A Certain Person ‘Spins’ Money When EcoCash Payments Delay Says RBZ Governor Mangudya

Tinashe Nyahasha Avatar
Bond Notes

So the story of the week has been the directive issued by the Financial Intelligence Unit of the Reserve Bank of Zimbabwe to EcoCash instructing them to freeze the accounts of agents that transact above ZW$100,000 (USD2,000 or USD4,000) per month.

Of course, EcoCash went to court to have the order urgently suspended. On Friday, the Reserve Bank of Zimbabwe submitted their opposition to the urgent application at the High Court of Zimbabwe. The papers filed by both parties show that gloves are off in this one. We already talked about how EcoCash accused the Financial Intelligence Unit of ignoring their reports on suspicious transactions submitted by the mobile money operator.

Currency manipulator at EcoCash

The opposing affidavit written by the governor of the RBZ makes a very serious and interesting claim. The governor mentions that EcoCash transactions fail to be effected immediately and this creates an opportunity for spinning money. Here is the interesting bit:

What the general public does not know is what happens in the interim. The funds that have not been credited to the vendor or the recipient are then available for trading on the Ecocash Platform in the foreign currency market. In effect, the delays allow a certain person, who was the subject matter of an investigation, to buy and sell foreign currency in the intervening period.

John Mangudya’s affidavit

Have there been delays on the EcoCash platform?

Definitely there have been delays on the EcoCash platform. There has never really been an explanation why such delays sometimes happen. The most affected transaction seems to be the wallet to bank transaction. Most times the money reflects in the receiving bank account immediately but on occasion this doesn’t happen.

The longest I have seen someone having to wait for their money to be reversed back into their wallet after a failed wallet to bank transaction has been 4 days. This is a very frustrating thing when it happens, calling the bank and calling EcoCash….

Three jars, two lids

Just because there are occasional delays in some transaction doesn’t prove the RBZ assertion. If indeed there is some entity within EcoCash that manipulates the system in order to use the funds caught up between sender and receiver to buy forex on the parallel market then there is a hole created.

Let’s call the mysterious entity Mr X. If I do a wallet to bank transaction of $100 and Mr X manipulates the system to delay my transaction and he takes the $100 to buy forex on the parallel market what happens? The EcoCash system will be left short of $100.

Eventually my money has to be restored and my transaction should be processed or reversed. That money has to come from somewhere else and perhaps that will be from another delayed transaction. However there will be fewer lids than there are jars. The situation worsens if Mr X keeps taking money out of the system to buy more forex.

The hole cannot be filled by Mr X’s black market enterprise being profitable. If Mr X trades with my $100 and increases it to $120 it doesn’t change anything because he can’t bring that money back into the EcoCash ecosystem as a replacement to my missing $100.

When he deposits that money, it is really just another deposit onto the platform which has to be honored in its own right. As such, that money cannot fill the hole created when my $100 was diverted.

There is only one way to fill the hole

The only way holes like these ones can be filled is by creating money out of thin air. Governments do this every time. This is why fiat currencies get the slack from crypto enthusiasts and the rest of them but that’s another story for another day.

Just to give perspective: From 2014 to 2018, the Zimbabwean government was digging this hole in USD terms because the country was using USD. The government was spending more than was coming in and there was no way of filling the gap because the RBZ cannot print USD notes. They did the next best thing: they printed fake USD currency, not even notes. They just started pumping make believe numbers into the system. Eventually the shortage of the notes became noticeable and they started printing bond notes until they gave up and then just declared that what we called USD yesterday is now called RTGS$ today and it became Zim Dollar (ZWL) tomorrow…

Is the RBZ accusing EcoCash of printing money? Can EcoCash do this? It’s hard to believe that EcoCash could pull this off under the nose of the RBZ. In fact if the RBZ makes this claim then effectively they indite themselves. If Ecocash has been printing money, it’s called counterfeiting and they should have been shut down, tried, convicted and jailed till kingdom come.

If Mr X is stealing and not printing money

If indeed the RBZ accusation is true and EcoCash is not printing money then it means Mr X is in a serious debt spiral- that hole cannot be filled! Is there evidence of this huge hole?

Mangudya says the hole exists

In his affidavit the Reserve Bank of Zimbabwe Governor says there are EcoCash agents that are overdrawn and EcoCash has failed to offer an explanation on why that is so. Oh yes, overdrawn agents are a smoking gun in EcoCash’s hand. It will be very interesting to hear what the financial services company says about that one.

The central bank boss says these agents are overdrawn by ZW$39 million. Using the current parallel market exchange rate this is USD800,000. This is not pocket change and needs to be explained. To be sure the money is above this USD figure given that this debt didn’t just happen right now whilst the exchange rate is where it is.

