HARARE - Zimbabwean banks have “played down” the run on deposits that happened following President Robert Mugabe’s election victory.
The Bankers Association of Zimbabwe (Baz) — financial institutions’ umbrella body — yesterday told businessdaily that banks were conducting business “as usual”.
“The public shouldn’t be alarmed by the rumour that people have been hastily withdrawing their money,” said Sijabuliso Biyam, Baz chief executive yesterday.
He said: “There is really no cause for concern because everything is stable and normal.”
However, market insiders say depositors panicked following Mugabe’s election victory, withdrawing nearly $1 billion from banks in a week’s time.
“It seems people have no confidence in the new leadership.
“Last week alone close to $700 million was withdrawn from all the banks in the country — although much of the money was taken from banks in Bulawayo.
“If this trend continues for another week or so we might see some banks crumbling,” said a local analyst who preferred anonymity.
Crucially, most analysts say depositors feared reintroduction of the Zimbabwe dollar.
Mugabe won 61 percent of the July 31 plebiscite, beating long-time rival Morgan Tsvangirai — who is contesting the result.
Biyam added that despite the acute liquidity crisis prevailing in the economy, banks were in a “sound financial position”.
This comes as Zimbabwe’s economy — still suffering a hangover from a decade long recession under Mugabe’s Zanu PF rule — has already responded negatively to the election outcome.
On the first day of trade after Mugabe and Zanu PF’s poll win, the Zimbabwe Stock Exchange’s key industrial index plunged 11 percent, the bourse’s greatest fall in a single day, and has to date lost nearly $1 billion in market capitalisation.
Last week, Reserve Bank of Zimbabwe governor Gideon Gono had to calm down depositors in Bulawayo.
Addressing the business community in the second largest capital, the central bank chief said: “Access to loans is a function of deposits in a bank and if you are taking away deposits from the bank it means the bank will have nothing.
“This is what has happened in the banking sector in the past few days, given the extent people have withdrawn their deposits panicking that their money will be locked in banks as the new government will revert to the local currency,” he said.
He said return of the local currency was not imminent as the economy was still not able to sustain itself.
“We are fully aware that before the return of the local currency, the economy should have taken a sustained path of growth and I am not seeing this in the next three or four years,” Gono said.
He said four years after adopting a multi-currency system — dominated by the United States dollar — Zimbabwe was still to achieve a desired economic growth trajectory that would allow the country to revert to the local currency.
“We will need to see a certain sustained growth of our economy of not less than six percent or seven percent. It takes a while to be able to build that.
“There are also a number of aspects such as increasing capacity utilisation in industries to 80 percent as well as attaining not less than 60 percent employment levels, certainly if we reach that point, we need to introduce our own currency,” he said.