The Zimbabwean government is struggling to find enough cash to pay its workers, and more importantly the military, after it was forced to cut back on printing money because sanctions have severed its supply of banknote paper from Europe. Officials involved in the printing say the regime fears the presses could be shut down altogether if further political pressure causes the withdrawal of software licences used to design and print notes. Paper money is already in short supply because the state-run Fidelity Printers & Refiners in the capital, Harare, cannot keep up with demand created by the hyperinflation and rapid devaluation that causes notes to lose almost their entire value within weeks of being issued.On Monday, the central bank issued a Z$100bn note, the highest denomination to date but worth 7p, printed on what remains of stocks of the German paper. The source said the firm had been told new supplies of paper were coming from Malaysia but, for now, it was unable to meet the demand for cash created by the hyperinflation, estimated at 40,000,000%. Fidelity's presses, which had been running 24 hours a day for many months, are now rarely started up. The firm has also had problems maintaining the presses because it is unable to obtain spare parts. The cash shortage is contributing to the rapidly deepening economic crisis and further threatening Mugabe's regime. The government needs a fresh injection of cash soon to pay its workers, from teachers and nurses to the police. It also needs to ensure money reaches the army.
Zimbabweans are limited to withdrawing just $100bn a day from their bank accounts, less than half the cost of a loaf of bread, although the government has just increased the allowance to Z$1.5tn a day for those in the military. The cash is delivered to the barracks by the banks to save soldiers standing in line for hours.
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