Chinamasa says Zimbabweans need to change their dirty mindset to ease cash shortage


HON. KHUPE:  My question is also directed to the Minister of Finance and Economic Development.  Hon. Minister, businesses are slowly closing down, the reason being that they are unable to pay their foreign suppliers.  They are also not able to buy raw materials from outside the country because they are unable to access foreign currency from banks.  Bond notes cannot buy raw materials from outside the country, bond notes cannot pay foreign suppliers and besides, those bond notes are not available in banks. What is Government doing to make sure that businesses have access to foreign currency because this is the money which we need to move our economy forward?

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA): Mr. Speaker Sir, I thank the Hon. Member for the question.  Before she goes to town about access, you must access something that is there.  So, the first step we are taking is to ensure that there is foreign currency to be accessed.  What we are doing is to incentivise those who are exporting.  All of us are earning in US dollars but we do not make US dollars, none of us makes US dollars.  So, the export incentive is primarily intended to build a larger pool of foreign currency so that we can meet the demands of manufacturers.  I recognise the problem you mentioned about shortage of foreign currency to buy raw materials and so on.  I consider it temporary in the sense that we have taken measures through the Central Bank to move away from the previous system of an over liberalised foreign exchange market.  We are now moving towards a managed foreign exchange market.

 We have set out priorities over usage of that foreign currency to address the key priority uses which are importation of fuel and raw materials.  We are building – basically we are going towards there.  The problems you mention are temporary in my view. I thank you.

 *HON. ADV. CHAMISA: Thank you Mr. Speaker.  I thank the Minister for the words that he said about lack of foreign currency.  From what Hon. Khupe said, there is also shortage of local currency, we realise there are bank queues and in this cold weather, people are sleeping at the banks to try and get money.  At one time you were standing there and you said this will come to an end.  You also said Dr. Mangudya will commit suicide if it does not come to an end but he is still alive.  From what you said it seems like you are backtracking from what you had said earlier, the challenge still persists.  Is there anything that is being done by your Ministry to address the challenges because we tend to think the Minister is not aware of the challenges and we think the Minister does not know what to do anymore?

 This issue has affected workers, widows, pensioners and even Members of Parliament have faced challenges in the banks.  What is the Government doing to ease the cash crisis or the liquidity crunch in the country?  I thank you.   

 HON. CHINAMASA:  I encourage Members of Parliament to use plastic money.  Plastic money is not a challenge.  Please understand me Vice President.  There is no country that has a policy which states that all the money in the bank should be in physical cash.  In our country, the deposits in the banks amount to US$7.2bn.  So, it is impossible for us to give US$7.2bn in physical cash of US dollars.   For us to get US dollars, we get it through exports and when we get that money, we then use that money to buy more cash from the Federal Reserve Bank in America. The money that we are supposed to buy fuel, we are now buying money for you to use. What I am saying is that each country says about 10% to 15% of bank deposit should be in physical cash, is that not the case?  Now, when we look at it, we realise that what is in circulation is in line with about 11% but because of people who do not listen, they are the ones who are taking money, hoarding it and it is no longer in circulation.

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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.


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