“No Cash Accepted” signs are increasingly common in Australian shops, thanks to COVID-19. Even before the the pandemic struck, though, we were well along the cashless path, with demand for coins halving between 2013 and 2019.
For the most part Australians have taken cashless payments in their stride. A fully cashless society is often envisaged as inevitable.
But the experiences of Sweden and Zimbabwe, two very different countries that have gone much farther down the path to a cashless society, highlight the pitfalls of such thinking. Sweden shows the need to safeguard access to cash. Zimbabwe shows the importance of the transition not being forced.
Sweden’s cashless experience
Sweden was quick to move toward a cashless society. In the decade to 2018, its central bank, the Riksbank, says the proportion of purchases in shops using cash dropped from about 40% to 13%. Now even panhandlers and public toilets take cards or a mobile payment system called Swish.
But the bloom started coming off Sweden’s cashless rose relatively quickly.
Over the past few years Swedes have been increasingly concerned about the elderly, those living in rural areas and people from migrant backgrounds being left behind by businesses switching to Swish no longer accepting cash.
Last year all but one of Sweden’s political parties supported new laws requiring Sweden’s major banks to continue to offer cash services across the country.
Britain’s government has also promised to guarantee access to cash, with the UK Treasury drafting legislation based on the Swedish laws.
In Australia, research by the Reserve Bank of Australia (from 2019) suggests about a quarter of the population remain “high cash users”, for whom no longer being able to use cash would be “a major inconvenience or genuine hardship”:
These high cash users are more likely to be older, have lower household income, live in regional areas, and/or have limited internet access.
With the vast majority of Australians still wanting the choice of cash, the moral from Sweden is maintaining access to cash is likely to require regulation.
Zimbabwe’s cashless experience
The lesson from Zimbabwe’s experience with cashless transactions is rather different. It’s about the importance of the move to cashless being voluntary, and occurring organically.
While the conditions shaping Zimbabwe’s experience are unlikely to be replicated in Australia, it is nonetheless worth understanding for the broader moral.
In Sweden the transition to cashless payments was overwhelmingly welcomed. In Zimbabwe, the change was mixed up with bigger economic travails. It was neither wanted nor particularly welcomed.
Zimbabwe’s chequered history of economic crises include hyperinflation hitting 231,000,000% in October 2008. To deal with that problem, in 2009 the government suspended the Zimbabwean dollar and instead allowed Zimbabweans to use foreign currencies as legal tender. US dollars fast became the cash of choice.
This de facto “dollarisation” stabilised the economy, but it also resulted in a scarcity of cash. Supply could not be topped up by the government printing money. The supply of US dollars was also reduced by their use to buy imports as well as being stashed away as savings.
Government attempts to address this cash shortage, such the introduction of a “surrogate currency” in 2014, failed due to the lack of popular trust. Zimbabweans instead turned to electronic payment platforms such as Ecocash, a phone-based money-transfer service. By 2017, 96% of all transactions were electronic.
Use shapes understanding
In Sweden, the transition to cashless payments has not fundamentally affected people’s concepts of money and value.
In Zimbabwe, however, the move toward cashlessness has been experienced as a disruption of pre-existing forms of economic life, rather than their seamless extension.
It is tainted by distrust in government institutions and the value of all money. “Bad cash is better than good plastic!” as one street trader in Bulawayo (Zimbabwe’s second-largest city) told me.
This crisis of trust in the very understanding of money is worth noting at a time when the COVID-19 pandemic accelerates our move to cashless transactions. Changes in everyday economic life brought about by the shift to cashless transactions have the potential to reshape how we understand money in unpredictable ways.
Zimbabwean authorities are in discussions with several international investment banks to support a new stock exchange that will trade exclusively in foreign currency, Finance Minister Mthuli Ncube said.
“The interest has been huge,” Ncube told an analyst briefing. He declined to give further details.
Yvonne Mhango, sub-Saharan Africa economist at Renaissance Capital, told the briefing that uppermost on foreign investors’ minds was the ability to repatriate their capital. “What they want is a functioning stock exchange,” Mhango said.
The global lenders would handle clearing and settlement of trades, thereby guaranteeing investors’ funds, Zimbabwe Stock Exchange Chief Executive Officer Justin Bgoni said at the event. The companies involved in talks are based in Africa, Asia and Europe, he said.
The exchange, to be known as VFEX and based in the resort town of Victoria Falls, will open in “a couple of weeks,” said Bgoni, who will also head the bourse.
