Zimbabwe bans mobile payments over accusations of “economic sabotage”

From: RegTech Analyst

Digital payments and trading on the stock exchange has been suspended in Zimbabwe in response to what President Emmerson Mnangagwa’s government called “criminality and economic sabotage,” Reuters reported.

Government spokesman Nick Mangwana argued that the move was made to address the plummeting Zimbabwe dollar and to allow for “intrusive investigations”.

The government said that mobile payment platforms were behind massive currency trade outside of formal banking channels.

“Government is in possession of impeccable intelligence which constitutes a prima facie case whereby the phone-based mobile money systems of Zimbabwe are conspiring, with the help of the Zimbabwe Stock Exchange, either deliberately or inadvertently, in illicit activities that are sabotaging the economy,” the statement said.

It is expected that banning mobile payments will be extremely damaging for the country as four-fifths of all transactions in the nation are made that way.

The payments industry is huge in Africa, with 40.1% of the investment between 2014 and the first half of 2019 being injected into the payments and remittances segment of the continent’s FinTech industry, according to FinTech Global’s research.

Hardly surprising given that the launch of the Kenyan mobile-phone transfer system M-Pesa has often been ascribed as one of the key moments in the growth of the African FinTech industry.

Before banning mobile payments, Zimbabwe was already on the Financial Action Task Force’s (FATF) list of high-risk jurisdictions list for deficiencies in their anti-money laundering or counter terrorism financing protocols.

Back in February, the FATF urged Zimbabwe – along with Botswana, Ghana, Mauritius and Uganda –to make both regulatory and administrative efforts to create a more solid protection against dirty money flowing through their systems.

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