On the street, money dealers are offering cash at a premium ranging up to 10 per cent and discounting Rand by a similar margin. All of these developments point to an emerging cash crisis which is likely to become much worse in the next few weeks. The implications are very serious – clients will be fearful that their banks may be on the edge of failure – even if, from a technical point of view, they are sound financially. The business community is discovering that they cannot pay their suppliers even if they have ample funds in the Banks. If this continues, shortages of goods will start appearing and queues might develop for fuel.
The reasons are technical and are linked to a sharp decline in confidence in Zimbabwe and fears of an impending collapse. The reasons are linked to the deteriorating political situation and the almost complete failure of the Government to get to grips with the infighting in Zanu PF and rampant corruption in all State controlled spheres of activity.
With revenues to the State now below the monthly cost of employment, Government is desperately mopping up all sources of liquid cash in the economy to the detriment of all other stakeholders. It is rumored that the Ministry of Finance is using cash balances in the Reserve Bank’s RTGS accounts to meet its own cash needs and that this is the main explanation for the current slowdown in the RTGS system. However at its roots is simply a total absence of confidence and this can only be addressed by a change in government. The beleaguered and faction-ridden Zanu PF regime simply has no solutions to the myriad problems that the country is currently facing.Only a legitimate and democratically elected government will be in a position to extricate millions of Zimbabweans from the life penury and deprivation that they are presently experiencing.