If Mr X exists what would I have done if I were him?

The only way I would think to close the hole is to keep the hole small at any given time and then to fill it with transaction fees. I would charge for transactions as normal and find a way to keep the money still on the EcoCash ecosystem. It would be a complex operation definitely but in theory it should work.

Why go through complexity though? Why wouldn’t I just not dig the hole at all and I just use my transaction fees to buy as much forex as I can? Why would I touch money on my platform, money that doesn’t belong to me and that will be difficult to replace without a currency printing machine that only a central bank can have?


What’s your take?

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

  1. The Empress

    This is just the typical Zimbabwean nonsense. Before we start going down rabbit hole trying to follow the trail of this bull manure, let’s ask ourselves these 3 questions.
    *Does the RBZ and Zimbabwean government have in place rules and laws against fraud, counterfeiting and criminal devaluation of the countries currency?
    *Do the RBZ and the Zimbabwean government have the legal authority to create new rules and laws against actions that are deemed detrimental to the nation and people of Zimbabwe?
    *And finally does the RBZ and Zimbabwean government have the legal authority to investigate and prosecute alleged criminal activities?

    In my personal opinion the answer to all 3 questions is YES.
    If this is the “certain person” exists and was investigated and proof was found of criminal activity why was this proof not forwarded to the Attorney General’s Office or to the Zimbabwe Anti Corruption Commission (lol) so that this ” certain person” could be brought before the courts and prosecuted to full extent of the law?
    Or why is RBZ Governer not announcing new rules that make actions of this “certain person” illegal if the current RBZ rules do not cover the actions of this “certain person”?
    The answer may quite simple maybe
    this ” certain person ” is Voledemot (he who can not be mentioned by name) and the RBZ Governor is in the process of getting in touch with Harry Potter to ask for help.
    Or maybe the statement given out at night and RBZ Governor was afraid the” certain person” is a ghost whose name can not talked about at night as per our African culture.
    Or this “certain person” doesn’t exist and the RBZ Governor was bored and decided to conduct a morbid experiment on how much bull manure he could feed the people of Zimbabwe.

  2. Tinashe Choto

    Ecocash ,econet fought government on cash in cash out when government stopped it but again with cash shortages ecocash cash in and cash out don’t actually exist anymore or haven’t in over a year and through ecocash agents thats how the black market has thrived abd government tried to limit amounts agents do at a time but they just did more that time some individuals had over 3 million on their lines and from where ,i personally have had money stuck between ecocash and steward babk(another econet baby ) for over 4 months and got it back without interest.One would ask what amount of money rotates on ecocash and where did it come from ,they have obviously generated billions out of thin air and it’s hard for RBZ if they haven’t fully checked if you add all the balances in rtgs that were in the banks and on mobile money platforms a lot of money came out of thin air. Government should not back down this time around black market fuels inflation and econet ecocash is the black market no ecocash not much of black market. Zimbabweans we are just docile ,econet is quick to take government to court why because they pay a lot of tax but the people are robbed everyday by econet and noone has said anytging ,inconsistent internet which results in major data losses major money losses, money lost in transactions , if you don’t check there are duplicate transactions or failed transactions that deduct money, the last ecocash upgrade lost a lot of businesses and individuals a lot of money ,Econet has to be reigned in ,they have gotten away with murder in so many way and people need to be compensated and they are messing up our country

    1. Farai Zizhou

      Your comment is the most sensible. I use the Ecocash platform to change my hard-earned USD and that cannot be denied. It is black market dealing and will never get us anywhere as a country. Anyone who denies the use of that platform for illegal dealings is obviously not sincere at all. It has to be stopped and RBZ is right on this one. Why do I have to spend 3 days to get back my balance on failed transactions? This happened to my family several times including when making purchase at a petrol station (imagine having been lucky to join a fuel queue and getting to the pump after half a kilometre trek, then having to go away with a near empty tank), when trying to pay school fees, & when trying to pay hospital fees in an emergency (hospitals demand payment upfront even in an emergency). If anyone thinks this is exciting, well, the time will soon pass for such uncivil behaviour. I long suspected that the monies deducted from our accounts and credited after three days were actually being used for illegal transactions. Let us wait and see..

    2. M2

      I made similar comments in September 2019 in response to this article https://www.techzim.co.zw/2019/09/strive-masiyiwas-comments-on-ecocash-agents-selling-cash-are-hypocritical/
      “I wonder if the RBZ has a mechanism to monitor the total RTGS money in circulation. Given the size of some mobile money platforms, they could very easily become their own “central bank” without anybody realizing it. There is nothing to stop them from injecting fresh “fake” electronic money into their own platforms (e.g. when paying their creditors through their own platform). The freshly injected money just circulates from one mobile account holder to another. The possibility gets even scarier with the new bureau de changes that buy USD cash in exchange for mobile money. That mobile money could very easily come from a bottomless internal suspense account. As long as the mobile platform controls a large enough market share of accounts, any new money it injects on its own platform will just move from one account to another and other players will have no way to detect the trickery. The problem only manifests through a general rise in inflation. This is exactly the same way that RTGS was abused by the central bank to steal people’s US dollars.”