There is a general perception that there is no film industry to talk about in Zimbabwe. This argument is mostly based on comparisons with other well-resourced film economies, such as Hollywood, or even South Africa’s.
Based on my study of the Zimbabwean film industry I disagree with this view. Zimbabwe does have a film industry, but perhaps, not one that meets everyone’s expectations and certainly not one that can be comparable to Hollywood’s formal value chain.
Zimbabwe, like many other developing countries, faces political and economic challenges and the film industry’s problems are compounded by a lack of either governmental or corporate support, which has led media scholar Nyasha Mboti to observe that the sector is “orphaned”.
There are, nevertheless, efforts at the grassroots, of various informally constituted cottage industries producing video-film products. These include video-films shot in as little as a week, on very low to zero budgets and by remarkably lean crews (who may also feature as the acting talent). These efforts should be celebrated as indications of enthusiasm, creative genius and sheer endeavour that auger well for the future of an industry (by any definition).
Making it work
In a recent paper I argue that making a film in most developing countries is mégotage, as observed by the ‘father of African cinema’, Senegalese filmmaker Ousmane Sembène. The mégotage metaphor means that producing a film in such contexts is a desperate endeavour, akin to scrounging around for cigarette butts.
It is such a grit and grunt, huff and puff affair, to the extent that even a 10-minute short film has to be admired.
Evidence on the ground shows that the mégotage sometimes pays off. Zimbabweans are known for their resilience and ability to kiya-kiya (‘make things work’ in the Shona language) when faced with what seems to be a dead end. A large portion of the country’s economy is characterised by such kiya-kiya efforts, as anthropologist Jeremy Jones observes.
Zimbabwe’s film industry appears to thrive under very difficult circumstances. Recent video-films like Kushata Kwemoyo, Escape, Chinhoyi 7 and lately, the Netflix hit Cook Off, all made during the so-called Zimbabwean crisis (stretching from around 2000 to date) showcase the filmmaking talent and cinematographic capabilities abundant in the country. It’s what once led film scholar Frank Ukadike, in his book Black African Cinema, to remark that Zimbabwe was Africa’s Hollywood.
Ukadike made his remark more than 20 years ago. It was based on the film-friendliness that Zimbabwe exhibited back then. At the time, many Hollywood companies, including the Cannon Group who were popular for blockbusters like Missing In Action and Cyborg featuring stars like Chuck Norris and Jean-Claude Van Damme, used Zimbabwe as a filmmaking location because of its splendid scenery, efficient financial systems and durable infrastructure. Famous faces such as Sharon Stone (in King Solomon’s Mines) and Denzel Washington (in Cry Freedom) graced the country as cast in the movies.
At the same time, Zimbabwe’s Central Film Laboratories serviced the southern African region’s film processing needs. All this promise has disappeared, owing to a combination of political and economic factors that have traumatised most economic sectors, and this is the source of the pessimism.
Riches from grassroots
What I celebrate is that, in the midst of such adversity, filmmaking continues to thrive. A critical mass of youthful filmmakers armed with camcoders, laptops, cell phones and an assortment of improvisations, has emerged and continues to keep the filmmaking impulse alive. Among the leading lights are Von Tavaziva (Go Chanaiwa Go Reloaded), Shem Zemura (Kushata Kwemoyo), Joe Njagu (Cook Off) and Nakai Tsuro (Mwanasikana), to mention just a few.
Most of the time, their route to audience is the DVD or Youtube, often for little or no returns. But the enterprising ones, like Von Tavaziva, have discovered ways of beating the scourge of piracy by producing high volumes of DVDs and selling them at very affordable prices in accessible city spaces.
With proceeds from such endeavours, they mount their next productions – no government support, no bank loan, no moaning!
There are further encouraging signs, if the aesthetics of contemporary music videos is anything to go by. The work of Vusa ‘Blaqs’ Hlatshwayo and Willard ‘Slimmaz’ Magombedze indicates cinematographic competences that can further improve the video-film genre. A veteran of the crisis years, filmmaker Tawanda Gunda Mupengo (Tanyaradzwa and Peretera Maneta) told me that if people keep at it, the local art of filmmaking will only get better. He believes that emerging talent, even away from the major cities, should be encouraged and this will have a multiplier effect, not only on volumes of video-films, but also the human resource-base needed for profitable film business in the future. He says:
Let there be a competent crew in Masvingo. If that crew makes a film that is successful, they will breed a community of filmmakers. They will be training people on the ground when they are shooting and editing, so that we have vibrant little pockets.
