Africa
Cash shortage hits Zimbabwe
In Summary
- US President has directed more US sanctions against Mugabe's government.
- Daily bank withdrawal limit of US$1 is hardly enough to buy 10 kgs of the staple maize-meal.
- Hyper-inflation has passed the nine million per cent mark.
- Many Zimbabweans have survived the crisis through foreign currency remittances from relatives who fled to Western and neighbouring countries.
HARARE, Friday
Cash shortages have become the latest manifestation of Zimbabwe’s multi-faceted economic and political crises, with banks restricting daily withdrawals for individuals and businesses to slightly more than US$1.
Even as life gets tougher, President George W. Bush on Friday signed an order expanding US sanctions against the “illegitimate” Zimbabwe government of President Robert Mugabe.
“This action is a direct result of the Mugabe regime’s continued politically-motivated violence,” Bush said in a statement.
US$1 is hardly enough to buy 10 kilogrammes of the staple maize-meal, available only on the parallel market due to widespread food shortages.
Jonathan Shoko, a father of three from the capital, Harare, was shocked when, after spending two days in a bank queue, he could not buy 10kg of mealie-meal worth Z$200 billion (US2,22).
“My children had gone for three days without a decent meal when I saw 10kg of maize- meal going for $190 billion at Mbare Msika (a popular market in a poor Harare suburb),” he said.
He had just received his July salary of $2 trillion and had hoped he could do something useful with the money before it lost value.
“At the bank, they were only allowing withdrawals of $100 billion, which meant I had to wait another day before buying the maize-meal but when I came back, it had gone up to $200 billion. I had used part of the money thinking the price wouldn’t change and for a moment I was angry and thought of reporting them to the police,” he explained.
But he decided to continue scouting for food for his children.
Hyper-inflation, which has passed the nine million per cent mark, has meant that the Zimbabwe dollar is losing value daily.
The cash crisis has been aggravated by tight sanctions imposed by the West on President Robert Mugabe’s regime following the veteran leader’s controversial victory in last month’s one-candidate presidential run-off election.
This forced German firm Giesecke & Devrient, which had been supplying Zimbabwe with more than half of its note paper requirements for the past 40 years, to halt its deliveries to the central bank.
The Reserve Bank of Zimbabwe (RBZ), like many government institutions, has been paralysed by the political stalemate caused by Mr Mugabe’s disputed re-election. Gideon Gono, the central bank governor, said he had taken measures to mitigate the effects of the German firms’ decision.
However, the bank’s failure to review the cash withdrawal limits to match the hyperinflation is fuelling a great deal of anxiety among Zimbabweans.
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