Mobile money, ZSE ‘sabotaging the economy’ says Zim govt
Under the Zimbabwe government’s latest directive, individual mobile money transactions will be processed normally, while merchant lines can only facilitate incoming transactions and are compelled to move money into bank accounts to make payments. All agent lines have been suspended.
This after Zimbabwe’s central bank made concession to a blanket ban on all mobile money transactions over the weekend.
On Friday 26 June 2020 government spokesperson and Information Ministry Permanent Secretary Nick Mangwana issued a statement confirming the decision to suspend trade on the Zimbabwe Stock Exchange (ZSE) and freeze all mobile money transactions, accusing these channels of “sabotaging the economy.”
However, the central bank appears to have partially backed down and in a fresh statement outlined qualifiers suggesting the general public would be unaffected as “bona-fide transactions will be processed normally.”
The restrictions will now only apply to mobile agents and merchants. These parties are suspended, along with merchant accounts which will only be allowed to receive payments for goods and services and utilities such as power and water with a Z$5,000 (US$47) daily limit. It is unclear if the Z$5,000 limit applies to the receiving merchant account or payer.
Either way, the move will cause significant inconvenience to the transacting public with merchants either unable to accept payments due to the limit or buyers failing to make full payment.
Mobile money service EcoCash said it would only comply with directives from the Reserve Bank.
In a recent statement, Econet told its clients to “remain calm and to continue to do your lawful transactions as usual”.
The company said it was regulated by the Reserve Bank of Zimbabwe and the statement from Mangwana was not binding on them.
It stated: “EcoCash is regulated by the Reserve Bank of Zimbabwe and would naturally expect a directive of that nature and significance to be communicated by the Reserve Bank of Zimbabwe.”
The government believes its latest move will help contain the rapid collapse of the local currency and stem rising inflation, which is close to 800%.
However critics have accused officials of trying to deal with symptoms rather than fix issues that impact the economy, including corruption, policy inconsistencies and the government’s huge appetite for spending.
Former minister of Finance, Tendai Biti said the government was ill-advised to suspend mobile money transactions. “You can’t shut-down mobile money in a country where more than 80% of the people rely on mobile money. There is no cash in the banks. The black market can’t be killed by suspending mobile transactions.”
Economist John Robertson added: “The shutting down of mobile money means that the government is going to lose the 2% tax that the government has been collecting from all the money transfer.”