Nelson Chamisa
I hear that Banks have stopped giving $USD loans. This will have far reaching ramifications on industry, commerce and the economy at large.
As of June 2023, RBZ reports show that 94% of the loans are denominated in USD while 6% of the total loans were in ZWL. In terms of deposits, 88% of total deposits were in USD while 12% were ZWL. If the USD under the mattresses were deposited into the banking sector, share of the ZWL deposits would be undoubtedly close to 0%. This effectively means that the economy has dollarised.
In view of this, if the news circulating around which to the effect that banks have stopped issuing USD loans is correct, it simply means that the whole economy is cut off the financial system and its demise is close! There is no scope to substitute USD with ZWL because the supply of ZWL is very thin. In addition, with interest rate of 150% per annum, it is not viable to switch to ZWL loans. If the development is true, this situation is as good as taking out oxygen from a living being.
The chaos which will ensue is unimaginable – 49% of Zimbabwean currently live under extreme poverty. The ensuing economic hardships will likely increase extreme poverty and emigration into neighboring countries. The Zimbabwean economic crisis is now a SADC domestic crisis! The country is paying the price to rot in constitutionalism, drought of good governance and a kwashiorkor of leadership! Zimbabwe must return to majority rule, a people’s government and a restoration of fundamental freedoms, rights and democracy. Zimbabwe needs a capable, responsible and accountable government.
Post published in: Business