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Minister Patrick Chinamasa

Nyemudzai Kakore Harare Bureau
THE financial services sector now holds $6,1 billion in deposits owing to an upturn in the use of plastic and electronic money platforms, the Minister of Finance and Economic Development, Patrick Chinamasa, said yesterday.

Minister Chinamasa said this was facilitated by the move from a cash-based economy and payment system where the public has shifted to the use of plastic money and Real Time Gross Settlement transfers.

As such, Government was in the process of installing and activating point of sale (POS) machines in all Government and quasi-Government departments, he told Parliament yesterday

“There is no way that you can have cash to represent the bank deposits. Currently, we have something like $6,1 billion in bank deposits. There is no way you can have physical cash of that amount. Even in the United States, it is only 10 percent of virtual money and that is money in bank deposits,” said Minister Chinamasa.

“While you are talking about a cash crisis, the cash crunch is actually easing because of the corresponding increase in use of plastic money. I am pleased of that crisis because it has given us an opportunity to come up with solutions to that problem. We need, of course, to secure the point-of-sale machines and it is a process. Already, the uptake of point-of-sale machines has been phenomenal.”

He was responding to Glen Norah legislator Mr Webster Maondera on Government policy regarding the payments done to Government departments as most departments want service seekers to pay cash upfront instead of using point-of-sale machines.

On the progress made in printing bond notes and their introduction, Minister Chinamasa said the Reserve Bank of Zimbabwe was finalising the signing of a tripartite agreement with the African Export/Import Bank (Afreximbank) and bond notes printers ahead of the introduction of bond notes in October this year.

He assured the nation that the guarantee facility of bond notes would not exceed the US$200 million guaranteed by Afreximbank since the regional bank had a reputation to protect.

“The US$200 million is a guarantee facility. The bond notes are coming to play a two-fold purpose, as an export bonus scheme but more importantly to stop leakages of US$. The way things are, if we brought in $2 billion today, tomorrow it will be gone.

“That is what I think we need to understand. Because of its appreciation, everybody is looking for United States dollars. They will find ways to come and mop up, siphon and fish out our US$. That is the reason also why we are coming in with the bond notes”.

Government is putting in place measures to boost exports as the major foreign exchange earner through various production and export incentives.

These include the five percent export incentive scheme and other support to gold producers to boost the economy.

Minister Chinamasa said other measures include implementing the international financial institutions (International Monetary Fund, World Bank and African Development Bank) Arrears Clearance Programme to unlock more external funding and lowering bank lending rates from as high as 35 percent to current levels of 6-15 percent.

He said these measures and incentives to boost exports are primarily aimed at top export earners of gold (particularly the small scale producers) and tobacco growers.