One shudders to think how and why mobile money platforms had traction in Zimbabwe despite hefty charges levied on using such platforms. Zimbabwe found itself in a mess again following the demise of the USD in circulation following the introduction of Zimbabwe bond notes and coins at a discount under the disguise of export incentives. The Gersham Law was quick to come true as the bad money drove away the good money. Banks struggled to issue USD to its clientele this led to those in need of hard currency paying a premium to access hard currency. Multi exchange rates emerged ranging from USD to local bank account balance, USD to Zim Bond note cash and coins with separate rates as well as USD to mobile money. It’s important to note that Ecocash- a money transfer platform of Cassava Smartech Zimbabwe is the leading mobile money platform in Zimbabwe.
Ecocash is a pioneering mobile financial services solution that has given access to the Zimbabwean unbanked population in an unprecedented scale in Zimbabwe. Owing to the serial collapse of the banking institutions in Zimbabwe [as evidenced by closure of branches for most branches, downsizing by Standard Chartered Bank and the exit of Barclays Bank from Zimbabwe] the size of the banked population had reduced to less than 10% of the population when Ecocash was introduced in September 2011. Presently, Ecocash has more than 10.5 million users, that is over 90% of of the adult population in Zimbabwe.
The move by the government was to address the few abusers of the facility. Of the 10.5 million registered users, 6.4 million have been active during the last 90 days. Since Ecocash Cash in facility inception in September 2011,227 519 851 Cash in transactions worth USD10 195 646 216 plus ZW$7 542 785 610 have been conducted. On the other hand, 387 308 926 Cash Out transactions worth USD8 657 704 182 plus ZW$4 142 862 274 have also been conducted. It’s a no brainer that Ecocash has played a critical role in facilitating transaction activity between Zimbabweans in circumstances of acute liquidity challenges. To date Eco cash agents stood at 51 000, more than the number of banking branches of all banks in Zimbabwe combined, talk of convenience.
Should all be punished for the crimes of the few, is this not the same spirit underpinning ‘sanctions’ which the same government has mobilised the SADC block to protest against? The Zimbabwe justice system is also premised in the Blackstone ratio which stipulates that it is better that ten guilty persons escape than the one innocent suffer. It is instructive that Government must err on the side of innocence, especially in the present case where the defaulting users can be investigated and identified, something that the Central Bank has been doing already with the full cooperation of Ecocash.
Legal minds posit that the Cash in and cash out facilities constitute rights in property that the Ecocash and Ecocash users cannot be compulsorily deprived of other than in full compliance with the provisions of Section 71 of the Constitution of Zimbabwe which renders the shutdown unconstitutional in this regard. Some schools of thought are of the view that Ecocash has been discriminated against in preference to the RTGS platform as the Central Bank has not banned any functionality that enables cash withdrawals and cash deposits. To prohibit cash withdrawals an deposits through the use of Eco cash only is thus discriminatory.
The chairman of Econet Zimbabwe, business acumen Strive Masiyiwa has this to say, ‘Closing Mobile Cash In Cash Out will kill millions’. In an application made at the High Court Tuesday [01.10.19], Cassava Smart Tech argues the decision by the Reserve Bank of Zimbabwe was illegal. It was stated that the cash in and cash out facilities are core to the Ecocash system. In order to pull these facilities down, the whole Ecocash platform has had to be pulled down first. At whose cost?
Cassava Smart Tech Chief Executive officer argues that said the directive flew in the face of rational thinking and the country’s Constitution. Considering that Ecocash platform handles seven million transactions per day by approximately two million people, the consequences are huge and far reaching. Some of these transactions are done to deal with lifesaving situations. Pulling down Ecocash could thus mean loss of life, loss of opportunities that could save livelihoods and financial loss running into hundreds of millions if not billions. Its remains a mystery as to the card the Central Bank is holding close to their chest.
Article from AFRIC Editorial
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