Despite the valiant efforts by Reserve Bank governor John Mangudya to mitigate Zimbabwe’s biting cash crisis, huge challenges remain — a situation that has seen illegal foreign currency dealers resurfacing in numbers around the country over the past few weeks.
News teams from the Daily News established yesterday that with the country experiencing a severe cash crunch that began late last year, illegal foreign currency dealers — and in some cases bank tellers as well — have begun to do fast business, robbing desperate Zimbabweans blind in the process.
In some extreme cases, a number of bank clients claimed that they had allegedly been charged an exorbitant 10 percent “commission” by tellers and dealers for electronic transfers to the accounts of money changers in return for hard cash.
A Harare street dealer even boasted that he was allegedly using his connections within certain banks to access cash and make “nice money” from this.
“I am certainly not exploiting anyone. I see myself as an entrepreneur who is helping people to have instant access to cash which might otherwise take them two to three weeks to get using normal banking channels,” the dealer, who was only prepared to identify himself as Dave, told the Daily News.
In Bulawayo, another dealer said she was making a killing from people changing the South African rand into US dollars, particularly “injiva” — Zimbabweans working in South Africa.
This comes as the central bank recently imposed stringent daily cash withdrawal limits to ease the current cash crisis that has seen people queuing for days at banks to access their funds.
Economic experts have also warned that the apex bank’s decision to introduce bond notes within the next few months would worsen the liquidity and cash crisis, as depositors frantically withdraw their money, fearing the return of the Zimbabwean dollar — which Mangudya says is not on the cards.
Zimbabwe adopted a basket of currencies in 2009 to replace its discredited local currency which had been rendered useless by world-record hyperinflation, with many people — including poor pensioners — losing all their life savings in the process.
Mangudya was earlier this week taken to task by businesspeople for his plan to introduce bond notes at a time when the economy is virtually on its knees.
University of Zimbabwe economics lecturer, Ashok Chakravati, told the Daily News that the move to introduce the bond notes was “unnecessary.”
“Other countries have been in import deficit situations before and history has shown us how export bonuses are awarded without instilling panic in fragile nations.
“An export bonus is appropriate, especially in a country with no way of devaluing the currency like Zimbabwe. The bond notes route is very unnecessary,” Chakravati said.
Businessman Lovemore Mukono said the government did not have the “right to introduce new money” without consulting stakeholders.
“Government needs to reconsider printing any money that has a Zimbabwe bird before we agree. We do not want to have a situation in which people brag to us that they are using our money as toilet paper again.
“We, as businesspeople want assurances that the over-printing horrors of 2008 will not happen again,” he said.
Prominent businessman Shingi Munyeza said the government had to cut its own expenditure before adopting “drastic actions such as the bond notes”.
“We have established that one of the main reasons why we are in this mess is that the government is over-spending. Why then is government not quickly plugging the hole and living within its means?” he asked.
Economist Brains Muchemwa also said the bond notes should not be imposed on the market.
“Currencies have to compete for relevance and bond notes should not be imposed on the market. The market has the right to reject the notes. Besides, the market is not ready for such interventionist measures.
“The country’s history has shown that control measures do not really work. Every time stringent controls are enforced there is always resistance from the market,” Muchemwa said.
The Daily News reported earlier this week that pressure was mounting on President Robert Mugabe and Zanu PF, as new data emerged suggesting that Zimbabwe’s economy was teetering on the brink of total collapse.
This prompted analysts and the opposition to observe that the increasingly frail nonagenarian was failing to “rig the economy”.
In its latest damning report on Zimbabwe, the International Monetary Fund (IMF) predicted that the country’s economic difficulties were set to continue and deepen — amid a grinding recession, the worsening cash crisis, mounting company closures and job losses, and a political legitimacy crisis that is refusing to go away.
“Unless the country takes bold reforms, the economic difficulties will continue in the medium-term,” the fund said in a statement, after consultations with Zimbabwean officials.
Observers also say not much has gone right for Mugabe and Zanu PF since they won the hotly-disputed elections in 2013, with the ruling party ravaged by its seemingly unstoppable factional and succession wars.
MDC spokesperson Obert Gutu said it was clear that the local economy was “dead and buried” and that Mugabe and Zanu PF were “failing to rig the economy”.
“No rocket science is needed to appreciate that the Zimbabwean economy is no longer not even on life support. It’s actually now dead and in the mortuary. With imports far-outstripping our net exports, it’s simply not possible to resuscitate the … economy without fixing the socio-economic and political fundamentals.”
Gutu also warned that the recent introduction of bond notes by the Reserve Bank of Zimbabwe would not improve the prevailing liquidity and cash crisis, but would further affect confidence levels in the country.
““We have to go back to basics. The illegitimate Zanu PF regime is utterly clueless and it shouldn’t stay in office a day longer if we are to turn around our collapsed economy.
“Mugabe and his entire Cabinet should proceed to do the honourable thing and resign en masse. Anything other than this will not help anyone. Armageddon is beckoning,” he added.
The spokesperson of the People’s Democratic Part (PDP), Jacob Mafume, concurred with Gutu saying the country’s mounting economic hardships were the result of the “stolen” 2013 vote.
“The government is learning the hard way that you cannot rig the economy.
“No amount of rhetoric from Mugabe’s spin doctors or bum-shaking from Mbare Chimurenga Choir singers will mask the obvious fact that every person and family in Zimbabwe is in trouble because of their voodoo economics.
“The people of Zimbabwe need to rescue the present government from this misery of governing the country and allow Mugabe to rest,” he said.