The Reserve Bank of Zimbabwe (RBZ) through its Financial Intelligence Unit (FIU) has directed ZimSwitch Technologies to implement a daily and monthly limits of ZW$20 000 and ZW$100 000 on the ZIPIT platform with immediate effect.
In a letter directed to ZimSwitch Technologies chief executive officer Cyril Nyatsanza, FIU noted that the existing ZIPIT limits which have no monthly cap are being misused, primarily for illicit foreign currency transactions.
“The current ZIPIT limits of ZW$100 000 per day allow a customer (subject to any bank-specific limits) to move about ZW$3 million per month, using a single account, and much more if he / she is multi-banked and / or uses third party accounts,” reads the temporary downward review of ZIPIT limits letter.
“The FIU has noted KYC shortcomings in the ZIPIT system that make it difficult for banks, regulators and law enforcement agencies to speedily identify counter-parties to a transaction, or to identify multi-banked users.”
FIU said: “Until such time when adequate safeguards are built into the ZIPIT system to minimize the money laundering risk, ZimSwitch is directed to implement, with immediate effect, daily and monthly ZIPIT limits of ZW$20 000 and ZW$100 000, respectively”. The limits have been arrived at cognizant of the reality that very few Zimbabweans earn more than ZW$100 000 per day and those who do have other payment options available for higher value transactions, FIU added.
Following the February 2019 unpegging of the exchange rate from the US dollar and the June 2019 introduction of the new currency—the Zimbabwe dollar —the exchange rate has deteriorated from 2.5 Zimbabwe dollars per US dollar in February 2019 to 65 Zimbabwe dollars per US dollar this month.
Recently, the apex bank closed an unspecified number of mobile money agent lines suspected to have been fueling exchange rate volatility.
However, experts say the authorities are merely “tinkering with the symptoms” while the elephant in the room is the rock-bottom confidence in Zanu PF rule. Zimbabwe is still recovering from the shock of El-Nino induced drought which characterised the 2019/20 cropping season resulting in crop failure, livestock and wildlife deaths. This and among other issues has brought more pressure to the fiscus.
The southern African nation economy’s downward spiral has fueled unemployment and poverty. Zimbabwe’s GDP is poised to contract by 7.4% from an initial projection of 0.8% growth in 2020, according to IMF’s Sub-Saharan Africa Regional Outlook.