Source: Do Zimbabweans deserve all this? – DailyNews Live
16 April 2017
HARARE – The cash shortages affecting Zimbabwe today are nothing new; this
is familiar territory people trudged during the tumultuous years of
2008-9.
We warned before that the signs were ominous when government introduced
bond notes last year, ostensibly as an export incentive which would also
ease the obtaining cash shortages.
On Thursday last week, the Reserve Bank of Zimbabwe (RBZ) issued a
statement to say the maximum cash back amount the public could get from
wholesalers and retailers going forward was $20, regardless of the
purchase one had made.
The RBZ believes this will be a panacea to the hoarding of cash which they
claim caused the current shortages.
However, the confidence the banking sector was beginning to get on the
back of the stabilising years of the Government of National Unity between
2009-13 has wholly dissipated through ruinous Zanu PF policies.
Previously, the RBZ has said bond notes are not Zimbabwe dollars for they
are not a currency but financial instruments, issued at par with the US
dollar, but there are renewed worries that the central bank plans to
circulate more bond notes to ease dollar shortages in a move that could
open the door to rampant printing of cash as happened in 2008 when
inflation hit 500 billion percent, wiping out savings and pensions.
This is confirmed by recent RBZ overtures – aired out through central bank
director Economic Research Simon Nyarota during a public lecture at the
National University of Science and Technology in Bulawayo two weeks ago –
that the country should adopt bond notes as a primary currency to
alleviate cash shortages and solve economic challenges and this obviously
shows that there has been little sincerity in earlier statements by the
apex bank.
RBZ said calls for the formal adoption of the South African rand as an
anchor currency were not going to solve the country’s biting cash
shortages.
Zimbabwe’s economy is agro-based. It defies logic how government expects
to spur the agricultural sector when tobacco farmers are spending weeks at
auction floors with banks struggling to provide cash as the liquidity
crunch intensifies amid surging demand for cash.
The government directive instructing tobacco farmers to open bank
accounts, doing away with spot payments at the auction floors, has proved
to be a disaster as banks are unable to meet the stipulated $1 000 for the
initial sale.
This comes as the new electronic marketing platform has faced critical
operational challenges that have riled tobacco farmers.
Crucially, this inevitably dampens expectations of improved foreign
exchange earnings consistent with tobacco marketing seasons, thereby
dealing the economy as a whole a fatal blow.
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