Zambia: Businesses Suffer From Coin Shortage
They are known as numismatists – people who collect coins as a hobby – and according to All Africa, they are the culprits driving the coin shortage problem in several Zambian provinces.
Of all the different types of hoarding that exist, did you ever consider that coin collecting could be such a menace to society?
When the country’s coins are released from the banking system and into the market, consumers have a tendency to keep these coins, which hinders circulation. The motivation behind coin collection is generally harmless. However the lack of coins is making it difficult for various merchants to carry on with business.
In January of this year, the Zambian bank reintroduced the country’s currency. However, the Bank of Zambia did not include one-ngwee coins during the rebase. The deputy minister asked parliament why the minting of the coin was neglected, and if a paper note replacement was a viable option. The house of parliament responded saying further research needed to be completed before confirming a national shortage and concerning the public.
The Central Bank of Zambia reported the issue of coin starvation is being experienced in several parts of the country. According to All Africa, taxi drivers operating in the Southern Province of Zambia complain that business is difficult with the low availability of coins. Smaller businesses, such as the taxi industry, are highly dependent on coins to sustain their trade. When there is a shortage of coins, both merchants and customers are often unable to give precise change.
Merchants and consumers both agree that every coin counts, which explains why some consumers like to harbor coins at home. Some people collect coins for psychological reasons that instill hope for future wealth, or they may be hoarding simply because many complain coins are too heavy to carry around. Instead of lugging around the weight, many people will throw change in a bin at home.
To help combat this problem, members of parliament have suggested replacing certain coins with paper banknotes, which are much lighter. If MPs can encourage consumers to use cash, then circulation would improve.
Despite the relatively innocent reasons for coin collection, the outcome remains the same: trade and commerce in Zambia is being negatively affected. Consumers need to release coins back into the market more often to keep the market thriving. However, finance minsters did report that the coin printing is an on-going process and that the public can expect to see an increased availability of coins soon.
To read the full story at All Africa click here.