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The Reserve Bank of Zimbabwe (RBZ) has announced a permanent ban of mobile money agents as part of its effort to clamp down illegal foreign currency trading in the country.

The ban comes after the Central Bank suspended mobile money agents in June this year on accusations that they were creating a quasi currency thereby destabilising the Zimbabwean dollar (Z$).

The affected mobile money operators include Ecocash owned by telecom giant Strive Masiyiwa’s Econet Group, Netone’s OneMoney, Telecel’s Telecash and MyCash.

“Agent wallets are no longer serving any legitimate purpose and were now being used primarily for illegal foreign exchange transactions,” reads part of the RBZ’s Mid-term Monetary Policy Statement. “Agents’ mobile money wallets are therefore abolished, with immediate effect.”

RBZ said mobile money agents currently holding value in suspended and frozen wallets shall be allowed to liquidate the funds to their bank accounts, upon the Financial Intelligence Unit (FIU) having satisfied itself of the legitimacy of the source of funds.

The ban has a devastating impact on Ecocash that holds more than 90 percent market share of the country’s mobile money. “We will continue to engage the relevant stakeholders to find the best solution for the transacting public,” Econet Group’s spokesperson told Biztech Africa.

Transactions limit by individuals has been pegged at Z$5 000 ($50)per day. However, pressure has been mounting on RBZ to review this mobile money daily limit considering inflation rate has surpassed 800 percent per annum as of July this year but the Central Bank is defiant.

The Total Consumption Poverty Line for an average family of five persons is now at Z$15 573 ($155), according to the Zimbabwe National Statistics Agency. This means considering the daily limit, families will have to go to supermarkets several times to meet their monthly demands.

Following the suspension and freezing of agent and bulk-payer wallets in June, mobile money operators have allowed illegal foreign currency dealers to use multiple individual wallets as a means to bypass the transaction limits and continue with their illicit transactions, according to RBZ.

“Mobile money operators shall, with immediate effect, close all multiple wallets, and allow just one wallet per individual,” reads the statement.

Victor Bhoroma, a Zimbabwean economist told Biztech Africa that closing extra mobile money wallets will definitely not deter black market activities which in a way can only be addressed by an efficient foreign currency exchange market, market confidence and strong institutions.

“However, it brings sanity on the use of individual mobile money wallets for business transactions and foreign currency trading,” he said.

He said the government is trying to push transactions back to the formal banking sector by the current daily limit but there was a need for RBZ to adjust it upwards provided mobile money operators justify and propose such changes.

“Z$5 000 is too little when it comes to monthly family needs and will increase the cost of transacting on mobile money as customers will have to pay for certain goods and services in more than two transactions,” said Bhoroma.

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