Zimbabwe’s mobile transactions up 5%

ZIMBABWE has registered a 5,07% growth in the value of mobile and internet based transactions to US$360,67 million in April 2014 from US$343,26 million in the previous month, latest Reserve Bank of Zimbabwe (RBZ) figures show.

Taurai Mangudhla

This follows a 21,91% growth in mobile and internet based transactions to US$343,26 million in March 2014 from US$281, 56 million in February. Going forward, analysts see mobile and internet based transactions growing as base infrastructure improves and services providers come up with new product offerings.

Earlier this month, the country’s leading mobile network provider, Econet Wireless (Econet), announced its partnership with global remittance company, World Remit, unveiling an international money transfer product to be known as Ecocash Diaspora.

At the launch, Econet Services CEO Darlington Mandivenga said the new product would bring in at least US$600 million revenue to Econet, a third of all foreign remmitances into Zimbabwe based on 2013 figures, in its first year of operation.

Diaspora remittances amounted to US$1,8 billion last year.

The services will come with cheaper tariffs compared to existing options such as Western Union’s money transfer services.

Ecocash CEO Cuthbert Tembedza said Ecocash was involved in discussions with the RBZ to review limits for Ecocash transactions and Ecocash wallet balances from US$3 000 per month to US$10 000 on selected customers.

This is expected to drive volumes on Ecocash which has handled over US$4,5 billion since it was launched in 2011 with over 170 million transactions processed on over 1 million accounts.

In the April report, the RBZ said the total value of card based transactions increased by 12,75% to US$379,42 million in April 2014, from US$336,52 million in March 2014.

The real time gross settlement system (RTGS) continues to dominate transactions with the value of settlements processed through the platform in April 2014 growing by 3% to US$3,4 billion from US$3,3 billion in March 2014 while the volume of transactions registered a decrease of 4%, from 192 020 to 183 626 over the same period.

In April 2013, transactions on the RTGS system exceeded US$4 billion.

“The value of cheque transactions, however, decreased to US$9,65 million in April 2014, from US$10,40 million in March 2014,” said the central bank.

RBZ said annual broad money growth slowed down by 1,13 percentage points from 7,78% in March 2014 to 6,65% in April in what the central bank says represents a marginal recovery from an average of 1,44% recorded in the last quarter of 2013.

On a month-on-month basis, broad money increased by US$136,5 million (3,33%) in April, compared to US$72,2 million (1,8%) in March.

“Largely contributing to the growth in money supply, were expansions of US$171,0 million in over 30-day deposits; US$107,2 million in under 30-day deposits; US$100,9 million in demand deposits; and S$92,7 million in savings deposits,” said the RBZ.

The central bank said growth in money supply continued to be partly driven by tobacco sales.

As at end of April 2014, cumulative tobacco sales amounted to over US$330 million, which represents significant inflows into the economy.

The tobacco market season closes end of this month. Deposits held by Zimbabwe’s financial institutions improved by 1,8% between February and March 2014 to US$4,1 billion largely driven by tobacco sales, offsetting successive slowdowns which characterised the period August to November 2013.

The central bank said annual broad money supply growth increased to 7,78% in March 2014, a 2,32% growth from 5,46% recorded in February 2014.

Cumulative tobacco sales as at March 28 2014, raked in US$121,3 million, representing a significant liquidity inflow into the economy as tobacco is financed from offshore sources.