Learn why Zimbabwe is not dropping cash yet

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In line with our focus on understanding the African market, ARYZE interviewed Dr Moses Chundu on the Economic sentiment in Zimbabwe 2022, and why he believes the country is not ready to move away from fiat.

Dr Moses Chundu is a celebrated Economist from Zimbabwe, who has worked within the fields of academia, banking, government, and development, both on analytical and executive levels.

From 2008-2013 he was the Principal Director, and Economic Advisor to the Prime Minister of Zimbabwe. He attributes his impressive knowledge of global trends to his work-related travels, where he met with world leaders in more than 60 Countries during his career.

Now semi-retired, he has returned to his Academic roots and teaches at the University of Zimbabwe, in the Department of Economics and Development. He sits on a number of boards and is Executive Director for the Africa Leadership and Management Academy (ALMA), which aims to develop leaders of the future, leaders of integrity.

As politically neutral, Dr Chundu defines himself as someone who does not fit in to any party

I play for team Zimbabwe, I want something that is good for our country, something good for Zimbabweans.

Dr Moses Chundu

The unfiltered outlook

In a February 2022 Article by The Herald, the IMF is quoted saying Zimbabwe’s economy is celebrated as being resilient and on a firm path to recovery, citing improved capacity utilisation in industry, higher agricultural outputs and stabilising prices and exchange rates due to effective policy interventions in Zimbabwe.

Dr Chundu firmly disagrees.

This is far from what the citizens are feeling on the ground here in Zimbabwe, they cannot relate or reason with these high-flying reports that are coming from Washington. You can’t celebrate growth that is driven by one season of good rains, and yes, there has been some efforts with infrastructure development, especially the roads, but it is predominantly in the context of the upcoming 2023 elections. Let’s rather ask why we have left our roads to deteriorate to a state where they are impassable.

Dr Moses Chundu

Source: banknoteworld.com

Bans and hyperinflation

Zimbabwe has in the past experienced some of the worst hyperinflation in the world, which at its high was doubling every day, and gave rise to the now notorious 100 trillion-dollar notes. This all ended in 2009 with the adoption of the USD in efforts to stabilise the economy.  Since 2009 the country has experienced periods of growth and stability but in June 2019, the country’s finance minister Mthuli Ncube, released an official statement banning the transaction of all foreign currencies, in order to strengthen the Zimbabwean dollar.

Having always been consistent on his Economical stance Moses Chundu explains

We tried to warn the government that banning the USD was a bad move, you cannot drive out good money with bad money. Yes, you can put in statutory instruments for all you want, but the market will always win.

Dr Moses Chundu

In the wake of the ban, banks had gone under, citizens experienced tremendous loss of income, savings and mortgages that were converted unilaterally were now essentially worthless.  Moses believes that Zimbabwe’s driver of inflation is not so much of money supply, but rather exchange rate distortions.

The electronic cash experiment

Through the years, Zimbabwe has faced what can best be described as a currency identity crisis.  In 2016 bond notes and coins were introduced as a measure to combat the shortages of USD cash in the country and functioned in parallel to the foreign currencies.  But following the ban of foreign currencies in February 2019, the Zimbabwean government introduced a new currency, the RTGS dollar (Real Time Gross Settlement).

This was a cocktail of Bond coins, Bond notes and electronic RTGS balances.  This could arguably be seen as Zimbabwe’s first digital currency and was traded through mobile E-money Apps such as Ecocash. The RTGS however quickly suffered the wrath of inflation which escalated to 300% before foreign currencies were yet again legal. As Moses Chundu explains:

When we tried to introduce the RTGS as electronic money, we did not have credible fiat money.  In a way we had moved into crypto without calling it crypto; money that is not money. It was introduced for the wrong reasons which is why it didn’t work.  People were being pushed away from the USD, being forced into a currency they were not ready to embrace.

Dr Moses Chundu

Chundu believes that even though the rest of the world is moving towards cashless systems, there is a portion of the Zimbabwean market that cannot be substituted for anything other than physical cash any time soon.  The structure of the commerce in the country, from public transport to small traders, and the value chain through imports all function on fiat.  He also argues that going cashless requires a tremendous amount of confidence in the banking system which will ultimately hold the balances.

The cashless move should be seen as a continuation of a functioning system but is not appropriate as a continuation of a dysfunctional system without trust.  The citizens have been robbed and the central bank has been at the centre of the heist. Pensioners and depositors have lost their money more than twice in a lifetime, they can not just wake up one morning and trust the central bank with their money, it does not work like that.

Dr Moses Chundu

Zimbabwe and Central Bank Digital Currencies

On a recent trip to Dubai, Zimbabwe’s finance minister Mthuli Ncube, showed great optimism for blockchain technology, despite cryptocurrencies having been banned in Zimbabwe since 2017. Moses Chundu shares the enthusiasm.

I think it is the future, there is no better way to break the physical walls and barriers to international trade than with a technology of this magnitude, that defies distance and jurisdictions.

Dr Moses Chundu

He however worries that due to the narrow understanding of blockchain technology and its broad application in business and connecting communities, the adoption may be slow.   He Furthermore, pointed out that with the citizens traumatised by a failed electronic local currency, it will be viewed with suspicion”

When asked if he thinks Zimbabwe will develop and adopt a CBDC (Central Bank Digital Currency) in the future, he noted

I would not be surprised, but it will not be smooth. We need to resolve the trust deficit between citizens and the monetary authorities first.  Countries working on their CBDC have fiat money that are not in dispute and that have been stable for years. We need to focus on confidence builders and not force things on people, they have suffered enough.

Dr Moses Chundu

Moses Chundu believes that the key to economic recovery is for the government to acknowledge that there is a problem, and only then, will they find the path to fix it..


Blockchain technology is solving financial frictions worldwide, by seamlessly creating transactions and remittances that are traceable and transparent. This however either requires trust in a Centralised digital currency, or the ability to access Decentralised digital currencies.With the Zimbabwean crypto ban still firmly in place, and the lack of centralised custodial trust, digitalization of the national currency may only be viable in the distant future.

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