RBZ Freezes EcoCash Agent Accounts That Handle Above ZW$100 000 Per Month – Here’s Why That’s Dumb

Farai Mudzingwa Avatar
Econet Zimbabwe, Mobile Money in Zimbabwe, Mobile Money Agents, Cash In, Cash Out

Another day another confusing decision by the RBZ… The central bank has directed EcoCash and other mobile money service providers (think OneMoney, Telecash & MyCash) to freeze accounts belonging to agents with transaction activity above ZW$100 000.

Whilst at this point its fair to say we have become accustomed to such weird declarations and laws coming from the central bank, I’ll go on a limb to say this is one of the most senseless decisions they’ve made in a while.

ZW$100 000 amounts to around US$2000 according to the current parallel market rates. That is pocket change for agents who you expect interface with hundreds if not thousands of consumers per month.

Even going by the official interbank rate – which is pointless since agents don’t get money at that rate- ZW$100 000 still amounts to just US$4000. Cashing out anything above this threshold will mean an agent sees their account being frozen.

This is probematic because this means agents are no longer incentivised to facilitate more transactions and will make less on commission as a result. Less economic activity doesn’t sound like the solution to Zimbabwe’s turmoil.

EcoCash’s statement makes sure to note that they were not consulted in this directive as they obviously would not have agreed to such a directive which not only affects their business but also affects agents and consumers who will have less agents to offer cash out or cash in services because most will simply be banned due to this directive.

Let’s talk about that national switch for a moment

We recently wrote an article on the new national payment switch that the government is working on. One of the things we know about the switch is that the RBZ will have real-time access to monitor transactions and if their motivation for that is so that they can dish out such directives and enforce them more freely then we’re in trouble.


What’s your take?

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  1. Imi Vanhu Musadaro

    This is not a balanced article, to say the least. I think the author decided the directive was dumb, then tried to raise points to support their thinking.

    How are agents reaching trade volumes of $100,000 when cash is still relatively scarce? Plus, business was subdued because of the lockdown.

    The exchange rate also has no relevance to this article. Mobile money agents deal in local currency, thus “agents don’t get money at that rate” is meaningless, if they are operating within the confines of the law.

    Regardless who is running the mobile money switch, there will be no difference to the actions of RBZ. They have full access to monitor transactions as it exists. Transaction trends shouldn’t change simply because they have realtime access, unless you are implying that EcoCash and others are underreporting figures. If so, that would further justify their actions.

    1. Farai Mudzingwa

      Can’t say I disagree with the first paragraph of your comment.

      You do know ZW$100 000 is a mere US$2000. Agents who are not at all involved in forex trade can EASILY, EASILY pass that figure in a matter of days not to mention an entire month.

      1. Imi Vanhu Musadaro

        The value of 100k in USD has no relevance to this discussion.

        Who was cashing in, or out, during the lockdown? When most people were restricted to their homes, given that context could this 100k be easily achieved? Let’s not feign ignorance to try and seem to have valid points.

        What supposedly happened is that line activity persisted as if there was no lockdown in effect. That was the source of the alarm.

        1. Hama dzangu

          The ghetto wasnt locked down. The ghetto people were only saying they were not allowed to go to town and to work only. Otherwise it was business as usual in most cases

  2. Ronald

    Article iyi yakanyorwa nemunhu asiri kunzwisisa kuti agent line rinoshanda basa rei? HARISI REKUTENGA MA USD NDEREKUITA CASH IN CASH OUT zvekutenga ma USD izvi ndozvirikutoita avharwe

    1. George

      He is unwittingly admitting kuti agents are dealing in forex which is illegal. They are driving the parallel market

  3. Tech Tech

    The real issue is that agent are incentivised. The more transaction the higher the commission they get. You cannot just put a blanket to say every line handling 100k and above should be blocked. It harms economic activity. Its apparent that this has been done before to arrest parallel market but it has not worked. Maybe yes but for a while.

    1. Farai Mudzingwa

      Exactly, this is the thing people are failing to realise. Yes you might not like the fact that forex traders exist but outside of forex traders agents cashing out and cashing in can EASILY pass that 100k limit.

      Secondly, the problem of the parallel market isn’t about agents, it’s due to the fact that the RBZ themselves have disincentivised companies/people from getting money from the interbank maybe because of their 1:25 cap. Why would any sane person get half the money they can get???

      People are looking at this and celebrating as if it’s a good thing but if this is held up agents will just cease to operate. There is also no way of distinguishing whether an agent is doing 100k illegally or legally neither does RBZ propose one . A joke if ever I’ve seen one

  4. Food For Thought

    If the gvt can track down and arrest fake news creators from a complex social media Web surely if they really want to find a change money agent they can. This blanket freeze only hurts Finance ministry 2% tax collection.

  5. Valentine

    High volume forex trade takes place through commercial banks that’s a fact. A holistic approach to forex trading should be looked. Too many regulations confuse and spoil the economy.

  6. former consult

    some comments ok.
    but, you must understank the zim poli-econo dynamics.
    ask, i will tell you.

  7. Thomas

    Not sure if agent lines are critically important.

    What purpose do agent lines really serve other than to do forex trading and extort citizens when they genuinely want to do cash out? Payment for goods can be done on a merchant line. Simple.

    What will happen to Zimbabwe if agent lines are banned till economy returns to normal. Please enlighten me.

    Other countries operate without them and they have bigger economies than Zimbabwe.

  8. Anonymous

    Which ecocash agent does cash out ? Imika