Finance minister taken to task over Zim cash crisis

Members of Parliament (MPs) have taken Finance Minister, Mthuli Ncube, to task over Zimbabwe’s persistent cash crisis, with legislators demanding to know what was being done to address the situation.

Since late 2018 when the Reserve Bank of Zimbabwe ordered a separation of local bank accounts from nostro, effectively reintroducing the Zimbabwe dollar, which had been ditched during the 2008 hyperinflationary era, cash availability has been a challenge.

Bank queues in Zimbabwe have long become a permanent feature across urban centres.

During a question and answer session in Parliament recently, law makers questioned why the government’s interventions including the recent printing of $10 note denominations, were not helping the situation.

“Let me draw the Honourable Minister back to 2007/08/09 and so on; inflation was in quintillion,” said Southerton MP Peter Moyo.

“Even a country which was in war never experienced such inflation. Today we are slowly going back to 2008. You may put a Statutory Instrument and so on, and try to arrest the people that are selling money in the streets, that will not work.”

Moyo said: “I am requesting the Honourable Minister to sit down carefully with his colleagues in Cabinet and adopt the multi-currency system. This country is in serious problem. People who are earning say RTG$6 000 or 7 000, it is US$30 nowadays. So I humbly request the Minister to seriously consider this country to use the multi-currency system.”

Moyo said the adoption of the multicurrency system could be Zimbabwe’s “messiah.”

“We may try to do whatever trick but there is no trick that you can do even if you print a $100 bond, it will not solve the problem. The problem will persist,” he said.

Rushinga MP Tendai Nyabani asked Ncube why illegal forex dealers were not dealt with. “We have Bureau deChanges in the country that are supposed to change money but you find money changers in the streets and they are not even afraid,” said Nyabani.

However, Ncube said cash in circulation was too insignificant to end bank queues.

“At the moment, our cash in circulation is about 4% of Gross Domestic Product,” said Ncube. “In other economies and in the region, it is about 10%, or even below half. So, it will take us a while to get up there.”

He went on to shoot down the proposal on the adoption of the multicurrency regime.

“You cannot afford to have hard currency only and no domestic currency,” argued Ncube.

“No economy can develop without a domestic currency, you need that.”

Source: Centre for Innovation and Technology (CITE)