Chinamasa defends cashless economy

FINANCE minister Patrick Chinamasa has defended Zimbabwe’s insistence on operating a cashless economy, saying countries such as India have since abolished use of cash and adopted electronic transactions.

BY VENERANDA LANGA

Responding to questions from senators recently on how he will address the cash crisis, which continues to affect the economy, Chinamasa said cashless transactions were better as they helped curb corruption.

“In most jurisdictions, the cash-based transactions constitute about 10% to 15%, and in our situation, we are at 16%. But even at 16%, money is not circulating, and even if the Central Bank governor was to pump in billions — whether of bond notes or United States dollars, that money is withdrawn and it is never re-deposited in the banks,” he said.

“When you have that situation, where money is just being withdrawn and not being re-deposited, it means that the circulation is inefficient and you cannot run the economy that way and when we inquire into the reasons, it actually boils down to lack of trust and confidence.”

The Finance minister said India abolished cash transactions, insisting on electronic ones.

“Electronic is better because, as we try to fight corruption, much of it is promoted through usage of cash, where people move with suitcases of cash to bribe others,” he said.

“When transactions are done electronically, there is a paper trail, which inhibits those who would want to commit corruption. There is a problem with some shops, but my own view is that those shops, which are insisting on cash, are losing business because you cannot transact in cash if the cash is not there and it is clearly not in their interest.”

Chinamasa claimed that most businesses, including those at Siyaso (informal traders), were now transacting electronically
“The bulk of transactions in the future are going to be electronic and the sooner we accept that, the better for our good health,” he said.

Loading...

3 Comments

  1. To hell with you Chinamasa and your useless zanus, you have failed to realize that new governing party and government is what the whole world is wanting in zimbabwe. As long as you and your zanu pf government is still owning illegal governing systems,forget about developing zimbabwe i bit you- witches.

  2. VaChinamasa makaitira Economics kupi? Do not be such a nincompoop! It is all about the issue of confidence with the banking system and Government en masse. Restore confidence and see if we do not deposit mari dzedu kumabank. I cannot deposit my US$ yandinozonetsekana kutora. Are you forgetting kuti mari dzese dzirimumabank are actually US$? Yet the prices of commodities and services have doubled and even trebled; and only in Zim has the US$ lost value. Even now, if I want to make international payments, I am asked by YOUR banks to bring hard US$ currency, and they do not acknowledge the money in my account as US$. Is the money in our accounts and Ecocashes ZimDollar or US Dollar? I need an answer Minister! Your Ministry, the RBZ, and more importantly, the Government, en bloc, has proved to be gravely incompetent to lead. You need to be ashamed of yourself and Mangudya for not resigning as a matter of principle. This is the very same reason for poor FDI inflows. Do not put us in the same basket with India; they had their own reasons. You are superficially addressing the symptoms of a bigger problem that you seem to be evading from redressing as a minister and as ZANUPF.

  3. Comment…hurumenda ye zanu haina chaichakwanisa kubva rini tichitambura nevanhu ivava hatichichina tariro ne mbavha idzi

Leave a Reply

Your email address will not be published.