Zimbabwe cash crisis.
New Finance Minister Mthuli Ncube implemented a 2% tax on money transfers and unveiled other proposed reforms in early October. Initial uncertainty surrounding the new measures led to panic-buying of supplies, cash shortages and a subsequent clampdown on public protests. Following modifications, the new measures have been endorsed by local industry, the IMF and the World Bank -- but public mistrust lingers.
Foreign currency shortages may worsen as exporters face rising costs without a market-based foreign exchange rate for converting earnings.
The Reserve Bank will struggle to gain the trust of the public, government and investors amid recent corruption scandals.
Wasteful spending, corruption and public-sector wages (which account for 90% of budget spending) will persist as major deficit drivers.
