Germany stops banknotes to Zimbabwe

By Louis Weston in Harare and Harry de Quetteville in Berlin

THE printing presses which produce reams of worthless banknotes in Zimbabwe may soon fall silent after a German company stopped supplying paper.

Giesecke and Devrient, based in Munich, said it would no longer deliver watermarked paper to President Robert Mugabe’s Reserve Bank. This was due to “the critical evaluation by the international community, German government and general public” of the political situation in Zimbabwe.

Facing an spiralling economic crisis, Mr Mugabe’s bankrupt regime must print money in order to pay its bills. This has sent inflation rising above two million per cent and wiped out the value of the Zimbabwe Dollar.

Today, the currency is not even issued in the form of a proper banknote. Instead, most bills are “bearer cheques”, marked with an expiry date. In practice, prices double every two or three days and the notes become worthless long before they officially expire. More recently, the Reserve Bank, which is issuing bills in ever-larger denominations, moved on to special “agro-cheques”, leading to wry comments about how much “aggro” people have to handle.

The highest value banknote is worth Z$50 billion - which is presently enough to buy one can of baked beans. At the TM supermarket in Harare’s northern suburb of Borrowdale, many shelves were bare yesterday. But a kilogramme of mince cost Z$490 billion and a kilogramme of sausage was going for Z$170 billion. A litre of imported orange juice cost an eye-watering Z$303 billion.

Some prices have trebled from a week ago, when toilet paper worked out at just under Z$22 million for a single sheet. There was none in the supermarket yesterday, but by now there is probably an alternative use for the Z$50 million note.

At one Harare restaurant, dinner was Z$875 billion per person, and a bottle of house wine was a little short of half a trillion dollars a bottle.

In one shop, a television was on sale, with a sign marked “1.7”. Asked if that meant trillions, the shopkeeper answered: “No, the next one. I don’t know what it’s called.”

The currency is now so worthless that the multitude of zeros have become confusing — to machines as well as people. Technical standards mean most tills around the world are limited to 12 digits, so Zimbabwean businesses have been forced to slash six zeros off their display prices, and their receipts are marked “multiply all prices by 1,000,000”.

As well as the difficulty of dealing with prices that double every few days, the sheer number of notes involved mean that some businesses are now switching to accepting US dollars and South African Rand. This is officially illegal - and also increasingly unavoidable.