By Patience Rashai

Economists have welcomed Government’s move on ecocash cash-in, cash-out, and cash back transactions arguing that they were the main drivers fuelling the price distortions and the illegal money market.

Commenting on the matter, economic analyst with the Reserve Bank, Tendai Chirwangu said that there was need for Government to reign in on mobile money operators as the economic climate was becoming hazardous.

“Whilst this might seem as a negative move on the transacting public, it is a necessary evil. There was need for Government to put a stop to the commodification of cash because slowly cash had become a commodity to be placed a price tag on the market. And ecocash was the main culprit,” he said.

This is an untenable situation given that employees who are formally employed access their salaries in plastic form.

“Zimbabwe’s economy and particularly currency has been on a tailspin since 2016 but this craze has been accelerating since October 2018 and is not getting better. As such, the public should be cushioned,” he said.

Chirwangu said that incidents of cash hoarding in order to finance money changers and the parallel market, as well as money laundering were on the rise as well.

“Though the public might not appreciate the move right now since they are plunged with issues of accessing cash, the real question they should be asking is why the cash in circulation seem to be dwindling by the day yet its scarcity was hardly felt last year.

“This should therefore speak of someone benefiting from all this madness and scarcity of cash. As long as cash remains scarce, it means that ecocash agents would continue in business and even fuel inflation,” he added.

Zimbabwean mobile money agents, have been capitalizing on cash shortages to buy cash for re-sale to mobile wallet holders at a premium of up to 60% leading to one accessing as little as 40% of their mobile balances if need be to access funds.