By Daniel Itai.
(News of The South) – Zimbabwe’s economy is set to contract by 6.5% this year after a massive drought and power shortages.
Zimbabwe’s finance minister Mthuli Ncube said that Zimbabwe was going to spend more than $300 million to import 840 000 tonnes of maize after the drought left more than half the population in need of food aid.
The Reserve Bank of Zimbabwe (RBZ) also said that half of the total $19 billion in reserve balances held across the country’s banking sector was being held by only 50 companies operating in the country and that this was posing a high risk of manipulation and pushing up exchange rates on the parallel market.
The central bank also said it was important for authorities to monitor the flow of money from the companies’ accounts to avoid associated risks.
Due to these companies holding 50 percent of the total $19 billion in bank deposits, there is little remaining for the rest of the Zimbabwe population to bank in their accounts.
However, the Zimbabwean authorities have been strongly criticised for allowing companies and individuals linked to the ruling Zanu-PF administration to engage in illegal foreign currency dealings with no consequences.
In September, RBZ’s Financial Intelligence Unit closed in on accounts held by Sakunda Holdings and its subsidiary firms amid concerns they were heavily involved in illegal foreign currency dealings.
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