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Emmerson Mnangagwa: $100 Million British Loan to Ease Zimbabwe Cash Crisis

Zimbabwe's President Emmerson Mnangagwa
Zimbabwe's President Emmerson Mnangagwa

President Emmerson Mnangagwa says the $100 million loan provided by the British government and Standard Chartered Bank is expected to ease Zimbabwe’s crippling cash crisis.

Mnangagwa made these remarks in Harare on Friday while attending a meeting organized by the Women’s Coalition of Zimbabwe and several other organizations focusing on challenges faced by women, including parliamentary representation.

He said, “For the first time after nearly 20 years, we have received a soft loan from the British of $100 million and the Governor (of the Reserve Bank of Zimbabwe John Mangudya) has been telling me how he has disbursed the money and as from yesterday (Thursday) almost every single bank in the country had received part of the $100 million received.

“We believe that this will go towards easing cash shortages, but not only that, there are so many other sources which I would want the Minister of Finance to best articulate as to how we are fighting the issue of cash shortages. We do not delight in seeing our people sleeping on queues for cash. That is not necessary and that is not proper and this is as a result that we do not have our own currency.”

Zimbabwe is facing a cash crisis due to diminished production in many sectors of the economy and lack of foreign direct investment and related issues.

Finance Minister Patrick Chinamasa, who accompanied Mnangagwa at the meeting, added that the cash crisis is worsened by the use of the United States dollar instead of the country’s own currency.

“First, we do not have a currency of our own. We use a hard currency as a medium of exchange. We use U.S dollars to import U.S dollars from the Federal Reserve of the United States and sometimes we decide that instead of importing US dollars we would rather import fuel and electricity using the foreign currency that we have.

“The major problem that we have is that the U.S dollar is the medium of exchange. Where do we get it? We get it from exports, we get it from Diaspora remittances, we get it from lines of credit and foreign direct investment. But because of the challenges we are facing, we are not getting much FDI as we should and indications are that it is going to improve as we go into the future but currently that is not so.”

Some critics claim that Zimbabwe’s economy has been devastated by the Zanu PF government, which has an unworkable populist agenda.