The Zim government has suspended Ecocash and all other Mobile Money Transfer platforms as well as the Stock Exchange in a desperate bid to tame volatile US dollar exchange rates which continue to gallop beyond those pegged by authorities.
The suspension, effective immediately, will see Ecocash, One Money, Telecash and MyCash Mobile money platforms cease transactions.
In a statement Friday, Information Ministry permanent secretary Nick Mangwana singled out privately owned Econet subsidiary, Ecocash as the platform on which criminals piggy-backed to perform acts of criminality running into millions.
“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,” Mangwana said.
He added, “The measures will also include the suspension of all trading on the Zimbabwe stock exchange.”
The sabotage, according to government, is being done by “wolves in sheep skins amongst the population”.
Mangwana said government was well informed about the country’s phone based mobile money systems which were conspiring, allegedly with the help of the Zimbabwe Stock Exchange, to perform illicit activities that were sabotaging the economy.
“Illegal externalization of foreign currency through transfer mispricing, acting as bank outside the purpose for which they were originally licensed, as non-banking financial institutions, this includes in the particular case of Ecocash, holding well in excess of ZW$8 billion distributed across just over 50 100 agent merchant lines as at 10 June 2020whuch is not under the scrutiny of the Financial Intelligence Unit.
“Fraudulently creating and issuing non-attributable and non-auditable agent cellphone lines accounts.
“Hiding irreconcilable accounts in suspense accounts which hold huge credit balances for unjustifiably long periods.
“Ecocash in particular, is acting as the centre pivot of the galloping black market foreign exchange rate and therefore, fueling the incessant price hikes of goods and services that are bedevilling the economy and causing untold hardship to the people of Zimbabwe.”
Mangwana added, “In this regard, it has been conspiring with big merchants to act as their conduit through which they transfer hundreds of millions of dollars per day to runners on the streets who then buy US dollars on their behalf.
“Rampant, often arrogant, non-compliance with directives issued by the Reserve Bank of Zimbabwe and the Financial Intelligence Unit.
“Facilitating illicit trade in notes and coins, at contrived rates of between 30% and 50%, thus causing artificial shortages of the same within the banking system.
“Criminally allowing agent lines that were banned by the RBZ to continue trading illegally and using bulk airtime sales at discounted prices which are cross rated to phantom USD exchange rates which further distort the Zimbabwe market and deliberately mop up US Dollars from the black market, thus forcing up the exchange rate in a manner that has hitherto been difficulty to explain for the monetary authorities.”
The Information Secretary went on to say that 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 Rate (OMIR).
“This, in turn, results in four or more US:ZWL parallel market exchange rates operating in the market,” he said.
“At any time, therefore there is the official rate, an Ecocash rate, OneMoney rate and the OMIR among others.
“As the RBZ governor aptly observed recently there are multiple contrived phantom exchange rates in use in the Zimbabwe Economy which conspires to defeat fiscal policy.”