Zimbabwe banned banks from lending in a bid to stem the decline of its local currency, but quickly backtracked on Friday.Analysts says this desperation to have its own national currency makes legitimate business almost impossible in Zimbabwe.has stymied Zimbabwe's economy, five years after he declared the country"Open for business."
"They are desperate to have their own national currency even though they have nothing of value to underpin it," said Stephen Chan, a professor of world politics at the School of Oriental and African Studies in London."It's an act of desperation. It makes legitimate business almost impossible."Zimbabwe's economic woes began in 2000 when then-President Robert Mugabe encouraged invasions of White-owned commercial farms by subsistence farmers.
An executive at an agro-processing firm, who asked not to be named for fear of reprisal, said his company can't borrow what it needs to pay 500 farmers for the soy and sugar beans it contracted them to grow, or fund the purchase of inputs such as fertilizer for next season’s crop. Nick Mangwana, a spokesman for Mnangagwa, said the lending ban was"initially a bit misunderstood" but there is now a better understanding on why it was necessary.Zim backtracks on shutting bank lending after firms shut facilities
"That just talks to the confidence they have in their own currency," she said."We are working at ways to make sure we can spend those Zimbabwe dollars in a meaningful way before they obviously lose value."
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Fin24 This week he will follow up by banning bakeries from baking bread?
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