If you somehow still don’t know, Ecocash entered the overcrowded Bureau De Change industry yesterday with their new service *150#. With the current cash shortages and them being behind 99% of mobile money transactions Ecocash obviously have an advantage- most foreign currency sales already involve Ecocash anyway.
However their solution, awesome as it is does not solve two major problems that customers continue to face in the forex market. These are:
- Forex trade continues to be a one-way street even until now. You can sell foreign currency officially but you cannot buy foreign currency easily
- Once you sell in exchange for Ecocash you will struggle to cash out.
Individuals still have to deal with the black market
We are not even going to mention that official rates still lag behind black market rates. Although Ecocash’s rate of $10.80 ZWL per $1 USD is not that far behind from the prevailing black market of $11 ZWL it is not on par with what other exchanges are offering.
The real reason why the black market exists is that individuals and informal traders who drive the Zimbabwean economy still struggle to access foreign currency officially. While you can walk into an exchange and sell your USD no one allows you to walk and buy it back. Therein lies the problem.
The official market is basically a vacuum machine that sucks up all USD and never gives it back. Leaving ordinary folk to deal with the spectre of buying currency on the black market when they need it.
Ecocash’s exchange is no different. It gives you the option to sell. There is no option to buy USD. That makes it just another exchange in a way.
Then there is the issue of accessing cash. The Ecocash Exchange only tops up your Ecocash Wallet balance. These are what we call Ecocash Dollars, and while officially ( and falsely), they are equal to bond notes, they are not.
If you want to buy stuff cheaply you have to convert that money into cash. Ecocash has allowed it’s ecosystem to fester when it comes to the cashout problem. You will have to pay a premium of around 40% to convert your money into cash.
If you factor in government tax and official Ecocash charges you might be left with half of what you had in the beginning. In fact, $10.80 is worth:
10.80*60%=6.80-0.9
$6 bond.
Currently, the black market is paying as high as $8.50 ZWL bond per $1. That is a massive difference and is all thanks to Ecocash’s unscrupulous agents. Currently, it is nigh impossible to cash out officially even at Econet shops where everything cashed in is taken by employees.
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