CASH CRISIS IN ZIMBABWE


 

By Paul Ndiho

Zimbabwean voters hope the first election without Robert Mugabe will bring change in a country where most people are unemployed, stranded with little or no money to feed their families.

Timothy Ngolobe is a University graduate, and unemployed.  He makes living hawking on the streets. Cash Crisis in Zimbabwe

“The situation is just bad. You can go to any bank; whether it’s the local banks or Standard Chartered, you’ll not find any cash. But if you go outside of the banks, just at the front door of any bank, you’ll find cash.”

Like many of his generation, he hopes that the cash crisis will be one of the first issues tackled by the newly elected government. He thinks that there is a conspiracy between the banks who have the cash and vendors who sell it through official channels.

 “This is a bank, and the ATM’s are dry. You can’t get any cash out of this ATM. So what people have done is to resort to selling money on the streets.

Let me see how easy it is to exchange money on the road. Cash transactions have significantly gone up because of Long lines of people waiting to withdraw money from their banks.

Richard Varince says it’s tough feeding his family. And wants a better Zimbabwe after the elections.

“We have got a serious crisis in Zimbabwe. We’re sleeping in queues; there is no cash. In some cases, you’re given 50-dollar Bond or 100-dollar bonds. So it’s very tough for my family and me to survive.”

Zimbabwe, in effect, has more than three parallel currencies – the rare US dollar, bond notes, and electronic transfers.

Francis Machimbe another Harare resident says higher interest rates are eating into people’s savings, especially for small transactions. And sometimes, the locals pay over 45% interest rates per transaction.

 “If you have got money in your bank account, you can transfer it into Eco Cash, but the guys at Eco Cash can charge you from 35% – 45% interest rate.”

But for Vendors, they argue, that Eco Cash is the reason many Zimbabweans can still pay their bills and buy groceries.

While mobile money transfer has been a success in many African countries, Zimbabwe was forced to adapt to Eco Cash due to the severe shortage of hard currency and banks running dry. For Tinyashana Toka, a vendor who lives in one of the high-density suburbs of Harare – the situation couldn’t be dire.

“At least if we could have unfettered access to our own currency, that hard currency here would be available to all vendors. We could be ordering our stuff at a low-cost selling them cheaply. But for the moment, we’re facing a lot of challenges and selling our wares. Hence, we’re forced to buy cash for survival, not for business.”

Financial analysts say for Zimbabwe to fix this currency crisis the authorities would need to restore confidence in the country’s Financial system. As supporters for both the opposition and ruling party head to the ballot, the question is whether the voters will punish the incumbent president for the ongoing cash crisis or give him the benefit of the doubt.

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