World Economy

Zimbabweans Resort to ‘Pillow Banking’

Zimbabweans Resort to ‘Pillow Banking’Zimbabweans Resort to ‘Pillow Banking’

Zimbabwe’s Finance Minister Patrick Chinamasa claimed depositors were fuelling the country’s biting cash crisis by keeping money outside the formal banking system.

But depositors have said they were resorting to “pillow banking” because they could not access their cash from banks when they needed it, AfricaNews reported.

Zimbabwe has been experiencing cash shortages in the past few weeks—reminiscent of the 2008 economic and political crisis—with depositors queuing for days at banks to get their hard-earned money.

The liquidity crisis is a problem that we have to look squarely in the face and address,” Chinamasa said bizarrely, claiming that government was putting in place various measures, including a national financial strategy to ease the challenge.

We have to understand that we don’t print the United States dollar. We are a unique country—one of three countries in the world—that pays wages and buys small goods like mazhanje in United States dollars and that comes with its own challenges,” he said.

Zimbabwe abandoned its own currency in 2009 and now uses mainly the US dollar and the South African rand, although other currencies are also legal tender.

However, the recent depreciation of regional currencies against the greenback has seen the country losing more money to increased imports, as it is now cheaper to import than buying local products.

Chinamasa added that the “temporary cash shortages” were also being accelerated by Zimbabweans refusal to embrace plastic money.

In an effort to encourage people to use the banking system and promote financial inclusion, Zimbabwe recently ordered tobacco farmers, most of them communal farmers who had taken up growing the cash crop and ditching others such as maize and wheat, to open bank accounts to facilitate payments for deliveries.