n Journal of Strategic Studies : A Journal of the Southern Bureau of Strategic Studies Trust - The role of the financial sector on economic growth in Zimbabwe

Volume 3, Issue 1
  • ISSN : 2076-6645
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This paper attempts to assess the relationship between finance and economic growth in Zimbabwe following the adoption of the multiple-currency framework in February 2009. The paper makes use of the existing literature to evaluate the developments taking place in the financial sector and how they relate to economic growth. We conclude that the financial sector in Zimbabwe is inefficient owing to the huge interest rate spreads, the absence of the lender of last resort and the short term nature of loans extended to the private sector. The paper recommends, among other measures, the restoration of the lender of last resort function to the Reserve Bank of Zimbabwe, strengthening bank supervision and putting in place confidence building measures so as to promote a savings culture among the banking public.

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