Zimbabwe News and Internet Radio

Mnangagwa calls for increased use of plastic money

By Mugove Tafirenyika

President Emmerson Mnangagwa yesterday acknowledged the worsening cash crisis and encouraged increased use of plastic money.

President Emmerson Mnangagwa
President Emmerson Mnangagwa

Addressing mourners during the burial of the late national hero John Chimbandi at the National Heroes Acre, Mnangagwa — hoping to retain power in the first vote due on July 30 since Robert Mugabe’s downfall in November after 37 years in power — said his government “remains fully seized with the matter.”

This comes as bank ATMs have run out of cash and financial institutions are limiting withdrawals to as little as $20 bond coins.

Mnangagwa said he was aware that “our people continue to face hardships linked to cash shortages.”

“We have, to date, released millions of US dollars into the market for circulation to ease this problem. However, as soon as the money is injected into the system, it is sponged out,” he said, adding that “more creative ways of comprehensively tackling this problem, both in the short to medium term, are being considered.”

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Mnangagwa added: “Meanwhile, I encourage us to increase our usage of plastic money, in line with global trends.

“I once again exhort those in the financial services sector and ICT players to equip our various markets, formal and informal traders throughout the country with the requisite infrastructure to enhance nationwide non-cash transactions.”

When the country ditched its currency in 2009 and adopted a hard currency regime, notes came back into fashion in the form of greenbacks.

But suddenly, as economic mismanagement crept in after collapse of the inclusive government in 2013, bank notes began depleting, with the central bank feeding the system with a phantom currency printed through the real time gross settlement (RTGS) system.

Then, suddenly, bank queues emerged, and a campaign by the central bank and government called on depositors to use plastic money in the form of debt cards for transactions.

The volume and value of plastic money over the past few months has increased markedly, but the cost has been high.

Mnangagwa said: “Similarly we urge all stakeholders to ensure that the transacting public is not punished through excessive charges for the use of plastic money and electronic transactions.”

Mnangagwa’s main challenger Nelson Chamisa, leader of the Movement for Democratic Change, promised on Thursday during his manifesto launch to scrap bond notes as soon as he wins the July 30 poll and join the Common Monetary Area led by South Africa. –DailyNews