Why is there no money at the banks but plenty on the streets?


I thought to myself I might not be able to investigate, but I can just observe. And this was what I did.

I remember when cash shortages began way back in 2002, the Zimbabwe Congress of Trade Unions said cash shortages were mainly due to lack of confidence in the government and in banks.

This seemed to be what was happening.  Zimbabweans had every reason not to trust banks.

John Chikura of the Depositors Protection Corporation says six banks have closed down and some 54 909 depositors lost their money.

Only 11 620 have been paid the mandatory $500 paid to every depositor, a system that only benefits those with less than that in their bank accounts as they get all their money back.

A colleague said people still have money  but no longer keep it in the bank because they no longer trust banks.

Besides, it is impossible to get your money from the bank.

“We now call it Asian banking, which means keep your money under your pillow.”

Indeed most people are keeping their money at their homes but unfortunately some have become targets of robbers.

In June, The Herald reported that robbers got away with $80 000 stashed in a car.

Criminals broke into a house in Belvedere in Harare last month and got away with $20 000 cash.

A maid recently appeared in court for stealing $3 000 from her boss.

People have money, and there is plenty of it on the streets of Harare, Bulawayo, Gweru and even Johannesburg.

Walking around, you see people with wards of cash, selling it.

A Zimbabwean only identified as Garikai who is a money trader in Johannesburg said he was getting as much as $20 000 in bond notes every month smuggled to him and wished the present cash crisis could continue as he is cashing in on it.

The cash shortages have created cash barons with connections in banks and politics.

The informal sector which now accounts for more 60 percent of Zimbabwe’s economy is also fuelling the cash business because entrepreneurs do not bank their money as they will not be able to get the amount they want when they want it.

During the 2007-2008 crisis for example, then Central Bank governor Gideon Gono said that there was $67 trillion in circulation in Zimbabwe but the Central Bank could only account for $2 trillion.

Continued next page


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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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