According to reports, Zimbabwe has declared that it will permit mobile money agents to resume operations within the nation in an effort to increase demand for Zimbabwe Gold (ZiG), the country’s new gold-backed currency.
Arriving in April 2024, the Zimbabwean dollar (ZiG) took the place of the Zimbabwean dollar, whose value had fallen by 80% compared to the US dollar this year alone.
The new currency represents Zimbabwe’s sixth, fifteen-year effort at a stable domestic currency.
According to Bloomberg, in an effort to boost the usage of the ZiG and suppress the black market, Zimbabwe’s Treasury has suggested allowing Econet Wireless Zimbabwe, state-owned NetOne, and Telecel’s mobile money brokers to operate.
Zimbabwe’s deputy minister of finance and investment promotion, David Mnangagwa, reportedly told the nation’s parliament that agents will serve as a bureau de change, assisting the public in obtaining small quantities of foreign currency for daily use. This information was reported by the local media outlet, Sunday News.
After outlawing mobile money brokers in 2020, Zimbabwe has decided to allow them back.
“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,” said the deputy minister.
“That is the first part to allow interchangeability without having to go to the streets,” he said.
“This means that our rural constituencies will be able to access the ZiG and the USD at mobile money agents,” Mnangagwa stated.
The country prohibited mobile money agents in 2020 after they were accused of being the main cause of the collapse of the Zimbabwean currency and the country’s economic growth. Now, the country is reintroducing the agents.
Fintech services in the nation have encountered some challenges lately. WorldRemit, a money transfer provider, declared in June 2022 that it will no longer be doing bank transfers in the country of Southern Africa. It declared that it was no longer confident in its ability to offer Zimbabwe’s highest caliber of service.
It remains to be seen if the new currency and the return of mobile money agents can boost the nation’s economy.
Important lessons learned
Zimbabwe is expanding the use of its new gold-backed currency, ZiG, by reopening operations for mobile money brokers, such as Econet Wireless.
With this policy, the public will have access to a bureau de change service, the informal market will be suppressed, and ZiG usage will increase.
2020 saw the ban on mobile agents because of claims that they collected premiums and aided in the depreciation of the Zimbabwean currency.
At least 100 street vendors have been detained by the authorities as part of its effort to end unofficial market operations.
It is predicted that the reinstatement of mobile money agents like Econet Wireless and NetOne will accelerate the uptake of Zimbabwe’s new gold-backed currency, called ZiG. The goals of this decision are to increase public acceptance of ZiG, decrease the black market, and offer bureau de change services. But the agents were already barred in 2020 over claims that they imposed more costs and aided in the depreciation of the Zimbabwean dollar.
Zimbabwean mobile money agents:
These intermediaries let customers to perform a range of financial activities, including deposits, withdrawals, and money transfers, by facilitating financial transactions through mobile devices.
Zimbabwe’s latest attempt to create a stable indigenous currency is called ZiG, and it was unveiled on April 5, 2024. ZiG is backed by gold. The goal of this gold-backed initiative is to rebuild public trust in the country’s currency after multiple failed attempts over the previous 15 years.
To stabilize the economy and lessen dependency on the black market, the Zimbabwean dollar was replaced with the ZiG.
A bureau de change is a company that makes it easier to convert one currency into another. According to this news, Econet Wireless Zimbabwe and NetOne, among other mobile money agents, will serve as bureaux de change, enabling the general public to obtain small amounts of foreign currency for daily use. This will encourage the adoption of the ZiG and lessen reliance on unofficial market vendors.
