Cash Crisis: Net Closing in on Money-launderers

Sleeping in banking queue in search of the elusive dollar, selling cash for a profit has become a normal, daily routine for an average Zimbabwean. 

No, the government is seeking to clamp down money launderers as a solution to address the cash challenges being faced by the country, a cabinet minister has said.

Addressing delegates to the Chamber of Mines Annual General Meeting here last Friday, Finance and Economic Development Minister Patrick Chinamasa said the net was closing in on people holding on to money for speculative purposes.
People Sleeping Waiting for Cash in Zimbabwe

Minister Chinamasa said the primary causes of the cash shortages were the physical deficit, low production and indiscipline in the economy. He said the introduction of incentives on exporters, coupled with naming and shaming those externalising money, were some of the measures being put in place to address the challenge.

“As long as we borrow to balance my books, it means I am creating artificial money, which is why the promotion of plastic money,” said Minister Chinamasa.

“But also, in order to take the physical cash, the US dollars, we take money from the nostro accounts to buy the physical cash from the Federal Reserve, that is foreign currency that should be used to buy your machinery.

“The other challenge is low productivity and that is why we introduced the incentives for exporters.
“Then there is the indiscipline in the market. I now have the figures of people who just send money out of the country, our money and we are now closing in on those culprits.

“There is a lot of market indiscipline that we are addressing. No one is going to complain when the net closes on these culprits. What people do not know is that we have laws in this country which criminalises acts such as money laundering.”

Minister Chinamasa said the current cash shortages were also a result of the economic transition and structural shift from formal to informal economy.

He said there was no way tobacco farmers and artisanal miners could get all their money as cash from banks. Instead, he encouraged them to open bank accounts and use plastic money where possible.

“When tobacco was grown by 2 000 farmers, they had bank accounts. Except to take cash to pay their workers, everything else was done through writing a check.

“Now with the structural shift that happened arising from our land reform, where we had 2 000, we now have 97 000 small scale farmers who have never known what a check is and they have no bank accounts,” he said.

“Their knowledge of money is that it must be in cash and not in a bank.” Minister Chinamasa encouraged Zimbabweans to change their mindset and promote the use of plastic money.

Zimbabwe has been facing the cash shortages since April last year. - Sunday Mail

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