This comes as banks are reporting a rising demand for cash despite the aggressive push by authorities to promote the use of plastic money and mobile platforms as part of their measures to promote a cashless society.
At the same time, analysts warned in interviews with the Daily News at the weekend that the snaking queues which have become a permanent feature at banks around the country signalled the fact that “panic” had set in among both ordinary Zimbabweans and businesses — amid understandable fears that the dying local economy was hurtling towards the debilitating lows of 2008.
They also said that the accelerating disappearance of the country’s surrogate currency — bond notes, which were meant to mitigate the country’s acute cash crunch — was worsening the panic.
This comes as United States dollars have long vanished from the formal market — with the coveted greenbacks now only easily available in the country’s thriving black market.
Economist, Godfrey Kanyenze, warned long-suffering Zimbabweans yesterday that all indications were that the current long cash queues would worsen as the watershed 2018 elections approached.
“There is a real problem in the sense that what precipitated this problem in the first place was the government’s fiscal indiscipline … you will notice that it is because of this imbalance that treasury is scrambling to pay bonuses which were not budgeted for in the 2017 National Budget … and therefore the immediate future is not looking good.
“Then of course, there is the fact that the country is headed for an election and due to the state of things in the country and in Zanu PF, with its factional fights, populist decisions cannot be ruled out, so this situation can only be expected to worsen,” Kanyenze told the Daily News.
He also pooh-poohed the $200 million Afreximbank facility from which the government is getting funding support to print bond notes, saying this was grossly insignificant, and warning that it was a matter of time before this was completely exhausted.
“There is a good chance that government will draw down on the facility without the country experiencing any changes.
“The $200 million is insignificant given the present situation. Government has more obligations in the coming future and the only way out is increasing productivity.
“We also need to realise that we can’t borrow ourselves out of this situation (current economic difficulties),” Kanyenze added.
Another economist, Vince Musewe, also said cash shortages were going to persist until the country restored confidence in the banking sector and increased productivity.
“The cash in circulation at slightly over $300 million is too little compared to the over $6 billion deposits in the sector. The problem is also that when people get money, the little that they can access, they are not putting it back into the banks.
“The queues will not go away until such a time that money begins circulating between the banks and all economic sectors,” he said, also warning that people were going to continue hoarding cash.
In the meantime, the disappearance of the country’s surrogate currency from the market is also forcing banks to give desperate Zimbabweans their cash in sackfuls of coins.
The Reserve Bank of Zimbabwe (RBZ) introduced bond notes at the end of last year to ease the severe cash shortages, but so far this has completely failed to satisfy the market’s cash needs.
This has seen banks limiting the amount of money both individuals and companies can withdraw to as low as $20.
RBZ governor John Mangudya announced at the weekend that the central bank had so far injected $140 million in bond notes into the market from the $200 Afreximbank facility.
There were also about $20 million in coins circulating in the market, he said.
Mangudya also revealed that the central bank had increased its importation of US dollars, in a bid to try and ease the country’s cash crisis.
“We have stepped up the importation of cash to meet demand. We are now importing $15 million up from $10 million per week.
“US dollar deposits have increased significantly by between 40 and 50 percent but banks are quick to turn them into nostro deposits,” Mangudya told the State media.
Last month, the International Monetary Fund (IMF) also noted that bond notes had failed to solve the country’s deepening economic crisis, further calling for comprehensive reforms.
“Zimbabwe is in a very, very difficult situation, as you know. There is a limited amount of foreign exchange inflows coming in and no monetary policy tool.
“So, it’s very important to have a more comprehensive policy package which also addresses a lot of the fiscal challenges that the country faces,” IMF director for the African Department, Abebe Aemro Selassie, said.
Zimbabwe is deep in the throes of a debilitating economic crisis which has led to horrendous company closures and the consequent loss of hundreds of thousands of jobs.
At the same time, economists have said that poverty levels in the country are skyrocketing, with average incomes now at their lowest levels in more than 60 years — with more than 76 percent of the country’s families now having to make do with pitiful incomes that are well below the poverty datum line.
This comes as Zimbabwe has now been officially ranked as the poorest country in Africa.
According to the Africa 2016 Wealth Report, Zimbabwe has been ranked as the country with the poorest people on the continent, with average wealth of $200 per person.
In the report, AfrAsia — a Mauritius-domiciled financial institution which once operated in Zimbabwe after acquiring the now-defunct Kingdom Financial Holdings Limited — noted that back in 2000, Zimbabwe was one of the wealthiest countries in sub-Saharan Africa on a wealth per capita basis.