NO QUICK FIX TO CASH SHORTAGES FOR ZIM
HARARE - Finance and Economic Planning Minister Patrick Chinamasa, says the prevailing cash shortages will not disappear “overnight,” and urged people to be patient as Government starts implementing measures to address the shortage of banknotes.
He also hinted that Government may consider building gold stocks to back up the local currency in the event it decides to reintroduce it.
Addressing the 2018 postbudget seminar organised by the Confederation of Zimbabwe Industries, Mr Chinamasa said the shortage of cash had largely emanated from high level of expenditure of Government and widening budget deficit being funded through Treasury Bills.
The TBs had resulted in excessive “printing” of money and this had driven real money out of circulation and replaced it with bank balances, Mr Chinamasa said.
“There will be no quick fix to the cash shortages. . . it will happen but not overnight. That is why we need to increase exports and keep an eye on imports coming into the country,” said the minister.
Zimbabwe has grappled with cash shortages since April last year with authorities blaming externalisation, the hoarding of cash and depressed exports and low foreign investment.
It is understood that about $3 billion was externalised from Zimbabwe since 2015 and the Government has since granted a three-month moratorium within which individuals and corporates that externalised the money and assets are expected to bring them back.
The amnesty stretches from December 1 to February 28, 2018. The government will neither ask questions nor prefer charges against those that will be repatriating the money.
In his inauguration speech on November 24, President Mnangagwa pledged to resolve the country’s cash shortages.
Mr Chinamasa said while it would be imperative to address economic fundamentals necessary to re-introduce the local currency, the Government may also looking at building gold reserves to back up the Zimbabwean dollar. –