Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono yesterday (Friday) said that sanctions imposed by Western countries had led to the drying up of foreign currency inflows into the country affecting the smooth running of the economy.

"Before the land reform programme, Zimbabwe got assistance from many countries. But this assistance stopped after President Mugabe and government took land for redistribution," Gono said.

Gono said in the period 1980-1999, Zimbabwe got US$522 million from the International Monetary Fund, US$1.4 billion from World Bank, US$525 million from African Development Bank and US$2.5 billion from other countries as balance of payment support. He said since 2000 up to date, Zimbabwe has not received any balance of payment support from multilateral institutions. But he said the country will settle all its debts.

"We shall pay all our debts. This is why I am asking you to go all out and till the land and avoid corruption. We will be able to pay all our debts," Gono said.

Zimbabwe escaped IMF sack in 2005 having reneged in settling its arrears. An eleventh hour payment saved the day for Zimbabwe. Zimbabwe retained its membership of the Fund but without voting rights as well as borrowing powers. Zimbabwe is in critical need of balance of payment support after the dismal performance of the country’s exports due to the disturbances caused by the haphazard land reform programme.

Gono accused some of the governing party’s senior officials – whom he described as "cash barons" – of stashing cash in foreign countries.

"We had $67 trillion in the banks at the end of day yesterday (Thursday) but today (Friday) we can only account for $2 trillion in the banks. By this I mean there is only $2 trillion in the banks.

"If the banks and the public do not have money then who has it? It is the cash barons," said Gono to the applause of the thousands of ruling Zanu PF supporters after he was asked to address the congress on the ongoing cash shortages in the banks.

Gono however fell short of disclosing the measures that the central bank will take to restore cash viability in the banks. He said the central bank would soon introduce a raft of measures at a later date and accused the unnamed Zanu PF officials of running offshore foreign currency money transfer agencies.

"We know that people are sleeping in queues at the banks as a result of cash shortages. We have put in place measures which are in our secret bag but we will not disclose them publicly before they come to fruition."

Ruling Zanu PF members such as former army chief and now business tycoon, Solomon Mujuru, have in the past been accused of running such ventures, which led to the closure of many foreign currency-trading agencies in the country, by the central bank.

---

Share This Story On:

Average user rating