Zim faces salt shortages

Zim faces salt shortages

Source: Zim faces salt shortages – DailyNews Live

BUSINESS WRITER      14 March 2017

HARARE – Zimbabwe is facing serious salt shortages after one of the
country’s largest suppliers, Botswana Ash (Botash), said its operations
are being affected by a debilitating cash crisis.

Botash general manager corporate services Victoria Lekoma said her
company’s trade deals have been severely affected by the current liquidity
challenges that Zimbabwe is experiencing.

“Cash crisis has affected volumes of our transactions and suppressed the
movement of goods (processed sodium chloride and soda ash) from Botash
into Zimbabwe for the past year or so,” she said.

Zimbabwe adopted a basket of currencies dominated by the highly-valued
United States dollar in 2009.

However, the country has been witnessing an acute liquidity crunch due to
a widening trade deficit and lack of production.

Long queues at banks have become the order of the day to buttress the
liquidity crunch and cash crisis that the country finds itself in.

Financial institutions have resorted to limiting daily withdrawals to a
paltry $50 per day while other banks do offer far less daily.

The cash shortages have also affected international trade as companies
operating in Zimbabwe are struggling to service their foreign obligations
as well as procure raw materials.

Last month, British American Tobacco Zimbabwe said it was failing to pay
over $5 million in dividends to its offshore major shareholder, due to
cash challenges.

The liquidity situation has also resulted in mobile money companies
refusing to accept dollar payments for pay television platform, DStv while
some banks are also now restricting payments for the service.

This comes as Zimbabwe has started to tighten the screws on “excessive”
spending and use of scarce foreign currency

Zimbabwe is $1,6 billion in arrears to the World Bank and African
Development Bank, outstanding debt that prevents Harare from securing any
extra financing from the two institutions or the International Monetary
Fund.

Economic experts said the country, which was regarded as one of Africa’s
most promising prospects at independence from Britain in 1980, was
offering a wrong diagnosis to its cash crisis by introducing bond notes.

“The bond notes are just a short term solution as the problem of liquidity
will continue to resurface in the long term,” economic commentator Francis
Mukora said.

“It is important that monetary authorities return to the basic tenets of
economic management.

“Cash shortages or illiquidity is not a challenge on its own, but a
derivative of underlying economic implosion.

“This is not the time to be looking at solutions for the cash crisis. It
is time to look for solutions for the economic problems bedevilling the
country so that liquidity is guaranteed in the short to long term,” he
said.

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COMMENTS

WORDPRESS: 1
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    Morty Smith 7 months

    Wonderful. God bless Zimbabwe.