  3. absbshsj

    Kunzwa msoro kutema mukoma..handiro dambudziko..tsvaga chikonzero..we can try to explain trails and vatious dynamics..ingorovai nyoka msoro wayo fullstop..dont waste our time with affidavits and staff..we have ZACC and if the evidence is there why has t not been submitted for conviction..lets not waste time with Mr X examples while culprits go scot free..Reserve Bank imika…

    1. Knowledge Sibanda

      What a shame.Ecocash is greedy and very corrupt

  4. Knowledge Sibanda

    It is high time Ecocash pays the prices for being greedy at the expense of the Central Bank. They(Ecocash),have failed by all means to put control measures against abuse of Agent lines by their clients and to that effect the Central bank has an obligation to protect ordinary citizens from such greedines and instead of compliyng with the directive they go to court seeking a interdict so that they cover their tracks. I think RBZ FIU must dig further to see who is at the centre of such illicit dealings and who else expect the chefs at Cassava,they are running their onwn mini-central bank within their structures. This is what is destroying and killing the Economy,because ordinary citizens are not protected from such greedy and form of evil.

    Thumbs up to Mr John Mangudya for a good work.Don’t give in to these CARTELS.

    Thank you

  5. Tafirenyika

    Let there be real money in circulation and these baseless allegations will come home to rest. The RBZ should just work on putting money in circulation then ecocash will be one of the options.So will be manipulating the platform when bank transfers take forever and econet is not involved?

  6. Samuel Beta

    We might accuse econet of all the wrong doings but was benefiting from those transactions? It was RBZ. It is difficult to talk with you mouth full.RBZ has made billions out of ecocash, in fact its their cash cow. Which makes it difficult for them to prosecute even if its wrong

  7. Tinashe

    This is very dangerous journalism and extremely irresponsible. You do not know how EcoCash works nor how it is regulated by RBZ. If you did, @Nyahasha, you would not be so quick to proffer your conspiracy theories. I would expect better from this media house. Reminds me of this other writer you brought on a couple of years ago. If you intend on writing about such stories, a little more investigative journalism would really be welcomed.

    1. Tinashe Nyahasha

      Tinashe, this article is reporting on what the RBZ governor said on record. How is that irresponsible? In fact, the article doesn’t offer an opinion other than how complex a problem the problem created will be if the governor’s assertions are true which in itself is reason to take those assertions with a grain of salt. At the same time, overdrawn agent accounts if they indeed exist cannot be ignored.

      Which writer that we brought a couple of years back are you referring to? It’s a serious question, it will help us improve. Please give detail if you don’t mind

  8. Anonymous

    Ponzi scheme @ its best

  9. Anonymous

    If someone takes my money and does not provide a service I would have paid for and then much later decides to give back the money after pressure, that person would have still committed a crime of the theft not so? I think ecocash has done this many times effectively committing theft and only returning ‘money’ when pressured

  10. tawanda makazhu

    The story here is all linked to our current economical meltdown.if our government is struggling to put our currency back in line.we experience these challenges,that is where eco-cash gets in to help the money problem,if we have hard cash readily available eco-cash won’t be necessary.it is difficulty to solve eco-cash agent fraud unless the money issue is solved.
    eco cash is giving three quarters of our population the amount of money which the country is failing to do. if the country was giving us enough money you wouldn’t see people queing at banks.people are desperate and eco cash is taking advantage of their desperation to do even worse than the best expected of them.the problem is on the ejecting of enough cash & stabilisation of hard cash in the banks of zimbabwe.it is not a one yr fix,though.it needs real work,dedication,commitment,pragmatic,meritocracy and honest is needed to bring that about.

  11. Distraction

    Banks have been doing this for the longest time with transfers. This practice is not new. Is either party a saint in this fiasco? A big no. The RBZ needs to fix the money circulation problem because they are at the root of this. When bricks of new currency with videos is seen on video time and time again yet as the money authority they still have not explained to us how some individuals get access before everyone else. Ecocash is exploiting a system that instead of being fixed is busy trying to shift blame. RBZ made Ecocash and now it’s a case of the pot calling the kettle black.

    Hapana kana mutsvene apa.

2023 © Techzim All rights reserved. Hosted By Cloud Unboxed