Govt suspends mobile money platforms, ZSE trading
Harare (New Ziana)-The government on Friday suspended the operations of mobile money platforms and trading on the country’s bourse with immediate effect as part of measures to tackle rampant illicit financial transactions.
In a statement, Information, Publicity and Broadcasting Services permanent secretary Nick Magwana said the mobile money platforms have been used for actions tantamount to economic sabotage.
“Government has, with immediate effect, undertaken a series of prudent and coordinated interventions to deal with malpractices, criminality and economic sabotage perpetuated by the ‘wolves in sheep skins amongst our population’ that His Excellence the President alluded to during his official address on the occasion of the Hero’s burial of Stanley Nleya at the National Shrine.
“These measures include the suspension of all monetary transactions on phone-based mobile money platforms in order to facilitate intrusive investigations, leading to the arrest and prosecution of offenders.
“Concurrently, the measures will also include the suspension of all trading on the Zimbabwe Stock Exchange,” he said.
He added: “These measures are to subsist until such time that the mobile money platforms have reformed to their original purpose and all the current phantom rates of exchange 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 23rd June 2020”.
Mangwana said operational modalities of the measures would be announced by relevant monetary, regulatory and law enforcement authorities in the next few days.
“Government will concurrently ensure that prudent measures are also put in place to mitigate and prevent any collateral damage that these interventions may cause to the innocent transacting public who were using these platforms,” he said.
Government, Mangwana said, is in possession of 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.
The activities include illegal externalisation of foreign currency through transfer mispricing; acting as banks 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 ZWL$8 billion distributed across just over 501 000 agent/ merchant lines as at 10 June 2020, which is not under the scrutiny of the Financial Intelligence Unit,” said Mangwana.
He said all mobile money platforms were complicit in the illicit activities.
“Ecocash, OneMoney, Telecash and MyCash mobile money platforms are all complicit in these illicit activities in varying degrees. Ecocash, however, which controls nearly 94 percent of all mobile money transactions, is at the centre pivot of this problem and its resultant impact on Zimbabwe’s economy,” he said.
Mangwana said the impact of the illegal activities facilitated by mobile money platforms was worsened by the existence of fake counters on the ZSE, which are epitomised by the Old Mutual Implied Rate.
“At any time, therefore, there is the official rate, an Ecocash rate, a OneMoney rate and the OMIR rate among others. As the Reserve Bank of Zimbabwe Governor aptly observed recently, there are multiple contrived phantom exchange rates in use in the Zimbabwe economy, which conspire to defeat fiscal policy,” he said.