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ED, Masiyiwa square off over crashing Zimdollar

ZIMBABWE’s President Emmerson Mnangagwahas picked a fight with the country’s most successful businessman. The economy may be the loser. Under pressure from a plunging currency and 737% inflation, Mnangagwa’s administration on June 27 restricted almost all mobile money transactions in a country where 90% of commerce is conducted on handsets because of cash shortages. On July 17, the police accused Srive Masiyiwa’s Econet Wireless Zimbabwe Ltd, which dominates mobile cash transfers, of money laundering. The battle pits Mnangagwa, who came to power in a November 2017 coup, against Masiyiwa, the businessman who founded and controls Econet. The company’s mobile money unit EcoCash has 11,4 million customers and a 98% share of the market. Its platform is used for everything from buying household furniture to paying public transport fares. The government is seeking a “scapegoat,” said Derek Matyszak, an independent governance analyst in Harare, the capital. “They are shooting from the hip at the inflation monster.” Masiyiwa, who founded Econet in 1998, has a net worth valued at more than $1 billion, based on Bloomberg calculations. The 59-year-old businessman and philanthropist has been a frequent critic of the government. At the same time, he’s appealed for aid to help Zimbabwe fight the coronavirus pandemic. Blind eye EcoCash is accused by the government of turning a blind eye to the use of its platform to fuel black market currency trading. The Zimbabwe dollar was valued at 100 per United States dollar on the black market — four times above a currency peg of 25 to the greenback that ended in June — at about the time of the transaction ban. The gap has since narrowed as the authorities allowed the official rate to depreciate to 72 to the dollar. Oversight of EcoCash will now be moved to the central bank from the Postal and Telecommunications Regulatory Authority of Zimbabwe. From August 15, the central bank will be able to monitor its transactions, as they will pass through ZimSwitch, a national payment platform. “It’s the necessary medicine to cure our economy, which is under siege,” said Patrick Chinamasa, acting spokesman for the ruling Zanu PF. A search and seizure warrant filed by the police aimed to allow them to examine EcoCash’s subscriber list and transactions. A judge denied the police application. Dire consequences “Independent investigations so far have also confirmed government allegations,” said Ndavaningi Mangwana, the Information permanent secretary. “Implementation of a full set of regulatory reforms will even bring down the rate and prices to a much more realistic level which responds to economic fundamentals and not whimsical creation of digital money by some platforms.” Econet denies the money-laundering allegations. The accusations against are a pretext for a bolder move, Econet chief executive officer Douglas Mboweni said in court filings. “There appears to be an agenda to destroy Econet and remove it from its market leadership position to the benefit of another operator,” he said. It counts as rivals

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