President Emmerson Mnangagwa’s government has banned banks from lending.


ZIMBABWE’S civil servants have pleaded with the government to reverse its decision to ban banks from lending out money, saying the move had worsened their already dire situation as they can no longer access loans.

Last week, authorities ordered banks to stop lending with immediate effect, ostensibly to stop speculation against the Zimbabwean dollar as part of a raft of measures to stop its rapid devaluation on the black market.

President Emmerson Mnangagwa has accused unnamed speculators of borrowing Zimbabwe dollars at below-inflation interest rates and using the money to trade in foreign exchange, a practice he says was driving up inflation.

But speaking to the Daily News yesterday, Apex council chairperson Cecilia Alexander said they were covering their basic needs through borrowing from banks as their “meagre” salaries cannot sustain their daily needs.

“We don’t think that was the good thing to do, maybe they were trying to address something but in the process they are creating a bigger problem.

“They have to rethink their position because most civil servants were depending on borrowing.

“We are earning below the poverty datum line. Borrowing was sustainable for many people because we would be able to pay school fees and other necessities.

 “Over and above that, the banking system will collapse because they are surviving because of interests. Honestly, we are doomed without lending.

“Given the ongoing economic challenges people will not be able to pay school fees, pay medical bills. We were heavily dependent on loans.”

Alexander said the government was supposed to find other means to address the issue of extreme lending because the majority of Zimbabweans’ earnings don’t allow them to borrow huge sums of money from banks.

“It is affecting everyone including those who are not involved in illicit financial deals.

“People will not be able to make ends meet because borrowing was so critical to most of us.

“It is also not good for our economy because these borrowings were making the economy grow and most companies were relying on loans,” added Alexandra.

She also bemoaned the fact that the government had not honoured its pledge to pay school fees for teachers’ children.

 “Last term monies were not paid, they carried forward these debts and again this term they haven’t paid.

“This is contrary to our agreement and what is happening on the ground and now they have banned lending?” she said.

On their part, the teachers unions said there is a possibility that many pupils will drop out of school due to non-payment of fees by parents.

Progressive Teachers Union of Zimbabwe (PTUZ) secretary-general Raymond Majongwe noted that since 2017 the Zimbabwe School Examinations Council(Zimsec) recorded a decrease in ‘‘O’’ Level candidature has been falling down due to poverty.

“Parents who were unable to raise money quickly enough in the past made use of the lending facilities provided by banks and other money lenders.

“Unfortunately at a crucial  juncture we have had the government  making the  announcement whose effect is to prevent  people from borrowing  money for registering their children,” said Majongwe.

 On their part, Amalgamated Rural Teachers Union of Zimbabwe (Artuz) accused the government of “failing to account for simple economic realities”.

“Teachers like the majority of Zimbabweans these days rely on borrowing for survival and also running small businesses …this will negatively impact negatively on capacity utilisation on their day to day living.

“Teachers are already incapacitated as things stand, we condemn in the strongest terms the bush economics that was employed as an excuse to arrest economic failure,” said Artuz in a statement yesterday. – Daily News