Reserve Bank of Zimbabwe governor John Mangudya has repeated over and over again that there is money in the system but it is not circulating. Why?
A business colleague said it was very easy to solve the cash crisis if new Finance Minister Mthuli Ncube and Mangudya do their jobs.
Ncube just needs to abandon the bond note because it has become currency and is the one fueling the black market. With only one major currency, the United States dollar, this will immediately kill the black market.
While Zimbabwe has multiple currencies, the business colleague said it was better to maintain the United States dollar for the time being because the future of the rand was shaky. Besides, the dollar killed the rand as one of the major trading currencies before the introduction of the bond note.
Ncube intimidated that he wants to abolish the bond note before the end of this year.
The second point, the businessman said was that Mangudya should play his supervisory role more seriously by auditing every bank.
First he could check how many people have more than one bank account and why they need these accounts?
Of course some people might argue that the central bank has no business doing this as it is people’s money, but the truth is that the cash you have is not really your money, it is the central bank’s money.
Every note is clearly market: “I promise to pay the bearer on demand……”
People might not realise how serious this is. But at one point, employees of one company went on strike complaining why their employer had 120 bank accounts but was failing to pay them on time?
Mangudya could also pile pressure on banks to monitor unusual movements of money like some countries do. If so example not more than $10 000 has ever been deposited into your account then suddenly $100 000 is banked, that should ring alarm bells. The bank should find out what that money is for and who is banking it.
When told this would almost be possible to implement, the business colleague said: “It is quite easy. Once people realise that there is a system that monitors their activities they usually stop all criminal activities. Look at the police, the very same police officers that were demanding bribes left right and centre are the very same police that are still manning our roads but they are not asking for any bribes.”