Current efforts by Zimbabwe’s central bank to restore confidence in the country’s banking sector are proving to be an exercise in futility amid concerns by analysts that the authorities could be applying lipstick to a frog.
Queues continue to form at commercial banks in the capital Harare, more than a week after the Reserve Bank of Zimbabwe (RBZ) introduced new Z$5 and Z$2 notes as well as Z$2 coins on November 11 with a promise that the injection of the notes would help ease a liquidity crisis that has bedevilled Zimbabwe since 2016.
RBZ governor John Mangudya announced in October that the central bank would gradually inject about Z$1 billion of cash into the market over the next six months.
However, the injection of the first batch of the new Zimbabwe dollar notes and coins has done little to quench the thirst for liquidity, with some depositors saying they have to queue for up to four hours outside the bank before they get their money.
“Nothing has really changed because we still queue for several hours in order to access our money,” said Philip Kawanzaruwa, a depositor with one of the commercial banks in Harare.
The banks are limiting withdrawals to between Z$50 and Z$300 per individual per day.
“This daily withdrawal limits are meaningless, given that prices of most commodities and services have shot up while some of the banks continue to stick to limits that were set more than three years ago,” adds another depositor Misheck Bhunu.
Analysts say the current economic situation in Zimbabwe demands more than mere currency or other reforms.
“The challenges facing Zimbabwe, including the liquidity crisis, demand more than tinkering with the economic levers. Unless we embark on well-meaning political reforms, everything else we do will be akin to applying lipstick to a frog,” political analyst Donald Porusingazi said.
He said Mangudya and Finance Minister Mthuli Ncube are setting themselves up for failure as long as they continue to embark on economic reforms that are not backed by a fairly robust restructuring of the political system.
“Like others before them, both Ncube and Mangudya are destined to fail as long as they continue to push through economic changes without the necessary alterations to the political architecture of the country,” the analyst said.
He cited the scourge of corruption, noting that none of the economic reforms would work as long as lip service continues to be paid to ridding the country of political cartels behind a thriving foreign currency black market.
At least two commercial banks are being investigated by the RBZ after they allegedly released large sums of the new notes and coins onto the black market on the very same day that the new money was released.
However, it has been more than a week since the central bank announced it was investigating the two financial institutions and still no word on the outcome of the probe.
This has left many Zimbabweans wondering whether anything will come out of the latest attempt at economic reforms or it’s just another case of the authorities splashing lipstick on frog.
JN/APA