Zimbabwe’s Cash Crisis Deepens
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Tags: Bond Notes, CABS, John Mangudya, POSB
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THE cash crisis gripping Zimbabwe continues to worsen, heaping untold misery on ordinary people who are forced to sleep on pavements at bank fronts waiting, mostly in futility, to access their money.
It’s also a double whammy for retired government workers who, in addition to being unable to access their money, have also seen their pay days delayed by weeks as the administration struggles to pay its workers.
Unaware that banks have no money, most of the pensioners travel long distances from their rural homes into cities and towns only to get stranded for days at the financial institutions without anyone explaining why they cannot access their funds.
Ironically, the crisis has been blamed on its proposed solution. Zimbabwe has long struggled with shortages of the US dollar resulting in the government, recently, proposing to introduce so-called bond notes to help ease the liquidity crunch.
And with the bond notes due to get into circulation early next month, many distrustful depositors have besieged banks to take their US dollars out, fearing the government is bringing back a local currency by stealth.
In Harare, last week, the CABS First Street Branch was forced to lock its automated teller machine (ATM) doors to customers on Thursday afternoon because of the unavailability of cash.
Elsewhere, long queues could be seen at CBZ branches but it was the State-owned People’s Own Savings Bank (POSB) which was the hardest hit as most of its Harare outlets had no money.
The foreign-owned commercial banks appeared to be faring better as customers were beings served while the indigenous institutions were clearly struggling with long queues evident at most branches.
A survey by NewZimbabwe.com in the capital revealed that most of those queuing were pensioners over the age of 65 who did not even have a clue on why they could not get their money.
A retired teacher asked for a bottle of water from this reporter saying was hungry and thirsty as he lamented his plight.
“I am coming from Epworth where I am staying with a relative because I live in Mt Darwin,” he said.
“I left Epworth around 0230 hours to get into town on foot because I do not have any money. I am now feeling very hungry because I have not had anything to eat since morning.
“There is not even water to drink. No one is helping us as the bank staff have not even attended to us since we got here.”
Those who spoke to this publication refused to be identified, saying they feared possible victimisation by State agents.
“What I do not understand is that National Social Security Authority (NSSA) has deposited our money in POSB.
“So, what has happened to our money then? I have rates and bills to take care of and the situation is now confusing as I do not to know what really is taking place in this country,” said another pensioner from Chaona in Mazowe district.
Most said they had been sleeping pavements at bank fronts in the city and expressed disappointment at the failure by the authorities to explain why they couldn’t access their funds and when the situation could be expected to improve.
Why is the government punishing us?
“We are not sure when we will get our money,” said a pensioner from the capital.
“We have gone to all POSB outlets in town but, not even one has cash. We cannot just sit at home when we are supposed to be given our money that we worked for.
“Why is the government punishing us? All they want are votes but they do not care about our welfare. It seems like we are queuing for loans, as if we want to borrow money from the bank!”
A Headman from Guruve who only identified himself as Kazingizi was in tears as he said: “We have worked hard for this government but it does not care for us anymore.
“I have been at every POSB outlet today. Look at me, I am very old and cannot walk long distances.”
Most banks have imposed withdrawal limits while those who use mobile money services such as EcoCash and Mukuru.com were also reportedly failing to access money.
A black market has also emerged for the US dollar with those requiring bigger denomination notes such as $100 bills buying them for an extra $10 on the streets.
Mistake was made in 2009
The central bank has rejected suggestions that its drawn-out plan to introduce bond notes is worsening the cash crisis.
Reserve Bank governor John Mangudya last week blamed the crisis on the country importing far more than it exported.
“Foreign currency should be earned first. It is unfortunate that the people who make noise the most do not understand,” he said. “We need to increase production by coming up with good investment policies and then we can boost productivity.”
Mangudya described as a “mistake” Zimbabwe’s adoption of the US dollar in 2009 to replace the local currency which had been rendered worthless by hyperinflation.
“The major mistake was done in 2009 when Government liberalised the economy, which led to the use of the US dollar as a trading currency instead of a reserve currency. This resulted in some investors coming to Zimbabwe only for the US dollar and these took the money out.
“Since 2009, we gave an impression that Zimbabwe manufactured US dollars. The move taken in 2009 was dangerous. It was both economic and political and maybe we spent more time on the political side.”
By Anna Chibamu
