Zimbabwe’s dilemma – a stubborn preference for foreign currency

About a week ago I received a call from a West African media practitioner looking to understand why Zimbabwe is perpetually in crisis mode when it comes to its currency and why the country can’t simply adopt local tender and be done with it. As someone steeped in context, I took him through the anecdotes of our many currencies over the last decade and a half - along with why it’s gotten harder for local tender to stick as the years have passed.

After the call though I did wonder if there’s data that could answer a simple question - why are Zimbabweans so reticent to let go of the US$ despite multiple attempts by their government to transition back towards local tender? 

I did find some interesting data and to put it plainly - turning to the US$ in 2009 really made a massive and positive impact on Zimbabwe as a country along with its inhabitants - with a number of metrics outlining this positive shift. We’ll be comparing these positive trends with what followed when the country started transitioning to something resembling a local currency following 2017’s introduction of the “bond notes”.

The one piece of context that won’t be supported by much in the way of data is that it's key to remember that the US$ was introduced following a period characterised by record-breaking hyperinflation. The side effect of this hyperinflation and the version of the story you’ll hear anecdotally by talking to any Zimbabwean is that the standard of living plummeted, and stores turned into housing for spiders