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Zimbabwe is hiking mobile money taxes to plug its fiscal deficits

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Mthuli Ncube

Cash-strapped Zimbabwe has turned to mobile money for additional treasury funding with a hike in taxes for mobile wallets and electronic payment transactions.

Zimbabwean business owners and consumers in the country say the new fiscal measure will push up costs in an economy already battling rising inflation and currency shortages in a country with a history of cash shortages, multiple currencies and hyperinflation, mobile money had become a key payment alternative.

Cash is hardly ever accessible in Zimbabwe as banks frequently run out of monetary notes, leaving mobile money and bank cards as the only transaction options.

But it now appears mobile money, dominated by leading mobile operator Econet’s EcoCash with a 96% market share, could be made a victim of its own success.

The recently appointed finance minister, Mthuli Ncube, said the tax on the mobile wallet and electronic transactions will increase from a flat five cents per transaction to two cents per each dollar transacted.

This would be a reduction if all you ever transacted was one dollar but a significant increase beyond that.

Zimbabwe hopes the restructuring of the taxes will raise additional funds for the government which is battling fiscal deficits. Ncube has explained that such measures, although hard to bear, will enable the government to mobilize funds for the treasury.

Mobile money has been one of the few significant successes in Zimbabwe’s troubled economy over the last decade. The introduction of the bank to wallet transfers has spurred mobile money usage, according to the telecoms regulator.

It said the total number of active mobile money subscriptions increased by 12.6% to reach 5.6 million at the end of the second quarter.

The government stands to rake in the earnings, especially as the mobile money merchant, airtime and bill payments values increased by 45.3% in the second quarter 2018 to $1.1 billion compared to the first quarter period.

The number of mobile money transactions had also risen by 38% to about 404 million. This effectively means that the government of Zimbabwe previously earned about 5 cents from a transaction of about $100 but now earns around $2 for transactions worth the same amount.

There has been dismay over this, with Zimbabweans taking to social media to condemn and register frustration over the tax hike.

Econet Wireless, which runs the dominant mobile wallet, EcoCash, has initiated the unbundling of the platform with a view to separately list it on the Zimbabwe Stock Exchange.

Analysts at IH Securities said this week that the fin-tech divisions of Econet – including mobile insurance – have become valuable assets worth separating from the mobile telephony services.

“We believe that the fin-tech division is an attractive stand-alone asset and as at FY18 revenue in this SBU was $244 million.

As the cash constraints persist, EcoCash remains well positioned to maintain its strong growth trajectory,” IH Securities said in a market note.

Industrialists in Zimbabwe have complained about the mobile money tax increase, with the Confederation of Zimbabwe Industries explaining that “this tax will compound through the value chain” with the consequence that there will be a 2% charge at each value chain stage.

Mthuli Ncube Money Transfer Tax

“This will prejudice the competitiveness of Zimbabwe value chains against foreign value chains. We believe that this can be effectively mitigated by a cap (monetary value) on the charge (per transaction),” said Sifelani Jabangwe, president of the Zimbabwe industrialists grouping.

The tax hike on mobile money in Zimbabwe follows Uganda which introduced a controversial mobile money and social media tax earlier this year but has now has reduced the mobile money levy from 1% to 0.5% for cash-outs.

The Ugandan parliament also voted in favour of abolishing mobile money taxes for ‘sending, receiving and depositing money into mobile wallets.

Other African governments such as Kenya have, however, also raised mobile money taxes, with Kenya hiking mobile money statutory levies from 10% to 12% in June.

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HEALTH

Constitutional Court sets aside High Court ruling that would have widened Zimbabwe’s abortion grounds

The Constitutional Court has declined to confirm a High Court ruling on mental health and abortion, saying the lower court skipped a required step. It did not rule the restrictions justified.

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Zimbabwe’s Constitutional Court has set aside a High Court judgment that sought to widen access to lawful abortion, ruling that the lower court did not complete the legal analysis required before striking down a law.

In a judgment delivered on 14 October 2026, the apex court declined to confirm the High Court’s declarations that provisions of the Termination of Pregnancy Act were unconstitutional, according to reports by NewZimbabwe.com and The Herald. The High Court had found the law unconstitutional to the extent that it excluded mental health as a ground for lawful termination, and that its definition of “unlawful intercourse” did not cover conduct prohibited under the Mental Health Act.

Writing for the court, Justice Bharat Patel said the High Court had not separately applied the test in section 86(2) of the Constitution, which asks whether a limitation on rights is fair, reasonable, necessary and justifiable in an open, just and democratic society. “A finding that the impugned legislation limits a constitutional right does not, without more, render that legislation unconstitutional,” he said.