The informal filmmaking practices (which are in fact Zimbabwe’s film industry), should be encouraged to thrive, with or without government support. The example of Nigeria’s film industry, Nollywood, which has grown from rags to riches, offers inspiration in terms of how grassroots efforts may blossom in the long run. As it was for Nigeria, so can it be for Zimbabwe.
The Zimbabwean government recently signed an agreement to pay 4,500 white farmers US$3.5 billion for infrastructure improvements on the land expropriated by the government during the chaotic land reform programme of 1997/8.
The initiative shows commitment to constitutionalism and respect for property rights and restoring the rule of law. The agreement is also a noble attempt at bringing closure to a questionable episode of the country’s land history.
But the proposal to fund the exercise by issuing a sovereign bond is highly ambitious. With an ailing economy, the country simply doesn’t have the resources to meet its commitment to white farmers. In his letter dated 2 April 2020 to the heads of the International Monetary Fund (IMF), World Bank, African Development Bank (AfDB), Paris Club and European Investment Bank, Finance Minister Mthuli Ncube clearly outlined that the country does not have the medical and financial resources to fight the COVID-19 pandemic. Although the government cleared its US$107.9 million arrears with the IMF in 2016, it is still struggling to settle its US$2.2 billion debt to other international financial institutions, including the World Bank and African Development Bank.
The government has proposed issuing a long-term sovereign bond, a process where the government sells bonds to investors on either domestic or international financial markets to raise funds. This year, only Ghana, Gabon and Egypt have managed to do so.
It has also called on international donors to help it raise the needed funding. If these options do not raise sufficient funds, another proposal is to sell municipal land around the nation’s biggest cities.
In my view issuing a sovereign bond would be ill-advised. The main reasons for this are that the economic and political conditions are not conducive to an issuance of such a bond. For a country to successfully issue a sovereign bond, it needs some basics in place. It needs an international sovereign credit rating, stable domestic economic fundamentals and investor confidence. None of these are currently present in Zimbabwe.
Why it’s a bad idea
Most of the factors relate to internal political and economic fundamentals.
Firstly, Zimbabwe does not have a sovereign credit rating from the three international credit rating agencies – Fitch, Moody’s or Standard & Poor’s. Without a rating, it is impossible to successfully issue a sovereign bond on international markets because it’s a key input in determining yield and coupon payment on a bond. The government has not yet solicited a rating from the big three rating agencies. It is among the 23 African countries that are yet to request an international sovereign rating.
Secondly, the country has no domestic debt market. If it did, it could try to mobilise local investors who understand the associated risk exposures and could perform their own due diligence. Domestic institutional investors would have to subscribe for the government’s bond issuance to be successful.
Thirdly, the country has changed its currency more than 10 times since 2000. In 2019, the Central Bank banned the use of foreign currency for trading and reintroduced the Zimbabwe dollar quasi-currency that had been abandoned in 2009. The local currency depreciated by more than 320% in less than a year. This eroded savings and pensions, and saw a further loss of confidence in the entire financial system. Strength of a country’s currency determines the attractiveness of its bond issues. A weak currency compounds the risk of default and debt sustainability as repayments will still have to be made in foreign currency.
Fourthly, the increasing economic crisis in the country has eroded the goodwill that the current government accrued post-Mugabe era. President Emmerson Mnangagwa’s actions have failed to tally with his “open for business” mantra. His trips to Davos have failed to yield any significant foreign direct investment as investors question his credibility.
Fifth, the government has been hostile to the private sector. It ordered the closure of the stock exchange on 29 June 2020 and accused businesses of fuelling currency devaluation. State security agencies attempted to stop certain business operations of Econet and Old Mutual, the two largest companies listed on the stock exchange. They were accused of fuelling hostilities against the government. It is these companies and their multinational networks that would support the bond issuance by purchasing the government bonds.
Sixth, the government’s brand has been damaged by a number of government officials being targeted for sanctions. Some are calling for stronger sanctions for human rights abuses. Investors perceive a country that does not respect its rule of law as unlikely to respect its sovereign bond covenants nor honour its obligations on time.
In addition, the government’s commitment to transparency and integrity has been called into question on the back of accusations of mass corruption. Despite promises, there has been little to no action against government officials embroiled in corruption scandals.
