Why did Harare drag its feet on illicit deals?

Over the years, we have seen city and town councils across Zimbabwe demolishing houses built illegally on land not owned by the builder, or without initial planning approval.

What has puzzled us is that city councils would wait for people to put up structures, even finishing the house, before moving in to demolish the structure.

Unfortunately, we are witnessing a similar situation in the financial services sector, where illegal activities are allowed to flourish for years and reach levels where the value of the local currency is being decimated.

In the past couple of weeks, we have seen the financial intelligence unit (FIU) of the Reserve Bank of Zimbabwe coming down hard on what it called abuse of national payment systems, mobile money and the Zipit platforms.

The FIU accused EcoCash, which has a market share of more than 90% of mobile money transfers, of allowing illegal activities to be conducted on the system.

The FIU identified more than 1,000 agent lines that it said lacked proper know-your-customer records, which it proceeded to block. On the Zipit platform the FIU said the system has shortcomings that make it difficult for banks, regulators and law enforcement agencies to speedily identify those sending and receiving the funds, or to identify multi-banked users.

While the decision to freeze accounts and put limits on the payment systems of EcoCash and Zipit are well within the FIU mandate, what is baffling is why potentially illegal activities were allowed to go on for such a long time.

If the FIU had been vigilant and had done its work by the book, the local currency would not have been hammered as badly as it has been on the black market.

As the saying goes, a stitch in time saves nine. These illicit financial transactions should have been nipped in the bud.