Inflation is once again spiraling out of control. | Source: TradingEconomics.

Zimbabwe’s woes continue as the cash-strapped southern African nation is now so poor it cannot even issue its own passports.

President Emmerson Mnangagwa told reporters that the issuing company is refusing to do any further business with the government until it has settled its debts.

According to Reuters, however, the passport office is running short of specialized ink and paper and the necessary foreign currency reserves to purchase it with. Elsewhere, shortages for everyday items like bread and fuel continue to push more Zimbabweans to apply for international travel documents.

Inflation Rapidly Approaching 100% in Zimbabwe

Higher prices are spiraling out of control in the country, with Zimbabwe easily being the worst performing nation in the African block.

Only last week, authorities outlawed the use of other currencies as legal tender. In their place, the government installed a new Zim currency, temporarily referred to as the RTGS dollar.

Obvious Lack of Faith in the Local Currency

Zimbabwe was once lovingly referred to as the breadbasket of Africa. That label is now long gone thanks to the insane monetary policies of prior dictator Robert Mugabe. In 2008, Zimbabweans hoarded US dollars and South African rands in the aftermath of a local and global financial crisis.

The local currency became practically worthless overnight. The move to a multi-currency approach largely stabilized the country, but now citizens are fearing déjà vu as a new government takes the helm.

Ten years is not enough time to forget the effects of hyperinflation. Those days are still fresh in the memory of most citizens who became accustomed to carrying around million-dollar wads of cash.

Citizens Allegedly Offering Massive Premiums for Bitcoin

Amid the frenzy, local traders began offering massive premiums for Bitcoin on peer-to-peer exchange LocalBitcoins. Despite this massive deviation from the norm, Bitcoin still commands a premium in most southern African nations. Cross-border crypto-fiat arbitrage is difficult, even if cryptocurrency flaunts international borders.

Bitcoin is currently trading at $76k in Zimbabwe.
A 600% premium compared to international prices.

People are DESPERATE to financially exit their corrupt and hyperinflated currency.

The world desperately needs Bitcoin!!!

— Ivan on Tech (@IvanOnTech) July 1, 2019

With runaway inflation and untrustworthy authorities, wealth preservation appears to be front-and-center on the minds of many Africans. Zimbabwean finance minister Mthuli Ncube even hinted last year that cryptocurrency could play a part in solving the country’s cash shortages.

Nothing has come of that suggestion, though, and the crowding at the passport office is proof of it.

One applicant interviewed by Reuters, Bothwell Mhashu, is intent on escaping Zimbabwe’s economic troubles by joining his elder brother in Namibia. Passport or not, he’ll first have to navigate his country’s bureaucracy.

Source: CCN Markets