The Reserve Bank of Zimbabwe (RBZ) today released the Mid Term Monetary Policy Statement which highlighted the events of the previous year and this one. In that statement, there was an interesting revelation. The RBZ has acquired or is set to acquire a 15% stake in the national payments switch, Zimswitch.
“The Bank is proceeding to acquire 15% shareholding in Zimswitch
RBZ Mid-Term Monetary Policy Statement
Technologies (Private) Limited in order to spearhead interoperability of
infrastructure and connection protocols of mobile money transmission
providers and mobile banking providers through the national payment
switch and enhance monitoring and surveillance of the financial system in Zimbabwe.”
Now, this is both shocking and it isn’t (if that makes sense) because if you remember last year at around this time Zimswitch was anointed as the national payments switch by the Reserve Bank of Zimbabwe. This meant that any financial institution that wasn’t part of the Zimswitch network has to bend the knee to the company.
The establishment most affected by this was EcoCash which had existed for the longest time as an independent outlier. This however ended when SI 80 of 2020 mandated interoperability or in other words, all wallets and accounts under the Zimbabwean sky had to be able to communicate with one another.
On the RBZ side of things, Zimswitch as the national switch makes sense because it already had a relationship with the banks seeing as the company is owned and was started by the banks. Mobile Money operators like OneMoney and Telecash were already on board so as they say this was a route one decision.
However, I didn’t foresee that the Reserve Bank of Zimbabwe (RBZ) would go as far as to take a piece of Zimswitch. I don’t know about you and maybe there are some financial market soothsayers who saw this coming but this is (at least in my opinion) very unusual.
Stranger still is when we look at the reasons for the acquisition and the one that I am sure stood out to many is the line that reads “enhance monitoring and surveillance of the financial system in Zimbabwe“. This to me suggests that the RBZ is tightening its grip on the financial sector even more and as we saw with EcoCash being forced to pull its Bank-to-Wallet promotion, the saga with mobile money might also not be over.
The full Mid-Term Monetary Policy Statement is in the link below:
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6 comments
I don’t think that they should be allowed to acquire such a stake as it quicky leads to bias and preferential treatment as we’ve seen with every other institution that government has a stake in. Zimswitch will find it easier to influence RBZ policy and RBZ will (even unintentionally) guide Zimswitch on future policy which is not public knowledge. Certainly these issues have been raised and ignored.
More stank if you ask me. They should be bringing more competition for zimswitch instead this move all but cements the company’s monopolistic dominance, good luck to anyone looking to compete. As RBZ now has a vested interest in maintaining its competitive advantage.
And that statement is ridiculous “enhance monitoring and surveillance of the financial system in Zimbabwe“, by that logic, regulators would have to acquire a stake in every company that falls within their jurisdiction so as effectively carry out their mandate. Nonsense, nxa!!!!
This is a great move we hope this will mean more liberation of the financial system so that fintechs can leverage on this development.
sure
If Zimswitch fails to perform, RBZ won’t have as much independence as they have now, to enforce certain measures. Besides, as Mkhu rightly mentioned, the financial services sector needs to be liberalized and more players must be given a chance in order to improve service delivery.
Now the Referee wants to play also