Reserve Bank of Zimbabwe (RBZ) threatened to embark on an unusual exercise. It sought to pursue illegal foreign currency dealers via the surveillance of WhatsApp groups through its financial intelligence unit, in collaboration with the police, banks, mobile-money service providers and relevant regulatory agencies. It threatened to bar and freeze suspects’ mobile numbers and accounts. RBZ then introduced a foreign exchange auction system (FEAS), which resulted in a move from a fixed exchange rate on the interbank market, which had, since March, been pegged at one US dollar to 25 Zimbabwe dollars (ZWL). After the introduction of the FEAS, the US dollar is now officially trading at 57 ZWL, against a black-market rate of between 80 and 100 ZWL. RBZ must not lose sight of its contributory role to this crisis through its (mis)management of the nation’s banking system that led to the liquidity crisis in the first place. This birthed and nurtured the mobile-money system that has since spiraled off its radar and, hence, out of its control.
The repercussions of which are yet to fully play out, is the plight of citizens already burdened by a loss of livelihood options during this indefinitely extended Covid-19 lockdown, that is most concerning. After the shock announcement of a blanket suspension of mobile-money services, the RBZ emerged, seemingly to avert a crisis, and reviewed the ban. This reviewed statement indicated that the ban is on MMT agents and merchant mobile-money account holders, while individual transactions up to a maximum of 5,000 ZWL are permitted. Prohibitive costs associated with opening and maintaining a bank account, MMTs have offered a lifeline amid Zimbabwe’s protracted liquidity crisis. The Covid-19 context has also increased the demand for mobile-money services. This is because in light of the increasing levels of police abuse and brutality, they are a safer option in the current context in which citizen mobility, even for access to essential services, is restricted. Long-term solution to Zimbabwe’s liquidity crisis, which inevitably fuels the illegal foreign currency exchange market, must be found. Beyond the concerns of manipulation and illegality and hyperinflation as a result of money supply mismanagement, the latest crackdown compounds already immeasurable suffering for the majority of Zimbabwe’s citizens.