'Cash shortages set to worsen'

HARARE - As jittery ordinary Zimbabweans wait with bated breath for the introduction of bond notes next month, the Reserve Bank of Zimbabwe (RBZ) has warned of worsening cash shortages ahead, in a further dose of bad news for the country’s dying economy.

This comes as the current severe cash shortages have seen desperate depositors swamping banks as they bid to withdraw their little savings ahead of the imminent introduction of the much-distrusted bond notes.

Addressing delegates at last week’s National Economic Consultative Forum (NECF), RBZ FROM P1

deputy governor Kuphukile Mlambo, warned that the end of the tobacco season and the depreciation of the South African rand and British pound would further exacerbate the current cash shortages.

“We are no longer an economy that is dependent on manufacturing exports. We are totally dependent on four commodity exports — tobacco, gold, platinum and chrome,” he said.

“But these minerals do not always perform well or deliver all the time. For example, the tobacco season has just ended now and between now and February we have no tobacco money. This does not really improve the situation.

“Remittances are also in trouble now because someone who was sending money back home to their parents, say R1 000 ... the money is now coming in at say $60 … so, although the rand amount is the same, the dollar value has fallen.

“It’s the same as those in the United Kingdom where the pound has also fallen. So in view of all these dynamics, everyone should do all they can to spare cash because the money just isn’t there,” Mlambo added.

He also explained that current cash shortages were a combination of the country’s widening trade deficit and cash leakages.

“Why the cash shortage now? I can tell you why, for many years since 2009 we have been receiving inflows of about $6 billion on average per year, with spending outflows of about $7 billion per year.

“So every year you accumulate a $1 billion gap and you are kicking it down the curb and at some point it has to bite you,” he said.

At the same time, the World Bank has also confirmed that Zimbabwe’s economy is dying, downgrading the country from its list of improved economies to the unflattering tier of struggling countries.

On the other hand, the International Monetary Fund (IMF) has said Zimbabwe’s economic growth will slide back further to a negative 0,3 percent this year, before shedding off more in 2017 where it is projected to fall further to a negative 2,5 percent.

Comments (7)

Its interesting to note that the Deputy Governor actually knows the source of the problem, spending more than what we were producing. What then didnt you do something about it considering that this falls directly under your jurisdiction? Its a shame that people are suffering because of you guy's failure to do your work. You should all be dismissed for incompetence than embarrass us and our country like that

jocks - 18 October 2016

The governor does not control govt expenditure. Our govt generally believes that money grows on trees. Look at the likes of Jonathan on how they just steal and spend as they wish. Check the flights for Robert and his expenditures in Asia and middle east! The genreal opublic has to import because our manufacturing sector died a long time ago. We cant eat platinum, gold por use diamonds to bath. The only answer is to re-industrialise...but that should come with reviving Agriculture in general to allow processing (just to start with). Thats easy production. Steel production, with the likes of ZISCO is long forgotten. Thats stuff for a serious govt not this zanu pf circus.

Jonathan Musorobhangu - 18 October 2016

Why is Mugabe and ZANU(PF) synonimous with negative economic growth rates. Anything that is not Mugabe or ZANU(PF) will have positive economic growth rates. Why???

Change Rutendo - 18 October 2016

Where is the 15B?If found this can cushion us for the next 3yrs

Tamirira Bond - 18 October 2016

Chinamasa tried his best but the G40 with the support of Mugabe frustrated him.Economic reforms to this criminal group is regime change agenda but this uncalled for stupid resistance would be a catalyst to the down fall of this regime whether one likes it or not.Let's wait and see in the next coming months.

Gen. Spinola - 18 October 2016

You canot cheat the economy! ZANU PF should just go simple.

Lloyd Makwarimba - 19 October 2016

Its clear, plain and simple members of this goverment stole, are stealing, and will steal from this country! Lets wake up everbody Lets do what we can to honestly challenge this goverment.

Young Zimbo - 19 October 2016

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