The Use of Surrogate Currency to Address Liquidity Crisis: The Zimbabwean Experience

Abstract

Zimbabwe has experienced an economic meltdown dating back to 2000, which created perennial economic woes such as a liquidity crisis that continued haunting the country to date. Various possible solutions were explored but did not yield the desired results. Amongst the explored solutions was an introduction of surrogate currency specifically to curb the liquidity crisis. This paper sought to explore the effects of using "surrogate currency" to address the liquidity crisis in Zimbabwe by employing a desk review. Currently, there is a dearth of literature on using surrogate currency in African countries. Hence this study contributes to the existing literature on the use of such currency. The review established that the surrogate currency led to the emergence of bad money as propounded by Gresham’s law of currency systems. Moreover, the surrogate currency rapidly lost its value, whereas the introduction of the surrogate currency failed to address the liquidity crisis, leading to other socio-economic challenges. Finally, financial reporting under the surrogate currency became a challenge as well. This study recommends the withdrawal of the surrogate currency and the use of multicurrency along with the promotion of products for export to attract more foreign currency into the economy.

Contested Notions of Ubuntu as a Corporate Social Responsibility (CSR) Theory in Africa: An Exploratory Literature Review

“…The method of study for this theoretical investigation is qualitative desk research. Desk research, also known as a desk study, refers to secondary data that can be collected without fieldwork [16]. It comprises systematically gathering and analysing pertinent data from available sources to understand an issue.…”

“…Ref. [16] further state that this method involves following a structured method in gathering relevant information to answer the research question. In line with this view, we followed [17] systematic quantitative assessment technique (SQAT) to systematically scout, collect, and analyse related literature to answer the research question.…”