The cash crunch that has been slowing down operations in the country over the past few months reached crisis level after banks last week revised withdrawal limits from $1 000 to $300 a day.
NewsDay Comment
Regrettably, the new regime also cut withdrawal limits for companies to miniscule levels of $1 000 daily. This means that some firms may have to halt many key functions in the interim.
Worse still, the prevailing cash shortages are further slowing down the country’s floundering economy, and more job losses must be expected in the next few months.
It is disastrous that almost all banks have discovered that they are confronted with a liquidity crisis as their customers suddenly demanded to withdraw money from their accounts, yet the cash is not there.
Curiously, no one has attempted to provide the answers to a myriad of challenges facing Zimbabweans, with Zanu PF preoccupied with the power dynamics of who will succeed the 92-year-old President Robert Mugabe.
Instead of mobilising financial resources to feed millions of food-insecure citizens, Zanu PF has reacted slowly to the crisis, yet spending millions of dollars on hopeless events meant to tighten its grip on power.
This is time Reserve Bank of Zimbabwe governor John Mangudya and Finance minister Patrick Chinamasa self-introspect, stand up and be counted by saving the country from total collapse.
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Mangudya and Chinamasa know what needs to be done, but are unfortunately scared stiff of their principal. They might, however, have to bite the bullet and impress on Mugabe to cut down on foreign travels and other events that are meant to prop him up as infallible.
Is it not unbelievable that Zanu PF has blown over $5 million on vain projects in the last five months by coercing struggling firms, parastatals and a few remaining white farmers to fund rallies, birthdays and solidarity marches?
In addition, the war veterans’ indaba blew about $2 million in unbudgeted State funds at a time the country is reeling from the effects of the financial challenges.
Clearly, Mugabe and his cronies are wasteful and insensitive to the plight of the majority.
Hence, the introduction of bond notes although plausible could be ill-timed particularly when the political leadership appears to be coming up with solutions for others and not themselves.
No doubt Mangudya is in an unenviable position given the worsening cash crisis and unending banking queues all over.
While Zimbabweans acknowledge the seasonality of the issue, it appears the current crisis is caused by the lackadaisical government approach to the problem.
We appreciate the fact that demand for huge sums of cash by a bank’s customer, which is usually referred to as “a run on a bank” could stall the country’s payment system as it continues to occur on a wide scale.
But it is unheard of that government can expect the majority to tighten their belts on the face of the cash crisis, yet Mugabe continues to gallivant gobbling huge sums of scarce financial resources on trips that have little or no significance to the nation.
The crisis needs a political solution, no doubt, to cut on all unnecessary expenditure, which includes Mugabe’s foreign travels. If the introduction of the bond notes will bring relief to the cash crisis, so be it, but there must be sanity in the whole process.
Mangudya must, therefore, adequately disclose the reason for the sudden big cash withdrawals from banks. He must also disclose those smuggling cash outside the borders for him to earn people’s trust.
Mugabe’s inability to bring the succession fights to an amicable end, endemic corruption among the country’s few “rising” investors — all of whom belong to the party leadership or closely associated with him or his wife Grace will continue to impact on the wellbeing of Zimbabwe.
It is time to look each other in the eye to save the country.
