The Zimbabwe cash shortages which have dogged the country for more than two years will ease within the next two months central bank governor John Mangudya said.
He said the country had imported $400 million and will also draw from the $1.5 billion Afreximbank loan facility to push more cash into the banking system.
“What I want to promise the nation is that within the next two months, the queues are going to be minimised. Starting from the end of this month, we should see increased supply of cash on the market as we get more money from tobacco, gold exports as well as increased supply from our lines of credit,” he told the Sunday Mail.
The easing of the cash crisis will be a major boon for President Emmerson Mnangagwa ahead of the crucial elections as this is one of the biggest problems the electorate is facing.
The central bank has made similar promises before but they have all come to nothing.
But Mnangagwa is facing a crucial election and will want to ensure that he gains the confidence of the ordinary citizens to get the mandate he needs to implement his economic reform otherwise he will be booted out and make history as one of the shortest serving presidents of Zimbabwe.
Mnangagwa already seems to have won the confidence of the business sector and the international community because of his focus on business rather than politics and only needs to ensure that the elections are free, fair, transparent and credible.
Below is the full explanation of how Mangudya wants to resolve the cash crisis according to the Sunday Mail.
When we are taking about cash shortages, it is important that we deal with the issue by first looking at economic fundamentals.
There are basically two major economic fundamentals that are causing the cash shortages..
The first one is that we have a current account deficit, because of the trade deficit. That is a result of our imports being higher than our exports.
The other fundamental aspect is that our expenditure in Government is higher than revenue.
Government is trying to address these two fundamentals so that our economy can function properly by increasing production so that we can build the confidence that is required for any economy to function properly.
This is why Government’s thrust on opening up Zimbabwe for business is very fundamental and critical to deal with those two fundamental challenges.
When we open up the economy for business, it means we are attracting foreign and local investment.
It means that you are improving the cost of doing business in Zimbabwe, which are critical to enhance business confidence and to enhance production.
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