Half of Zimbabwe’s savings were wiped out in six months and the stampede could have been caused by government’s inconsistent policy on indigenisation as investors took out their money because of fears that their companies would be taken over.
Movement for Democratic Change Shadow Minister for Finance Tapiwa Mashakada said deposits in Zimbabwe’s banks stood at $5 billion in December but are now around $2 billion because of leakages.
“Mr Speaker Sir, the international benchmark of savings to GDP is 40%,” he told Parliament when he moved a motion for Zimbabwe to adopt the South African rand at its principal currency.
“It is considered that a ratio of 40% national savings to GDP is requisite enough to make sure that there are investible surpluses or money for on lending to firms and consumers.
“In our situation our savings rate is only 8% of GDP. If companies and individuals and government are not saving, where do banks get that money to lend to consumers?
“In fact, whereas the total deposits that were in the banks by December was about US$5bn, now because of the leakages, the cash that is sitting as deposits in banks is now around US$2bn from US$5bn.
“So we have lost a lot of money in our financial system. So, savings are very critical because they are the basis for onward lending, they are the basis for financial intermediation.”
Zimbabwe is currently facing a cash crisis which has seen withdrawals being limited and cash being sold at a premium.
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