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Zimbabwe's Mugabe Names New Finance Minister Amid Currency Crunch

FILE - Ignatius Chombo has been named the new finance minister in Zimbabwe.
FILE - Ignatius Chombo has been named the new finance minister in Zimbabwe.

Zimbabwe President Robert Mugabe has replaced Finance Minister Patrick Chinamasa — who will lead a new Security Ministry — with Home Affairs Minister Ignatius Chombo in a cabinet reshuffle, the government said in a statement Monday.

The move comes against the backdrop of a severe hard currency shortage that has dealt a fresh blow to confidence and investment in the southern African economy, which uses the U.S. dollar.

Chinamasa was appointed finance minister in 2013 after Mugabe was re-elected and his move to head a newly created ministry of cybersecurity, threat detection and mitigation was unexpected.

Chombo, who does not have a finance background, is a staunch Mugabe supporter who comes from the 93-year-old leader's rural home district. He was a surprise choice for minister of finance.

The new finance minister will have to contend with a serious shortage of foreign currency that has seen U.S. dollar bank balances lose value against cash dollars, fanning a thriving black market.

The worthless Zimbabwe dollar was replaced by the U.S. dollar in 2009, but the economy has struggled over the last 18 months because of a massive domestic shortage of greenbacks.

As a result, cash — especially crisp, new, $100 bills — has enjoyed a steady 10 percent to 20 percent premium over dollars stored electronically in bank accounts — nicknamed "zollars."

Vice President Emmerson Mnangagwa lost oversight of the Justice Ministry to the head of Zimbabwe's spy agency Happyton Bonyongwe. In total, 10 cabinet ministers changed posts while two were dropped entirely.

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