inflation have forced store owners to inflate prices for their product,

00:58add high energy costs and taxes, and regular retailers can't compete with prices offered at these informal markets,

01:06where the much more trusted dollar is used for payment.

01:10Business is booming. We get more customers in the evening when they're coming from work and going home,

01:16and that's when we make money.

01:19While street vendors rake in the money, big-box stores are feeling the pinch.

01:24Pick and Pay, one of Africa's biggest grocery chains, has practically written off its 70 Zimbabwe-based stores

01:31because of deteriorating economic conditions. Experts aren't surprised.

01:36In every transaction, the business is doing in the formal setup is making a loss,

01:42an exchange rate loss, which cannot be compensated or covered.

01:47So what has happened is that a number of the businesses or a number of enterprises have folded hands.

01:54Supermarkets have seen them closing shops. We have seen the emergence of the informal sector.

02:01Zimbabwe Gold was the country's sixth attempt at establishing a new stable currency in recent years.

02:07So far, it has failed.

02:17For more UN videos visit www.un.org

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