RESERVE Bank of Zimbabwe (RBZ) governor John Mangudya yesterday said Zimbabweans had lost confidence in the banking sector and were no longer prepared to risk keeping their money in financial institutions due to the “traumatic past experiences”.
BY XOLISANI NCUBE
Mangudya told members of the Parliamentary Portfolio Committee on Finance and Budget that the nasty experiences of 2009 where people just woke up to find their deposits nullified had caused the majority to shun banks.
“We are a financially traumatised society because of what happened in the past. We need to build confidence within our people. If you look at the unbanked community, you will realise that there is need for confidence building,” he said.
This comes amid reports that over $3 billion was currently circulating in the informal sector and not finding its way into the banking sector.
The committee, which was being chaired by MDC-T MP Eddie Cross, sought clarifications from the central bank boss on the proposed amendments to the Banking Act which seek, among other things, to strengthen the sector by putting tough measures to nip abuse of public funds and ensure stable corporate governance in the sector.
Mangudya said the country should clear its estimated $10 billion debt with international financiers to attract fresh capital and foreign direct investment.
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His statements came at a time Finance minister Patrick Chinamasa has been under attack from some fellow Cabinet ministers over his moves to re-engage the international community and have a clear debt management strategy.
Mangudya said Zimbabwe should find means to clear the debt it owes to these multilateral institutions so that it could be eligible to get funding and attract fresh capital to revive the collapsed economy.
“We have to pay . . . we have to look for that money and pay so that we are able to attract foreign investment. It’s wicked not to pay debts. Even the Bible says the wicked borrow, but not pay,” he said.
