Zimpapers Logo

Leroy Dzenga Features Writer

Zimbabwe has an influential informal market, what it says takes precedent. Barely two months after overseeing a unilateral decommissioning of coins below a dollar, the invisible hand slaps again.

Citizens have been hit by another informal policy position — one made on street corners, derelict offices and rustic alleys — but with effects visible in the lives of ordinary Zimbabweans.

Bank notes with the tiniest of scratches are being rejected by vendors, kombi crews and the generality of the downtown economy.

When paying for a service using notes, one has to hold their breath on whether or not it is still considered legal tender.

A recent kombi ride from Westgate into the city centre was telling.

“I have $70 in two dollar notes I cannot use anywhere, service stations are refusing them and our bosses are worse, we are stuck with worthless paper,” Norest Machona, a kombi conductor told passengers as he rejected their notes.

So loathed are soiled notes that kombi crews are prepared to grudgingly settle for mobile money that accepting them.

Before this, it was easier to attach a magnet on a wool surface than getting kombi operators to accept mobile money.

“I would rather you send me the money into my phone with a percentage, I will make a plan when we get to town,” Machona said.

In declining the paper money, there was rage in his voice which raised questions; is there something Zimbabweans need to know?

Explaining the reasoning behind the aversion, Machona said their hands were tied.

“We buy spares, tyres and fuel in US dollars, so we have to buy the hard currency from the streets to be able to stay operating,” he said.

When The Herald visited downtown Harare trying to buy using torn notes, there was widespread resentment.

A woman selling fresh produce in Mbare who identified herself as Mai Ropa said farmers, especially those from Domboshava, have not been accepting these notes for months now.

“The horse has since bolted,” she said.

“You are asking about torn notes now? We have not been accepting those for a while. Every money decision we make is led from Mbare where farmers decide on something and we are just told,” she said.

A shop owner at Gulf Complex in downtown Harare central business district (CBD) gave us an insight into what influences their decisions.

“No one has been banking money over the past few years. After a sale, we convert all the money to US dollars for cash. The people we buy the hard currency from refuse these torn notes,” he said.

In the olden days, gluing damaged money was a sure way of guaranteeing its acceptability but not anymore.

“Glued money is a non-starter. I would rather accept a note hanging by a tiny thread than accept glued money. It gives us complications,” the business owner said.

An observation by The Herald showed most of these defiled notes belong to earlier batches of bond notes released before the reintroduction of the Zimbabwean currency.

When the bond notes were first released, they were backed by a US $200 million facility from Afreximbank and it is believed the value of these notes which are beginning to tear is around that value region.

These notes have a rough feel compared to the newer ones printed after the official return of the local currency, texture wise, the recent notes appear stronger.

Despite being outed as the major drivers of the attitude towards these soiled notes, kombi associations have distanced themselves from vehicles engaging in the act.

Greater Harare Association of Commuter Omnibuses (GHACO) Secretary General Ngoni Katsvairo said it is a decision birthed by ignorance.

“I think it’s just lack of education by crew and cashiers at spares suppliers side that those notes can be exchanged at the bank or be banked so they can be removed from circulation by the central bank,” said Katsvairo.

He challenged the Reserve Bank to inform the public that there was a channel to get the money changed.

Kombi conductors reject bank notes with the tiniest of scratches, leaving some commuters stranded

“The banks must inform their customers on the process of exchanging torn and soiled notes because if the public is unaware, the notes will remain in circulation,” he said.

A bank source said taking back soiled notes at the moment is a concept hard to implement.

“As you know, there is a cash crisis and banks do not always readily have cash so no one in their right minds can bring money back to the bank when they will not be immediately reimbursed,” said the source.

Most of the money that exchanges hands on Harare’s street ends up in the hands of a criminal few.

“The other thing is foreign currency dealers are engaging in illegal activities, as a result they cannot come to the bank with torn notes, they may have to prove the source of their funds if their frequency is suspicious,” the source added.

When bond notes were introduced in 2016, they were backed by a legal instrument, Statutory Instrument 133 of 2016.

The law which was promulgated through the Presidential Powers (Temporary Measures) Amendment of the Reserve Bank of Zimbabwe Act.

In this law, the money was declared legal tender whose key characteristic is wide acceptability.

“The Minister may by notice in a Statutory Instrument prescribe that a tender of payment of bond notes and coins issued by the Bank that are exchangeable at par value with any specified currency other than Zimbabwean currency prescribed as legal tender for the purposes of section 44A, shall be legal tender in all transactions in Zimbabwe to the same extent as that prescribed currency,” read part of the gazette.

This was crystalised when the Zimbabwean currency was reintroduced and the Reserve Bank told the market that the 2016 bond notes should continue to work alongside notes which are almost similar in design save for a few variations.

However, the difference in texture may create a problem in the near future even with untorn notes.

“The way I see it, people will have different rates for these new notes and old bond notes, the same way coins and notes have different rates on the street market,” a money changer identified as Mapfumo said.

At this point, Zimbabweans have no option but to use torn and glued notes in supermarkets.

In 2018, during the Monetary Policy Statement, the Reserve Bank of Zimbabwe said plastic money accounted for 98 percent of transactions in the economy.

The economy has essentially gone paperless save for kombis, vendors and the downtown economy.

Now, the people who insist on cash are bringing in conditions to its use, despite the fact that some are paying a premium close to 40 percent to access it.

Who will save citizens from the street policymakers?

Feedback: [email protected]