Civil servants bonuses at risk as banks limit cash withdrawals

via Civil servants bonuses at risk as banks limit cash withdrawals | SW Radio Africa by Tererai Karimakwenda  November 22, 2013

Civil servants who are due to receive their annual bonuses, and others whose minimum wage was recently increased by government, have expressed concern that they may not be able to withdraw their money, after some local banks imposed a limit on cash withdrawals.

There has been much talk about a liquidity crisis in Zimbabwe and long queues have been forming outside the local banks as workers try to collect their wages before the Christmas holiday.

Economic analyst John Robertson explained that liquidity is simply the conversion of assets into cash, and Zimbabwe is importing more goods than it is exporting, which means more money is leaving the country to pay for the goods.

Speaking to SW Radio Africa on Friday, after some banks announced a $200 withdrawal limit in Harare, Robertson said: “The banks have loaned their money to people who borrowed to buy stock. These people have not been able to sell the stock and they don’t have money to pay back the banks. So there is money tied up in stock that is sitting on the shelves.”

He added: “Many people lost their jobs recently. Contract workers have simply been told ‘your contract has now expired’. Others have been retrenched and are unwilling to spend money because they are not sure when they will see more of it.”

Robertson explained that there was some stability during the days of the Government of National Unity (GNU) because investors had faith in the stability of the government. But the controversial and disputed election victory claimed by ZANU PF led to potential investors holding back their money.

Meanwhile, MDC-T leader Morgan Tsvangirai blamed ZANU PF for the current economic meltdown that has gripped the country. In a statement released Friday, Tsvangirai said: “Robert Mugabe has created a national crisis, a crisis of legitimacy, expectations and a crisis of the economy where everyone is now turning into a vendor as companies are closing and there is no employment.”

The statement came after Tsvangirai concluded meetings with his party structures in Harare province, which started at the beginning of November and were meant to solicit the concerns party officials following the disputed July 31st elections.

The MDC-T leader said ZANU PF had created the national crisis and only the MDC-T, “as an alternative party”, can revive and turn around the economy. He added that the MDC will not participate in the next elections without reforms being implemented first.