Chinamasa grilled in Parliament over cash shortages

HON. CHINAMASA: Mr. Speaker, thank you very much to those who have raised this issue. It is very important so that we understand the cause of the shortage. The causes of the shortage is that all our payments, certainly from Government and even from the private sector, are RTGs deposits into their bank accounts. Those deposits are not represented by physical cash – US$ or bond notes but as always, we embrace the electronic form of transfers  and business will move smoothly with minimum disruption to the economy which currently is the case.

Hon. Holder asked me a question – are people’s money in the banks safe and I said I can guarantee that those deposits are safe. The only problem is that you cannot withdraw $8 billion. Currently, the total deposits are $8, 7 billion. Now, there cannot be any expectation to withdraw $8, 7 billion in cash because that cash is not there. We do not have a currency of our own. We have to import US$ and we pay for importation of US$ in the same way that we pay for importing a car. We have to pay to the Federal Reserve of the United States of America.

The point I want to emphasise, I understand there is a problem but it is not to the extent that in fact people would want us to believe. True, whether people want to withdraw amounts and those are the people who are on the queues, yes there are challenges because the banks do not have the cash and these are issues that we are seeking to address. I hope that in the course of time, we should be able to find a solution but clearly, all the economies are now running on the basis of a cashless society and I do not think anyone of us here has been unable to transact for as long as you want to transact electronically. I thank you.

HON. HOLDER: My supplementary is that the Minister has explained eloquently but my question is – in the mining sector there is chrome, diamonds, gold and all sorts of minerals that have not been paid cash. What is happening to that money and why can we not have our own reserves of gold? Where is it going to? That is where my question is because you are being paid 70%. Of that 70%, 30% is going into transactions. So, the 70% is bond and some US$. So, I want to know. At the end of the day you are saying we cannot withdraw but we are mining and exporting, so where is that money going to?

HON. CHINAMASA: Mr. Speaker, I am very grateful to Hon. Holder for his question because it affords me an opportunity to explain very basic economics. As the august House will be aware,  we have been growing production of our gold from 12 metric tonnes in 2013 to 24.5 metric tonnes last year.  This year, we are anticipating or projecting to reach 30 metric tonnes.  Now, the question is – where is that money? 

We are exporting gold and where is that money going? I can answer it in two ways.  First, he acknowledges and admits that the artisanal miners, not the primary producers; the artisanal miners are being paid for the gold that they deliver – 70% in US dollars.  In other words, 70% of the gold that we have exported and paid for in US dollars – we are paying the artisanal miners.  Some of the foreign currency that is earned through gold, gold is one of our major export earning items and a lot of that foreign currency goes to the importation of fuel, electricity and essential things that are necessary to drive this economy.  And, for the Hon. Member to try to say we should not have fuel and electricity because we are producing gold is I think very unreasonable.  I thank you Mr. Speaker.

HON. MAONDERA:  Thank you Hon. Speaker.  My supplementary question to the Hon. Minister is that, whilst he is saying we should go electronic in transacting as a way of alleviating cash shortages; surprisingly most Government departments are not electronic.  They are refusing swiping, they are refusing RTGS but are insisting on cash.  So, is it not hypocrisy that the Minister is saying we should be electronic yet the very same Government departments that he superintends on are refusing – [AN HON. MEMBER:  VID for example.] – So, how can that be operated?

HON. CHINAMASA:  Mr. Speaker Sir, I am again grateful for the question.  Not everyone whom we want to transact business with electronically has been able to do so and not through their own fault.  This has been an issue about the supply of point of sale machines which like I pointed out in my answer, we have now upped the supply from 45 000 to 70 000 and that should improve the extent to which we can transact electronically.  We are gunning to increase the supply to 120 000 point of sale machines; which means that anyone doing meaningful business will be required by law to transact their business electronically, which currently is not the case.

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