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Zimbabwe Cash Crisis Persists Despite Higher Withdrawal Limit

Days after Zimbabwe's central bank increased daily withdrawal limits, the lines outside Zimbabwe's banks are still as long as ever. As Tendai Maphosa reports from Harare this is seriously affecting productivity for those with jobs.

Starting this week, Zimbabweans can withdraw, on a daily basis, 20,000 Zimbabwean dollars (equal to about $5) from their bank accounts up from the previous daily limit of 1,000 Zimbabwean dollars. But this has failed to reduce the lines that sometimes spill off the sidewalk onto the streets as people wait to withdraw their money. Most of them still say it is not enough to meet their daily needs in the country with the world's highest inflation rate.

In addition to the frustration this causes, president of the Zimbabwe Congress of Trade Unions (ZCTU) Lovemore Matombo tells VOA it is disrupting productivity in the work place.

"Some people have suggested that they can only work for eight hours for the whole week suggesting that four-fifths of production is lost per week," he said.

Matombo adds that this worsens the economic situation since the country's manufacturing sector has virtually collapsed. Unemployment in Zimbabwe is estimated at more than 80 percent.

The ZCTU president says his organization had planned to demonstrate on October 1 against the then daily withdrawal limit of 1,000 Zimbabwean dollars. He says the increases only put the planned action on hold.

"What we are observing especially in Harare is characteristic of what's happening elsewhere around the country but we need to get information from our staff members from our trade unions representing the various provinces as to what is happening," said Matombo. "Once that is done we are going to march to the reserve bank in the case of Harare and to other reserve bank agencies in the case of the various provinces around the country."

Only weeks ago the central bank revalued the currency by loping off ten zeros. This was so people would not have to carry piles of money for the most basic transactions. But the zeros are coming back - on the day bank withdrawals were increased, Z$10,000 and Z$20,000 notes were introduced.

An economist speaking on condition of anonymity told VOA that the note shortage could be partly due to a shortage of printing paper. This is because a German firm, which used to supply Zimbabwe, stopped doing so citing the government's poor human rights record. He however added that an abundance of notes would simply drive Zimbabwe's hyperinflation. The solution, he says is to get the country's economy working again.

Critics of President Robert Mugabe blame his government's mismanagement for Zimbabwe's economic woes. He in turn says Western imposed sanctions are to blame.

Meanwhile, strike action over pay by its pilots has forced the national airline, Air Zimbabwe, to ground its fleet for 48 hours starting Friday.