Who is withholding Zimbabwe’s cash- banks or people?


Looking through the governor’s power point presentation, there is no mention of ‘Foreign Currency Receipts’ in all of the 22 slides.

To breakdown the governor’s numbers, Zimbabwe’s ‘Foreign Currency Receipts’ come from exports (60 percent), Diaspora Remittances (28 percent), Foreign Direct Investments (5 percent) and External loans, 8 percent (the total actually comes to 101 percent, but why quibble about the 1 percent?)

Going by this Zimbabwe would have earned $1.6 billion from exports, our friends and family in the diaspora would have sent some $784 million back home and the country would have attracted some $140 million in foreign direct investment (FDI) as well as accessing $224 million external loans.      

Based on last year’s data, $1.6 billion worth of exports by half year is attainable given that between January and September, last year the country had earned $1.8 billion in exports.

According to Zimstat, exports had grossed some to $724 million by March this year.   

Official data, however, shows that during the first quarter Zimbabwe received $180 million in diaspora remittances so assuming that all things are equal that amount would have doubled to some $360 million by half year.

But according to the Governor’s figures remittances at $784 million have already surpassed the full year projection of $750 million in only six months.

Central bank figures on FDI show that net foreign direct investment  was $254.7 million against $399.2 million in 2015 so $140 million FDI in the half year could mean an improvement in the full year but still illustrates weak investor sentiment.   

So, are the banks holding on to all the money?

A half-year report on the banking sector by local brokerage firm, IH Securities shows that of the $160 million in bond notes so far released by the central bank into circulation, banks only held $9 million worth as of April.

Zimbabweans, who still have fresh memories of the horrors of hyperinflation, prefer to hold on to their cash.

Their insistence on physical cash is proving a headache for the RBZ and banks in general.

But if, less than eight years ago you pushed a wheelbarrow  full of money to buy a loaf of bread, you would understand the anxiety. – The Source



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The Insider

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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