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A pointed out that productivity needs to be increased by up to 9% in the next seven for the country to meet the target of joining an upper-middle income bracket. But how can the country’s digital transformation also help to push Zimbabwe forward?
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The Idea of a CBDC
A central bank digital currency (CBDC) is a central-owned digital coin, and there’s been a lot of talk of them being introduced in different countries across the planet. In fact, it was reported recently that the Harare Institute of Technology has been working on a CBDC for Zimbabwe. There’s no confirmation yet of when this currency might be introduced but what can we expect if it finally gets introduced at some point?
One of the reasons for creating this sort of digital currency is to reduce the current printing and transaction costs for the Zimbabwean dollar. Given the country’s disastrous inflation in the past, they’re also likely to be interested in the way that a CBDC can help them to avoid currency manipulation and trading on the black market.
Zimbabwe also has one of the world’s highest rates in terms of the unbanked population, as around three-quarters of people living here don’t have a bank account. CBDCs could ensure that everyone can open a digital wallet and obtain easy access to basic financial services.
The Online Population
The number of people who can access the internet is crucial to the next stage of Zimbabwe’s digital development, as this is what determines how quickly online services can grow. the internet penetration rate in the country is just over 30% meaning that more than 10 million Zimbabweans don’t currently use the internet.
While this might not seem like a pressing issue, the fact that almost seven out of every ten residents in the country don’t go online suggests that growing digital business and launching initiatives like a CBDC is going to be extremely difficult. Ecommerce is still relatively small here compared to other countries, with that low internet penetration rate and a scarcity of options holding it back.
Online entertainment is another factor, as this is an industry that’s grown enormously around the world and produces a huge amount of revenue. However, Zimbabweans looking for entertainment will often have to turn to international sites, with Netflix and Amazon Prime among the options for those people who want to watch a movie or a TV show.
As per the , we can see that there are many online slots that can be accessed and played for free. Zimbabweans with internet access can try the likes of Triple Diamond, Golden Goddess, and Bier Haus without using their own funds. They also offer VSO Coins, which are their own digital currency players can use to wager on games.
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Where Do We Go from Here?
There seems to be little doubt that easier, cheaper access to the internet is going to be a key factor in helping the Zimbabwean economy to grow. In addition, people need to be able to get hold of affordable devices such as smartphones to go online. An ECONET study puts the smartphone penetration rate in the country at 52%, which sounds impressive but leaves Zimbabwe far behind neighbours like South Africa and Kenya.
There’s still a long way to go before we can consider that Zimbabwe has a strong digital economy, but there are signs that it’s moving in the right direction. For example, the World Bank released a Zimbabwe Digital Economy Diagnostic report in 2021 that confirmed that over 7.6 million mobile wallet holders are in the country, which is more than the total number who use the internet that we’ve seen in other reports.
These figures suggest that there’s a strong digital payment system where 96% of all the country’s formal sector goes through a digital payment system, this is largely due to the government heavily promoting the use of digital payment methods and makes Zimbabwe one of the leaders in this respect on the African continent.
It seems certain that we will see the digital economy in Zimbabwe grow in the next few years, and the speed of this growth is going to be linked to the overall growth of the economy.
Online Reporter