The Country Behind the $100,000,000,000,000 Bill Hits a New Stage of Dysfunction

Zimbabwe, the country that brought the world the one-hundred-trillion-dollar bill, has reached a new stage of monetary dysfunction. Because of a lack of small change, businesses have started printing their own “money"—scraps of paper, sometimes handwritten, that customers can use to pay for future purchases. Others are handing out change in-kind, making customers whole with juice boxes, pens or slices of cheese.

The paper chits and other pecuniary workarounds are the latest products of two decades of extreme mismanagement of Zimbabwe’s currency.

It started in the early 2000s, when the government of then-President Robert Mugabe printed ever more money in an attempt to compensate for a collapse in agricultural production that followed a controversial land-redistribution effort. After monthly inflation peaked, by one measure, at 79.6 billion percent, the government in 2009 abolished the Zimbabwe dollar and began using U.S. dollars instead.

That switch brought a few years of monetary stability, until the Reserve Bank of Zimbabwe could no longer meet the demand for U.S. dollars. Money stored in bank accounts couldn’t be withdrawn in cash and, in early 2019, the central bank reintroduced the Zimbabwe dollar, changing U.S. dollar-denominated savings and domestic government debts into a local currency of rapidly declining value.

Today, $1 costs more than 900 Zimbabwean dollars and inflation hit 230% in January. Most businesses once again demand payments in U.S. dollars, although the Zimbabwe dollar remains the country’s official currency.

That’s where the issue of change comes in. Zimbabwean commercial banks and the central bank import U.S. dollar bills for local use, but their heavy weight and low value makes flying in coins from overseas uneconomical. One-dollar notes—the most widely used bills in a country where even before the pandemic nearly 40% of people lived on less than $1.80 a day—are also often in short supply.

The paper IOUs have proven an unsatisfactory fix. For starters, they aren’t fungible. Ms. Manyowa, a 23-year-old college student, spent 15 minutes waiting by the till of a Harare Chicken Inn until another customer paid with a $1 bill she could use for the bus fare home.

“It’s frustrating," Ms. Manyowa said as she waited.

In contrast to bank notes, which are usually made from cotton or plastic, paper chits also can’t withstand an extended spin in the washing machine.

Adelaide Moyo, a journalist for a Zimbabwean newspaper, says she has more than once found the faded remnants of vouchers from Chicken Inn or the local franchise of Netherlands-based supermarket chain Spar stuck to her clothes when she pulls them out of the wash.

To avoid such losses, Ms. Moyo says she has accepted slices of cheese, extra sauce and, once, a hard-boiled egg instead of more paper chits. Those barter trades usually don’t offer good value for money, like the slice of cheese that cost her $0.50, but, she says, they’re better than carrying around, or losing, vouchers from multiple places. “You’d rather just get the food," she said.

Zimbabwe’s malfunctioning currency has forced businesses to become creative, says Warren Meares, the chief executive of Simbisa Brands, which owns Chicken Inn and several other fast-food chains.

The rapid devaluation of the Zimbabwean dollar has made it too costly to constantly reprint menus, which show prices in both U.S. dollars and the local currency, so the company installed TV screens to display meals and their prices. “It was costing us almost $2,000 to $3,000 every time you had to change prices," said Mr. Meares.

Simbisa’s vouchers have serial numbers and are replaced every six months to avoid their getting too worn out. Although they lack the safety features of bank notes, Mr. Meares says he’s not aware of any attempts to forge the chits, which only come in $0.25 and $0.50. “We’re not going to accept more than $3 or $4 worth of vouchers from you," he said. “It’s not worth it."

The company has also launched an app, called InnBucks, that allows customers to receive change via a smartphone.

The chits issued by Spar feature an intricate pattern and holograms. The supermarket chain has had to replace the electronic tags on its shelves because the old ones ran out of digits to display prices in Zimbabwean dollars.

Smaller stores keep a book with the names of customers they still owe money to behind the counter or scrawl amounts yet to be reimbursed on receipts. Some clients, fearing that a shopkeeper won’t remember, have taken to filming those exchanges on their phones.

Harare-based economist Gift Mugano says that despite the chits’ drawbacks, most Zimbabweans still prefer them to getting their change in local currency. “People don’t trust the government. But the very same people trust the private sector," he said. “If I’m given a token in a fast-food restaurant, I know tomorrow when I come back it is accepted."

Zimbabwe’s central bank and the finance ministry didn’t respond to requests for comment.

When Zimbabwe was formally on the dollar in the 2010s, many businesses used South African rand, which at the time traded at around 10 rand to the dollar, as change. Since then, the neighboring country’s currency has also fluctuated in value—it currently trades at around 18 rand to the dollar—no longer making it a great alternative.

Bank cards also aren’t widely used, as many Zimbabweans now withdraw their salaries in U.S.-dollar cash the moment it hits their account. “Zimbabweans have got this fun name. They’re calling it NMB bank," said Mr. Mugano. “National Mattress Bank."

In one corner of Harare, Allen Mutonga and the small grocery store next to his barbershop have created their own monetary union. When Mr. Mutonga’s customers don’t have the right bills to pay for his $5 haircuts, he sends them next door to make a purchase and get change via a handwritten note on the receipt from the shopkeeper.

“I’ll take the receipt home and hope that they have change the next day," he said. If they don’t, “I buy something."