HARARE - Zimbabweans lived it up during the month of December last year in spite of the country’s liquidity challenges, latest data from the Reserve Bank of Zimbabwe indicates.
In its December 2017 monthly report, the central bank said the total value of cash transactions was 17 percent higher at $245,92 million during the month compared to $209,07 million in November 2017.
Traditionally know as a high-spending month, December 2017 was, however, lacklustre compared to December 2016 spending which recorded $397,50 million in cash transactions reflecting a 38 percent decline is cash transactions year-on-year.
“Mobile and Internet-based transactions also increased to $ 4,1 billion in December 2017, from $3,36 billion in November 2017,” the apex bank said.
The 24 percent increase in mobile and Internet-based transactions coincided with a 15,1 percent rise in card-based transactions.
“The total value of card-based transactions stood at $ 794,74 million during the month under review, up from $690,13 million recorded in November 2017,” said RBZ.
During the month of December 2017, the value of cheque transactions however decreased to $3,6 million, from $4,88 million in November 2017.
This comes as formal retail businesses benefitted from increased use of plastic money caused by a worsening cash crisis, which is slowly undermining the informal sector, now the largest source of employment in the country, according to analysts.
Most banks have stopped importing United States dollar notes due to the fact that the largest component of money within the banking system is unsupported by real currency through imports.
Zimbabwe adopted a multiple currency regime in 2009 to escape hyperinflation, with use of the greenback dominating transactions.
But availability of US dollar notes started declining in 2016, with critics blaming government for repaying local debts using electronic funds transfers, in the process depleting the stock of foreign currency in the banking system.
This led to a depletion of the stock of notes in the economy, which was compounded by huge imports which also meant the export of currency from the economy.
In response to the worsening cash crisis, government and the RBZ have encouraged the use of plastic money, which resulted in the roll out of more point of sale terminals in supermarkets, pharmacies and other retail businesses and government departments.
In his Treasury bulletin recently, Finance minister, Patrick Chinamasa, is on record saying the manufacturing sector experienced growth in 2017 due to a number of government initiatives to improve the business environment as well as the growing use of plastic money and e-transactions.
Plastic money, he said, was “easing the liquidity challenge for the benefit of the industrial activities”.
— The Financial Gazette