Millions face hunger as Zim runs out of money

Fidelity Printers, the state-owned company that churns out banknotes for the
Robert Mugabe regime, was thrown into a crisis early this month after a
German company stopped supplying banknote paper because of concerns over
Zimbabwe’s recent violent presidential election. Two-thirds of the
1,000-strong workforce was ordered to go on leave, and two of the three
money-printing shifts were canceled.
Fidelity Printers is regarded as Mugabe’s lifeline because it prints the
money he uses to pay the police, soldiers and intelligence organs that keep
the regime in power. But what would happen if the regime can’t pay the
security forces on which it relies to keep up its brutal campaign?
On the streets there has been an immediate cash crunch, with the prices of
all items from bread to beer skyrocketing, since the German company pulled
the plug on its relationship with the country.
Independent economic analyst in Harare, John Robertson, told Newsreel on
Tuesday that people’s basic spending is far higher than their daily cash
withdrawal limit from the banks. He said for people to make “useful
purchases, they have to queue every day for a week” to have enough money.
But he said “by that point the prices would have gone up anyway, so people
can’t keep up”.
Robertson said the few remaining companies in the country are facing closure
and have already shrunk in size in an effort to stay open. But he said that
all stock is imported, and because local suppliers are constrained by price
controls “they can’t make a profit, as controlled prices are far below the
cost of production”.
Robertson added that the government is considering approaching Chinese firms
to import banknote paper, but he says it is likely the country will run out
of currency before then.
The question for Zimbabweans now is how they can keep food on the table,
when there is no money to pay for basic food that already costs more than
the average Zimbabwean earns – that is if they can find it.
Robertson said people have already changed their lifestyles to deal with out
of control inflation. He said “dietary habits have changed and people are
surviving on basics, so malnutrition is already setting in”. He added that
“a great many more people will be suffering in the future”, because the
reality is, that with Zimbabwe’s poor agricultural turnover, people will
have to resort to importing food. But he said “prices are beyond the means
of average Zimbabweans, so many more people will go hungry”.