4 Reasons Zimbabwe’s currency is worthless. Zimbabwe experiences very high inflation. Especially in the 2000s. Due to a number of factors. Namely economic, political, social and many others. Zimbabwe’s inflation is very high. This is the cause of Zimbabwe‘s inflation problem:
- Political Crisis
The political crisis is one of the main factors of political instability which resulted in the economic collapse of the State of Zimbabwe. The political crisis influenced the very high inflation factor in 2000. The Zimbabwean government took very controversial decisions. The government confiscated the land rights of the white minority population, most of whom were engaged in the food sector. This caused disruption to food production which resulted in the food sector in the country of Zimbabwe being reduced. Meanwhile, Zimbabweans’ demand for food remains constant. In fact, it tends to increase.
- Economic sanctions and international isolation
Economic sanctions and international isolation were imposed on the country of Zimbabwe for violating human rights. The Zimbabwean government is subject to economic sanctions. In a way, big countries limit international trade with Zimbabwe. This action resulted in foreign investors and even local businessmen having difficulty turning around their economy. In Zimbabwe there is high unemployment due to the lack of job opportunities.
- Many Zimbabweans are unemployed
High unemployment and job losses cause uncertainty in social figures. Coupled with very high inflation, the result is that Zimbabweans have difficulty meeting basic needs.
- Zimbabwe Prints too much money
The political crisis had a huge impact on the Zimbabwean state in making decisions. A fatal decision will result in higher inflation. the Zimbabwean government prints a lot of money. Initially it aimed to fulfill the state budget and overcome inflation. Because the banking system is under high pressure, confidence in the local currency begins to decline. And people are also switching to using foreign currency. Very high inflation in Zimbabwe created very serious economic suffering. To overcome this problem requires serious efforts including economic reform, restoration of political stability, and wise management of monetary policy.