Will Zimbabwe be Africa’s first cashless society? Telecommunications company, and now mobile-banking service, Econet Wireless, predicts that in less than 12 months notes and coins will be long-gone from this southern African country.
“We do not expect anyone to still be using paper money in a year’s time,” the company’s CEO Douglas Mboweni recently said. “It will be just like Europe or America, where you no longer see people carrying bundles of cash.”
The collapse in Zimbabwe’s economy in 2002 paved the way for the Econet Wireless mobile payment system.
“Hyperinflation had destroyed people’s confidence in financial institutions,” said the Zimbabwe company’s founder, Strive Masiyiwa, at the Mastercard Foundation Symposium on Financial Inclusion in July.
“The lowest denomination circulating was $1,” Masiyiwa said. “If you want to buy a packet of sweets for your child, you can’t get change.” The company set up a mobile payment system that handles small amounts and allows people to save as little as $1.
“Today 43 percent of the GDP moves through Econet Wireless,” he concludes.
Masiyiwa was born in Zimbabawe (then Rhodesia) in 1961. He and his parents fled the country in the turmoil after then-Prime Minister Ian Smith declared independence in 1965, settling in Zambia.
His parents, who ran their own business, could afford to send Masiyiwa to school in Scotland when he was 12. After school, he studied electronic engineering at the University of Wales and worked briefly for a computer company in Cambridge before returning to Zimbabwe in the early 1980s.
Econet Wireless was established in 1998, but not before a fight.
Masiyiwa waged a five-year legal battle with the government for a license to deliver telephone services. The company now operates in 17 countries including Botswana, Lesotho, Kenya, Nigeria, South Africa and New Zealand. In 2000, while the U.N. filed a civil suit against Zimbabwe leader Robert Mugabe, Masiyiwa moved his family and company headquarters to South Africa.
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