Seventh, Zimbabwe’s economy has failed to pick up in the post-Mugabe era. Instead, it has become worse. Food production is at its all time low, the health sector has been paralysed by constant protests and inflation has been estimated at more than 800%.
The last internal factor to consider is that the country’s central bank can no longer perform its functions as the lender of last resort and facilitating cross-border transactions, because of the lack of foreign exchange reserves. Forex access has been restricted to government agencies, departments and selected individuals. Local banks technically have the liberty to make their own forex transaction arrangements with other international corresponding banks.
There are also some external factors that make raising capital this way a bad idea right now. The international debt market has been depressed as a result of COVID-19 and is likely to remain so for the next two years as investors wait to see how countries emerge from the crisis. And the cost of issuing a bond has doubled, which has priced most African countries out of the market. Zimbabwe is no exception.
All these factors are not favourable for Zimbabwe to issue a sovereign bond.
Zimbabwe has many pressing issues. Given that the economy is at its lowest, compensating farmers is a luxury the country cannot afford. It will not yield the implied results of increasing foreign direct investment.
Instead, Zimbabwe should focus on demonstrating the political will to restore business confidence. Evidence of this will include the removal from public office and prosecution of people involved in corruption.
It should also acknowledge the challenges it faces and commit to genuine political dialogue. International partners and investors interpret the denial of the challenges faced by the country as being dishonest and untrustworthy.
Lastly, the government should implement the economic reforms previously agreed with multilateral lenders. Under the agreement, policies should focus on eliminating the government’s double-digit fiscal deficit and adopting reforms to allow market forces to drive the functioning of foreign exchange and other financial markets. These will help stabilise the currency and monetary policy. Without fully implementing these reforms agreed with multilateral agencies, mobilising foreign direct investment will remain a dream.
Zimbabwe’s ruling party said it will expel Old Mutual Ltd. from its financial system, sowing confusion over the status of the insurance giant in the country and what will happen next in the government’s battle to fix its chaotic currency system.
The highest decision-making body of the Zimbabwe African National Union-Patriotic Front on Friday said it endorsed a decision to “eject Old Mutual from the financial system” and to shut down the country’s biggest mobile-money platform, Ecocash. The institutions have caused “runaway inflation through illegal parallel exchange-market rates,” the party’s acting spokesman, Patrick Chinamasa, said after the meeting in Harare.
The government wants to stop companies from using differences in the 175-year-old insurer’s share prices in London, Johannesburg and Harare to determine a potential forward rate for the currency. Measures that were being considered included suspending Old Mutual’s shares from the local bourse, having the securities traded in dollars, or moving it to a planned foreign-exchange based market, people familiar with the matter said earlier this month.
“When they say it is ejected, I’m not sure what he means,” said Lloyd Mlotshwa, the head of equities at Harare-based IH Securities. “I’m not sure it’s a delisting yet, at this point it’s a confusing statement.”
Chinamasa didn’t give further details or respond to calls and text messages from Bloomberg seeking comment.
The local stock exchange has been shut for two weeks after security forces forced the government to cease trading and halt most mobile-money transactions, people familiar with the matter said last month. Clive Mphambela, a Treasury spokesman, declined to comment. A spokesperson for Old Mutual in Johannesburg didn’t respond to calls and a text message seeking comment. Nick Mangwana, a government spokesman, didn’t immediately reply to a text message.
A perennial shortage of cash means anyone who has banknotes is able to negotiate exchange rates with brokers who pay the funds onto mobile-money platforms. The brokers can then sell the hard cash at an even higher rate. The Old Mutual Implied Rate values the Zimbabwean dollar at 122 against the greenback, compared with a black-market rate of about 100, and Friday’s closing price of 65.8765. The government in June abandoned a peg of 25:1 that was put in place in March.
Justin Bgoni, the chief executive officer of the stock exchange, said he is aware of the comments from the ruling party, but wasn’t sure what it implied and would rather wait for official communication from authorities before commenting.
Sean Gammon, managing director of Harare-based Imara Edwards Securities Pvt Ltd. said the comments by Zanu-PF were probably directed at delisting Old Mutual rather than its removal from the entire financial services sector. Old Mutual spans banking, property and insurance in the country.
The last communication received from authorities was that inspections would be conducted into stockbroker trades in the coming days, he said. Once concluded, trading should resume.
