Beaven Dhliwayo Features Writer
The Reserve Bank of Zimbabwe’s (RBZ) move to ban all cash-in, cash-out and cash-back transactions is both timely and relevant as the platforms were now being used by cartels to siphon cash while causing massive market distortions.
In the recent past, errant EcoCash agents and money changers had taken the economy into their hands, making life dreadful for ordinary citizens. EcoCash agents have been widely blamed for charging extortionate premiums upwards of 60 percent for cash-out transactions, taking advantage of cash shortages the country is currently facing.
On cash-back, the RBZ also banned the service, arguing that retailers were now abusing the platform as they were no longer banking cash, further worsening cash challenges in the country. Zimbabwe started using the EcoCash platform sometime around 2011 when cash shortages began setting in.
Econet Wireless Zimbabwe, saw an opportunity emanating from the cash shortages and opened the EcoCash platform, riding on its wide subscriber base of over 10 million users. Since its inception, the EcoCash platform has processed transactions worth about US$10 billion and $7 billion, making it the largest mobile payment platform in the country.
On the other hand, cash-out transactions worth nearly US$8 billion and $4,1 billion have been conducted. This means the platform is crucial to the economy considering the liquidity crisis, but there is need for strict regulation, and Cassava Smartech Limited, a subsidiary of Econet Wireless, should partner with Government to deal with unruly elements abusing the platform. Although people are yet to find ways of getting cash for their day-to-day activities, they heaved a collective sigh of relief when the Central Bank issued a directive to Cassava Smartech to halt operations of some of its errant agents.
There is no sabotage on Government’s part, but all is in the interest of the public. Government, as the public protector, should do everything within its power to protect citizens, especially from bad elements involved in manipulation of the local currency.
Of late, unscrupulous EcoCash agents were charging more than the stipulated charges raising high suspicion that they are being used by the same cartels, who are controlling the parallel market.
Recently, RBZ’s Financial Intelligence Unit (FIU) reportedly gathered information that identified rogue companies were pouring in over $1 billion into the parallel market to mop up United State dollars.
To this end, EcoCash agents had turned their booths into illegal selling points of cash at exorbitant premiums ranging from 40 to 60 percent. Ordinary citizens, who genuinely require cash for their daily needs, like transport, were forced to buy money at the booths that were seemingly captured by cartels and assumed a new role of illegally selling cash.
The situation was now untenable to the extent that some kombi operators, retailers, wholesalers, ice cream vendors and other traders had set up illicit “cash wholesales” where vendors hoard cash at lower rates ranging between 10 to 20 percent for resale at higher rates.
One can see that the situation needed an overhaul with immediate effect and Government’s move is commendable, and should be implemented for the benefit of Zimbabweans.
Instead of threatening to completely shut down its EcoCash platform because of RBZ’s ban of cash-in and cash-out transactions effected on Monday, Cassava Smartech Limited, which runs EcoCash, among other digital innovations, should find common ground with Government to protect citizens.
Holding Government to ransom is not a good idea, but collective effort by both parties will help end acts of economic sabotage, which must not be tolerated in the country. While delivering his second State of the Nation Address (SONA) on Tuesday, President Mnangagwa made it clear that Government will not tolerate acts of economic sabotage as it continues with initiatives to grow the economy as enunciated in Vision 2030 and the Transitional Stabilisation Programme (TSP).
“My Government continues to take bold and decisive steps to open up and grow the economy for the benefit of all our people,” he said.
“The roadmap articulated in our Vision 2030, with the TSP as the key building block, is being systematically pursued. We are reforming our economy, we are reforming political space, and the very fabric of our society.
“I am encouraged by the nation’s positive response to the currency reforms which we have embarked on. Government is equally pleased with the relative stability of the exchange rate over the past eight weeks,” the President enunciated.
However, he said last week’s events of exchange rate manipulation, “amount to economic sabotage and should not be tolerated”.
It is time that Cassava Smartech partners the RBZ, the Zimbabwe Anti-Corruption Commission, the Zimbabwe Republic Police and other relevant authorities to end this madness of economic sabotage.
Cassava Smartech has the systems to track all the wrongdoings, which happened and are still happening through agent lines, to stop cartels keen on mopping up the US dollar on the market. Using its server, the company should partner Government to carry system reviews and security checks on its agent network to expose any anomalies to protect the public from irregular and outright fraudulent activities.
In the event that suspicious activities are detected, the parties should collectively investigate and appropriate corrective action be effected, including incarceration, suspension and barring of offending agents.
From these standard system reviews and security checks, a database should be made for all suspicious transactions and be handed over to those with arresting powers as the country fights economic saboteurs.
There is need for a disciplined role of mobile money agents, as they are an integral part of Government’s policy and goals towards financial inclusion and a cash-light society. Cassava Smartech should not expend energy going to the courts, yet the company has the mandate to check and balance its network of agents, who are inflicting pain on the generality of Zimbabweans.
The powers behind the company should always strive to be innovative and device ways that can help end money laundering activities in the country.