Green Party president Peter Sinkamba has proposed that the Bank of Zambia (BOZ) should trigger a currency change over following a shortage of cash in the country.
BOZ has confirmed there is an acute cash shortage in circulation, especially large denominations with most ATMs without cash.
The Financial Intelligence Centre (FIC) has equally confirmed unprecedented cash withdrawals in the last months.
Mr Sinkamba has since noted that the cash crisis in the country is evidence of looming bank failure hence the need to consider going that direction as that will also generate sufficient funds to finance eurobonds.
Mr Sinkamba has further observed that government safety nets put in place designed to forestall overestimated risks of panic are on the verge of collapse.
“Before bank failures show their ugly face pretty soon, and since the safety nets are on the verge of collapse, our thinking outside the box strategy is that BOZ swiftly intervenes with an urgent currency strategy of a currency change-over” he said.
“Theoretically, these events are evidence of a looming banking crisis. Widespread bank failures are on the way resulting from depositor withdrawals characterised by election loss panic” he said.
He says a currency change-over will have several advantages such as generating substantial revenue for government through a sliding scale taxation of genuine deposits above set thresholds, force everyone to bring back the cash into the banking system thereby increasing the taxable income and with incentives, government would capture illicit cash, pretty easily.
“In our view, this exercise alone could probably generate sufficient funds to finance the Eurobond loans”
