It’s not every day that a country’s finances are so dire that it has less money in the current account than the average working Brit at the end of a long January. But it emerged this week that the nation state of Zimbabwe has just $217 left in the current account after paying all of its civil servants.
Finance minister Tendai Biti said that many of the countries civil servants are probably better off right now than the national coffers after this particular payday. Their wages constitute around 73% of the country’s public spending.
So what’s kept the finances so incredibly close to the edge? Well, the country’s economy has suffered because of a decade of inflation, which reached 500 billion per cent in 2008.
It meant that the government started printing 100 trillion-dollar notes in Zimbabwean currency, just so that people could make ordinary purchases.
Essentially during those crazy inflation years, then President Robert Mugabe’s policies left the country with a minimal tax base and next to no cash reserves. But the country switched to the US dollar and a new coalition government was formed in 2009, which the IMF says is the main reason for the economy getting back on an even keel and inflation calming down.