Zimbabwe will allow mobile money agents, once blamed for fueling the collapse of its now-defunct Zimbabwean dollar, to operate again to boost the use of its new gold-backed currency.
Details
Econet Wireless Zimbabwe Ltd., founded by tycoon Strive Masiyiwa, state-owned NetOne and Telecel’s agents will be allowed to start operating in the coming weeks to increase the use of the ZiG and curb the unofficial market, according to a proposal by Zimbabwe’s Treasury.
Between The Lines
Introduced on April 5, the ZiG, short for Zimbabwe Gold, is the country’s sixth attempt at a stable local currency in 15 years.
It replaced the Zimbabwean dollar, whose value had plummeted 80% against the US dollar this year.
Zoom Out
Mobile money agents were banned from operating in July 2020 after those working for Econet’s Ecocash, the largest mobile operator, were accused of charging premiums on transactions.
What They’re Saying
The agents will act as a bureaux de change and help the public access small amounts of foreign currency for everyday use, Kuda Mnangagwa, the deputy finance minister, said.
“This means if you have an Econet line and if you register for Ecocash you can convert from ZiG to US dollars or from US dollars to ZiG at the official exchange rate,” he told lawmakers in parliament last week.
“That is the first part to allow inter-changeability without having to go to the streets as.”
Why This Matters
The move adds to steps by Zimbabwe to eliminate street market traders, whom it accuses of contributing to its previous currency crisis.
Source: Bloomberg
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