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Zimbabweans hope the economy will pick up

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As a new reality dawns on Zimbabwe, many are hoping the economy and investment will now begin to pick up.

Bloomberg and World Bank data shows that Zimbabwe’s economy has halved in size since 2000 and the liquidity crunch has given rise to what is termed plastic money in Zimbabwe.

According to EcoCash, a subsidiary of Econet, a telecommunications company, more and more Zimbabweans are now getting used to paying for goods and services via alternative methods.

Zimbabwe’s liquidity crunch is severe.

In what was once Africa’s bread basket, Zimbabwe is today the region’s basket case, with real per capita income down 15 % since 1980.

Even if one has 10 000 US dollars in the bank, they are only permitted to withdraw $20 in a day.

This has pushed some merchants such as Econet to come with up with ways to accelerate the use of plastic money plastic money.

Currently, more than 6 million customers use plastic money which has also helped 70% of the population to be financially included.

According to the International Monetary Fund, hyperinflation peaked at about 500 billion% at the end of 2008.

This led to the nation abandoning its own currency in favour of a basket of foreign exchange including the South African rand and the US dollar, as well as bond notes printed by the government. But the bond notes are not going down well with traders who prefer to trade using the SA rand.

The country’s share of regional gross domestic product has dropped to less than 1% from 1.5% 37 years ago, when Mugabe came to power.

It improved slightly during a unity government agreed to following disputed elections in 2008 and it remains to be seen what impact the resignation of President Mugabe who served for more than three decades brings for a country’s struggling economy.

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