News / National
Panic as Zimbabwe banks run out of cash
03 Apr 2016 at 14:32hrs | Views
Despite the best efforts of Reserve Bank Governor John Mangudya and his team to mitigate the situation, the debilitating cash shortages that hit local banks a few weeks ago are worsening, sending the country's long-suffering citizens and floundering companies into panic mode.
Analysts who spoke to the Daily News on Sunday yesterday said the cash crunch manifested "the sad reality" that Zimbabwe's economy was continuing on its catastrophic downward spiral - a consequence of the country's decades-old political crisis that is widely blamed on President Robert Mugabe and Zanu-PF.
This comes as a number of banks have run out of cash over the past few days, in addition to imposing more stringent daily withdrawal limits and other measures.
The country started experiencing serious cash shortages at the beginning of this year, resulting in the central bank imposing limits on withdrawals - a move that is said to have seen many companies and individuals opting not to deposit their money with financial institutions, thereby worsening the crisis.
A snap survey by the Daily News on Sunday yesterday revealed that one government-controlled bank did not have any cash, but promised enough cash would be secured from tomorrow onwards.
"I have been coming to the bank this whole week and the message has been the same. There is no cash, and when I went to a supermarket for a payback I was told I could only get $10. What can I do with $10?" a furious depositor with the bank said.
Another major bank that has until now seemingly not been affected by the cash crunch has just imposed a $600 daily withdrawal limit from $1 500 for individuals, and $1 500 for companies from $5 000.
Other financial institutions have also since moved to temporarily suspend their ZimSwitch inter-connectivity arrangements with other banks at their ATMs - an electronic payment platform for local banks that makes life easy for consumers.
The situation was not any better in many Harare supermarkets, with depositors wanting to access cash at one outlet only able to get $10, after buying goods worth $5.
Efforts to get a comment from Mangudya yesterday did not bear fruit. However, the RBZ chief said recently that the cash shortages were a "logistical issue and nothing more", implying that the shortages are temporary.
"The problem is people want to declare a crisis where there is none, the situation is under control.
"Note that we import the money, so it is merely a logistical issue," he said.
Barclays Bank managing director, George Guvamatanga, also assured depositors last month that the cash crunch was "nothing short of a coincidental logistical issue".
Still, the cash shortages have sent many Zimbabweans, who recall the 2008 economic crisis and hyper-inflation era with dread, into panic mode as they fear losing their money.
The Daily News on Sunday reported last week that there were growing concerns that Zimbabwe had once again hit the depths of humanitarian and economic despair that were last experienced in 2008, when the country's seemingly unending political crisis precipitated an economic meltdown of monumental proportions - which culminated in the death of the Zimbabwe dollar and mass emigrations out of the country.
In a surprising admission, a Zanu-PF politburo member also recently admitted that the country was "in dire straits" - a sentiment that flew in the face of official communiqués by both government and other governing party officials who incredulously continue to claim that all is well in the country despite obvious evidence to the contrary.
Speaking to the Daily News on Sunday's sister paper, the Daily News, the bigwig said "burying our heads in the sand like ostriches as we are doing" was not helping the country - adding that it "pained" him to see so many Zimbabweans suffering to the extent that they were doing.
"It is a fact that the economy is in a very bad shape, and that the poor are being particularly hard- hit. I think part of the way out of this is for all of us is to admit that the country is in dire straits so that we can all sit down as Zimbabweans to find the requisite solutions.
"I feel pained to see so many of our people, particularly the poor in towns and rural areas having to make do with so little or nothing, and they have lived like this for so long.
"In fact, many young people who are under 25 years in our country don't really know a good, normal life. It's time for us to stop the denial.
"We need to rise above the culture of petty political fights that is now a permanent feature of Zimbabwean life, whether one looks at Zanu-PF or the country generally. As Dr Amai (First Lady Grace Mugabe) always says, it's time to stop all this," the contrite bigwig said.
The official spoke as analysts warned that Zimbabwe was teetering on the brink of total collapse, a situation they said was spawning worsening citizen despondency which could lead to growing opposition to Mugabe and Zanu-PF's 36 years in power.
Most political and economic observers have also warned that 2016 would in all likelihood be harder all-round compared to 2015, which was itself generally described as an annus horribilis (horrible year).
They said there was "little hope" that life would get better for most Zimbabweans, and that if anything, the country's ailing economy would get sicker, while the deadly factional and succession wars ravaging the post-congress Zanu-PF were set to worsen.
Zimbabwe National Chamber of Commerce (ZNCC) chief executive Christopher Mugaga said with all the country's key economic indicators - including inflation, unemployment and gross domestic product growth - heading in the wrong direction, the only way out was for the government to "quell the crisis of mistrust within the country".
"Politicians mistrust each other more than ever before while they are the custodians of policy proposals. This therefore leaves a void when it comes to thoroughness in implementation.
"It is also vital to find feasible strategies to look for foreign direct investment without necessarily relying on the carrot approach of relying on incentivising potential investors.
"Let the policy environment be transparent and consistent while relegating populist policy measures to the dustbin.
"For example, what is the rationale of even considering giving bonuses both to the civil service and the private sectors when all the numbers are pointing southwards?" Mugaga said.
So bad is the economic situation in the country that thousands of companies have closed their doors over the past three years, leaving hundreds of thousands of poverty-stricken employees and their families in the lurch.
