Ecocash defies Zimbabwean government’s order to suspend mobile money transactions

Ecocash, the mobile money business of Econet Wireless Zimbabwe is not heeding to the government of Zimbabwe’s order for mobile money operators.

On Friday, June 26, the government suspended most monetary transactions on mobile-phone platforms and trade on the Zimbabwe stock exchange in an effort to stabilize its currency.

President Emmerson Mnangagwa’s administration accused mobile-money platforms in the country of a conspiracy to sabotage the collapsing Zimbabwe dollar.

According to its information ministry, the suspension of monetary transactions by companies including Econet Wireless Ltd. unit Ecocash will “facilitate intrusive investigations, leading to the arrest and prosecution of offenders. Other companies affected by the regulations include state-controlled Telecel.

The ministry added that the government is in possession of “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.”

However in defiance, Ecocash issued a notice to its customers, stating that the suspension order emanated from the Secretary for Information, Publicity and Broadcasting services, not the Reserve Bank of Zimbabwe who is the regulator of its business.

It enjoined its 10 million Zimbabweans to remain calm and to continue doing their lawful transactions.

Ecocash currently accounts for nearly 94% of all mobile money transactions in the Country.

The government said that “mobile-money agents would not be allowed to process mobile financial transactions but merchants could receive payments within certain limits”

The government pointed at the Strive Masiyiwa owned company stating “Ecocash, in particular, is acting as the centre pivot of the galloping black market exchange rate and therefore fuelling the incessant price hikes of goods and services that are bedevilling the economy and causing untold hardship to the people of Zimbabwe.

Ecocash has denied any wrongdoing and even the Zimbabwean stock exchange has not responded to the suspension.

However today, June 28, in a turn of events, the mobile money operator tweeted that it has received a directive from the Reserve Bank of Zimbabwe, suspending all agent and bulk payer lines. This means that

• Cash In and cash Out services have been suspended until further notice.
• Merchant to Merchant and Merchant to Individual transactions have also been suspended until further notice

Though Ecocash says Pay Merchant transactions continue to operate normally, one wonders why the merchants would want to collect Ecocash payments for goods and services when the merchant can not use Ecocash to pay for goods to replenish his or her stock.

This will certainly be tough for the company and the Zimbabweans. Ecocash is the major cash cow and this suspension will adversely affect the group if the suspension continues for long.

Inflation in Zimbabwe is now at 786% and its recently revived currency has collapsed. The President has not been able to lure foreign direct investments into the country since the ousting of its previous President, the late Robert Mugabe.