How does a country’s financial system go through so many bouts of instability and experience so much strain? how do the citizens cope with all this?
As Zimbabweans, we haven’t figured that out yet. Otherwise, we wouldn’t be experiencing another cash shortage and constantly debating the merits of interventional measures like bond notes.
The ordinary Zimbabwean doesn’t have a direct say on policy implementation or economic reforms. They are stuck with whatever solution is decided by the officials that lead the charge on these matters.
The government – represented by the Reserve Bank of Zimbabwe which is the industry regulator, and the entire collective of bankers – unified under the banner of the Bankers Association of Zimbabwe are the two entities – the collection of officials, that should have responded to the crisis with emergency measures.
Unfortunately, they haven’t been treating the alarming situation as the crisis that it is. If they had, we would have noticed some changes taking place.
The clear as day cash crisis solutions aren’t being implemented
Instead, we are reassured again and again that measures are in the pipeline and that all will be well soon. The plans are shared every time the Reserve Bank or the government responds to questions on what is going to be done.
These proposed solutions actually make sense and by now everyone who’s shared a thought on the crisis has heard them being thrown up in every sort of discussion, analysis and breakdown of the cash crisis.
Plastic money should be encouraged; transactional fees should be drastically revised downwards; mobile money, as popular as it is, should be promoted as a leading solution for electronic transactions through a review of tariffs; infrastructure that supports these measures should be invested in without a moment’s delay; and awareness should be raised on how all these are the new ways of trading in a cashless Zimbabwe.
Instead of being enacted, these measures are just held onto by the Reserve Bank and the government without any supporting actions.
A case of greed and avoiding the horrible medicine
Perhaps we are expecting too much from the central bank or the government and even the bankers themselves especially since it’s looking like these parties aren’t affected by the current situation and that some of them, like the banks, are actually benefiting from it.
With business models that rely heavily on transactional revenue, local banks aren’t so quick to embrace any measures that would have an impact on their bottom lines and as people increasingly turn to electronic channels that have high costs these banks are actually boosting their revenues.
At the same time, the fact that the bankers themselves agree that they have saddled the ordinary Zimbabwean with outrageous charges but they aren’t being brought to task for it also shows how some of the issues around the cash crisis aren’t being addressed.
It was reported that two bank CEOs recently admitted that costs like the $2.50 charge for card swiping or the $10 charge for an RTGS transaction are outrageous and are preventing financial inclusion.
This means that there is a general awareness of an obstacle but it isn’t being removed. The regulator or the government should have swiftly addressed this, acting to lower those same charges.
Instead, the only reaction has been from Steward Bank which has reduced its RTGS charges and offered its customers a free Friday swiping promotion that will last until mid- July.
Just like the case of EcoCash zero-rating its payment transactions it has taken the profit or growth motive of one service provider to enact some changes that all Zimbabweans have anticipated all along.
Zimbabweans are always optimistic in the face of any sort of challenge. However, this positive approach to tough situations shouldn’t be viewed as an opportunity to skirt responsibility and not respond to challenges that plague the country.
The hope is that sanity will prevail and action will be taken before things get any worse than they already are.
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10 comments
the issue is everyone in zim is a hustler and hajairirwe pabag. thus noone cares. and thus export incentive doesn’t work. in production you are lucky if your margin is. 20% so when rbz keeps 50% for industries and 80% for tobacco vpeople qonr produce reducing exports employment etc.
and gvt should say all ministers and gvt personnel get a vehicle max worth of 20000 not the issue now where they get a double cab Benz and SUV costing over 200000. better yet a procurement freeze would be best.
and come on I leave 150 in an account for a year and get a call that I owe 55 how dies that happen no interest nothing banks need to get it right.
What type of account was it? A savings account? A current account?
it just shows that they have one aim with the introduction of bond notes – they want to print money to pay debts and fund the next election – nothing to do with people – the solutions are so simple – a policy pronouncement to encourage a cashless society as stated in the article & things will normalize (zimbabwean normal) – no more cash shortages – the problem is the government owes banks money from the money they borrowed using treasury bills – that is what they want to fund
You got that right man. Its not about any externalisation nonsense, I mean if I have $100 in my bank account, I should be able to withdraw it when I want, no amount of ‘externalisation’ should externalise MY money, who is it that reaches into peoples bank accounts and disappears their money? And then again, if the bank can’t give me my money when I want it, should they not be taken to task by RBZ? Well in our case the central bank is being creative in coming up with fancy explanations – all of which are true blue lies! There is money missing from the system!
Banks are withholding money and only releasing it to their runners
Zimbabwe is a nation of educated fools!
A fool is a person who does the same thing again and again and expect a different result. You have the educated bankers, up to RBZ who are releasing US dollars into the black market through their runners, just like Gono error. Just go around money changers you see them holding new fresh clean dollars.
Well said Shumba, no money just disappears. The principle of conservation of matter or money says matter can neither be created nor destroyed but can be converted from one form to another. Simply put, in a closed system the amount of money remains the same. The bulshit about millions smuggled at border is work of intelligence operatives trying their luck with zim crowds
Mobile money or plastic money are not the solution to our problem TechZim. The problem we have right now is that govt has been taking hard cash out of the system, and converting it into fictitious electronic money in the RTGS and reserve system. That’s why even though you have $20,000 in your account, you can’t get a dime in cash! Us not being able to get cash from the banks is the smaller problem, and we can always get around that by transacting with plastic money amongst ourselves, but, you can’t buy products, services or material from outside Zimbabwe without hard cash, either at hand or in nostro accounts held by your bank. That’s where the problem is! We are a net importer, at the end of the day, no matter how much we trade in plastic and mobile money amongst ourselves, we shall soon run out of products to sell and buy! Have you thought why is that banks now will tell you that if you want to recharge your prepaid VISA or mastercard you have to make a cash deposit? That is because RBZ has no cash left,…it only has IOUs, and nostro accounts are zero, because we have not been exporting! These IOUs are Worthless as long as our govt does not reform policy wise and allow FDI to come in, or become credible enough to allow international institutions like IMF to lend us. Govt has not been able to get loans from international banks, so guess what…they borrowed from you and me without restraint or discipline whatsoever! And all that was not to invest in infrastructure or development,….it was all to finance the fiscal deficit that is driven by high and irrational spending. Now that they’ve spend our USD, they want to pay us back in their bond notes…another form of IOU from a bankrupt government that is seeing a perpetually shrinking revenue base. Without policy and fiscal reformation there is not solution at all..just band aid upon band aid for a festering deep wound.
Siege, you are very on point. Fact is there is zilch money left after they wiped out the cash with their TBs. I happened to approach RBZ enquiry get on my long outstanding telegraphic transfer and was flabbergasted to learn they wld rather put my personal requirements in their category 4 for payments as if I am borrowing to pay for my requirements. These morons, idiots whichever suits them best have sunk so low they can’t bring their heads up their dirt. You and me have as gud no money in the USD accounts we so badly worked our butts. I atleast thought they wld be sincere and let personal accounts be as such not to tell me School fees for their children take precedence over my personal choices. I really have no kind words for these thieves!