A tertiary institution in Zimbabwe, the Harare Institute of Technology, is working on developing a CBDC. The vice-chancellor sells the benefits of the CBDC to the President who is also the chancellor of the institution.
The vice-chancellor of the Harare Institute of Technology revealed that the institution is developing a CBDC during the institution’s 13th graduation ceremony.
Dr. Quinton Kanhukamwe, HIT’s vice-chancellor, believes that the blockchain technology utilized in the CBDC development will enhance trust and transparency.
The institution identifies the CBDC technology as a champion for the Zimbabwe industrialization and modernization agenda.
A good pitch to the president
Dr. Kanhukamwe sold the benefits of the CBDC to President Emmerson Mnangagwa, who is also the Chancellor of the institute, during the graduation ceremony. The VC pointed out the development’s goal to ease the printing and transactional costs. He also believes a CBDC would help eradicate manipulation of the fiat currency, cash hoarding and black market trading.
“The technology will reduce the printing of money as we work towards a digitized economy by 2030. The digital currency has the capability of eliminating currency manipulation, hoarding and fueling of black market currency trading,” said Dr. Kanhukamwe.
The Vice-Chancellor strongly opines banking the unbanked would help elevate small and medium business enterprises. Especially since this sector increases the chances of ordering finance.
“Many at times, the unbanked population believes that the traditional financial sector is only there to rip off all their earnings. It has the capacity to significantly reduce the regulatory cost for central banks thus reducing the transactional costs that will ultimately reduce the costs of service. As a result, there is a significant reduction in fees.” he stated.
Dr. Kanhukamwe’s pitch to the president comes at a time when the president’s administration complained often about the economic saboteurs. which greatly contributed to the manipulation of currencies and the crashing of the Zimbabwean dollar (ZW$).
Zimbabwean’s road map to creating a CBDC
It is not clear whether the Institute is developing the CBDC for the Reserve Bank of Zimbabwe or not. As it is essentially the role of the central bank to develop a nation’s CBDC. The bank did not either reveal the date when the CBDC will be rolled out.
In the most recent monetary policy statement, the reserve bank of Zimbabwe noted it had a CBDC roadmap in place. The central bank committed itself to release a public consultation paper that will advance “ abroad and transparent public dialogue regarding the potential benefits and risks of a CBDC.”
Zimbabwean government on cryptocurrencies
In late last year, 2021, the Head of the e-government Unit of Zimbabwe, Charles Wekwete touched on the introduction of cryptocurrency to be used as a legal payment service.
However, later on, the cabinet refuted the idea and assured that the Zimbabwean dollar would remain the legal local currency.
“The Government would like to assure the nation that it is not considering introducing another currency in the economy as reported in some sections of the media,” Information minister Monica Mutsvangwa noted during a post-Cabinet briefing.
Zimbabwe joins the major African states in developing their CBDCs. Just recently In July, the BEAC board of directors held several meetings in Douala, Cameroon. After the meetings, the quest for a CBDC came about. The Bank of Central African States (BEAC) could now be working on introducing a CBDC for its member states.
In 2021, Nigeria introduced its CBDC, e-Naira, the first CBDC to be launched in Africa. The e-Naira was extensively adopted as the Central Bank of Nigeria recorded a total of 37,810 transactions within a month after the launch.
Nigeria’s e-Naira spurred interest from other African countries. For instance, the Reserve Bank of South Africa was recently working on a wholesale CBDC. The Bank of Ghana also trolls the CBDC. The bank was testing the retail usage of a CBDC, e-Cedi. Netizens from Ghana who own a digital wallet app or contactless smart cards can use the e-Cedi.
The Central African Republic also stands out in offering digital currency to its citizens. The CAR, which is also a member state of the BEAC, introduced its national cryptocurrency, the Sangocoin. Sangocoin will majorly be used in the country’s long-term crypto project, Sango Island.
