Driving to work last week, Dennis Zhemi found his usually busy neighbourhood garage in the Zimbabwean capital Harare deserted and a forecourt attendant signalling “no fuel”.
For Zhemi, 43, it was a worrying sign that Zimbabwe’s long-running economic collapse could be heading for another vicious spiral of basic shortages, hyperinflation and social chaos.
His heart sank as he drove on, hoping to refuel at the next station, but at least 40 other cars were queueing for fuel.
“Immediately, I was reminded of 2008 when we slept in fuel queues and I prayed silently that we don’t return to those days,” the human resources consultant told AFP.
He left his car at the garage and caught a bus to work. A decade ago, hyperinflation wiped out personal savings, left shops empty and made it all but impossible to buy a tank of petrol or groceries. Inflation peaked at 500 billion percent before the Zim dollar was abandoned in a favour of the US dollar, and the economy never recovered. Fears of a repeat of those desperate days have grown in recent weeks, and panic buying has made prices rocket.
The stockpiling has been driven by a collapse in confidence in the parallel “bond note” currency that was launched by President Robert Mugabe’s regime nearly a year ago.
In theory, bond notes are worth the same as US dollars but consumers worry that they will become worthless like the old Zimbabwe dollar, which was scrapped in 2009.
“We are already witnessing shortages of basic commodities,” said Peter Mutasa, president of the Zimbabwe Congress of Trade Unions. “The situation has been triggered by lack of confidence in the bond notes. We are being driven to barter for goods because there is no hard currency in the banks.”
Currency traders in Harare now offer to exchange $1 for 1.37 bond notes – an illegal transaction. For non-cash bank transfers, the traders offer to pay 1.50 in bond notes for $1.
One small supermarket in Harare visited by AFP offered several prices for goods – an illegal but common practice.
A 175g bar of Protex soap cost $1, but 1.30 in bond notes or if you paid by card. A 2-litre bottle of cooking oil sold for $3.20, but its price has jumped suddenly to 4.50 in bond notes and $5 when paying by card.
Mugabe last week railed against currency “saboteurs”.
Further economic breakdown could reignite protests that shook Mugabe’s regime last year.
“There are those eager to manipulate the currency so that they can trigger inflation [and] cause panic buying,” he said.