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New notes fail to end cash shortages

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Bondnotes

New notes fail to end cash shortages. This can be evidenced by events where ordinary citizens in the country continue to face the daunting challenge to access the cash from banks. A snap survey carried out by Zim Morning Post in the capital indicated that ordinary citizen are still struggling to get cash from their banks. The introduction of the new currency has proven to be what not the doctor ordered to serve as panacea for the cash crisis.

Long winding queues remain permanent features outside banks as citizens struggle to access their funds, which are quickly eroded by the run-away inflation. The Government set a maximum withdrawal of ZWL 100 which is elusive but interestingly cash barons are seen selling hordes of hard cash.

Speaking to Zim Morning Post Business this week, an elderly woman Sheila Chihota (78), who hails from Chihota village, said she came to Harare to collect her monthly pension which she is struggling to get and is spending nights sleeping at outside the bank albeit without luck. “I have been here for the past three days and three nights hoping to get my pension which I worked for but nothing tangible is coming from the management.

“What pains me most is that we see people selling cash in the streets and we do not know where they are getting the cash from, if I want to buy cash from the streets I will be left with nothing since my pension is already peanuts, ” Chihota lamented. Chihota called the government to address the issue of cash crisis and deal with cash barons who are making life difficult for ordinary citizens

“The government should deal with those who are selling cash, where are they getting money to sell while we can’t get money which we have worked for the leaders should deal with this cash crisis as a matter of emergency, ” added Chihota. The question that lingers with no answer is the cause of the cash crisis.

Is it because of bank panics, stock market crashes, bursting of other financial bubbles, currency crises, sovereign defaults or otherwise? One can say, the cash crisis in Zimbabwe is the crisis of discipline and confidence in the economy as a whole. Speculation in the market is also rife with the richer getting richer, and the poor getting poorer. Chihota told Zim Morning Post that she has lost confidence in the Zimbabwe banking sector.

” I just want my money ,I have lost trust and faith in our local banks they take us for a ride, “ added Chihota. Economist Kudakwashe Machere said the government should dollarise so as to ease the cash challenge rather than doing things they know they won’t bring any meaningful result.

“Introducing new currency when people do not have faith in the banking sector is trying to plant tobacco in a desert, you will not get any result, ” said Machere. Zimbabwe has been facing cash crisis since the turn of the new millennium and the situation got easy during the time of inclusive government.

The crisis was to later haunt the government and in 2016, when the late former President Robert Mugabe through Reserve Bank Governor John Panonetsa Mangudya introduced the bond notes. This surrogate currency was pegged at a value at par with the United States Dollar.

Source – Zim Morning Post

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