HARARE – Despite ongoing valiant efforts by Reserve Bank governor John Mangudya to mitigate Zimbabwe’s biting cash crisis and assure wary citizens that all will be well, long and winding bank queues abounded around Zimbabwe yesterday.
Depositors who spoke to news crews from the Daily News on Sunday said they were making frantic efforts to withdraw their salaries and savings ahead of what they claimed was the “imminent” introduction of bond notes.
This comes in the wake of the recent announcement by authorities that they plan to introduce bond notes into the multi-currency market — to be backed by a $200 million loan from Afreximbank — to ease the country’s cash and liquidity crises.
However, the move has been received poorly by both economic experts and ordinary Zimbabweans, who worry that this could signal a return to the much-derided Zimbabwe dollar which was abandoned seven years ago as inflation spiralled to world record levels.
“We are not leaving anything to chance as we approach month-end and people are withdrawing their salaries as soon they are deposited. It makes sense to get our money from banks and pay our bills now,” a uniformed forces member who only identified himself as Itai said yesterday.
A queuing police officer who was interviewed by the Daily News on Sunday said the situation appeared to have been compounded by the fact that many civil servants had got paid on Friday, while tobacco farmers were also waiting to withdraw their money from banks.
On their part, many farmers — who are allowed to withdraw up to $10 000 a day compared to the individual maximum daily withdrawal limit of $1 000 — complained bitterly that they were failing to access their cash.
Last week, the Daily News on Sunday’s sister paper, the Daily News, reported that the unwelcome state of affairs had seen illegal foreign currency dealers resurfacing in numbers around the country.
The daily established that with the country experiencing a severe cash crunch that began late last year, illegal foreign currency dealers — and in some cases bank tellers as well — had begun to do fast business, robbing desperate Zimbabweans blind in the process.
In some extreme cases, a number of bank clients claimed they had allegedly been charged an exorbitant 10 percent “commission” by tellers and dealers for electronic transfers to the accounts of money changers in return for hard cash.
A Harare street dealer even boasted that he was allegedly using his connections within certain banks to access cash and make “nice money” from this.
“I am certainly not exploiting anyone. I see myself as an entrepreneur who is helping people to have instant access to cash which might otherwise take them two to three weeks to get using normal banking channels,” the dealer, who was only prepared to identify himself as Dave, said.
In Bulawayo, another dealer said she was making a killing from people changing the South African rand into US dollars, particularly “injiva” — Zimbabweans working in South Africa.
This comes as the central bank recently imposed stringent daily cash withdrawal limits to ease the current cash crisis that has seen people queuing for days at banks to access their funds.
Economic experts have also warned that the apex bank’s decision to introduce bond notes within the next few months would worsen the liquidity and cash crisis, as depositors frantically withdraw their money, fearing the return of the Zimbabwean dollar — which Mangudya says is not on the cards.
Zimbabwe adopted a basket of currencies in 2009 to replace its discredited local currency which had been rendered useless by world-record hyperinflation, with many people — including poor pensioners — losing all their life savings in the process.
University of Zimbabwe economics lecturer, Ashok Chakravati, told the Daily News on Sunday that the move to introduce the bond notes was “unnecessary.”
“Other countries have been in import deficit situations before and history has shown us how export bonuses are awarded without instilling panic in fragile nations.
“An export bonus is appropriate, especially in a country with no way of devaluing the currency like Zimbabwe. The bond notes route is very unnecessary,” Chakravati said. Prominent businessman Shingi Munyeza said the government had to cut its own expenditure before adopting “drastic actions such as the bond notes”.
“We have established that one of the main reasons why we are in this mess is that the government is over-spending. Why then is government not quickly plugging the hole and living within its means?” he asked.
In its latest damning report on Zimbabwe, the International Monetary Fund (IMF) predicted that the country’s economic difficulties were set to continue and deepen — amid a grinding recession, the worsening cash crisis, mounting company closures and job losses, and a political legitimacy crisis that is refusing to go away.
“Unless the country takes bold reforms, the economic difficulties will continue in the medium-term,” the fund said in a statement, after consultations with Zimbabwean officials.
Observers also say not much has gone right for Mugabe and Zanu PF since they won the hotly-disputed elections in 2013, with the ruling party ravaged by its seemingly unstoppable factional and succession wars.