UPDATED: Mobile money services & trading on ZSE suspended

By ZBC Reporter
THE Government has with immediate effect suspended all transactions on phone-based mobile money platforms plus trading on the Zimbabwe Stock Exchange (ZSE) in a move aimed at curbing and investigating illicit activities.

In a statement issued Friday evening by the Permanent Secretary in the Ministry of Information, Publicity and Broadcasting Services, Mr Nick Mangwana, Ecocash, Onemoney, Telecash, and Mycash are all involved in these illicit activities in varying degrees and the suspension will allow investigations to take place which will lead to the arrest and prosecution of offenders.

The statement highlights that the government is in possession of impeccable intelligence which constitutes a prima facie case in which phone-based mobile money systems of Zimbabwe are conspiring with the help of the ZSE in illicit activities that are sabotaging the economy.

The illicit activities include externalisation of foreign currency through transfer mispricing, acting as banks with Ecocash in particular holding in excess of ZWL$8 billion in just over 501 000 agent lines as at 10 June 2020, which is not under the scrutiny of the Financial Intelligence Unit.

“Ecocash, in particular, is acting as the center pivot of the galloping black market foreign exchange rate and therefore, fuelling the incessant price hikes of goods and services that are bedevilling the economy and causing untold hardship to the people of Zimbabwe,” reads the statement.

The statement highlighted that the mobile money platforms involved are often arrogant and non-compliant with directives issued by the Reserve Bank of Zimbabwe. This includes facilitating illicit trade in notes and coins at rates of up to 50 percent as well as allowing agent lines that were banned by the central bank to continue trading illegally.

“Ecocash, however, which controls nearly 94% of all mobile money transactions is the centre pivot of this problem and its resultant impact on Zimbabwe’s economy,” said Mr Mangwana.

“The impact is exacerbated by the existence of fake counters on the Zimbabwe Stock Exchange, which are epitomised by the so-called Old Mutual Implied Exchange rate. This in turn results in four or more US:ZWL parallel market exchange rates operating in the market,” he highlighted.

This scenario means that at any given time there are multiple exchange rates that all conspire to defeat fiscal policy.

The suspension will be in place until mobile money platforms have been reformed to their original purpose and when all the present phantom rates have converged into one “genuine rate that is determined by market forces under the foreign currency auction system which was launched by the Reserve Bank of Zimbabwe” on June 23.

Mr. Mangwana noted that operational modalities and details of the envisaged measures will be announced by the relevant monetary, regulatory and law enforcement authorities in the next few days adding that the Government will ensure that prudent measures are put in place to mitigate and prevent any collateral damage that the interventions may cause to the innocent public that was using the mobile money platforms.

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