Private hospitals in Zimbabwe are charging massive amounts of money - in foreign currency - for Covid-19 treatment.
With government hospitals ill-equipped, and with doctors and nurses on strike, the only hope available for those needing treatment is private care - something beyond the reach of many.
“Kindly be advised that all Covid patients are required to pay USD (American dollars) deposits, $60 (R1,080) for casualty, $3,000 (R54,000) for General Ward and $5,000 (R90,000) for ICU (Intensive Care) hospitalisation,” Obedience Ncube, credit controller for the Catholic run Mata Dei Hospital in Bulawayo, said in a statement.
A government worker earns the equivalent of US$30 (R540), which is about half the fee for a basic Covid-19 test at a private hospital.
Nurses this week said “no USD salaries, no work” as they vowed to stay away.
“The salaries we are currently earning are meagre. They amount to slave wages ... to those who have been subsidising our employer by going to work, mostly because you have an alternative source of income, we call upon you to reconsider this and withdraw your labour as well,” the Zimbabwe Nurses' Association (Zina) said.
The situation has been made worse with the skeleton staff at public health-care facilities testing positive for Covid-19, thereby being sent home for quarantine. Sixty-eight nurses (student and managers) tested positive in one day at the United Bulawayo Hospitals and they have since been sent home. They were tested after one patient died of the disease.
The government this month began hiring newly graduated nurses but some of them don’t want to report to work.
“I was assigned to a Covid-19 centre. I won’t go because my contract stipulates that I have three months to report for duty. This is like being deployed to the war front after training and above all there’s no money,” said a male nurse.
In Harare, The Avenues Clinic said it has put in place “elective admissions” whereby “emergency cases should have at least an RTD (resistance temperature detector) done”.
The hospital also said all admissions should provide proof of a Covid-19 negative test.
To date, Zimbabwe has recorded 605 confirmed cases, 166 recoveries and seven deaths out of 68,400 tests.
Zimbabwe’s state-run Sunday mail reported that Zimbabwe has sufficient foreign currency reserves to sustain the reintroduced foreign currency auction system, citing the Central Bank Governor, John Mangudya.
According to the governor, local lenders have almost $1 billion in their Foreign Currency Accounts (FCA).
“It’s about sufficient resources utilization of resources,” Mangudya was quoted as saying in the Harare-based newspaper.
“The first thing is that we do not expect the exchange rate to continue to go up because there is now a formal market of foreign exchange,” he said.
Zimbabwe reintroduced the foreign currency system on June 23, the first time in 16 years, in a bid to curb the local currency rout that was introduced a year ago.
“Just to put things into perspective, the interbank sysytem which we tried earlier in the year failed because the banks could not trade among themselves due to counter party limits, as well as issue of de-risking,” he said.
“The exchange rate will be driven by effective demand from corporates,” he said.
He added that he expects “the exchange rate to stabilize at a level which allows users of foreign exchange to price their goods and services appropriately while at the same time providing good value for money for exporters.”
Every month, Zimbabwe exports $350 million to $400 million and receives $50 million to $60 million as remittances from abroad.
Crackdown on dissent is on the rise in Zimbabwe even as the country is under COVID-19 lockdown. The nation is recording a spate of abductions and torture common under late former leader, Robert Mugabe.
Three opposition activists from the Movement for Democratic Change-Alliance (MDC-Alliance) disappeared in May after being detained by police while on their way to an anti-government protest.
The women were found badly injured outside the capital Harare nearly 48 hours later and immediately hospitalized. They say they were abducted, sexually abused and forced to drink their urine.
Their abusers remain unidentified but as the women were abducted from police custody, it is assumed they were some kind of state agent.
The three women, member of parliament Joanna Mamombe, Cecilia Chimbiri and Netsai Marova, have since been arrested on charges of lying about their abduction and torture.
'Pattern of disappearances and torture'
Their rearrest came as the United Nations expressed its concerns over what it calls a "reported pattern of disappearances and torture that appear aimed at suppressing protests and dissent" in Zimbabwe.
According to the UN, 49 cases of abductions and torture were reported in the country in 2019 alone.
Thirty-eight-year old rights activist Tatenda Mombeyarara, who was taken from his home by heavily armed men in August 2019, is one of these.
After being severely beaten with metal rods, Mombeyarara was dumped in a quarry. At hospital, it was found he had a broken leg and bruised ribs.
During the beatings, Mombeyarara's attackers accused him of being involved in organizing protests.
