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Cash Shortage Looms

ZIMBABWE is set to experience serious cash shortages after a German company halted delivery of banknotes to the country this week in protest at the worsening political and socio-economic situation.

 

The move is expected to put the squeeze on a government which has survived on the printing of money for much of the tenure of Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono.

Information at hand shows that the German company, Giesecke and Devrient, said it would no longer do business with Fidelity Printers, an RBZ subsidiary responsible for printing money and bearer cheques.

Giesecke and Devrient has been doing business with Zimbabwe for the past 40 years.

Resultantly, Fidelity was forced to send all its workers on paid leave until August 4 as the RBZ now struggles to come up with a strategy to meet rising cash demand brought about by hyperinflation.

However, Gono said the central bank had put in place “pro-active and appropriate” strategies to counter these developments. He gave assurances to the banking and transacting public that the RBZ was on top of the situation.

With money printing now out of commission, Fidelity has been forced to scale down its working hours from 24 hours to just eight hours to cater for the Commercial Division, which is responsible for printing documents with security features.

Giesecke and Devrient said in a statement that it has stopped delivering banknote papers to Zimbabwe on July 1 in response to the political tension in Zimbabwe.

“Our decision is a reaction to the political tension in Zimbabwe, which is mounting significantly rather than easing as expected, and takes account of the critical evaluation by the international community, German government and general public,” said Karsten Ottenberg, the company’s management board chairman and chief executive officer.

The company said it had taken this route in response to an official request from the German government and the European Union which have been calling for increased sanctions against Zimbabwe.

The German government and members of parliament pledged to monitor companies dealing with Zimbabwe and force them to stop dealing with President Robert Mugabe’s regime.

Last week, six human rights organisations resident in Germany staged protests at Giesecke and Devrient’s offices in Munich, demanding that the company react to human rights violations in Zimbabwe as enshrined the company’s code of conduct.

“In your code of conduct you stress the respect for human rights and the responsibility for social and technical progress in society,” reads a letter addressed to Giesecke and Devrient’s management.

The six organisations are the Forum Menschenrechte Network of German Human Right Organisations, Kirchliche Arbeitsstelle Sudliches Afrika (KASA), Koordination
Sudliches Afrika (KOSA), World Student Christian Federation, Zimbabwe Network and the Initiative Sudliches Afrika.

“Yet whilst the world is crying out in the face of the brutal human rights violations by the Zimbabwe government, Giesecke and Devrient is seeing to it that the regime can use the production of money as a political weapon,” the letter said.

Giesecke and Devrient had delivered banknotes to Zimbabwe, subject to strict monetary rules defined by the World Bank. The company’s operations are reliant on political and moral assessments made by international trade regulators.

By Paul Nyakazeya

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