A recent US$4 million cash heist targeting a Safeguard Security vehicle in Bulawayo has brought renewed attention to the risks associated with Zimbabwe’s heavily cash-based economy. The brazen robbery, which occurred on 3 October 2024, has prompted Safeguard Security to issue a statement addressing the incident and reminding clients of their contractual obligations regarding cash movements.

In the statement, Safeguard Security confirms that reports of a “serious cash heist in Bulawayo outside Ecobank” are accurate. The company emphasises that this incident starkly illustrates the “very serious risks associated with cash holding and cash movement” in Zimbabwe.

The security firm reminds customers of their “responsibility to work within their contracted limits for the movement of cash, and to communicate clearly with us if a cash movement is to be out of the ordinary.” This highlights the importance of proper planning and communication when dealing with large sums of cash.

Safeguard notes that a “Four million dollar move obviously poses a significant risk and is well outside of any contracted limits for Safeguard (and almost certainly the security industry Africa wide..” This statement underscores the heist’s exceptional nature and the challenges security companies face in safeguarding such large amounts of cash.

The company warns that “Any other approach places the safety of your staff, our security teams, and your cash, at considerable risk.” This serves as a stark reminder of the potential dangers involved in handling and transporting large sums of cash.

Zimbabwe’s Cash Economy: A Double-Edged Sword

The Safeguard heist brings into sharp focus the ongoing challenges faced by Zimbabwe’s predominantly cash-based economy. Despite efforts to promote digital payments and reduce reliance on physical currency, cash remains king in many sectors, particularly the informal economy.

This preference for cash stems from a variety of factors, including:

Mistrust of banks: Many Zimbabweans remain wary of keeping their money in formal financial institutions due to past experiences of currency devaluations and account freezes.
Informal sector dominance: A significant portion of Zimbabwe’s economy operates in the informal sector, where cash transactions are often preferred due to their immediacy and lack of paper trail.
Government policy volatility: Sudden and sometimes drastic policy changes by the government have led many to prefer holding physical cash as a hedge against economic uncertainty.
Infrastructure challenges: Unreliable electricity and internet connectivity in some areas can make digital payments less practical than cash.

The Risks of a Cash-Heavy Economy

While cash offers certain advantages, it also comes with significant risks:

Theft and robbery: As evidenced by the Safeguard heist, large amounts of cash are attractive targets for criminals.
Economic inefficiency: Cash transactions can be slower and more cumbersome than digital alternatives, potentially hindering economic growth.
Limited financial inclusion: Heavy reliance on cash can exclude individuals from accessing formal financial services and credit opportunities.
Challenges in monetary policy: A large informal cash economy makes it difficult for the government to implement and monitor effective monetary policies.

Possible Solutions and Way Forward

Addressing the challenges of Zimbabwe’s cash-dominated economy will require a multi-faceted approach:

Rebuilding trust in the banking sector: The government and financial institutions must work to restore public confidence through transparent policies and improved services.
Promoting digital payment adoption: Continued investment in digital infrastructure and education on the benefits of electronic payments can help reduce cash dependence.
Incentivising formal sector participation: Policies that make it easier and more attractive for informal businesses to formalise could help reduce cash reliance.
Improving security measures: Enhanced security protocols for cash-in-transit operations and businesses handling large sums of cash are essential.
Gradual policy changes: The government should aim for more predictable and gradual policy shifts to build public confidence and reduce economic uncertainty.
Financial literacy programmes: Educating the public on the benefits and use of digital financial services can help drive adoption.

Historical Context and Previous Incidents

This is not the first time Zimbabwe has seen high-profile cash heists. In January 2021, a US$2.5 million robbery occurred along the Harare-Chinhoyi road, which was later revealed to be an inside job. The police arrested 11 suspects and recovered over US$456,000 along with vehicles purchased with the stolen money.

These incidents highlight the ongoing challenges faced by security companies and financial institutions in safeguarding large sums of cash in Zimbabwe’s economy.

Conclusion

The recent Safeguard Security heist serves as a stark reminder of the risks inherent in Zimbabwe’s cash-dominated economy. While cash offers certain advantages, particularly in an environment of economic uncertainty, it also presents significant challenges and security risks.

As Zimbabwe continues to navigate its economic challenges, finding a balance between cash use and digital financial services will be crucial. This will require concerted efforts from the government, financial institutions, businesses, and the public to build trust, improve infrastructure, and promote financial inclusion. Addressing these challenges head-on will allow Zimbabwe to work towards a more secure, efficient, and inclusive financial system that serves the needs of all its citizens while reducing the risks associated with large-scale cash movements.