As the country’s economy continues to deteriorate with cash shortages worsening, tight liquidity has created jobs for the unemployed as ever-innovative Zimbabweans invent and reap from a supposedly grim and bleak situation.
Most local banks have lowered their cash withdrawal limits, a situation that has seen desperate Zimbabweans buying and selling cash at a premium in the market, reminiscent of the 2008 hyper-inflationary era.
Another section of shrewd Zimbabweans has taken to offering card swipe services at the country’s various retailers and wholesalers for cash from customers.
Kupakwashe Kanonhuwa, a 26-year-old trained nurse told the Daily News on Sunday that she was making a living from offering to buy groceries for customers at supermarkets via swipe then selling the cash she receives from the customers on the black market.
“I realised one day that if I offered to swipe for customers who have cash they can give me their money. Then from there, I just need to find someone desperate for cash but cannot get it out of the bank, who can do a transfer into my account so that I can give them hard cash.
“However, I do not do this for free; I charge a five percent commission for all transactions. I target people who are buying a lot of stuff in bulk with cash,” she said.
Another cash dealer, who operates at a huge wholesale chain in the capital, said he had links in banks.
“Yes, I swipe occasionally, but here I have the opportunity to meet small scale business people who desperately need cash.
“So this way, I then hook them up with cash from some banker friends. The market commission at the moment is five percent. But then these things all rest on your client’s desperation for cash,” the dealer said.
The country’s cash shortages continue to worsen despite government’s efforts of importing money into the country, with dealers selling cash on the black market.
Most locals, with their cash trapped in banks, have begun doing transfers to those with cash at hand at a discount.
Another dealer who spoke to the Daily News on Sunday on condition of anonymity said he was charging a 10 percent commission for transactions and only did transactions over $5 000.
“What I do is I get people to transfer me their monies into my account, because I have a way of getting the cash out of the bank above the normal limit.
“So let us say you have $5 000 trapped in the bank, you will transfer that amount into my account and I will give you $4 500 in cash. From there I will get my bank people to give me the money transferred,” the dealer said.
The practice — commonly known as “burning” was popular during the 2008 era — is making a sure and quick return as the cash parched market struggles to adjust.
While the Reserve Bank of Zimbabwe (RBZ) has given assurance to the market that it has the situation under control, the long cash queues which surfaced in April have only gotten worse.
“We continue to import money but the problem is we are not using our currency so this presents a problem especially given that regional currencies are not performing well.
“This has made the United States Dollar (US$) a hoarding currency for most of these countries. So as soon as we import money, it leaves the country through Illicit Financial Flows (IFFs),” central bank governor John Mangudya is on record saying.
Known for their resilience and quick adaptation skills, most Zimbabweans have taken advantage of the situation to make ends meet.
Burning is now so widespread that even school bursars have joined the band wagon, dealing cash with bank insiders then splitting commissions.
A bank source told the Daily News on Sunday those school bursars — who in most cases always have cash — were linking up with banks, selling cash at a premium then having the cash transferred into their school accounts.
“It is a win-win situation for all. The bursars are supposed to deposit money into the various school accounts, so they sell the cash to us and we transfer money into the account so that the books balance.
“In some cases, schools are not even banking the cash so such bursars have much room to organise and deal with the cash,” the source said.
Hundreds of Zimbabweans have been spending chilly days outside banks queuing for cash; the few banks that are still releasing money are doing so with very little amounts, as liquidity remains elusive.
So, those selling cash at a premium are thriving, with the Daily News on Sunday reliably informed that some bankers have clients who need up to $150 000 per week raking up five percent commissions.
The economy is slowly hurling towards a full blown recession as poverty levels across the country continue to worsen.
While President Robert Mugabe’s Zanu PF-led clueless government is engaged in a senseless and bloodletting succession fight to replace the ageing leader, the 92-year-old is now under immense pressure to salvage what’s left of his legacy by rejuvenating the economy.
On Wednesday last week, Zimbabweans staged a “stay away” putting more pressure on Mugabe.
On May 4, when the central bank announced it had slashed maximum withdrawal limits from $5 000 to $1 000, most Zimbabweans did not have qualms with it as the average local salary is $350.
According to the Bankers Association of Zimbabwe boss Charity Jinya, while the maximum limit is $1 000, banks are releasing cash based on their capacities.
Presently, the few banks that are still giving cash are lowering their maximum withdrawal limits by the day, with reputable foreign-owned banks now disbursing as little as $150 per day.
Some banks have been lately issuing as little as $50 per day. Zimbabweans had turned to supermarkets for cash-backs as a means of withdrawal, however, some supermarkets have closed down the option.
The country’s financial institutions are now even pleading with deep-pocketed clients to supply them with cash in a move aimed at replenishing their nostro accounts as the country continues to grapple with a biting liquidity crunch.
Nostro accounts are accounts held in a foreign country by a domestic or local bank which is used to facilitate settlement of foreign exchange and trade transactions.
Mugabe’s government has however — and as usual — refused to take the blame shifting it to depositors which it says are fuelling the cash crunch through “pillow banking”.
Finance minister Patrick Chinamasa recently blamed depositors of fuelling the country’s biting cash-crisis by keeping money outside the formal banking system.
Zimbabwe abandoned its own currency in 2009 and now uses mainly the US dollar and the South African rand, although other currencies are also legal tender.
But, former Finance minister Tendai Biti said the present cash shortages could only be addressed after identifying the root of the hiccups.
The former Finance minister credited with single-handedly helping Zimbabwe transition into a dollarised economy — under whose stewardship the country experienced growth in the manufacturing sector — said there was need to inject cash into the productive sectors.
However, Biti said it was time government considered joining a regional currency body to re-balance the economy. daily news