Zimbabwe bank suspends Multichoice payments over forex shortages
Harare — Zimbabwe’s Steward Bank has suspended payments to MultiChoice, the pay-TV subsidiary of Naspers, citing unavailability of foreign currency, in a sign that dollar shortages are worsening in the country.
Local banks have been forced to limit withdrawals due to cash shortages, while importers face long delays in paying for goods they bring in, forcing some businesses to buy dollars on the parallel market.
Steward Bank, a unit of telecommunications company Econet Wireless, said in a statement that it was suspending payments to MultiChoice, Africa’s largest pay-TV firm, which is popular in Zimbabwe.
“To assist in effective allocation of foreign currency reserves at this critical time, we would like to advise that with immediate effect, the bank has suspended DStv payments for all account classes [except premium],” the bank said.
In May 2016, the central bank in Zimbabwe set priorities for imports, imposed limits on cash withdrawals and introduced a bond note currency in a bid to ease the acute shortage of money in the country.
In a report on Friday, the IMF estimated that $600m-$800m was in circulation in Zimbabwe.
Economic analysts said most of the money was outside the official bank sector.
Most Zimbabweans, who still vividly remember the 500-billion percent hyperinflation that wiped out their savings and pensions in 2008, are holding on to the US currency as a store of value.
This is worsening the country’s currency shortages.
Naspers has faced dollar shortages in other African countries including Angola, Mozambique and Nigeria. At the end of March, it had $289m trapped in those countries, but had managed to extract almost all the money by the end of May.
The South African group’s pay-TV business in the rest of Africa has suffered a decline in profits because of the effect of currency weaknesses in the main operating markets.
Reuters, With Staff Writer