Dr John Mangudya at RBZ: What Does it Mean For EcoCash & Mobile Money?


If you were waiting, the wait is finally over, former CBZ chief and Economist Dr Mangudya will be the new substantive Governor of The Reserve Bank of Zimbabwe. This comes at a time when the government is making deliberate efforts to re-position the Reserve Bank as the engine of Zimbabwe’s economic recovery.  The Herald reports that Dr Mangudya will assume his reigns at his new no. 80 Samora Machel  Ave offices effective 1 May for what could be the first of  two five year terms.

Given the current state of the economy particularly the banking sector, the Dr will have his plate full from day one. Amongst his brand new set of headaches will be mounting debt, a fading economy,  depressed spending, a devastated industry, an anguishing banking sector,  investor paranoia, mysterious policies and corruption. To make matters worse, unlike his predecessor, this governor will have virtually no control over money supply (perhaps a good thing for the rest of us). What he will likely have, however, is a lot of power, particularly over matters of policy.  As our government becomes more desperate to deliver on some incredible election promises, they will be forced to do away with populist policies in favor of economic best practices. For this reason, they will likely give their main banker the space he needs to make his voodoo work, especially after his success at CBZ.  Without his signature on any bank notes, I expect that we will witness a governor who will rely more and more on policy to exercise his power over issues that are beyond his immediate control.

Despite the plethora of existing problems he already faces, a formidable and familiar challenge awaits the governor’s full attention. This year alone we have already seen the RBZ and its current acting governor dragged into disputes surrounding mobile money.  Mobile money promises to be a stubborn feature on the new governor’s agenda.  POTRAZ has made it clear that mobile money regulations largely fall outside their jurisdiction, while the Reserve Bank has all along paid little attention to this sector. This deliberate lack of will to actively deal with the mobile money sector has seen EcoCash emerge as a giant with little interference or bureaucracy from men in ties. However, as EcoCash grows bigger and bigger, complaints and squabbles will intensify, the governor and the RBZ ( the adults in the room ) will be expected to intervene and set the rules.


Here is where it gets interesting; Dr Mangudya is no stranger to Ecocash or Mobile Money.  In his capacity as the CBZ chief, he undoubtedly felt and fought the full wrath of Econet’s brutally effective foray into the financial sector, the man witnessed first hand, the threat that mobile money represented to traditional banking if done with precision and a lethal intent. Given these experiences, we may be welcoming a governor who has a deep-seated contempt and mistrust of mobile money and what it represents.  If this is the case, we may be at the verge of a new era that will see Econet and other mobile money players losing a lot of the imminent battles that lie ahead. We may see the government also following their banker’s lead by putting in place legislation that could extensively tax and restrict mobile money operations. This would in turn signify the end of the growth and potential that the mobile money and ecommerce sectors have so far promised to a lot of our entrepreneurs.

But its not that simple, although CBZ and its fellow ZIM SWITCH alliance partners mounted the first real challenge against EcoCash’s dominance, there are indications that this dispute is close to resolution and that it was a battle of methods not principle. In fact, CBZ under the leadership of Dr Mangudya was the first bank to integrate with EcoCash before Econet bought their own bank. As he leaves CBZ – whatever his salary was – he leaves behind a government owned institution that is the most successful and arguably the most technologically innovative in its sector. If this is the case, we may be welcoming a governor who has a fetish for new technological innovation and a deep-seated belief in the opportunities that mobile money represents. The future could indeed be bright and flowery for mobile money and e-commerce.  Whatever the case is, I wish the new governor and mobile money well.

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