Respect Gwenzi, a Lead Analyst and Managing Director at Equity Axis has said that Ecocash and its Agents are not to blame for cash out premiums they are charging.
Gwenzi’s remarks come when there is a public outcry over the soaring premiums Ecocash agents are charging customers who will be withdrawing their money from their Ecocash wallets.
The public accuses Ecocash of perpetuating rent-seeking and economic sabotage by exploiting cash strapped citizens. The government and the Zimbabwe Anti Corruption Commission have also raised concern over the matter urging Ecocash to reign in its agents.
Gwenzi observes however that the outrage is misplaced as Ecocash does not control demand or supply. He noted that the country has a very huge cash deficit which creates a huge demand for cash over electronic money. He added:
It is also common knowledge that in an inflationary environment one would choose to hold physical forms of cash. The expectation of further loss in value of local currency would discourage circulation of notes which economic agents already know are in low supply and likely to preserve value better than bare RTGS. This is the crux of the matter, simple! Faulting the operator of an infrastructure who does not benefit from the premiums is a lack of appreciation of how money moves on the network. Even as blaming the rent seeking agent for taking advantage of the cash crisis, is to disregard the very essence of capitalism, which exists not for benevolence but for profit maximization.
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