Zimbabwe mulls return of mobile money services after currency woes

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May 14, 2024
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2 min read
A picture of a man sitting in a restaurant holding is phone.
  • Zimbabwe is considering allowing mobile money agents to resume operations to increase the use of the country's new gold-backed currency, ZiG.
  • This comes after shuttering mobile money services in 2020, blaming its agents for driving the collapse of the Zimbabwean dollar and the nation's economic growth.
  • The ZiG (Zimbabwe Gold), launched in April 2024 to replace the Zimbabwean dollar and boost the economy, has recently declined, losing 0.8% against the dollar. 

On May 6, 2024, the ZiG currency reportedly fell to its lowest level against the USD since April 8. The ZiG is Zimbabwe's sixth attempt at a viable local currency since 2008. The ZiG is backed by 2.5 tonnes of gold and the central bank's foreign currency reserves of $100 million. 

Zimbabwe has also taken steps to attract foreign capital, utilising its new gold-backed currency to persuade investors. Meanwhile, the nation's main trading partners are South Africa, Mozambique, and Zambia.

It also announced plans to require businesses to use only the official ZiG exchange rate when pricing goods and services to prevent the formation of an unofficial market.

Consequently, operators such as Econet Wireless Zimbabwe, state-owned NetOne, and Telecel's agents will be allowed to resume operations in the coming weeks, Bloomberg reported. 

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Ecocash, Zimbabwe's top mobile money platform founded by Econet was suspected by authorities in 2020 of contributing to the instability and devaluation of the now-defunct Zimbabwean Dollar (ZW$).

Black market transactions on the streets also forced the government to suspend mobile money, the country's primary payment method. Zimbabweans primarily use mobile money for transactions, accounting for 85% of all transactions in Zimbabwe in Q4 2018.  

The resumption is also expected to increase the use of the ZiG and reduce the unofficial market. Kuda Mnangagwa, the deputy finance minister, reportedly said, “the agents will act as a bureaux de change and help the public access small amounts of foreign currency for everyday use.” 

This means that anyone with an Econet line and an Ecocash account can convert ZiG to US dollars or US dollars to ZiG using the official exchange rate.

Besides, the move is another step in the nation's efforts to eliminate street market traders. 

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“That is the first part to allow interchangeability without having to go to the streets,” the finance minister said.


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