ZIMBABWE’s biggest telecommunications service provider – Econet – says the Information ministry which represents Government cannot shut them down like a backyard tuck-shop without any legal basis: continue transacting.
Government had attempted to suspend all monetary mobile money platforms as well as trading on the Zimbabwe Stock Exchange through a statement issued by the Information ministry on Friday night.
However, the suspension was immediately pooh-poohed by Econet who said the Information ministry had non legal standing to shut them down.
In the heat of the exchanges Information ministry permanent secretary Nick Mangwana on Saturday morning then took to twitter to post the Statutory Instrument on Banking (Money Transmission, Mobile Banking and Mobile Money Interoperability) Regulations, 2020.
It was unclear what informed his tweet.
A section of Mangwana’s followers were immediately hoodwinked into believing the Statutory Instrument had been gazetted to reinforce Mangwana’s previous statement that mobile money platforms had been suspended.
However, a perusal of the Statutory Instrument 80 of 2020 showed that it had been gazetted sometime in March to enforce interoperability.
Interoperability requires that every money transmission provider and mobile money provider shall be connected to a national payment switch controlled by the Reserve Bank of Zimbabwe that enables seamless transfer of money between two accounts.
On Friday night, the Information ministry had in a statement signed by Mangwana announced the suspension of mobile money platforms in a bid curtail illegal exchanges connected with the foreign currency black market.
Mangwana said the suspension would give the government time to carry out intrusive investigations to “deal with malpractices, criminality and economic sabotage.”
“These measures are to subsist until such time that the mobile money platforms have been 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,” reads part of the statement.
The ministry said government is expected to put in place some measures to mitigate and prevent any “collateral damage that these interventions may cause to the innocent transacting public who were using these platforms.”
The ministry noted that government had gathered “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 ministry said these included “the illegal externalization of foreign currency through transfer mispricing” as well as “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.”
The ministry blasted Econet for “acting as banks outside the purpose for which they were originally licensed as non-banking financial institutions.”
“In the particular case of Ecocash, holding well in excess of ZWL8 billion distributed just over 501,000 agent/merchant lines as at 10 June 2020, which is not under the scrutiny of the Financial Intelligence Unit.”
The ministry alleged that EcoCash in particular was the central pivot of the black market and conspiring with big merchants as their conduit to transfer millions of dollars a day to runners on the streets to buy US dollars.
“Ecocash, OneMoney, Telecash and MyCash Mobile Money platforms are all complicit in these illicit activities in varying degrees. Ecocash, however, which controls nearly 94% of all mobile money transactions, is the center pivot of this problem and its resultant impact on Zimbabwe’s economy,” the ministry charged.
“The impact is exacerbated by the existence of fake counters on the Zimbabwe Stock Exchange, which are epitomized by the so-called Old Mutual Implied Exchange Rate (OMIR). This, in turn, results in four or more US:ZW parallel market exchange rates operating in the market.”