Zim banks run short of money
Tobacco farmers on the receiving end of a financial crisis
AFTER selling the first of their tobacco crop when auction sales opened this week some farmers demonstrated angrily when their banks would not let them withdraw cash from their accounts.
The farmers said they were furious because earlier in the week the Reserve Bank of Zimbabwe, the Zimbabwe Tobacco Association as well as the official Tobacco Industry Marketing Board released a statement that farmers would be able to withdraw R13 000 from their banks after their first sale of the season, and half that amount after subsequent sales.
Farmers blocked the entrance to the tobacco floor and the police arrived with their batons but retreated and then returned in riot gear.
Zimbabwe has largely run out of cash, both US dollars, and its new currency, known as Bond Notes. The Zimbabwe dollar collapsed in 2008 when it had no value.
Farmers said the banks did not have enough cash to honour the pledge they would be paid.
Central bank governor John Mangudya did not answer his phone on Friday.
Zimbabwe Progressive Tobacco Farmers’ Association president Mutandwa Mutasa said: “The central bank should rein in banks so farmers are paid promptly.
“Farmers have to return to their farms to continue attending to their produce. It does not help at all to keep them here for a long time.”
David Masawu, a tobacco farmer, said that the delay meant farmers were running up unnecessary expenses staying in town because they needed to wait for their cash.
“Cash delays are giving us headaches as we now have to spend endless nights waiting for the money to reflect in our bank accounts. It is not good for us.”
Eventually, farmers were allowed to withdraw about a third of the cash they were promised and were told the rest would be available next week.
Tobacco produces about a third of Zimbabwe’s foreign currency.
Zimbabwe is so chronically short of cash it cannot release money to pay for imports for the mines, and has also not allowed airlines, including South African Airways, to remit their recent earnings from its extensive operations in Zimbabwe.
SAA has recently extended its operations in Zimbabwe and is now sending larger aircraft into Victoria Falls since the airport was upgraded and can now operate at night.