Harare. (Timothy Marks/Getty)
Zimbabwe will allow mobile money agents, once accused of facilitating the collapse of the defunct Zimbabwean dollar, to reopen and increase the use of a new gold-backed currency.
According to a proposal by Zimbabwe's Ministry of Finance, Econet Wireless Zimbabwe, founded by tycoon Strive Masiyiwa, the state-owned NetOne and Telecel distributors will be able to create a number of future contracts with the aim of expanding the use of ZiG and curbing the informal market. They are expected to be allowed to open within the next week.
Introduced on April 5, ZiG (short for Zimbabwe Gold) is the country's sixth attempt at a stable local currency in 15 years. This was to replace the Zimbabwean dollar, which has plummeted in value by 80% against the dollar this year.
The agency, which employs thousands of people, was banned in July 2020 after employees working for EcoCash, part of the largest mobile phone company Econet, were accused of charging premiums for transactions. Their actions are blamed for causing one of several collapses in the Zimbabwean dollar. The company has previously denied any wrongdoing.
According to Deputy Finance Minister Kuda Mnangagwa, these agencies will act as currency exchange bureaus and help people obtain small amounts of foreign currency for daily use.
“This means that if you have an Econet line and are registered with EcoCash, you can exchange Jig to USD or USD to Jig at the official exchange rate,” he told MPs in Parliament last week. “That’s the first part of making it exchangeable without having to go to town.”
An Econet spokesperson did not immediately respond to an email seeking comment.
The move furthers steps by the southern African country to weed out street market traders, which the country blames for contributing to the last currency crisis.
At least 100 street vendors were arrested across Zimbabwe, most in the capital Harare, according to the Zimbabwe National Prosecuting Authority.
“The police are making arrests every day. We rely on using WhatsApp with customers,” Drew Moyo, a street vendor who has suspended his business in Harare's CBD area, said on Monday. “If you want to get arrested, try trading on the street.”
According to him, it was being traded at 17 jigs to the dollar on the streets of Harare. This is higher than the official market price of $13.48, according to central bank data.