Zimbabwe’s banks and the economy are critically short of foreign currency, and in the last few weeks, cash tills in most supermarkets have been empty, with banks struggling to release even small amounts to its customers. Most ATMs never have any cash these days.
Shortly after he was sworn in as Zimbabwe’s second president in November, Mnangagwa offered an amnesty to those who had sent money out of the country: if they returned it within three months, they would not be prosecuted and no questions would be asked.
Last week, Acting Information Minister Simon Khaya Moyo said 105 of those who exported cash illegally had returned it. But he said 1166 more people or companies still needed to return cash.
He added that the total outstanding amount still outside the country was $1.3bn and that the deadline had been extended for a further two weeks, to March 15.
Zimbabwe has no currency of its own since it was cancelled in 2009 when an inclusive government came to power and all political parties agreed to use most foreign currencies, particularly the US dollar and South African rand. When the rand decreased in value against the dollar and other overseas money, people abandoned it and concentrated on using the dollar, which increased in value, making Zimbabwe’s imported goods and holidays the most expensive in the region.
Many of Zimbabwe’s groceries in supermarkets are sometimes double the price that they are in South Africa, except basics such as mealie meal.
The Zimbabwe dollar collapsed in 2008 over hyper-inflation because of the collapse of exports and severely diminished foreign currency earnings after the agricultural-based economy collapsed swiftly after farm invasions began in 2000.
The Zimbabwe dollar was abandoned by people on the streets and eventually was no longer printed.
During the optimistic early years of the inclusive government, banks reported customers were once again depositing cash, and some kind of normality returned to the economy.
However, as the 2013 election day grew closer, people began withdrawing cash, mostly US dollars, as many believed that Zanu-PF, the party that collapsed the economy in the first place, would win the polls. It did, and many banks reported staggering withdrawals of US dollars in cash.
In 2016, the central bank introduced limited amounts of a new currency called bond notes into the economy, which provided some immediate relief, particularly because exporters were paid a 5% bonus on their foreign earnings.
Today bond notes are also hardly available and almost no US dollars are seen in supermarkets or tills in other shops.
The only real currency that seems to be available in limited numbers are coins, called bond coins, which are minted in South Africa and cannot be used outside of Zimbabwe.
Most people now use phantom cash, as some call it, and those with bank accounts pay for groceries with debit cards that they can use in shops, but not to get cash out of the banks or ATMs. Poorer people use their cellphones to pay their bills, including electricity and school fees.
However, this is not real money, bankers say; it is phantom cash.
The black market for US dollars has stabilised in recent months, traders say, and a US dollar cash note is now trading at 1.4 to electronic money stored and used via people’s cellphones or in local bank accounts. Bond notes have a slightly lower rate at present.
Independent Foreign Service