Cash shortage is crushing Zimbabwe’s already embattled economy
The liquidity squeeze has left companies unable to pay their workers and foreign suppliers, driving many out of business, and swelled the ranks of economic exiles
Harare — Zimbabwe’s crippling cash shortage has left a black hole in the financial system that is crushing the rest of the economy. "We deposit the cash and it becomes theoretical, ephemeral," Mohamed Salam, who owns several small stores selling building supplies in Harare, said in an interview. "My bank balance says it’s there, but it isn’t. I can make payments electronically to local suppliers, but I can’t pay foreign suppliers." The liquidity squeeze has left companies unable to pay their workers in cash and foreign suppliers, driving many out of business, and added to the ranks of more than 3-million people who have become economic exiles. The economy probably shrank 0.3% last year and is set to contract 2.5% this year, according to the IMF. Zimbabwe abandoned its own currency eight years ago and adopted mainly the dollar, initially halting hyperinflation. Now, with a floundering economy and a strong dollar stoking imports and curtailing exports, banknotes have virtually disappe...
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