Cash

ZCTU will hold a general council meeting on Saturday, which is expected to deliver concrete plans with regards to when the action will go ahead, ZCTU general-secretary Wellington Chibebe told The Zimbabwean. There is as yet no fixed date, but we will be relying on input from the various labour forums, which will guide what form the mass action should take.

A job boycott in September organized by the trade union body was largely a flop, after workers ignored the call to stay away. The mass action was aimed at pressuring the government to hike workers’ poverty wages.

Chibebe said the government had not yet responded to a ZCTU letter requesting a speedy solution to the cash shortages, which are forcing citizens to queue for days as they attempt to withdraw money from financial institutions.

The letter, dated November 9 and addressed to Finance minister Samuel Mumbengegwi, reads:  The ZCTU gives your ministry 14 working days to address the situation and also to come up with a long-term solution, failure of which workers would be forced to mobilise for action to force the government to address the grave situation.

Chibebe said the two weeks elapsed Friday.

The deepening shortage of banknotes has forced many Zimbabweans to keep money at home. With inflation running at almost 14,840 percent, retailers and other traders have not been making deposits. Banks have limited individual withdrawals to a maximum of Z$20 million.

In a cocktail of desperate measures, the Reserve Bank last week hiked the cheque limit that can be accepted for clearing by 150 percent to a maximum Z$500 million in measures aimed at curbing the cash shortages.

RBZ governor Gideon Gono this week ruled out any form of intervention on the acute currency crisis, charging that there was Z$58 trillion in circulation and that the shortages were largely a result of speculation by black marketers.

With a total of Z$58 trillion in cash currently in issue and in circulation, the current shortages are principally a result of underground parallel market trading activities, Gono told a press briefing this week.

The money squeeze, now in its second month, has worsened the plight of Zimbabweans grappling with soaring unemployment and the country’s worst economic crisis since independence from Britain in 1980.

The ordinary person on the street no longer has confidence (in the banking sector) and even if you pump in a lot of money people will merely take it outside the banking system and keep it at home, said Witness Chinyama, an economist at Kingdom Financial Holdings.

Bank officials said cash had joined a rising number of basic commodities like fuel, sugar and maize meal in short supply on the mainstream market but more readily available on a thriving black market at a steep premium.

Chinyama said the situation had been worsened by hyperinflation, the highest rates in the world.

Interest rates offered by commercial banks that are negative after adjusting for inflation were also a deterrent for depositors.

Mugabe, 83 and in power for 27 years now, denies he has mismanaged the economy and charges that it has been sabotaged by local and international opponents over his controversial seizure of white-owned farms for redistribution to landless peasants.