New currency provides huge lift for retailers, informal traders

05 May, 2024 - 00:05 0 Views
New currency provides huge lift for retailers, informal traders Retailers in some suburbs witnessed a surge in customer traffic on Wednesday, as shoppers took advantage of the Workers’ Day holiday to stock up

The Sunday Mail

Tanyaradzwa Rusike

FOR nearly four weeks after the launch of the new unit on April 5 — Zimbabwe Gold (ZiG) — the United States dollar held sway on the local market as a medium of exchange for cash transactions, as monetary authorities undertook the elaborate currency changeover process.

This came with its fair share of challenges for the transacting public.

However, the release of new banknotes and coins into the market by the Reserve Bank of Zimbabwe (RBZ) on Tuesday heralded a new chapter in the country’s long and winding journey towards currency reforms.

The journey, punctuated by bouts of currency volatility and inflation, has not been easy.

But the introduction of the gold-backed ZiG is regarded as a step towards durable stability.

The long wait for cash

During the intervening period between the introduction of the new currency on April 5 and Tuesday, when the physical cash was released, ZiG was only available in electronic form.

Informal traders, who rely mainly on cash-based transactions, felt the heat.

For Ms Angela Hutu, who is based in Mbare, the lack of smaller denominations of Zimbabwe bond notes made it difficult to provide change to customers, especially for small, fast-selling items priced under US$1.

In the past, she relied solely on Zimbabwe bond notes for change, but their scarcity forced her to significantly scale back her stock.

Customers increasingly opted for hard currency transactions in round figures, which was largely inconvenient for consumers.

Before the currency switch, she used to buy two crates of tomatoes but because of the unavailability of cash for change, one crate was taking days to sell.

“Since the announcement of the new currency, business was low,” she told The Sunday Mail.

“We had to reduce our stock because people were not buying much and our produce was going bad.”

She, however, hopes the recent cash injection will help prop up her business.

“I have no problem with the new currency because it’s our money and we are ready to embrace it,” she added.

“Actually, we have been eagerly waiting for this because it will help us with change and customers will not be forced to buy what they don’t want.”

Ms Hutu’s experience mirrors the struggles that were faced by most informal traders last month.

The absence of physical ZiG cash created a ripple effect throughout the economy.

The public, especially those reliant on cash transactions, faced a constant struggle to find change.  This, in turn, choked everyday business. Intra-city commuters were not spared either.

Fares often fell short of round dollar amounts, leading to a frustrating game of “pooling change” with strangers.

This not only affected travelling times but also created tension, awkward interactions and, in some cases, physical confrontations.

Mufakose resident Mr Lessly Katswara knows too well the challenges that were faced by commuters.

“I work in Mt Pleasant where transporters normally charge 50 US cents for a trip, but because of the unavailability of change, we were forced to pair with other commuters before boarding so that there would be no disagreements over change,” he said.

“The availability of ZiG notes and coins means there is change and you are not forced to buy what you don’t want.”

Boost

ZiG has also resulted in a welcome boost for major supermarkets. With many Zimbabweans receiving their salaries last week, their purchasing power noticeably rebounded.

Retailers in some suburbs witnessed a surge in customer traffic on Wednesday, as shoppers took advantage of the Workers’ Day holiday to stock up.

Before the introduction of the new currency, business in major supermarkets was relatively low as consumers patronised tuckshops, where prices were considered fair and competitive.

Confederation of Zimbabwe Retailers president Mr Denford Mutashu said increased cash circulation would boost sales.

“The introduction of notes and coins will be game-changing as it will eradicate change problems,” he said.

“No consumer will be given coupons, sweets, chocolates or pens in place of their change.

“The Confederation of Zimbabwe Retailers welcomes this development that is poised to boost sales and ease of transacting by the public.”

Economist and member of the Reserve Bank of Zimbabwe Monetary Policy Committee Mr Persistence Gwanyanya said: “In a normal situation, cash transactions should account for between 10 to 15 percent of all transactions because cash is needed to lubricate the wheels of commerce.

“In our situation, the wheels of commerce had fallen to less than 1 percent for a long time.

“People are looking forward to ZiG coins and notes and I am sure the coming in of cash will complete the ZiG project.

“I am sure there have been a lot of concerns in the market because of the unavailability of cash. This is going to be addressed by the coins and notes.”

From bustling market stalls to supermarket shelves that have been restocked, a sense of cautious optimism fills the air.

Scarred by past experiences, Zimbabweans are embracing this new financial frontier with high expectations.

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