John Kachembere 23 February 2017
HARARE – President Robert Mugabe unwittingly confirmed Zimbabwe’s
worsening rot – which is widely blamed on him and his misfiring government
– when he revealed during his annual birthday interview with the ZBC last
week that even he kept money at home fearing bank failures.
Mugabe also hinted in that televised interview that Zimbabwe should adopt
the South African Rand to mitigate the country’s severe liquidity and cash
But it was the nonagenarian’s rare, frank and ready admission that he too,
along with many other Zimbabweans, kept his money at home rather than with
banks that surprised observers.
“They (ordinary Zimbabweans) carry those earnings into their pillows and
briefcases back home and hold funds back home and become reluctant to
release them. Then the banks will not have any resource and will continue
to talk of illiquid banks in the system.
“That is what has happened. Dzimba idzi dzizere nemari (Many homes are
full of cash). Tikati kumapurisa nemasoja (If we instruct the police and
soldiers to) go house by house and dig for the funds that are being hidden
there . . . You will be guilty and I will be guilty.
“I don’t know who will not be guilty here … Dzimwe nguva ukaona tumari
twako wotya kuti aah ndikanoisa uko kuti ndizonoitora mangwana hapana (If
you have savings you will be afraid of depositing them in the bank because
tomorrow you may not get that money).
“So you tend to keep it. It’s not your fault . . . It’s the fault of a
system that has not yielded enough cash. Mind you, the (American) dollar
is not our currency,” Mugabe said.
He spoke as long-suffering Zimbabweans continue to experiences pain and
chaos at banks as they desperately seek to withdraw their money.
This is despite the government’s recent introduction of bond notes in its
desperate bid to improve the availability of money.
On its part, the Reserve Bank of Zimbabwe (RBZ) has blamed the shortages
of cash on rampant externalisation and high imports.
Last month one of the government’s advisors, Ashok Chakravarti, revealed
that the country only had $304 million in hard cash in circulation,
including $73 million in bond notes.
“If you look at comparative studies from other economies cash to deposit
ratio should be between 10 (percent) to 12 percent. If an economy has got
less than 12 percent, it faces a liquidity crisis … We need $900 million
in cash to have adequate liquidity,” he said.
And as Zimbabwe’s economy continues to die, the World Bank last year
downgraded the country from its list of improved economies to the
unflattering tier of struggling countries, as Harare’s political and
economic turmoil continues to escalate.
In its publication titled Africa’s Pulse, the Bretton Woods institution
said the country had failed to register significant economic growth over
the past few years.
“Zimbabwe’s fiscal deficit has deteriorated as remedial actions have been
limited and this has resulted in the country registering a negative
correlation between the cyclical components of government consumption and
GDP,” it said.
Meanwhile, economists also say average incomes in Zimbabwe are now at
their lowest levels in 60 years, with more than 76 percent of families
having to make do with less than $200 a month.
This, they add, means that poverty levels have reached “numbing levels”,
amid indications that the situation will worsen in 2017, as the government
continues to demonstrate its inability to fix the Zimbabwe rot.