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Zimbabwe's deafening cash crunch

Zimbabwe's deafening cash crunch

Zimbabwe

Zimbabwe’s economy continues to worsen and the country is now running out of cash

Citizens are forced to make long queues for hours as the central bank has limited bank withdrawals.

Since March, the economy grappling with a devastating drought, has faced a shortage of notes.

We are doing an annual trade deficit of about 3 billion dollars

The southern African country has been using a mix of different foreign currencies since its own currency collapsed in 2009.

“What we are going through right now in Zimbabwe right now is not a cash crisis it’s an economic crisis. The cash crisis is a result of a situation that has been building up over quite a long time. So you have got a combination of government policies that have not worked out in terms of investment into the country, in terms of employment into the country, in terms production in the country,” said social activist Evan Mawarire.

Zimbabwe’s worsening economic difficulties has also seen the country’s trade deficit widen to 3.3 billion US dollars in 2015 from $400 million a decade ago.

Financial journalist, Nelson Banya says, “We are doing an annual trade deficit of about 3 billion dollars. What that basically means is we have more money leaving our economy than what we are bringing in and the situation has been made worse by the monetary policy intervention which was announced on the 4th of May, where the governor of the Central Bank announced that there will be a token currency to circulate side by side with the foreign currencies that are already in circulation,”

Zimbabwe has already imposed restrictions on imports of a list of basic goods, mainly from South Africa, to deal with a subdued industrial production and stem outflow of scarce dollars.