By Business Reporter- Today, Zimbabwe marks the 27th anniversary of “Black Friday,” a day that became a turning point in the country’s long struggle with currency instability.
On November 14, 1997, the Zimbabwe dollar plummeted by an unprecedented 72% in just 24 hours—a crash that set in motion decades of financial woes that still resonate today.
The catalyst for this crisis was a ZWD $4.2 billion payout to war veterans, announced by then-President Robert Mugabe in response to mounting pressure from veterans growing impatient with his leadership.
Dubbed the “50Kgs” package, this payout was entirely unbudgeted and funded by the printing press rather than actual economic productivity.
Many economists regard it as the defining moment that exposed Mugabe’s willingness to sacrifice long-term stability for short-term political gains, a trend that would prove disastrous for Zimbabwe’s economy.
Professor Gift Mugano, a respected economist, highlighted the significance of this decision on social media today. “We were not under sanctions at the time; we self-sabotaged,” he wrote, describing the economic fallout from Black Friday. “The money-printing machine is still running, and as long as ZANU-PF remains in power, we’ll be stuck in this currency crisis for decades.”
At the time, Zimbabwe’s economy was diversified and relatively stable.
But in the wake of Black Friday, Mugabe’s administration continued to rely on printing money to finance unsustainable programs, sparking cycles of inflation and ultimately hyperinflation in the early 2000s.
Zimbabwe then turned to “bearer cheques” between 2003 and 2008 as a desperate stopgap, introducing ever-larger denominations that soon became worthless.
This attempt, like many others, ultimately failed, leading Zimbabwe to abandon its own currency in 2009 and adopt a multi-currency system.
The cycle of financial mismanagement continued under ZANU-PF.
In 2016, the Reserve Bank of Zimbabwe introduced “bond notes” in another effort to stabilize the economy, but they too quickly collapsed. In 2019, ZANU-PF reintroduced the Zimbabwe dollar, rebranded as the “RTGS dollar” and later simply the Zimbabwe dollar, with promises of stability.
Yet, the printing press remained active, leading to familiar patterns of devaluation and inflation.
Most recently, the government introduced the “ZiG” (Zimbabwe Gold) digital token in April 2023 as a new attempt to counter currency erosion.
Critics, however, argue that ZiG may be yet another short-term fix masking deep-seated economic issues.
“Sanctions were not responsible for our past currency crises, nor are they to blame now,” Mugano emphasized. “Zimbabwe’s economic struggles stem from misguided policies and a fundamental mismanagement of resources, fueled by a refusal to address structural issues.”
The persistence of these challenges has left Zimbabweans trapped in a cycle reminiscent of 1997, facing rising prices, foreign exchange shortages, and soaring inflation.
Until structural reforms replace these artificial, short-lived solutions, Black Friday’s legacy will continue to haunt Zimbabwe.
As Professor Mugano warned, “If Zimbabwe does not fundamentally alter its approach, we may find ourselves marking the 100th anniversary of Black Friday still searching for an end to our currency woes.”