Zimbabwe to allow mobile money agents to operate again

Zimbabwe has reportedly announced that it would allow mobile money agents to operate in the country again to boost the use of its new gold-backed currency called the Zimbabwe Gold (ZiG).

Introduced in April 2024, the ZiG replaced the Zimbabwean dollar, whose value had plummeted 80% against the greenback just this year. The new currency is Zimbabwe's sixth attempt at a stable local currency in 15 years.

Bloomberg is reporting that Zimbabwe's Treasury has proposed that Econet Wireless Zimbabwe, state-owned NetOne and Telecel's mobile money agents to be allowed to operate as a way of increasing the use of the ZiG as well as curb the unofficial market.

According to local media Sunday News, Zimbabwe Deputy Minister of Finance and Investment Promotion David Mnangagwa told the country's Parliament that agents will act as a bureau de change and help the public access small amounts of foreign currency for everyday use.

Zimbabwe's move to reinstate mobile money agents comes after the country banned them in 2020. (Source: Image by wirestock on Freepik)

"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," the deputy minister added.

"That is the first part to allow interchangeability without having to go to the streets," he continued.

"This means that our rural constituencies will be able to access the ZiG and the USD at mobile money agents," Mnangagwa said.

Zimbabwe mobile money and currency problems

The move to reinstate mobile money agents comes after the country banned them in 2020, for allegedly driving the collapse of the Zimbabwean dollar and the nation's economic growth.

Fintech services in the country have faced a number of problems in recent years. In June 2022, money transfer service, WorldRemit announced that it will no longer be offering bank transfers in the Southern African nation. It said that it no longer believed it can provide the best quality service in Zimbabwe.

Time will tell whether the reinstatement of mobile money agents and the new currency will help the country's economy.

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High inflation in Zimbabwe has also threatened to put local operators out of business.

So much so that in July 2022 the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) reportedly approved tariff increases to help operators survive rising input costs due to the weakening local currency and high inflation.

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*Top image source: Flag wave photo created by wirestock on Freepik.