- The government of Zimbabwe on Friday suspended transactions on all mobile money platforms and Zimbabwe Stock Exchange due to complicit in illicit activities being conducted on these platforms.
- The government of Zimbabwe claims “Ecocash” is the centre pivot of this problem and its resultant impact on the Zimbabwe economy.
- Ecocash, Zimbabwe’s biggest mobile-money operator defied the government order, saying that only the Reserve Bank of Zimbabwe could order such a suspension.
The government of Zimbabwe on Friday announced the suspension of monetary transactions on all mobile money platforms as well as the Zimbabwe Stock Exchange trading so as to investigate “malpractices, criminality and economic sabotage” activities being conducted on these platforms.
According to the government of Zimbabwe, all mobile money platforms were complicit in illicit activities and the stock exchange was accused of housing “fake counters”.
The decision to suspend mobile payments will hit the economy of the East African country hard as mobile payments, which accounts for 20.40% of all transactions in the country due to cash shortages is widely used as a form of payment of goods and services.
Concurrently, the Zimbabwe Stock Exchange has seen increased volumes this year with June turnover of Z$1.9 billion almost matching the Z$2 billion that was traded the whole of last year.
“Government has, with immediate effect, undertaken a series of prudent and coordinated interventions to deal with malpractices, criminality and economic sabotage perpetrated by wolves in sheepskins amongst our population.”
“These measures include the suspension of all monetary transactions on the phone base mobile money platforms in order to facilitate intrusive investigations, leading to the arrest and prosecution of offenders,” read part of the statement released by the secretary for Information, publicity and broadcasting services, Nick Mangwana on Friday.
An attempt to revive the Zimbabwe dollar after years of dependence on the US dollar has failed, with little popular trust in the currency. Despite being pegged at 1:1 to the United States dollar for the first three years the Zimbabwe dollar continued to lose value on the widely used parallel market.
As a result, inflation hit more than 750 per cent, leading to a surge in the local stock market as investors sought protection in owning claims on real assets.
The Zimbabwean government claimed that it possessed “impeccable intelligence which constitutes a prima facie case whereby the phone-based mobile money systems of Zimbabwe are conspiring, with the help of the Zimbabwe Stock Exchange, either deliberately or inadvertently, in illicit activities that are sabotaging the economy”.
“Ecocash, in particular, is acting as the centre pivot of the galloping black market 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,” the government said.
Ecocash Defies Zimbabwe Order to Suspend Mobile Money Transactions
Following the suspension order of monetary transactions on all mobile money platforms by President Mnangagwa’s administration, Ecocash has come put to publicly defy the government order, saying that only the central bank could order such a suspension.
Ecocash, which was founded by US dollar billionaire, Strive Masiyiwa, is Zimbabwe’s biggest mobile-money operator with over 10 million registered users.
The company in an emailed statement said that it would expect a directive of this nature and significance to be communicated by the Reserve Bank of Zimbabwe, while urging all Ecocash users to remain calm and continue to do their lawful transactions as usual.
Zimbabwe Stock Exchange Chief Executive Officer Justin Bgoni denied being officially informed of the measures and could not comment, while Telecel CEO Angeline Vere said she was also unaware of the announcement.