Reserve Bank of Zimbabwe (RBZ) governor Dr John Mangudya
has said Econet Wireless must work hand in glove with the central bank to
foster market discipline among the telecom operator’s errant EcoCash mobile
money agents in order to stem out widespread misconduct.
Dr Mangudya made the call for united efforts to resolve the
problem, especially with Econet, in an interview with The Herald Finance and
Business yesterday after the central bank ordered the suspension of all cash-in
and cash-out transactions earlier this
week on the back of serious market indiscipline.
He, however, stressed the point that the central bank still
regarded the disciplined role of the mobile money agents, as an integral part
of the Government’s policy and goals towards financial inclusion and a
cash-light society.
EcoCash agents for cash-in and cash-out transactions have been widely blamed for
charging extortionate premiums upwards of 60 percent for cash-out transactions,
taking advantage of the acute cash shortage in the country. This has seriously
eroded the value of mobile money in Zimbabwe, reducing them to a fraction of
their real worth.
Zimbabwe, which recently scrapped a US dollar dominated
multi-currency regime in June this year and reintroduced its domestic unit,
started widely using EcoCash around 2011 as cash shortages were just beginning
to set in, with Econet instantly taking the lead given its extensive subscriber
base of over 10 million users.
However, Econet Wireless subsidiary, Cassava Smartech,
which administers the EcoCash mobile money system, yesterday filed an urgent
High Court application seeking to have the directive by the Reserve Bank set
aside in the interim until full court determination of the legality of the apex
bank’s directive is made.
“We are seriously seized with the EcoCash matter to see
what the best way forward is. But of course, it’s not about the platform; it is
about the people who are abusing the platform.
“Econet should help us monitor and control the conduct of
this segment of the financial services market because for Econet, this is their
road (platform) and some roads need humps, others have traffic lights while
others have detours; Econet must help us because this is their road.
“Econet must play a part, given that for instance, if you
exceed the regulated speed on a highway, you risk being slapped with fines for
flouting road rules and regulations; these are issues of governance and Econet
needs to help foster discipline on their platform among its agents,” he said.
“What has happened (suspending cash-in and cash-out) should
be a wakeup call for everyone; we need a united front from everyone to deal
with the problem. We must say let’s cease fire, stop fighting or blaming each
other, but let’s re-establish the rules of engagement,” Dr Mangudya added.
The RBZ chief said the need to foster financial inclusion
remained paramount, given that mobile financial services had gone a long way in
bringing into the bracket millions of previously unbanked and financially
excluded people.
Dr Mangudya said the central bank was already working on
increasing the amount of cash in circulation, currently at about $700 million
against a demand of about $1,5 billion-$2 billion, in line with global average
of requirement 10-15 percent of total money supply.
The central bank chief said to avoid the potential adverse
effects of sudden increase of money supply through cash injections, the RBZ
would stick by its monetary policy pronouncement that the cash injection will
be gradual.
While Econet has taken the central bank to the High Court,
where it has filed the urgent chamber application seeking an interim order for
the suspension of the bank’s Monday directive pending determination of its
legality.
Delivering the State of the Nation address yesterday,
President Mnangagwa said the Government was determined to consolidate digital
financial services, which were contributing to creation of financial inclusion
by way of delivering banking services to the previously marginalised citizens.
Since the inception of EcoCash services in September 2011,
cash-in transactions worth about US$10 billion and ZW$7 billion have been
processed through the platform, making it country’s largest mobile payment
platform.
On the other hand, cash-out transactions worth nearly
US$8,7 billion and ZW$4,1 billion have been conducted. Herald
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