Zimbabwe

Zimbabwe attempted monetary experimentation so extreme that it produced the world's only hundred-trillion-dollar banknote—and has since cycled through multiple currencies, each collapsing in turn, while the underlying economy lurches between crisis and partial recovery.

The territory's colonial economy was built on commercial agriculture and mining. Rhodesia's white-minority government, having unilaterally declared independence from Britain in 1965, survived sanctions partly through agricultural self-sufficiency. The tobacco farms of Mashonaland produced export earnings; maize fed the population; the commercial farming sector employed hundreds of thousands.

Independence in 1980 under Robert Mugabe initially preserved this structure. Land redistribution was discussed but deferred. The commercial farms continued operating under their existing owners. The economy grew modestly through the 1980s and 1990s.

The crisis began in 2000 with chaotic land reform. Ruling party supporters occupied commercial farms; the government retrospectively authorized seizures; experienced farmers fled or were expelled. Agricultural production collapsed. Tobacco exports fell from 236 million kilograms in 1999 to 48 million by 2008. Maize production failed, requiring food imports in a country that had been a net exporter.

The economic consequences were catastrophic. Hyperinflation reached rates that required new methods of measurement—an estimated 79.6 billion percent month-over-month in November 2008. The currency became worthless; the central bank printed hundred-trillion-dollar notes. The economy contracted by perhaps 50% from 2000 to 2008.

Dollarization in 2009 stabilized prices by eliminating the Zimbabwe dollar entirely. Multiple currencies circulated—US dollars, South African rand, Botswana pula. The economy recovered partially. But the government's desire for monetary control led to the introduction of bond notes in 2016, then the Zimbabwe dollar again in 2019, then the gold-backed ZiG in 2024.

The ZiG represents the latest attempt at stable domestic currency. Backed (theoretically) by gold reserves and foreign exchange, it immediately lost value on parallel markets. By late 2024, the official exchange rate diverged significantly from street rates. The pattern continues.

External debt of approximately $21 billion, mostly arrears and penalties, remains unresolved. Clearance requires engagement with international institutions that distrust Harare's governance.

By 2026, Zimbabwe's monetary experiments continue. The ZiG may stabilize or collapse like its predecessors. Gold production provides export revenue; tobacco has partially recovered; lithium deposits attract Chinese investment. But the fundamental question—whether the government can maintain monetary discipline—remains unanswered after a quarter-century of evidence suggesting it cannot.