Cash crisis returns as loaf of bread hits Z$100 million-dollar mark

By Tichaona Sibanda
24 April 2008

Cash shortages and queues are back once again, as the dithering over the presidential result shows little sign of ending. In the meantime the economy continues to flounder, without a leader to take stock of what needs to be done.

Our Harare correspondent Tagu Mukwenyani said the cash crisis has come back to haunt the country because of the massive inflation, despite the Reserve Bank introducing a Z$50 million denomination note in February. In the last week, the price for a loaf of bread has jumped from Z$65 to Z$100 million, while one egg now costs Z$20 million.

‘These are the consequences of a power vacuum currently prevailing in the country. This was the last thing the country needed in an economy whose inflation is hovering above 165,000 percent,’ Mukwenyani said.

In the capital Harare, some banks are reported to be running out of cash whilst some are only allowing clients to withdraw Z$30 million per day. People are reportedly spending five to six hours in bank queues – sometimes more.
The country’s economy has been in free-fall over the last decade. At least 80 percent of the population is living below the poverty line and an estimated three million people have fled into South Africa.

The government has done nothing to deal with these crises, which have been worsened by Mugabe’s refusal to relinquish power, despite his electoral defeat to the MDC. Mukwenyani believes the regime is currently trying to buy time in preparation for a presidential run-off: ‘It’s shocking that the presidential results are still not out three weeks after the elections, but political analysts believe the regime has tried but failed to change the outcome of the poll,’ Mukwenyani said.