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Zimbabwe cash crisis stifles Christmas spirit

Wednesday, December 21, 2016 - 01:50

The Christmas lights are on in Harare but many Zimbabweans are struggling to find holiday cheer. The former bread basket of Africa has a cash crisis and an economy which has halved since 2000, when white-owned commercial farms were seized by the government. Ivor Bennett reports.

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The residents of Harare are getting into the Christmas spirit. But this year Zimbabwe is experiencing the worst financial crisis in seven years. (SOUNDBITE) (Shona) STREET VENDOR, CLEVER MABACHI SAYING: "I have been selling Christmas decorations since 2009, but sales don't look promising this year because of the cash crisis. Being Christmas people will spare a little to buy, but it's definitely not the same." Last month new bond notes were introduced to ease the shortage of U.S. dollars. The currency has been accepted by most businesses and black market traders. But there are fears the Reserve Bank of Zimbabwe could print more than the $200 million limit. That could bring back the hyperinflation that caused the scrapping of the old currency. (SOUNDBITE) (English) HARARE RESIDENT, CHARLES SAKI SAYING: "There is nothing to celebrate this Christmas. Even the introduction of the bond notes has not solved anything because people are still queuing up in the banks." Zimbabwe used to be known as the bread basket of Africa. President Robert Mugabe's policy of seizing white-owned farms and forcing the owners to leave led to the economic crisis. And lenders like the IMF won't help until past debts are paid and wage bills cut. That leaves the government unable to pay its civil servants. The Finance Ministry says it's heading for a budget deficit nearly eight times more than forecast a year ago. (SOUNDBITE) (English) POLITICAL ANALYST, ERNEST MUDZENGI SAYING: "When you look at it across the sectors there have been salary cuts and in some cases salaries are not coming so people are burdened and for people to celebrate in that context is difficult if not impossible." The country's prospects are far from bright. A drought has also left 4 million people facing hunger with anti-government protests becoming more frequent.