Mobile money services boom in Zimbabwe as citizens avoid new currency
TLDR
- Zimbabwe's leading mobile money app Mukuru ships millions of USD via private planes to address demand for stable foreign currency, bypassing the new ZiG unit.
- The operation involves breaking down pallets of currency into smaller packages for nationwide distribution from Robert Gabriel Mugabe International Airport near Harare.
- This covert yet legal practice highlights the lengths companies go to satisfy customer need for USD in a country facing economic instability.
Mobile money players are shipping in US dollars with planes as Zimbabwe's currency crisis deepens. At least monthly, and up to thrice weekly, a private aircraft touches down in a high-security area of Robert Gabriel Mugabe International Airport near Harare. Its cargo: millions of US dollars in cash.
This covert yet legal operation, orchestrated by Zimbabwe's leading mobile money app Mukuru, involves breaking down pallets of currency into smaller packages for nationwide distribution, as reported by Bloomberg.
The practice underscores the extreme measures companies are willing to take to meet customer demand for stable foreign currency and avoid the new ZiG unit, in a country grappling with severe economic instability.
Key Takeaways
Africa's mobile money sector has boomed, processing $912 billion annually per GSMA. In Zimbabwe, fintechs uniquely cater to the demand for physical US dollars, a preference stemming from a hyperinflation crisis that obliterated savings and led to the national currency's abandonment in 2009. Despite six attempts to reintroduce a local currency, including the recent gold-backed ZiG, Zimbabweans remain skeptical. Before the ZiG's April launch, 80-85% of transactions were in US dollars. This cash reliance originates from a failed land reform policy over 15 years ago. While the ZiG has shown initial stability, convincing the population to embrace it has proven challenging, reflecting deep-seated economic mistrust and the enduring appeal of the US dollar in Zimbabwe's uncertain financial landscape.
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