Zimbos fear for the worst

Source: Zimbos fear for the worst – DailyNews Live

Tendai Kamhungira      24 May 2017

HARARE – There are growing fears among long-suffering Zimbabweans that the
country is on the verge of a complete implosion – after it was confirmed
earlier this week that the country is failing to pay its external
electricity suppliers.

This comes as stressed banks have also warned that the bond notes
introduced last year to mitigate the severe shortages of cash were being
siphoned from the domestic market and exported to neighbouring countries,
where there was a thriving black market.

Zimbabwe imports electricity mainly from South Africa’s State-run power
utility, Eskom, as well as from Mozambique’s Cahora Bassa – to augment its
dwindling power generation capacity occasioned by the government’s dismal
failure to plan and invest in new infrastructure to improve local
electricity supplies.

The government, through Zesa Holdings, owes Eskom and Cahora Bassa a
combined $83 million in payment arrears – which has prompted Pretoria to
give Zimbabwe a one-week ultimatum to settle an overdue $43 million, or
face being switched off.

Opposition parties slammed President Robert Mugabe and his government
yesterday for failing to address the country’s worsening cash shortages
and their failure to prioritise essential services when allocating foreign
exchange.

“No rocket science is needed to appreciate that Zimbabwe is sitting on a
political and socio-economic precipice. The economy of this country has
been to hell and back. We are in a major crisis.

“Mugabe doesn’t seem to fully appreciate and comprehend the economic
disaster that is engulfing the nation. He is living in his own world of
make believe.

“He needs help. The MDC reiterates that Zimbabwe is doomed for as long as
Mugabe and his Zanu PF gangsters remain in power,” thundered MDC
spokesperson Obert Gutu.

Zimbabwe is in the grip of a worsening economic crisis which has also
witnessed a severe shortage of cash, including the recently introduced
bond notes.

The disappearance of the country’s surrogate currency from the market has
also often forced banks to give clients their cash in sackfuls of coins.

It has also seen banks limiting the amount of money both individuals and
companies can withdraw, sometimes to as low as $20.

Last Friday, bankers finally broke their silence on the matter and
confirmed that Zimbabwe was facing a huge financial crisis which required
urgent attention by the government.

Addressing delegates at the Financial Markets Indaba held in Harare,
Barclays Bank Zimbabwe managing director George Guvamatanga said bond
notes had vanished from the local market and were now big business in
neighbouring countries.

“It’s not yet established, but there could be more bond notes at Park
Station in South Africa, and in Botswana, Zambia and Mozambique than we
have here in Zimbabwe.

“Someone realised there is an opportunity to sell the bond notes to
Zimbabweans living outside the country, who then don’t have to come here
and queue to withdraw their money from banks.

“At the moment, it’s easier for us at Barclays to give United States
dollars than to give bond notes,” Guvamatanga told transfixed delegates.