Zimbabwe shuts down the use of mobile money

The government battles to contain the country's economic crisis.
On social media, the Zimbabwean government's move has drawn a lot a lot of criticism
On social media, the Zimbabwean government's move has drawn a lot a lot of criticism


In spite of its fast blossoming in Africa, in Zimbabwe, the most common cash-in and cash-out functionalities have just been killed off as the government battles to contain the country's economic crisis.

Mobile money has hinged on transactions including payments at supermarkets, to other merchants and cross transfers from and into bank accounts. Success cases include countries like Kenya and Tanzania with MTN also ready to toll out mobile money in Nigeria. Yet in Zimbabwe, this has been killed off by the government because the functions are being abused. Considering large chunks of the country's economy runs through electronic systems, with EcoCash amassing a whopping 95 per cent share, this is a huge move. 

Zimbabwean mobile money agents have been capitalizing on cash shortages in Zimbabwe to buy cash for re-sale to mobile wallet holders at a 50 per cent premium. This means that when you try to access funds through the agents, you would only get about 50 per cent of the balance. On social media, the Zimbabwean government's move has drawn a lot a lot of criticism amidst the country's financial situation already in disarray.

Subsequently, this has resulted in high premiums on cash and also, occasioned heavy discounts for cash purchases in retail stores. However, the Reserve Bank of Zimbabwe fully backs its decision to freeze mobile money functionalities. It says that agents' engagement in illegal activities abusing the cash-in and cash-out facilities is compromising the national payment system.

Mobile money platforms such as EcoCash and M-Pesa have already helped scale up financial access for sub-Saharan Africa's large unbanked populations. With this recent move by the Zimbabwean government, there are big concerns with the government set to lose out on revenue from the 2 per cent tax on digital and electronic transactions.

Webinar #2 | Register to attend - Intergenerational signalling consolidation for the 5G era

Join CommsMEA, Deutsche Telekom and NetNumber as they explore opportunities for intergenerational signalling consolidation for the 5G era. The webinar is free but can only be accessed by registering below in advance.

Editor's Choice

Emerson expands analytics platform for industrial enterprise-level wireless infrastructure management
Plantweb Insight platform adds two new Pervasive Sensing applications that manage wireless networks more efficiently with a singular interface to the enterprise
Digitalisation seen as a competitive advantage by Middle East private businesses
Nearly 80 per cent of private business leaders acknowledge that digitalisation can impact business sustainability
Etisalat introduces Multi-Access Edge Computing architecture delivering best-in-class video streaming performance for 5G networks
MEC architecture achieves performance gains of as much as 90% in video streaming, validating how ultra-low-latency applications will be delivered over 4G and 5G networks

Most popular

Don't Miss a Story