The case was brought by the Community Working Group on Health and legislator and activist Nyasha Batitsa against the Health and Justice ministers, the Attorney-General and Parliament. The applicants argued that physical and mental health cannot be separated, and warned that forcing women with severe psychiatric conditions to continue a pregnancy could expose them to suicide, postpartum psychosis and lasting psychological harm.

The government defended the law, arguing that it is already broad enough to cover health conditions that threaten a woman’s life, and cautioning against a blanket approach to mental health conditions, which vary in severity. Pro-life groups that took part as friends of the court said expanding the grounds was a matter for Parliament.

The court also rejected any suggestion that Parliament’s decisions are beyond judicial review. “The conduct and decisions of Parliament, like any other exercise of public power, are subject to constitutional review by this Court,” Justice Patel said.

Importantly, the ruling is not a finding that excluding mental health from the abortion grounds is constitutionally justified. Both outlets report that the court’s decision turned on how the High Court reached its conclusion, leaving the broader question of whether mental health should be a lawful ground unresolved in these proceedings. The Act dates back to the 1970s.

Sources: NewZimbabwe.com, The Herald.

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BUSINESS

Government to revoke licences of non-compliant foreign firms in reserved sectors

Cabinet says foreign-owned businesses in 17 sectors reserved for Zimbabweans face licence suspension or revocation after inspections of more than 3,000 companies.

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Foreign-owned businesses operating in sectors reserved for Zimbabweans face having their licences suspended or revoked, the government said after Tuesday’s Cabinet meeting, as it moves from awareness campaigns to enforcement.

According to both The Herald and NewZimbabwe.com, inspections covered more than 3,000 companies across all 10 provinces. Cabinet was told that most foreign operators had not regularised their status despite campaigns and formal non-compliance notices. The Ministry of Industry and Commerce, the briefing said, will suspend or revoke the operating licences of non-compliant businesses in reserved sectors.

The rules come from Statutory Instrument 215 of 2025, gazetted in December 2025, which reserves 17 sectors for Zimbabwean citizens. Thirteen are reserved exclusively for locals, including borehole drilling, clearing and customs, tobacco grading, estate agencies and artisanal mining. In four others, retail and wholesale, haulage and logistics, grain milling, and shipping and forwarding, foreign firms may take part only through exemptions or regularisation plans. Retail and brick moulding were cited as areas where foreign players still have a large presence.

Both outlets reported the same compliance figures: 693 formal applications received; 269 foreign operators applying to regularise by transferring 75 percent of equity to Zimbabwean citizens; 144 entities seeking confirmation of their local status; and 63 entities qualifying for statutory exemption by meeting investment thresholds or being recognised international brands. The reports do not explain how these categories relate to the 693 total.

The reports differ on who spoke at the briefing. NewZimbabwe names Information Minister Soda Zhemu, while The Herald names Acting Information Minister Prof Paul Mavima and credits Industry and Commerce Minister Mangaliso Ndlovu with the compliance update. Neither says how many licences have so far been withdrawn, what penalties will apply, or when enforcement begins.

Sources: The Herald (via Zimbabwe Situation); NewZimbabwe.com.

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BUSINESS

ZINARA clears US$206 million DBSA loan for highway rebuild

The Zimbabwe National Road Administration says it has fully repaid the 2011 Development Bank of Southern Africa loan used to rebuild the Plumtree–Bulawayo–Harare–Mutare highway.

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The Zimbabwe National Road Administration (ZINARA) says it has fully repaid a US$206 million loan from the Development Bank of Southern Africa (DBSA), closing a debt that has weighed on the roads authority for years.

Board chairperson George Manyaya announced the repayment at ZINARA’s 10th annual general meeting in Harare. According to both The Herald and NewZimbabwe.com, the final payment was made on 30 September. “We no longer owe DBSA; we finished paying,” NewZimbabwe quoted him as saying.

The loan was secured in 2011 to fund the rehabilitation and upgrading of the Plumtree–Bulawayo–Harare–Mutare highway, one of the country’s main trade corridors. The two outlets give slightly different lengths for the road, so this report does not quote a figure.

The debt had repeatedly drawn scrutiny from Parliament. NewZimbabwe reported that Manyaya said the Public Accounts Committee had questioned ZINARA several times over the unpaid loan, and that clearing it was a priority for the current board because it stood in the way of raising further funding. The Herald reported that the repayment was presented as evidence that Zimbabwe honours its sovereign obligations and should help rebuild its credibility with lenders and unlock funding for infrastructure.

ZINARA collects road-user revenue, including licence and toll fees, and channels it to the maintenance and rebuilding of roads. With the DBSA obligation settled, the agency is expected to have more room to finance road works and to approach financiers, although neither report sets out specific new funding arrangements agreed on the strength of the repayment.

For motorists and transporters, the practical test will be whether the money once used to service the debt now translates into visible repairs on the country’s busiest routes.

Sources: The Herald (via Zimbabwe Situation); NewZimbabwe.com.

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