CONSUMERS can still use mobile money platforms to pay for goods and services, while agents and merchant lines have been suspended with immediate effect.
In a statement last night, the Reserve Bank of Zimbabwe (RBZ) reinforced the Government’s directive to suspend mobile money transactions.
However, the move would affect holders of agent and merchant lines while regular transactions for members of the public continued normally.
These measures targeted those behind mobile money shenanigans that have been haemorrhaging the economy through illicit financial transactions.
On Friday, the Permanent Secretary in the Ministry of Information, Publicity and Broadcasting Services Mr Nick Mangwana said mobile money transactions and trading on the Zimbabwe Stock Exchange (ZSE) had been suspended to pave way for investigations into illegal dealings connected to the foreign currency black market.
This came on the back of credible evidence that some of the transactions bordered on criminality and creating artificial money.
In yesterday’s statement, RBZ Governor Dr John Mangudya further clarified the suspension of the mobile money platforms, saying ordinary transactions would not be affected.
“Members of the public are assured that their bona fide transactions will be processed normally.”
The central bank boss said the measures were targeted at mobile money agents and merchant transactions that have been used as conduits for illicit financial activities.
“Following the Government press release on the suspension of monetary transactions on Mobile Money Platforms (One Money, My Cash, EcoCash and Telecash) dated 26 June 2020, the Reserve Bank of Zimbabwe (the Bank) wishes to advise the public as follows:
“All mobile money agents are suspended from facilitating mobile financial transactions with immediate effect;
“All merchant transactions are suspended except for receiving payments for goods and services as well as payment of utilities (water, power and airtime), which have been limited to $5000 per day for the convenience of the transacting;
“All mobile money liquidations should be done through the banking system; and all bulk payer transactions have been suspended with immediate effect.”
With its dominant market share of around 94 percent, Government has described Ecocash as “the central pivot of the galloping black market exchange rate”.
These malpractices had led to incessant price hikes of goods and services that were bedevilling the economy and causing hardships. “These unprecedented measures have been necessitated by the need to protect customers on mobile money platforms which have been abused by unscrupulous and unpartisan individuals and entities to create instability and inefficiencies in the economy,” said Dr Mangudya.
Yesterday, all the country’s three mobile operators, Econet, NetOne and Telecel advised their customers that the new measures would not affect regular transactions. Following the announcement by Mr Mangwana, Ecocash urged its customers to wait for further clarity from the RBZ.
“We urge all Ecocash users who exceed 10 million Zimbabweans, the majority of whom do not have bank accounts, to remain calm and continue to do your business as usual.”
In a statement yesterday, Telecel said: “To our valued customers, please be advised that the Telecash mobile money is operating as normal.”
NetOne also said that its One Money services would operate normally.
On Friday, Mr Mangwana revealed that vast sums of money were trading in the Ecocash system, with $8 billion held in 501 000 merchant and agent accounts along with large balances in suspense accounts. None of these accounts could be scrutinised by the Financial Intelligence Unit (FIU) of the RBZ which could, however, monitor dealings in bank accounts in the official banking sector.
Mr Mangwana said Government had evidence that millions of dollars were being transferred by merchants every day using mobile money platforms, to street runners in the black market to buy foreign exchange for their funders.
Although most agent lines were supposed to be suspended following a directive a few weeks, many were still operating and new lines had been opened. These un-auditable accounts were being used by criminal syndicates.
In an interview with The Sunday Mail on the operationalisation of the foreign currency auction system which commenced last week, Dr Mangudya said speculation was largely driving the parallel market exchange rate, which continued to balloon over the past week, trading at 1:90, although the official rate closed at 1:57.
“The value of any currency against another is dependent on several factors. These factors include the country’s current account balance, level of money supply growth, level of inflation, level of interest rates, external debt as well as other non-economic factors.
“While the economic factors play a critical role in setting the exchange rate, in Zimbabwe the plethora of exchange rates cannot be explained by those factors. The exchange rates have been driven more by speculation and expectations which has resulted in forward pricing of goods and services,” explained Dr Mangudya.
No comment could be obtained from the ZSE last night but an official close to the developments said the stock exchange would state its position by Monday.
Previously, the RBZ has accused Ecocash, a subsidiary of ZSE-listed Cassava Smartech, of engaging in shadow banking and running a Ponzi scheme that is creating fictitious money and balances in the system.
The central bank also said Ecocash exhibited a “blatant display of arrogance, defiance and impunity by failing to comply with directives from the FIU”.
Telecommunications expert Dr Dennis Magaya said: “This whole scenario is a reflection of the widening gap between growing digital world and policy regulation framework.
“At the end of the day, it is important to address this gap, because if it not addressed, it brings the good, the bad, and the ugly, as seen in this situation.”