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Mobile Money and Forex Dominate more than Zim$ Cash

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Zimbabweans generally prefer keeping U.S. dollars all over the country or South African rand if you are in the southern part of the country like Bulawayo to preserve its value, in case Zimbabwean currency loses even more value, or electronic cash becomes unworkable or is declared illegal.

Cash shortages MAY BE A THING OF THE PAST WITH A BIT OF STABILITY ONLY BROUGHT by the borrowed USD$ notes as well as the technological transfer of money through mobile phones. But this stability does not mean people have jobs or food at the table rather it is only a stop gap measure in place to avail cash to the transacting public.Before it was such an embarrassment that government was failing to give people their hard earned money which was in the bank and that showed dismal failure by the current regime.

Nevertheless perhaps measures by the Reserve Bank of Zimbabwe(RBZ) did curtail cash challenges but the coming in of NDS1 by the Ministry of Finance(MOF) does not necessarily translate to the same success story in availing cash which is a prerequisite for any sound economy. But even so the black market still hounds the sector with illegal forex dealers buying and selling US$ for a profit and vice versa.Most Zimbabweans never contemplated there was ever going to be any end in sight of cash shortages with the endless ques at banks, supermarkets , fuel stations and everywhere in public or private.

Suffice to say for now the Zim$ has been swallowed through the use of mobile money which has become the order of the day though it is also almost equally surfacing in circulation. The central bank says it is happy with the situation and wants 90% of all transactions to be electronic.

For years now, Zimbabwe has faced an acute shortage of cash which has forced people to switch to mobile money.

 

An informal sector is booming in the electronic exchange of foreign currency for the local currency, or in some cases, the other way around. This is called RTGS, or real-time gross settlement.

Most people were not accepting bondnotes which saw the MOF and RBZ phase them little by little introducing the Zimdollar 10 dollar note and 20 dollar note replacing the now defunct coins of the 2 dollar value and 2 dollar note which the transacting public were refusing because they were losing value and now the remaining 5 dollar note most Zimbabweans are giving the back side to the one still inscribed 5 bond and even the new one not inscribed bond very skeptical of smaller notes preferring the 10 and 20 dollar note instead.People do not want them, explains informal traders

“So people prefer using the RTGS for easy movement of doing their business. So that’s why they are preferring the local currency in RTGS form. Also it has better margin when they get it from the streets because we are offering 105-120 whilst the auction rate of the government is offered at 84-point something, 83-point something.”

The process is profitable for traders, and some people have left their formal jobs such as teaching for it.

But it’s a hustle which is technically criminal. That’s why some traders do not want to be identified such as this man.

“Zimbabwe’s currency is worthless,” he says. “That’s why people — even those formally employed — come to us in the streets looking for foreign currency. That’s how we survive.”

In a statement to TechnoMag Dr John Panonetsa Mangudya, Governor of the Reserve Bank of Zimbabwe, said he was happy with the current trend in which around 80% of the country’s transactions are conducted electronically.

“Our goal is to see Zimbabwe becoming a cash-lite society where at least 90% of monetary transactions are conducted through electronic products that include plastic money, mobile banking, internet banking and electronic transfers,” he said.

Critics disagree with him insisting cash no longer has value in Zimbabwean society, especially given that the financial system has collapsed before. But the element that it collapsed before means it is perhaps making gains and a bit of stability in as far as getting cash to transact and transacting through whichever channel which was not possible before.

Others who disagree with the Governor of the apex Bank believe in this era, you want to go 100% cashless. But you need to be very careful when you look at statistics.What we are celebrating at 80, and hoping to get at 90 may not actually be a success story. So people still need cash, to the extent the electronic money itself is not fully acceptable to the transacting public. People are still not trusting their financial system.

Zimbabweans generally prefer keeping U.S. dollars all over the country or South African rand if you are in the southern part of the country like Bulawayo to preserve its value, in case Zimbabwean currency loses even more value, or electronic cash becomes unworkable or is declared illegal.

Ross Moyo

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