HARARE (Bloomberg) — Zimbabwe suspended all monetary transactions on mobile-phone platforms and halted trade on the local stock exchange in an effort to stabilize its currency.
The measures come two days after President Emmerson Mnangagwa warned his government will tackle “malpractices” that he said have undermined his government’s efforts to end an economic crisis. Inflation in the southern African nation is at 786%, its recently revived currency has collapsed and the World Bank estimates the economy will shrink as much as 10% this year.
The suspension of monetary transactions by companies including Econet Wireless Ltd. unit Ecocash will “facilitate intrusive investigations, leading to the arrest and prosecution of offenders,” the Ministry of Information said in a statement Friday in the capital, Harare. Other companies affected by the regulations include state-controlled Telecel.
The 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 ministry said.
The measures will remain in place until mobile-money platforms have been “reformed to their original purpose and all the current phantom rates of exchange have converged into a genuine rate of exchange that is determined by market forces under the Foreign Currency Auction system,” it said.
Zimbabwe Stock Exchange Chief Executive Officer Justin Bgoni said he had not been officially informed of the measures and could not comment. Calls to Econet CEO Douglas Mboweni went unanswered, while a spokesperson for Econet declined to comment. Telecel CEO Angeline Vere said she was unaware of the announcement.