And the situation is not any better in the agricultural sector, where the country has moved from being the breadbasket of the region to a hopeless and much-derided basket case over the past two decades.
Analysts who spoke to the Daily News on Sunday yesterday said the cash crunch manifested "the sad reality" that Zimbabwe's economy was continuing on its catastrophic downward spiral - a consequence of the country's decades-old political crisis that is widely blamed on President Robert Mugabe and Zanu-PF.
This comes as a number of banks have run out of cash over the past few days, in addition to imposing more stringent daily withdrawal limits and other measures.
The country started experiencing serious cash shortages at the beginning of this year, resulting in the central bank imposing limits on withdrawals - a move that is said to have seen many companies and individuals opting not to deposit their money with financial institutions, thereby worsening the crisis.
A snap survey by the Daily News on Sunday yesterday revealed that one government-controlled bank did not have any cash, but promised enough cash would be secured from tomorrow onwards.
"I have been coming to the bank this whole week and the message has been the same. There is no cash, and when I went to a supermarket for a payback I was told I could only get $10. What can I do with $10?" a furious depositor with the bank said.
Another major bank that has until now seemingly not been affected by the cash crunch has just imposed a $600 daily withdrawal limit from $1 500 for individuals, and $1 500 for companies from $5 000.
Other financial institutions have also since moved to temporarily suspend their ZimSwitch inter-connectivity arrangements with other banks at their ATMs - an electronic payment platform for local banks that makes life easy for consumers.
The situation was not any better in many Harare supermarkets, with depositors wanting to access cash at one outlet only able to get $10, after buying goods worth $5.
Efforts to get a comment from Mangudya yesterday did not bear fruit. However, the RBZ chief said recently that the cash shortages were a "logistical issue and nothing more", implying that the shortages are temporary.
"The problem is people want to declare a crisis where there is none, the situation is under control.
"Note that we import the money, so it is merely a logistical issue," he said.
Barclays Bank managing director, George Guvamatanga, also assured depositors last month that the cash crunch was "nothing short of a coincidental logistical issue".
Still, the cash shortages have sent many Zimbabweans, who recall the 2008 economic crisis and hyper-inflation era with dread, into panic mode as they fear losing their money.
The Daily News on Sunday reported last week that there were growing concerns that Zimbabwe had once again hit the depths of humanitarian and economic despair that were last experienced in 2008, when the country's seemingly unending political crisis precipitated an economic meltdown of monumental proportions - which culminated in the death of the Zimbabwe dollar and mass emigrations out of the country.
In a surprising admission, a Zanu-PF politburo member also recently admitted that the country was "in dire straits" - a sentiment that flew in the face of official communiqués by both government and other governing party officials who incredulously continue to claim that all is well in the country despite obvious evidence to the contrary.
Speaking to the Daily News on Sunday's sister paper, the Daily News, the bigwig said "burying our heads in the sand like ostriches as we are doing" was not helping the country - adding that it "pained" him to see so many Zimbabweans suffering to the extent that they were doing.
"It is a fact that the economy is in a very bad shape, and that the poor are being particularly hard- hit. I think part of the way out of this is for all of us is to admit that the country is in dire straits so that we can all sit down as Zimbabweans to find the requisite solutions.
"I feel pained to see so many of our people, particularly the poor in towns and rural areas having to make do with so little or nothing, and they have lived like this for so long.
"In fact, many young people who are under 25 years in our country don't really know a good, normal life. It's time for us to stop the denial.
"We need to rise above the culture of petty political fights that is now a permanent feature of Zimbabwean life, whether one looks at Zanu-PF or the country generally. As Dr Amai (First Lady Grace Mugabe) always says, it's time to stop all this," the contrite bigwig said.
The official spoke as analysts warned that Zimbabwe was teetering on the brink of total collapse, a situation they said was spawning worsening citizen despondency which could lead to growing opposition to Mugabe and Zanu-PF's 36 years in power.
Most political and economic observers have also warned that 2016 would in all likelihood be harder all-round compared to 2015, which was itself generally described as an annus horribilis (horrible year).
They said there was "little hope" that life would get better for most Zimbabweans, and that if anything, the country's ailing economy would get sicker, while the deadly factional and succession wars ravaging the post-congress Zanu-PF were set to worsen.
Zimbabwe National Chamber of Commerce (ZNCC) chief executive Christopher Mugaga said with all the country's key economic indicators - including inflation, unemployment and gross domestic product growth - heading in the wrong direction, the only way out was for the government to "quell the crisis of mistrust within the country".
"Politicians mistrust each other more than ever before while they are the custodians of policy proposals. This therefore leaves a void when it comes to thoroughness in implementation.
"It is also vital to find feasible strategies to look for foreign direct investment without necessarily relying on the carrot approach of relying on incentivising potential investors.
"Let the policy environment be transparent and consistent while relegating populist policy measures to the dustbin.
"For example, what is the rationale of even considering giving bonuses both to the civil service and the private sectors when all the numbers are pointing southwards?" Mugaga said.
So bad is the economic situation in the country that thousands of companies have closed their doors over the past three years, leaving hundreds of thousands of poverty-stricken employees and their families in the lurch.
And the situation is not any better in the agricultural sector, where the country has moved from being the breadbasket of the region to a hopeless and much-derided basket case over the past two decades.
Source - dailynews
