New strategies needed to mitigate cash crisis

HARARE - The Reserve Bank of Zimbabwe’s decision to introduce an additional $300 million bond notes will not help ease the current cash crisis.

There was a lot of excitement and apprehension last year when the central bank introduced the $200 million Afreximbank-backed bond notes, with the majority of people hoping that the export incentive would help reduce cash shortages.

However, less than a year down the line, the situation is far from ideal. In fact, things have gone from bad to worse as depositors are now only getting at most $20 a day from their banks while corporates have resorted to the black market to get foreign currency.

This then begs the question, how will the next tranche of bond notes help with the current cash crisis?

What Zimbabwe requires at the moment are new strategies to help stem the liquidity crunch that has resulted in companies failing to make foreign payments while local depositors are spending lots of valuable time queuing to withdraw their cash.

The Confederation of Zimbabwe Industries was spot-on this week when it noted that the country lacks a clear-cut strategy to deal with the country’s foreign currency shortages and foreign payment delays, presently pegged at over $1 billion.

Due to the foreign currency shortages, local manufacturers are also failing to secure key raw materials on time from foreign suppliers as the country’s banks have low nostro account balances.

Zimbabwe’s largest industrial body must be applauded for speaking up and highlighting some of the challenges affecting the country.

For quite a long time now, most influential stakeholders in the economy such as businesses, lawyers and the academia have been very conspicuous by their silence on macro-economic matters affecting the majority of people in the country.

It is an undeniable fact that Zimbabwe has very great potential, enormous potential, it is a country that is in a region that is growing. It has a central location within that region and historically it has had a very well-educated population.

But the country clearly lacks good policies that can unlock value and improve the livelihoods of its citizens.

Since 1980, the policies within the country have not always been conducive for economic growth and that is something for both the government and private sector to sit down and see what can be done.

The government has to put the right policies in place and the private sector has to make use of those policies to create economic growth.

One of the reasons why things are not going on well in Zimbabwe is the lack of consistent conducive policies due to the ruling party’s — Zanu PF — predatory politics.

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.