Friday, January 4, 2013

I'm Not a Millionaire Anymore!

Gina's Post:

Up until a few days ago, many Zambians (including those of us on a meager Peace Corps stipend) could consider themselves millionaires.  Every month, we had over a million kwacha (roughly US $200) deposited into our bank accounts.  Even something as small as an avacado would cost 500 kwacha, which is about 10 cents.  So . . . if you weren't used to all the zeroes, things at first appeared very expensive!

Supposedly all of these zeroes came from the Zambian high inflation rates in the 1980's until the early 2000's.  Back then, people literally had to pin 50 kwacha notes together to make 1000 kwacha, or one "pin," which was a standard trading value.  Up until a few days ago, something that was 50,000 kwacha was "50 pin" and something that was 5,000 kwacha was "5 pin," or about 1 US dollar.  Now, instead of 50 pin, it's 50 kwacha, not 50,000 kwacha.  Essentially, three zeroes have been dropped.

Check out the new banknotes at: http://www.ukzambians.co.uk/home/2013/01/04/consumers-yet-to-familiarise-with-rebased-kwacha/

So far, most Zambians I've seen are very excited about the new currency and want to keep all their fresh crisp notes.  Even the market ladies would say, "this shirt is only 5 pin, I mean, 5 kwacha" as they orally corrected themselves.  Since my only experience with the new kwacha has been in Solwezi, it'll be interesting to see what the villagers think of the change.  Supposedly there are going to be new coins to compete with the old 500 and 1000 kwacha notes, so I can see that getting a little confusing, but so far so good.

Maybe the US could learn from this currency rebasing and drop pennies and nickels?  Just a thought.

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