Zimbabweans have lost faith in RBZ

The past weekend was characterised by massive panic buying, while efforts by the Reserve Bank of Zimbabwe (RBZ) to assuage fears of shortages and price hikes have so far drawn a blank.

Fearing a repeat of the food shortages of 10 years ago, many Zimbabweans, after reading a message circulating on social media sites, resorted to panic buying - an indication they have lost faith and confidence in authorities.

Ordinarily, a message from the central bank would have been enough to calm fears, but we have entered a period where faith in the RBZ is at its lowest ebb due to a sequence of events.

The central bank insists that the bond notes are at par with the US dollar, but it is clear that this is untrue, as a healthy parallel market has developed.

Bond notes have failed in what they were meant to achieve - that is reduce cash shortages - but the central bank continues as if it's business as usual.

Statistics from RBZ show that the country has exported more than it was doing say 10 years ago, but due to the lack of confidence in the system, very few care for these figures and are instead preparing for a doomsday scenario, where everything will come crashing down.

Due to uncertainty, most people have resorted to keeping their money in US dollars, which is a safe haven, rather than keep it in banks, which they no longer trust.

RBZ governor, John Mangudya may insist that there is enough money on the market and he does not understand the bank queues, the reality is that because they have no faith in the authorities, many Zimbabweans have resorted to keeping US dollars at home, and using plastic money for most transactions.

Mangudya has his work cut out for him if he is to restore confidence to the banking and monetary systems, which are set for implosion if this trend continues.

The disastrous 2008 is still vivid in the memories of many and Zimbabweans are moving to protect themselves from the effects of shortages and price hikes by buying in bulk.

If they trusted the government, as during the period between 2008 and 2013, Zimbabweans would not have resorted to such methods, but it is clear that the confidence is wearing thin and no matter what the authorities say, this will find no takers.

The ball is in the government's court to restore that confidence and faith, as failure to do that could be catastrophic for the economy.