We will not go into detail on the failings of RBZ on financial oversight for the country but I will narrow down to the EcoCash story.
The last crazy move by the RBZ was to bar all Agents who transact above $100 000 per month, let me repeat $100 000 per month. This is equivalent of $1 700 on the grey market and $4 000 using the official exchange rate.
After that move, which is not clear whether it's meant to target the agents or the EcoCash business, one of the biggest tax payers in the country and one of the best channels for collection of revenue for government from the informal sector.
On March 16, Kenya's President Uhuru Kenyatta encouraged the population to use mobile money and electronic cards. Soon after, the Central Bank of Kenya increased transactions limits for individuals.
Said the CBK: "While the immediate objective is to reduce the risk of transmission of COVID-19 by handling bank notes, these measures will also reduce the use of cash in the economy over the medium term."
Mobile money works the same in Kenya, Zambia, Tanzania and other countries. Why then is the RBZ targeting EcoCash? For me, it's trying to find a weaker target and scapegoat to explain the run-away inflation and exchange rate.
It is interesting to note that an Individual can do $100 000 using Zipit in a day, yet EcoCash agents are supposed to be limited to $100 000 per month. Why EcoCash? This is purely selective administration of the regulations.
For those, who may not understand mobile money in detail, all money that comes into EcoCash, comes through the banking system.
That's the only channel. So what is going on here. I hope, the ministers and everyone else is not getting misled by the RBZ.
If one were to stop EcoCash today, will the black market go away? Will inflation reduce? It's ridiculous to think like that.
Now that the agents are blocked, the rate has crossed US$1: $63. So does this have anything to do with the closed agents?
As a country, we seem not to get our priorities right. It's clear the RBZ is keen to kill EcoCash and hope to grow OneMoney. Will this work? It won't!
I have just done some research and below is a table which shows the transaction limits, which is how much one can "Send Money" using a mobile money platform.
Other countries have higher limits per single transaction than an EcoCash agent is allowed in a month!
Why is Zipit spared? Or is it going to be the next target? Is the problem EcoCash?
If there are culprits within EcoCash agents, why not target them?
If the police can't find an offending motorist, will you ban all cars from the road or worse still destroy the road so that no car can use that road?
It may be worthwhile for the RBZ to invest time in investigating what is going on in the economy, and build trust and confidence.
This will not help anyone. Now that the rate has run away, it may help EcoCash, now they are exonerated! They are certainly not to blame. But then, who is next?
