Why did Zimbabwe abandon its currency?

Zimbabwe abandoned its national currency in 2009 after record breaking hyperinflation and a battered economy. There was a huge sigh of relief as Zimbabwe adopted multiple currencies dominated by the U.S. Dollar and the South African Rand. The multiple currencies also included the Botswana Pula, the British Pound Sterling and later even more currencies were introduced such as the Japanese Yen, the Indian Rupees and the Chinese Yuan. Consumers soon got used to the various exchange rates between the various currencies. This was much preferred to the bundles of trillion dollar notes with no value at all. The empty shelves were full once again and fuel shortages disappeared. Artificial shortages had been created in anticipation of hourly and daily price hikes.

But what created the hyper inflationary environment? There was a shortage of foreign currency as exports had dropped due to political instability which caused the closure of industries and loss of jobs. The country was importing more than it was exporting hence dwindling foreign currency reserves. The scarce forex meant that demand for it drove the exchange rate through the roof. The then governor of the reserve bank Dr. Gideon Gono resorted to aggressive quantitative easing by printing valueless notes. The zeros on the notes continues to increase into the trillions of Zimbabwe Dollars. This was the most difficult time for the country. It seems as though the printing was a political move to maintain the personal forex needs of a few government officials.

Having adopted the multiple currencies, Zimbabwe has failed to address the macroeconomic conditions which led to hyperinflation. Basically a country needs a functioning economy which is able to meet local demand for goods and services, and produce a surplus for export. This is how we get foreign currency. To the contrary we have industries close. The country has been heavily reliant on diaspora remittances from Zimbabweans living abroad as economic migrants. What the government has failed to do is maintain a business relationship to extract more value from the potential for investment that this constituency presents. The government has chosen to be politically vindictive to avoid granting a diaspora vote. 

Should the Zimbabwe Dollar be resurrected? The macroeconomic fundamentals have worsened since the local currency was abandoned. It would be politically and economically suicidal for the government to do this. I doubt they would go for it but you never know what a visibly desperate government could do after Finance Minister Patrick Chinamasa has failed to attract a cash injection from all weather friends China and Russia. Zimbabwe is under the IMF staff monitoring programme and it seems Zimbabwe has failed to secure any funding which is of course not advisable considering the monumental failure of foreign aid as the principal funder of economic growth and development.

Zimbabwe abandoned its currency because it failed to sustain an economy that could create wealth and a surplus for exports. Hyperinflation which an extreme case of inflation resulted in the total loss of value rendering the worthless notes unusable. The government has failed to resuscitate the economy and is again running out of forex and are relying on diaspora remittances. Bringing the Zimbabwe Dollar back under these conditions will show desperation, panic, and will be proof that this is a politically motivated suicide.