Home Uncategorized Breaking news!!! Government suspends Ecocash, OneMoney and all mobile money services

Breaking news!!! Government suspends Ecocash, OneMoney and all mobile money services

PRESS STATEMENT: SUSPENSION OF MONETARY TRANSACTIONS ON PHONE-BASED MOBILE MONEY PLATFORMS

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Government has, with immediate effect, undertaken a series of prudent and coordinated interventions to deal with malpractices, criminality and economic sabotage perpetuated by the “wolves in sheep skins amongst our population” that His Excellency the President alluded to during his official address on the occasion of the Heroes burial of Cde Stanley Nleya (Gagisa) at the National Shrine.

These measures include the suspension of all monetary transactions on phone-based mobile money platforms in order to facilitate intrusive investigations, leading to the arrest and prosecution of offenders.

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

These measures are to subsist until such time that the mobile money platforms have been reformed to their original purpose and all the current phantom rates of exchange have converged into one genuine rate that is determined by market forces under the Foreign Currency Auction System which was launched by the Reserve Bank of Zimbabwe on 23th June 2020.

Operational modalities and details of the envisaged measures are going to be announced by the relevant monetary, regulatory and law enforcement authorities in the next few days.

Government will concurrently ensure that prudent measures are also put in place to mitigate and prevent any collateral damage that these interventions may cause to the innocent transacting public who were using these platforms.

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.

These activities include:

-a) Illegal externalization of foreign currency through transfer mispricing;

b) Acting as banks outside the purpose for which they were originally licensed, as non-banking financial institutions. This Includes, in the particular case of Ecocash, holding well in excess of ZWL$8 billion distributed across just over 501 000 agent/merchant lines as at 10 June 2020, which is not under the scrutiny of the Financial Intelligence Unit;

c) Fraudulent creating and-issuing non-attributable and non-auditable agent cellphone lines/accounts;

m) Maintaining unauditable mobile phone lines or accounts which are being used by criminal syndicates, in connivance with insiders, to steal money from subscribers through such fraudulent practices as teeming and lading;

n) Acting as conduits for the circulation of counterfeit USD notes; and

o)Facilitating criminal activities through the non-enforcement of KYC requirements; and Ecocash, OneMoney, Telecash and MyCash Mobile Money platforms are all complicit in these illicit activities in varying degrees.

Ecocash, however, which controls nearly 94% of all mobile money transactions, is the centre pivot of this problem and its resultant impact on Zimbabwe’s economy.

The impact is exacerbated by the existence of fake counters on the Zimbabwe Stock Exchange, which are epitomized by the so-called Old Mutual Implied Exchange Rate (OMIR). This, in turn, results in four or more US:ZWL parallel market exchange rates operating in the market. At any time, therefore, there is the official rate, an Ecocash rate, a OneMoney rate and the OMIR among others. As the RBZ Governor aptly observed recently, there are multiple contrived phantom exchange rates in use in the Zimbabwe Economy, which conspire to defeat fiscal policy.

Statement issued by N Mangwana Secretary for Information, Publicity and Broadcasting Services

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