Zimbabwe’s lack of cash is now a good thing
Zimbabwe’s severe cash shortage is providing the impoverished southern African country with some relief in the fight against the coronavirus: One less way of spreading the disease.
About 90% of transactions are done digitally after an economic collapse caused foreign currency and local bank notes to dry up. While Zimbabwe only has two cases of Covid-19, the government has declared a national emergency as an outbreak could overwhelm the health system in a nation battling shortages of everything from fuel to food.
“It’s a big advantage,” Eddie Cross, a member of the central bank’s monetary policy committee, said of the cashless environment. Reserve Bank Governor John Mangudya last week urged lenders to ensure uninterrupted continuity with all digital banking platforms, which were the “safest and most secure forms” of transacting.
The U.S. Federal Reserve earlier this month responded to the outbreak by placing cash repatriated from Asia in quarantine for up to 10 days as it awaited advice from the Centers for Disease Control. The South African Reserve Bank said March 16 there is no evidence that Covid-19 can spread through notes and coins, while advising people not to fall prey to criminals posing as officials to “recall” cash from the public.
Kenya, where the use of mobile money and digital banking is widespread, has urged citizens to use their phones for payments and reduce their use of cash and bank cards to curb spread of the virus. Rwanda on March 21 said electronic payments and online banking services must be utilized whenever possible, rather than visits to banks and ATMs.
The most widely used digital platform in Zimbabwe is EcoCash, a mobile-money provider owned by Cassava Smartech Zimbabwe Ltd. that processes over 7 million transactions a day. EcoCash has more than doubled limits for its clients to make transacting easier, the state-owned Herald newspaper reported on March 23.
Lenders are restricted to cash disbursements of only Z$300 ($12) per week to depositors. The highest bank note in circulation is Z$5.