New Zimbabwe.com

Cash crisis: Mnangagwa says $1.5 bn liquidity support facility on cards

PRESIDENT Emmerson Mnangagwa, who assumed power in a military coup last November, has admitted the cash crisis in the country is causing great hardships for ordinary Zimbabweans.

Addressing thousands who gathered at the National Sports Stadium in Harare to commemorate Zimbabwe 38th Independence anniversary, Mnangagwa said the liquidity crunch was a significant issue which could not be addressed overnight.

Zimbabwe has been grappling with a serious cash shortage in the past few years which has seen citizens sleeping in bank queues in an effort to access their hard earned cash.

The introduction of the bond notes, a surrogate currency brought in under the guise of an export incentive in early 2017, has failed to improve the situation.

The currency, which was said to be at par with the US Dollar on inception, is now being exchanged at almost 1:60 to the greenback on the parallel market and has disappeared from the formal banking system together with the dollar.

But President Mnangagwa on Wednesday acknowledged the scale of the challenge and promised government was creating concrete plans to get around the crisis.

He said his government which has been on an investment offensive, was putting in place measures to resolve shortages of cash by mobilizing foreign finance from regional and international institutions.

“In the same breath, the Reserve Bank of Zimbabwe, working with the Africa Export Bank, has put in place a $1.5 billion facility earmarked for both liquidity support and provision of guarantees for investments into the country,” he said.

The President said government was also increasing cash and currency importation while opening up economic engagement and enhancing exports to increase supply of foreign currency.

“I am optimistic that these efforts will not only improve our credit rating, but will unlock fresh capital to finance our development agenda,” he said.

The cash crisis has reached alarming proportions, with local banks now giving out coins to depositors, in some cases in small five cents denominations.