Zimbabwe suspends mobile money platforms and stock exchange trading

Zimbabwean dollar bond banknotes.  (Photographer: Waldo Swiegers/Bloomberg)
Zimbabwean dollar bond banknotes. (Photographer: Waldo Swiegers/Bloomberg)

The Zimbabwean government has suspended trading on the Zimbabwe Stock Exchange as well as all monetary transactions on all mobile money platform saying it needed to investigate “malpractices, criminality and economic sabotage” activities being conducted on these platforms.

“Government has, with immediate effect, undertaken a series of prudent and coordinated interventions to deal with malpractices, criminality and economic sabotage perpetuated by wolves in sheep skins amongst our population.”  

“These measures include the suspension of all monetary transactions on the phone base mobile money platforms in order to facilitate intrusive investigations, leading to the arrest and prosecution of offenders,” read part of the statement released by secretary for Information, publicity and broadcasting services, Nick Mangwana on Friday.

With cash shortages currently prevailing in Zimbabwe, mobile money is widely used as a form of payment of goods and services. By value mobile payments accounted for 20.40% of all transactions in the country.

The government said all mobile money platforms were complicit in illicit activities including Strive Masiyiwa's own mobile payment platform Ecocash, which “...is the centre pivot of this problem and its resultant impact on the Zimbabwe economy”.

Masiyiwa is a Zimbabwe's US dollar billionaire and founder of international mobile phone company, Econet Wireless Group.

“Concurrently, the measures will also include the suspension of all trading on the Zimbabwe Stock Exchange.”

The ZSE has seen increased volumes this year with June turnover of Z$1.9 billion almost matching the Z$2 billion that was traded the whole of last year.

The stock exchange was accused of housing “fake counters”.

Zimbabwe has struggled to maintain stability of its local currency for since reintroducing it back in 2016. Despite being pegged at 1:1 to the United States dollar for the first three years the Zimbabwe dollar continued to lose value on the widely used parallel market.

This led to the lifting of the peg in 2019 in favour of a managed float but lack of transparency and restricted movements by the Reserve Bank of Zimbabwe saw foreign currency holders preferring the parallel market where the exchange was at a premium to the official one.

The managed float was later abandoned in March this year and a peg at 25 to the green back was introduced. The situation however worsened leading to the parallel market rate reaching 100 to the green back.

The ban is in place until mobile money platforms have been reformed to their original purpose and all currency phantom rates of exchange have converged into genuine a rate that is determined by market forces, the government said.

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