Ari Goldstein

Recent events between Econet and the Reserve Bank of Zimbabwe make me skeptical. The accusations that The Apex Bank is throwing in the way of Ecocash, a simple mobile payment platform makes me wonder if we have serious authorities.

It is not the first time that RBZ has accused Ecocash of unsavory business practices and it is not the first time again that Ecocash has had to take RBZ to court. I might point out that Ecocash won the previous battle and RBZ has been forced to reverse their instructions before. It is simply a bad business on their part not on Ecocash.

I do not believe in coincidence and when there is even an appearance of one, my essence tells me to be very suspicious and to see the numerous shades of grey between black and white. I distrust any authority that shows its helplessness and a kneejerk reaction that appears not to be not clearly thought out as it is always the case between RBZ and Ecocash.

The banning of Ecocash agents emerged on the heels of high demand by RBZ for Ecocash to allow other mobile service providers to also use Ecocash platforms with the purpose to allow interchangeability is suspicious to me and as a person who does not believe in coincidences, I am indeed skeptical. Is the RBZ trying to muscle Ecocash into agreeing to the arrangement? We have been here before those who followed us in the mobile service provision businesses.

There have also been attempts to force Econet, the former parent company of Ecocash, to share its facilities with other service providers.

Ok, I will share here some of the functions of RBZ and then look at the functions of Ecocash and see why is it that the Apex Banker Dr. John Panonetsa Mangudya accuses Ecocash of being a Ponzi Scheme, how is it even possible to say agent lines have overdrafts of $39 million and how is it even shocking to a banker of his stature considering that businesses operate with overdrafts all the time.

The RBZ is responsible for the formulation and implementation of monetary policy, directed at ensuring low and stable inflation levels. A further core function of the Bank is to maintain a stable banking system through its supervisory and lender of last resort functions. Other secondary roles of the Bank include the management of the country’s gold and foreign exchange assets. The bank is the sole issuer of currency and acts as banker and advisor to Government.

Monetary policy formulation and implementation;
The issuer of banknotes and coins;
Custodian of gold and other foreign assets;
Banker and advisor to the government;
Bankers’ bank and lender of last resort.

So it is RBZ that is the issuer of banknotes and coins right? We have seen countless videos of street traders flashing new banknotes in the streets while banks claim to have no cash to give their customers. We have seen black markets flooding with obscenely large sums of cash in the streets and we have always been perplexed at how is it possible for such filthy looking people to have access to such newly minted notes and coins.

Most of the notes would actually be bearing the RBZ wrapper and tags to show their source. Now, from one of the functions of The Apex Bank, it is clear that the Bank is the issuer of banknotes and coins so all money comes from it. One may be tempted to argue that RBZ is asking Ecocash to close the lines of its agents with balances exceeding $100 000 a month to eliminate the black market on the streets.

Do we blame the sword for the death instead of the hand that wields it?’ Why is RBZ’s Mangudya blaming Ecocash for fuelling the black market? Does Ecocash issue out coins and notes or that is the function of RBZ? Does Ecocash have a way of creating fictitious bank balances or is something that banks and RBZ have the capability to do? We all know that RBZ has done it before. So how is it a shock now that they are doing it again and would want it to look like it is all being done by Ecocash? How has a platform that is simply for exchange ( trading ) become the source? If the traders are abusing the platform, it is for RBZ to catch them. Ecocash has said it has reported suspicious agents to the RBZ and FIU and no action has been taken.

It’s a clear sign of madness for RBZ to blame Ecocash for overdrafts or even for creating fictitious balances. How does Ecocash benefit from that? We all know where all the money circulating in the system originally comes from. We all know who must control the flow of money in the Economy. The actions of the banks, who they fund, who they give overdrafts to, and who they give cash to, all leads up at the door of RBZ and its Financial Intelligence Unit. If they don’t know these things then they are not doing their job and must simply resign.

To say Ecocash creates fictitious balances is to be foolish indeed. Ecocash is simply an innovative mobile payment solution for Econet customers. It allows you to perform simple financial transactions, like send money to loved ones, buy prepaid airtime or data for yourself or other Econet subscribers and pay for goods and services, all using your mobile phone. It doesn’t originate money, the money is originated elsewhere, and that elsewhere leads back to the door of the RBZ.

Saying the Ecocash platform is to blame for the black market is being simply an admission failure by RBZ albeit in a roundabout way. How will Ecocash benefit from creating the fictitious balances? Dr. Mangudya is lying when he says so and I say this unreservedly. When he further claims they have been investigating someone, there are simply trying to whip up public outrage and sway everyone to their site via a composition of fallacies. Has he, Dr. Mangudya been able to carry out any of the other functions of the RBZ?

One of the core functions of the Reserve Bank of Zimbabwe is to promote financial stability. The Bank Supervision Division contributes to this overarching mandate through its responsibility in (a) the registration of new banking institutions, (b) the conduct of off-site surveillance, and (c) the conduct of risk-based on-site examinations. The question that begs answers is: Is RBZ doing this instead of focusing on Ecocash? Are they really serious? Can they tell us which bank of those closed agents has been used? Which bank was the overdraft on those lines come from?

Financial Inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit, and insurance – delivered in a responsible and sustainable way. Ecocash helps in meeting this goal clearly through the services it provides. Seeing that its main target is the poor and the people in remote areas with no access to normal banking facilities, therefore it is nonsensical and counterproductive to fight Ecocash.

RBZ must fix its eyes on where the money is coming from. Mobile money does not exist in isolation, the money comes from the bank accounts. RBZ is just trying to shift responsibility and avoid dealing with the issue they surely know they must face. For the Reserve Bank Governor to come out and speak about some fictitious character spinning money shows that they are not taking us seriously as a nation. Does that make any sense to say a certain individual has been under investigation and then turns to blame Ecocash on that? Like seriously? They are investigating a person who is abusing the Ecocash platform for his/her illicit activities and then suddenly it turns to be Ecocash’s fault? Why? Is it because they have an efficient system that is trusted by clients and service providers alike?

The argument is simple, money deposited in Ecocash agent’s line comes from banks first and those banks, not Ecocash, are the real culprits. Surely how is Econet responsible? The charges for each and every transaction cannot surely be the cause of the black market shift. In the electronic ecosystems, there is far much more money in Banks than in mobiles. RTGS and bank transfers transact far larger sums than mobile money systems. And this spectrum has no limits. Mobile money pushes smaller amounts and is mainly used by the poor and these are the people that are actually affected by the bickering between RBZ and Ecocash and by any directives from the Apex banker to Ecocash.

As I said, I do not believe in coincidence but I believe there are people up to some mischief at the RBZ. My fervent hope is it will not be too late when we finally realize it.