Zimbabweans are holding on to their preference for US dollars, posing a challenge to the countrys newly introduced gold-backed digital currency, the ZiG. This hesitance is fueling a boom for remittance and mobile money companies that are resorting to creative ways to get physical dollars into peoples hands.
The preference for US dollars stems from the countrys tumultuous economic history. Hyperinflation in the early 2000s eroded trust in the local currency, and subsequent government actions like seizing foreign currency deposits have left Zimbabweans seeking favourable alternatives.
The demand for dollars is massive in Zimbabwe, said Ross Martin, commercial manager for Africa at Travelex, a leading foreign exchange firm, who spoke to Bloomberg Africa . Remittances from Zimbabweans living abroad underscore this point, surging 16 to USD 823 M in the first half of 2024 alone, according to the Reserve Bank of Zimbabwe.
Mobile money companies are stepping in to bridge the gap. Mukuru, the countrys biggest money transfer service, exemplifies this trend. The company, founded by Zimbabweans in England during the hyperinflation era, now airlifts millions of US dollars into the country every month, Bloomberg reports .
Millions of US dollars arrive on pallets, broken down and bundled into smaller packages for easy distribution. These packages reach transfer points nationwide - essentially small kiosks where recipients can withdraw US dollar remittances in cash.
