The Reserve Bank of Zimbabwe has imported US$240 million in cash since March as it moves to address the cash shortages plaguing the local market.
However, it is understood that the market needs more than US$320 million per month to easily transact.
The central bank is currently pushing for a shift from cash transactions to plastic money. Deliberately using plastic money is thought to ease the demand for physical US dollars.
The strictures and bureaucracy involved in importing cash – often associated with anti-money laundering rules and regulations – makes the whole process extremely difficult.
Also, international banking regulations limit the amount of cash that can be imported per day.
“We have been importing between US$10 million and US$15 million per week since the beginning of March to ease the cash shortages
We also need measures to deal with fiscal consolidation, reduce the cost of doing business, improvement of the investment climate and the promotion of free banking are therefore necessary to promote production and confidence within the economy,” RBZ Governor Dr John Mangudya said.
He acknowledged that importing cash was not an overnight process as banks were subjected to Customer Due Diligence (CDD) by their correspondent banks.
A correspondent bank is a financial institution that provides services on behalf of another, equal or unequal financial institution.
Government has already started reducing the civil service wage bill.
According to the latest report from the Auditor General, Government employs more than 500 000 workers. More than 22 000 vacant posts, except those deemed critical, have since been abolished. The cost-cutting measures within the civil service are expected to save more than US$400 million annually.
“On the long-term solution, all we need is to produce, produce and produce goods and service so that we can export to other countries and satisfy the local consumption.
“This will allow us to deal with our trade deficit of around US$2,5 billion annually since 2009. All we need is to have good investment climate and ease of doing business policies to lure investors in our country which has so much potential in terms of investments.
“The whole formula needs to be rest for meaningful production to take place and if we provide all these solutions we are home and dry,” he said.