Shops must not shun coins

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It appears the prejudice against coins is continuing unabated, especially in the capital, Harare.

The formal sector is now reading from the same script as their informal counterparts.

There is now a leading retailer maintaining a separate till for coins below $1.

Although the registered retailers are yet to explicitly state their intentions, their separation of tills should communicate a tacit casting of aspersions.

How registered businesses are drawing inspiration from pirate retailers, is a question Zimbabweans need answered.

There should be clarity on how the economy should proceed after a swift ambush on Zimbabweans rendering useless money they had grown familiar to.

Coins under $1 amount to ZW$42,7 million in the economy.

Where are the authorities when money they are giving out in the banks is being rejected by small businesses and treated with contempt by large retail corporations?

Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya says people must not despair, as they can go and exchange the money at the bank for bigger denominations.

Not sure how practicable this is when there is a cash shortage. Just who would take money back to the bank after queuing for it?

One would be forgiven to believe that financial institutions are dumping money whose usefulness is diminishing on unsuspecting citizens.

Those who passed through basic economics class know the characteristics of money.

The characteristics are durability, portability, divisibility, uniformity, limited supply and acceptability.

As it stands, it appears small coins are failing the acceptability test.

Zimbabwe’s economy is largely informal, and if denominations of a currency cannot buy in the largest sector of any country, then they are nearing uselessness.

The unilateral decommissioning of the money has consequences in a country battling cash shortages.

Is the money that is rendered useless and relegated to desk drawers being replaced in value terms?

If the 25 cent coins are worth for argument’s sake, $20 million, their relegation means the country has lost that amount of cash in circulation. It increases pressure on the remaining accepted denominations, possibly worsening the cash crisis.

At some point though, these small businesses need to be called to order.

Their refusal to accept so-called small coins points to a bigger problem.

Small-to-medium enterprises are not banking money, why would they have gripes with money if it is going to end up in the banking system?

Every legal business in Zimbabwe should be called to accept money in all denominations without reservations.

It is a legal requirement, and the law has to be followed even when it brings a degree of inconvenience.

Our problem as a country is that we now have an uncompromising business sector bent on having the best conditions at any given time.

This is why we have had retailers who import products and slap a profit margin that exceeds 100 percent.

The business world in Zimbabwe, large and small, is not acting in good faith.

Authorities have to come in to ensure people are not left at the mercy of the worryingly powerful informal sector or downtown economy.

Government has to clean up the banking sector and ensure there are minimal inefficiencies. After it does that, it has to make it a legal requirement for all businesses to bank their money.

Mbare’s Siyaso Market sees millions of dollars exchanging hands on a daily basis.

All that money is being traded outside taxable channels, prejudicing the Government in the process.

This explains the obsession with cash in the informal sector, it is to evade any paper trail and evade questions of paying taxes.

There are people making thousands of dollars from their trades, but do not contribute a single cent to the fiscus.

Running a business has a number of costs and taxes that make up the list.

If ever authorities needed justification to ensure there is compliance in banking money, this coins debacle should be a good place to start from.

There is no reason why registered commuter omnibuses, spares shops, service stations and other cogs in the value chain should not have multiple payment systems.

Unregistered businesses, on the other hand, should be given incentives to formalise their work and contribute to the growth of the country.

When one is formal, it is hard for them to make arbitrary decisions on whether or not they are accepting money.

The Government is working to consolidate the standing of the Zimbabwe dollar which was brought back recently.

As President Mnangagwa said, Zimbabwe will not be reverting to the multi-currency system.

This means there have to be measures in place to ensure the reintroduction of the Zimdollar bears tangible benefits.

It is hard for people who had grown addicted to the predictability and consistency of the United States dollar to be brought back to a local currency.

The journey is in itself slightly uncomfortable, it does not need further impediments through money that appears like it is perishable.

For any currency to work, there has to be confidence.

Confidence comes from predictability and it is hard to achieve when people get on public transport only to be told that the money is no longer accepted.

Money should bring convenience to its holder, when it disadvantages those in possession of it, there must be introspection.

If the Zimdollar is to work, then the madness surrounding coins has to be cleverly fixed.

Right now there are fears that the same fate that met the 1 cent, 5 cents, 10 cents, 25 cents and 50 cents coins will meet the $1 coin and soon the $2 one.

One still needs 50 units of the highest coin in Zimbabwe to buy $5 litres of fuel, if portability is a concern to those who are “decommissioning” the coins unofficially, then no denomination is safe as it stands.

Being proactive can help avert crises though.

The RBZ, seeing that prices are going up, should make a pre-emptive effort to ensure that money in circulation can be used in a practical manner.

In an economy where a loaf of bread is around $17, there should be adjustments on the denominations of money available.

There is need for objective thinking in money supply because as it stands, the people are exposed as there is no show of intent in as far as ensuring the money is accepted through enforcement of law.

The RBZ says stressed Zimbabweans should “bank their money to avoid inconveniences that they may be facing from conducting business with bulky small denomination coins.”

Whether the call will be heeded remains to be seen.

Presently, citizens remain at the mercy of the downtown economy and the question is; who will take a stand on their behalf, now that formal retailers have joined the list of those showing a negative attitude towards coins?–herald.o.zw

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