Zimbabwe’s government has moved to revoke a recently implemented suspension on bank lending which sparked widespread criticism and added more instability to an already battered economy, pushing retailers to hike prices of consumer goods, and rejecting the local currency.
According to experts, the loan ban triggered widespread calls from citizens for President Emmerson Mnangagwa’s government to sit down with all state holders to produce a concerted effort to halt the ongoing economic freefall.
In a statement released on Tuesday, Zimbabwe’s central bank governor, Dr. John Mangudya, announced that the Southern African nation would be lifting the suspension, however insisted that investigations into companies responsible for taking out bank loans with local currency to purchase foreign currency on the black market are continuing, adding that is why the loan ban was implemented.
“The Bank wishes to advise the public that the temporary suspension of lending services by banks has been lifted with immediate effect,” read the central bank statement, adding, organizations being probed for abusing loan facilities would not be allowed to borrow from banks.
Sociopolitical analyst, Effie Dlela Ncube criticized Mangudya’s initial ban, arguing the response to the misuse of loans was a political response to an economic problem which backfired, hence government’s decision to reverse the ban.
“Lifting the ban is an acceptance of defeat,” said Ncube.
Peter Mutasa, the Secretary General of the Zimbabwe Banking and Allied Workers Union echoes Ncube’s sentiments, further urging Zimbabwe’s government to stop adopting knee-jerk approaches when it comes to managing the economy.
“It caused a serious shock that will be felt for many months to come and will cause economic agents to lose confidence in the market or government,” said Mutasa, adding, “We are still disappointed that they caused damage to the economy for no reason.”