With a rapidly devaluing currency and hyperinflation last measured in May at close to 800 percent on an annual basis, most Zimbabweans have haplessly watched their earnings evaporate. Some cannot afford to feed themselves any more - a loaf of bread currently costs $1.
In 2009, soaring inflation prompted Zimbabwe to ditch its failing sovereign currency in favour of a series of foreign currencies led by the United States dollar. But "dollarising" the economy hit a major bump in 2015 when greenbacks started vanishing from the formal banking system.
In a bid to end the US dollar shortage, Zimbabwe's central bank in 2016 introduced bond notes - a form of surrogate currency - that was backed by a $200m bond facility from the Africa Export-Import Bank. But black market speculation quickly eroded the bond note's value, triggering a shortage that the central bank tried to offset by creating electronic notes.
In a bid to end the US dollar shortage, Zimbabwe's central bank in 2016 introduced bond notes - a form of surrogate currency - that was backed by a $200m bond facility from the Africa Export-Import Bank. But black market speculation quickly eroded the bond note's value, triggering a shortage that the central bank tried to offset by creating electronic notes.
In February 2019, bond notes - both physical and electronic - were merged into the Real Time Gross Settlement (RTGS) dollar, also known as the Zimdollar.
In June last year, the government banned transacting in all foreign currencies and eventually introduced a new Zimbabwean dollar in November.
"The crisis has reached tipping point, for sure," said economist Victor Bhoroma, citing the "high levels of inflation, serious wage compression for labour, income and exchange rate losses for businesses, persistent fuel shortages, corruption and high levels of starvation".
Professionals have also been hit by the economic meltdown. The highest-paid teacher in February earned a salary of 4,600 Zimbabwean dollars ($51) at the black market rate of $1:90 Zimbabwean dollars. Last month, the salaries of government workers were raised by 50 percent, but soaring inflation means the increase will make little difference.
And with the local currency losing purchasing power as the US dollar continues to appreciate against it, civil servants have been demanding US dollar-denominated salaries. On Monday, nurses began a new round of industrial action.
"The [Zimbabwean] $3,000 [$33.3] average salary we earn is not sufficient to cover basic needs without even adding the costs required to attend work," the Zimbabwe Nurses' Association (ZINA), which represents about 15,000 state nurses, said in a statement.
Bhoroma, the economist, said bold reforms are required to extricate Zimbabwe out of the crisis.
"Zimbabwe's problems lie in the culture of governance in government, the spirit of cronyism in our leadership, policy inconsistency and decaying institutions. So, in a way, it's the system and structure of governance that needs to change not the faces in leadership that come from the ruling party in government. Zimbabwe critically needs reforms more than anything at the present moment."
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