BAZ moves to ease coin shortages
HARARE – The Bankers Association of Zimbabwe (Baz) is actively pursuing an agreement with the United States Federal Reserve Bank to import coins that are scarce in the local market, businessdaily has learnt.
Baz has over the year been considering importing $5 million worth of coins in various denominations to ease change challenges currently faced by businesses since the adoption of a multi-currency system in 2009, but shelved the plans due to high costs and logistical challenges.
In an interview recently, Baz president George Guvamatanga said coin shortages will soon be a thing of the past as plans have reached advanced stages to bring US coins into the country.
“We are currently engaging agents in the United States of America to help us secure coins from the Federal Reserve Bank. Plans are already at advanced stages,” said Guvamatanga.
After adopting the multi-currency system, the United States dollar and the South African rand have become the dominant units of exchange in business transactions.
However, the local market, especially in areas that are predominantly using the United States dollar, is plagued by coin shortages, including soiled and dirty notes.
Consumers are being prejudiced of a significant chunk of their incomes by retailers and other service providers who opt to offer trinkets as a form of change.
The problem has been more prevalent in the northern parts of the country, while areas in the southern parts, which use the rand for transactions, are faring well.
Zimbabwe has no formal arrangement with either the United States or South Africa to use their currency, this means the country has to bear the costs of repatriating the old notes to their respective countries for replacement.
In the 2011 National Budget Finance minister Tendai Biti indicated that there had been “fruitful interactions with the US Department of the Treasury which stands ready to facilitate access to acquisition of smaller denominated coins and replacement of soiled notes.”
Coin shortages on the local market have been worsened by the shortage of alternative payment platforms.
The use of plastic money has mainly been hampered by a wobbly national Information Communication Technology (ICT) backbone and lack of confidence in the banking sector.
Economists believe that more than 50 percent of the money in the economy is circulating outside formal banking channels.
Statistics from the ministry of Finance indicate that a cumulative two million card transactions valued at $210 million were undertaken between January and September last year, with automated teller machines) accounting for 84 percent and point of sale (Pos) representing 16 percent.
Mobile and internet transactions constituted only one percent of payments.