The government is yet to disburse cash handouts it promised
to cushion vulnerable populations against the effects of the Covid-19 lockdown,
35 days after.
Beneficiaries from marginalised communities and the
small-scale informal sector, are supposed to benefit from a $600 million fund,
getting $200 each in the phased roll-out programme.
They are bound to suffer another blow, it emerged, after a
fresh Reserve Bank of Zimbabwe (RBZ) directive to reduce small financial
institutions’ daily transaction limits from $2 million to $1 million.
The latest directive comes after government was forced to
backtrack on its decision to impose its ailing telecommunications entity,
NetOne, to manage the money transfers through One Money, as reported recently
by The Standard, working in conjunction with Information for Development Trust,
an anti-corruption non-profit outfit.
This move was seen as an attempt to nudge out the rival
Econet Zimbabwe’s Ecocash facility and provide NetOne a chance to gain market
share.
According to the Postal and Telecommunications Regulatory
Authority of Zimbabwe, NetOne processed only 1.1% of the total mobile money
transactions in 2019, while Econet handled more than 98%.
Government was supposed to start disbursing the funds,
beginning with the initial $90 million (US$3.6 million) starting mid-April but
to date, no one has received the $200 allocation, 35 days after President
Emmerson Mnangagwa announced the national lockdown to combat the spread of the
deadly Covid-19.
Mnangagwa has since extended the lockdown by another two
weeks.
Globally, Covid-19 has killed more than 240 000 people,
with over 3.4 million infections. In Zimbabwe, four people have died against a
total 34 positive cases to date.
Zimbabwe is ranked among the poorest countries in Africa
due to a long-ailing economy burdened by an unemployment rate independently
estimated at more than 90%.
Public Service, Labour and Social Welfare minister Paul
Mavima confirmed that no disbursements have been made to the beneficiaries,
pinning hope on Mnangagwa to bring more interventions to cushion citizens.
On Friday, Mnangagwa announced a second-two week lockdown
extension and said government had mobilised $18 billion to respond to the
Covid-19 pandemic.
“You have not seen any beneficiaries because no
disbursement has been done as of now.
“I have told you that my expectation was that we were going
to start disbursements before the end of April, but there is supposed to be a
wider intervention, which is going to be announced by the president,” Mavima
said before Friday.
But Small to Medium Enterprises Development minister,
Sithembiso Nyoni, sent out a different message, claiming that some people had
already started receiving the cash transfers, although conceding that the
disbursement process was slow, in an interview with NewsDay Weekender.
“They (government officials) are not sitting on the funds.
There are some people that have received the money; and what I am saying is
that they will get the funds.”
Informal traders, most of whom live from hand to mouth, are
failing to cope due to reduced opportunities to generate income during the
lockdown, which has been extended to May 17.
They and civil servants, who keep going on small loans from
micro-finance institutions (MFIs), will find it even harder to survive after
the RBZ’s Financial Intelligence Unit issued a directive reducing limits for
transactions for all daily bulk payer transactions from $2 million to $1
million two weeks ago.
Experts say the reductions would limit the MFIs roll out
capacity at a time banks were closed and the traders as well as civil servants
could not access bank loans.
Zimbabwe Association of Micro-Finance Institutions (Zamfi)
chairperson, Virginia Sibanda, said the move by the central bank was
disastrous, especially in the Covid-19 lockdown days, but hoped it was for a
short period.
“I wouldn’t know what led to that decision by the RBZ, but
it would not make sense since there was a push from government to make use of
mobile money platforms because of the lockdown and so on,” Sibanda said.
“This, will however, cripple operations as MFIs depend on
mobile money platforms for transactions, especially during the lockdown.”
MFI sources, who spoke on condition of anonymity said the
RBZ move took them by surprise as they were, on the contrary, pushing for an
increase in daily bulk transactions to $10 million, to factor in spiking
inflation, which is currently more than 500%.
The RBZ website indicates that 203 MFIs are registered with
it, with most of them processing into mobile accounts, mainly Ecocash.
“We disburse loans to civil servants and with the
reduction, if you were serving 10 000 people, they will now be half of that and
in these lockdown days, it is a disaster,” said one agent.
“The timing is regrettable and poorly thought out
especially as we are facing many challenges during the lockdown,” another agent
added.
“Imagine civil servants in rural areas, who mainly have
access to mobile money transfer facilities.
“We will be forced to put money into our clients’ bank
accounts and consumers, mostly soldiers, nurses and teachers will be forced to
go to the banks, which are closed anyway.”
The RBZ move will also force the MFIs to cut on personnel
because their capacity to pay workers will be reduced, he said.
RBZ governor, John Mangudya, however, said the Financial
Intelligence Unit was acting to stop illicit deals by some MFIs.
“They are not even supposed to be dealing with such figures
in any case,” Mangudya said.
“Once they start trading with $2 million, it is no longer micro and when it gets to that,
they should transact through a bank and not an agent.
“If they want to do bigger transactions, they should go
through a bank. They are coming to you with dirty hands. We know some of them
were now even operating bureaux de change instead of their core business.”
The central bank recently froze the accounts of scores of
MFI agents, accusing them of illegal dealings. Standard
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