President Promises Strategies To End Zimbabwe’s Cash and Forex Challenges

President Promises Strategies To End Zimbabwe's Cash and Forex Challenges
Image Credit: Reuters

President Emmerson Dambudzo Mnangagwa promised that the Zimbabwe government will announce strategies to alleviate cash and foreign currency challenges that have resulted in long queues and threats of company closures due to lack of raw materials in the country.

The Zimbabwean leader was speaking during the launch of the women’s bank in Harare yesterday.

“I am aware of the cash and foreign currency challenges which are a result of various reasons,” the President said.

“My government is seized with the matter and will in due course announce comprehensive strategies to conclusively alleviate the problem.”

Foreign currency shortages in Zimbabwe have resulted in delays on the importation of goods and raw materials used by the manufacturing sector.

Companies have been reported to be turning to the black market as the central bank rationalises foreign currency allocation.

“I urge our industry, commerce and SMEs alike to focus on business models that generate foreign currency for the country,” the Zimbabwean leader said.

“Banks should be active participants in distributing the scarce foreign currency resources in line with ‘know your customer’ principles with the aim of supporting growth sectors and foreign currency initiatives.”

Zimbabwe has been having cash shortages since 2016 and the Reserve Bank of Zimbabwe brought in the bond note to easy the cash crunch.

The bond note, which the central bank claims to be at par with the United States Dollar, did not end the cash shortages in Zimbabwe as the black market becomes the source of the legal tender in the country.

In response to the liquidity challenges, the Reserve Bank of Zimbabwe (RBZ)  brought in the bond note which it claims to be at par to the United States Dollar but the problem has persisted.

“We should continuously encourage our banking public to use plastic money for their transactions,” said the President.

Consumers have in the past complained that use of plastic money and mobile money has resulted in the three-tier system with those using bank cards having to pay more than those using cash.

Shortage of money and foreigh currency has led to the rise of the black market with money changers sprouling in the Harare Central Business District.

Depurty RBZ governor is on record stating that the shortage of cash is also the shortage of foreign currency in Zimbabwe.

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