Address cash crisis' root cause

IN the past few weeks, Zimbabweans have had to once again go through a repeat of an agonising and painful experience with the country’s financial sector — failing to access their hard- earned money from the banks.

It is extremely sad and disheartening.

The crisis, which brings back distressing and spooky memories, has caused untold suffering to most poor and hard-working Zimbabweans and it is not something new.

Around 2007-8, a whole lot of Zimbabweans went through the same stressful and dehumanising experience.

At the time, the masses, mainly the politically unconnected, struggled and lost significant savings that were trapped and irretrievable from the financial institutions.

The cash crisis that is prevailing now is simply a continuation of the unaddressed liquidity crisis that haunted Zimbabweans a couple of years back, on the back of the country’s economic demise.

While Finance minister Patrick Chinamasa says the problem, this time around, is exacerbated by “pillow banking” — depositors stashing their savings at home, out of the formal financial system, the question remains, why does it keep recurring?

In his own admission, the Treasury chief said “the liquidity crisis is a problem that we have to look squarely in the face and address”. That is a commendable and pragmatic approach, Chinamasa. Surely, we need to tackle our problems head-on.

The authorities and powers that be really need to address the root cause of the recurring cash crisis.

And to solve the challenge, Chinamasa said the government was putting in place several measures, including a national financial strategy (NFS). But, is that truly the solution? The problem happened in 2007-8

and disappeared in 2009 following the formation of the government of national unity between President Robert Mugabe and long-time rival Morgan Tsvangirai.

At the time, no NFS of some sort had been implemented by the government to compel or persuade Zimbabweans to entrust the banks with their savings.

Honourable Chinamasa and crew, this goes to show that Zimbabweans do not need an NFS for them to keep their hard-earned money in the banks.

It is about trust and confidence in the system. And that trust can only be earned through making our politics right.

When the latest cash crisis started, some financial sector players assured the depositors that it was just a logistical problem which had since been resolved.

But it has turned out to be a potentially serious crisis, as the problem persists.

Honourable Chinamasa, rather than talk about national strategies, taking into account those of Zanu PF’s ZimAsset that have not materialised, you need to create an environment that rebuilds Zimbabweans’ trust in the banking sector.

It is about trust.

 

Comments (4)

The problem of cash shortages is beyond pillow banking or use of credit cards/debit cards or cellphone banking. The country is not producing PERIOD. We need to produce on the farms ,in factories in mines in tourism etc. When we have to import fruits , vegetables ,maize,energy and anything else that you can think of , don't expect the country to have liquidity. The only way out of the problem is to produce , depressed commodity markets notwithstanding. We must export more than we are importing. The government should be telling the nation what they are doing to make the country a producer once again. Anything else kwave kutungana kwembudzi

shumba - 25 April 2016

The problem of cash shortages is beyond pillow banking or use of credit cards/debit cards or cellphone banking. The country is not producing PERIOD. We need to produce on the farms ,in factories in mines in tourism etc. When we have to import fruits , vegetables ,maize,energy and anything else that you can think of , don't expect the country to have liquidity. The only way out of the problem is to produce , depressed commodity markets notwithstanding. We must export more than we are importing. The government should be telling the nation what they are doing to make the country a producer once again. Anything else kwave kutungana kwembudzi

shumba - 25 April 2016

these hotheads(mbimbindoga) will not take a leaf from anyone or anything. they know the economic fundamentals that are applicable to defibrillate the kantry but they have their own vendetta with europe & america and are unwilling to engage! zanu think they are david and europe is goliath saka regai zvikurirane.

SaManyika Chaiye - 25 April 2016

it is a sad story ladies and gentlemen..was in Bulawayo cbd on Tuesday.. people getting a daily maximum cash withdrawal of only $200 from some banks..people have started sleeping on banks... ahhh

changes - 28 April 2016

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