Mombeyarara also faces charges of subversion from a previous arrest dating back to May 2019.
'Petrified and terrified'
The May abduction and torture of the three opposition activists has made him even more fearful.
"I am petrified and terrified. It is a difficult situation to become a villain when you are the victim," Mombeyarara told DW. "You are forced to decide to keep to yourself to prevent further victimization. You have to remain gagged to heal. The nature of harm caused on you goes beyond physical."
Zimbabwe under President Emmerson Mnangagwa (center) is still intolerant of basic rights, peaceful dissent and free expression, says Human Rights Watch
The identity of Mombeyarara's attackers is also unknown. But human rights organizations say in most incidences, the pattern of the violations points towards the state being the primary perpetrator of the abuses.
Zimbabwe's government, however, has denied any responsibility.
"Government does not engage or permit any of its agencies and institutions to use any methods such as torture, forced disappearances or abductions," Zimbabwe's home affairs minister Kazembe Kazembe said at a press conference last week.
He accused the opposition of working with foreign organizations to destabilize the government of President Emmerson Mnangagwa.
"Torture and forced disappearances are alien to us," Kazembe said. "We believe they have been brought from foreign environments to generate negative sentiments against our government."
There is increasing tension between Mnangagwa's government and citizens as a result of the poor state of the economy.
The cost of living has gone up dramatically from the beginning of the year especially under the COVID-19 lockdown. Inflation is now pegged at over 700% and long winding fuel queues are an almost permanent feature in the country's towns and cities.
Zimbabweans have been calling on the government to address the situation, but it appears as if the state is instead responding by silencing critical voices.
Failure to follow up
Zimbabwe has also been accused of failing to investigate and persecute the disappearances.
"Zimbabwe's failure to decisively deal with cases of abductions disappearances and torture severely undermines the standing of the country within the international community," said Human Rights Watch Southern Africa Director Dewa Mavhinga.
In early 2000, rights violations resulted in the sanctioning of political leaders in Zimbabwe, then ruled by Robert Mugabe.
The atrocities also led to the isolation of the southern African country from the international community.
Analysts say promises that were made in 2017 when Mugabe was removed from power have become empty. Hope was raised but it was naive because the systems used by Mugabe remained intact.
"The country need to end impunity if Zimbabwe is to be respected. Failure to do so undermines the country's reengagement efforts with the international community," Dewa Mavhinga told DW.
Credit: Deutsche Welle
Zimbabwe’s governing party, Zanu-PF, has summoned finance minister Mthuli Ncube and Reserve Bank of Zimbabwe governor John Mangudya to explain the country’s economic meltdown, the Zimbabwe Independent reported.
Members of the party’s most-senior decision-making body are concerned that the economy’s collapse — marked by inflation of 766% and a currency collapse — threaten the party’s popularity and could cost it the 2023 elections, the Harare-based newspaper reported.
The two officials told the party’s leaders at a closed-door session of the politburo that there is little they can do unless the government comes up with an economic-recovery strategy, the newspaper said. Patrick Chinamasa, Zanu-PF’s secretary for finance and acting spokesman for the party, wasn’t immediately able to comment on the Zimbabwe Independent story when contacted on Friday.
President Emmerson Mnangagwa has blamed the economy’s woes on the private sector. He told the same meeting of the politburo that the country’s currency, reintroduced last year, was under attack, Zimbabwe Independent said.
The Zimbabwe dollar is trading at 90 per US dollar on the black market, according to marketwatch.co.zw, nearly four times above the official peg of 25.
Zimbabwe’s central bank is limiting the number of internal bank transfers customers can make to two a day, as the central bank moves to curb trading in the parallel currency market.
Some “entities” were using their accounts to purchase foreign currency using a network of buyers, the Harare-based central bank said in a letter dated June 4 and seen by Bloomberg.
“These illicit transactions manifest in the form of daily, multiple payments from one account to beneficiaries who hold accounts in the same bank,” the central bank’s financial intelligence unit said in the letter.
The new measure follows a limit imposed last month by the central bank on the amount that banks may transfer via a payment platform with 2 million users. Companies that need to make more than two internal bank transfers a day will need to obtain approval from the lender’s management, it said. Central bank Governor John Mangudya was in a meeting and unavailable when sought for comment.
The Zimbabwean dollar trades at about 76 to the U.S dollar on the parallel market, while authorities have pegged the exchange rate at 25 to the greenback.