Guardian [UK] Reports imminent shortage of bank notes in Zimbabwe

Chris McGreal continues excellent coverage from Harare, reporting today of fears over the shortage of paper to print Zimbabwe's hyperinflated currency.

The problem for ZANU-PF is that since the German banknote company stopped supply paper during the violent presidental run-off campaign, they have not been able to find alternative sources locally.

McGreal reports:

"Zimbabwe was looking to Malaysia as an alternative source of paper but the government feared that the licence for the specialist software supplied by another European firm would be withdrawn as part of the boycott of Robert Mugabe's regime.

The software is supplied by Jura JSP, a Hungarian-Austrian company that specialises in security printing. A knowledgeable source inside Fidelity Printers said the software issue had created an air of panic.

"It's a major problem. They are very concerned that the licence will be withdrawn or not renewed. They are trying to find ways around it, looking at the software, but it's very technical. They are in a panic because without the software they can't print anything," he said.

On Monday, the central bank issued a $100bn note, the highest denomination to date but worth only about 7p, printed on what remains of stocks of the German-supplied paper.
The source said the firm had been told that new supplies of currency paper were coming from Malaysia but it was unable to meet the current demand for cash created by hyperinflation that economists estimated was running at about 40m%."

McGreal reports the real issue will be how will the ZANU-PF controlled government continue to pay soldiers?

The LA Times ran a very good insider story (without a byline) last week on the impending shortage of banknote paper, and the crazy world of Fidelity Presses, where 1,000 workers worked 24/7 seven days a week to keep printing more money.

The author of the LA Times story illustrates the meaning of hyper-inflation for those who can afford to drink beer in one of Harare's downtown establishments:

"Before the crunch, a beer at a bar in Harare, the capital, cost 15 billion Zimbabwean dollars. At 5 p.m. July 4, it cost 100 billion ($4 at the time) in the same bar.An hour later, the price had gone up to 150 billion ($6)."