Impact of the virtual cash economy on informal cross border traders’ livelihood outcome in Gweru, Zimbabwe

Abstract

Informal cross-border trade (ICBT) is a viable economic activity that many in Zimbabwe depend upon for survival. It has provided many people with a livelihood since the 1990s. Despite its crucial role in the livelihood of many,the fiscal policy of Zimbabwe has had a negative impact on ICBT. In 2016, a virtual cash economy was adopted by Zimbabweans owing to cashflow shortages in the country. While studies focusing on specific facets of ICBT have been conducted in Zimbabwe, fewer studies have documented the impact of a virtual cash economy on the livelihood outcomes of informal cross-border traders (ICBTs). To address this, the thesis analysed the impact of the virtual cash economy on ICBTs’ livelihood outcomes in Gweru, Zimbabwe. The study targeted 972 ICBTs. Triangulation was employed, using quantitative and qualitative methods to gather data over six months. Quantitative techniques comprised closed-ended questionnaires and qualitative methods included semi-structured interviews, open-ended questionnaires, focus groups, observations and secondary data. Data analysis was done using both qualitative and quantitative methods. Changing trends in livelihood outcomes were assessed for the period of 2009 to 2015 (i.e. before extensive use of virtual cash occurred) and the period of 2016 to date (after the increased use of virtual cash as a method of payment). Results showed that prior to more extensive use of virtual cash, ICBTs earned more income and acquired more assets.But, when virtual cash became a common method of payment, ICBTs experienced a negative impact ontheir income and livelihood outcomes. The study further investigated the economic challenges that the virtual cash economy posed to these traders. The results revealed that the virtual cash economy affected the ICBT business through the exchange rate, accessibility of cash and accessibility to the plastic money infrastructure. The study concluded with a framework that was developed to highlight the importance of cash in the success of ICBT and its sustainability in Gweru. The study demonstrated the need to integrate ICBT in policy-making to address issues that affect ICBT to ensure future sustainability by providing a livelihood to traders and those who depend on ICBT for their survival