Cash shortage has Zimbabweans spending the night in bank queues
Issued on: Modified:
Photos show Zimbabweans in the city of Bulawayo stuck queuing long hours to withdraw money as the country faces acute cash shortages.
Zimbabwe is currently enmeshed in a multi-faceted economic crisis. On top of that, cash shortages are making life difficult for not just banks, but citizens.
Cash has long been an issue in Zimbabwe, which abandoned its own currency in 2009, after hyperinflation rendered it useless. It started using many other foreign currencies, especially the US dollar (USD) and the South African rand. Zimbabwe now imports its money instead of printing it. Currently, it isn’t importing enough foreign currency to keep up with the demand.
There are many reasons for this shortage. Zimbabwe is currently facing a liquidity crisis and the economy is struggling. Moreover, the country currently imports more than it exports, so companies aren’t bringing in the foreign cash needed to make the system go. The economic problems have meant more foreign investors are pulling out of the country. Others blame corruption for this shortage.
Authorities, on the other hand, blame the crisis on the fact that Zimbabweans still shy away from plastic money and many mistrust institutions and prefer to have cash in hand. Central bank governor John Mangudya called out “cash hoarders” and authorities say that too many people are withdrawing their salaries and bonuses.
Fearful of the crisis, many companies and individuals have stopped depositing their money, adding to the shortage.
Whatever the reason, Zimbabwe is faced with the national cash shortage and people in Zimbabwe’s second-city, Bulawayo, are now spending hours queuing for cash in banks and supermarkets, according to activists working with the NGO Matabeleland Institute for Human Rights. This organisation works to promote the rights of historically disenfranchised people in this region.
People queue for cash in Bulawayo Central Business District on April 20, 2016.
“People told me they slept there to be at the front of the queue”Benedict Zimuto (not his real name) is the General Secretary of the Matabeleland Institute for Human Rights. He visited one of the long lines and spoke to people waiting there.
The cash shortage in Zimbabwe began about three to four weeks ago. Basically, there is just not enough cash in circulation. Many banks set up limits as to how much money you could withdraw and when. But the situation has been getting worse and now it’s getting difficult even to get cash from the banks. I began noticing the long queues as of the end of second week of April.
When I went to speak to people queuing outside of banks and grocery stores in Bulawayo, some told me they had slept there to be at the front of the queue in the morning [Editor’s note: The amount of money that people can withdraw per day has been reduced by many banks, one reason for this pile-up]. Others said they had gone to banks for the past two to three days in a row and still weren’t able to withdraw any money.
Long lines of people waiting for cash spiral through Bulawayo Central Business District on April 20, 2016.
Because many supermarkets in Bulawayo have ATMs, for the past three weeks, supermarkets have seized on an opportunity to maximise their sales by requiring you to buy groceries if you want to withdraw cash. If you want $100 USD, for instance, you have to buy $30 USD in groceries to get $70 USD in cash.
The government has moved in and is trying to encourage banks and citizens to move into mobile money, but due to many factors -including a lack of awareness about new technologies as well as a lack of appreciation of technological initiatives and poor network reception especially in rural areas - people still prefer to carry hard cash.
People wait for cash in Bulawayo Central Business District on April 20, 2016.
We are also likely to see the situation worsening next week (April 25 to May 5) because schools in Zimbabwe open on May 3 and parents will need to withdraw money for school fees. Moreover, it is the end of the month, so many people will want to cash out their salaries.
Though the government acknowledged that there is a cash shortage, they blame it on people trying to “sabotage” the ZANU-PF regime [Editor’s note: Robert Mugabe’s political party]. People here, however, feel like the government is failing them.
Frustrated with the failing economic situation and the lack of solutions from Robert Mugabe’s authoritarian government, many Zimbabweans took part in massive street protests in the capital, Harare, on April 14. These were the largest anti-Mugabe protests in 16 years.
That said, Observers in Harare said that they had not yet seen queues forming outside ATMs or banks like in Bulawayo. For Zimuto, the outer regions of the country are often overlooked by the centralized government.
Zimbabwe is a centralised country where everything is done in Harare. The people of Bulawayo and Matabeleland region have always complained of marginalisation and subjugation by the state. This cash crisis is another example. Banking institutions (which are all controlled and headquartered in Harare) will prioritise the centre and leave the peripheries suffering.
Many factors have contributed to the economic crisis, though experts often say the woes began in 2000, when the government launched a controversial policy of nationalising commercial farms and distributing land to black farmers. The formerly booming agricultural sector has since floundered.
Threats of increased nationalisation of other sectors, corruption and other fiscal pressures mean many companies and foreign investors have withdrawn from Zimbabwe or reduced operations. This has contributed to widespread unemployment.