President Robert Mugabe’s government announced on Saturday that it was banning the ”hoarding” of cash, in an attempt to deal with a desperate shortage of banknotes in Zimbabwe.
The state-controlled daily Herald newspaper quoted finance minister Herbert Murerwa as saying that according to regulations passed under Mugabe’s sweeping personal powers, ”the practice of hoarding cash would be penalised”.
It said that the law was to ”compel traders and parastatals (state-owned companies) to bank cash not immediately required for the purposes of their businesses.”
Murerwa said a special unit, the ”banking transactions promotion unit,” would be set up to enforce the new law, backed by police and the central bank.
No further details of the legislation were reported by the Herald, and commercial bank executives said they knew nothing of the new law.
Mugabe’s presidential powers give him authority to pass almost any legislation for up to six months.
The scarcity of banknotes has forced thousands of people to queue outside banks, sometimes for days, to try to withdraw their salaries. Withdrawals are limited to 5 000 Zimbabwe dollars.
Armed riot police are regularly called out when frustration boils over into disorder.
Economists say the shortage is a consequence of inflation that in the last six months has effectively doubled the quantity of cash needed by ordinary Zimbabweans for their daily necessities.
”It’s a threat which the government hopes will make people get rid of their cash,” said economist John Robertson.
”However, the guys in high places who have caused this and who have the most cash are the ones who will get away with it. They keep the cash because it is a commodity that can be traded at a profit.”
Reports in the independent press this week said that the central bank had set up a ”special facility” to give top government and ruling party officials access to almost unlimited cash.
Banking sources who asked not to be named said ministers and ruling party MPs last week drew bundles of about 25 million Zimbabwe dollars from the state-owned Commercial Bank of Zimbabwe.
Last week the government announced it would withdraw the current Zimbabwe dollar 500 note — the current highest in circulation — at the end of September and replace it with a new one, and simultaneously introduce a 1 000 dollar note.
This week central bank officials said Zimbabwe dollar ”travellers’ cheques” with a value of up to 100 000 dollars would be issued to ease the cash shortage.
Robertson said the new measures fell far short of dealing with the root of the crisis.
”The reason why the government has done this is because they don’t want to do what they should do, which is increase interest rates to give people an incentive to stop hoarding and keep their money in the bank,” he said. ‒ Sapa