Thursday, April 30, 2009
Biti is the international face of Zimbabwe's new "inclusive government," and he came to Washington to plead a heart-wrenching case. More than half the population of his country is surviving on international food aid. Reports of cholera outbreaks abated after international agencies rushed in thousands of truckloads of potable water, but 4,000 people have already died of it and most public health experts expect the epidemic to rise again. There's no money to fix the country's collapsed water system. Schools are closed for lack of funds to pay teachers; hospitals and clinics are nearly empty of doctors, nurses, medicine, and equipment. Unemployment stands at more than 90 percent.
After years of being looted by Mugabe's ZANU-PF party, Zimbabwe is dead broke. Biti and his colleagues from neighboring countries in southern Africa have been visiting Washington and London in an effort to persuade Western governments to lift sanctions on ZANU-PF members in the government and ask international lenders to restore development aid. And because of who he is, over time, Biti has a chance of changing those lenders' minds.
We all can agree that people in Zimbabwe desperately need help. But the West must be very, very careful in how it gives it. Mugabe remains fully in charge and his loyalists run the key security ministries and the notorious Joint Operations Command, responsible for some of Zimbabwe's most gruesome human rights crimes. He has unilaterally increased the number of ministers to 43 in order to water down the opposition's influence, and many of the 29,000 "Green Bombers" who perpetrated so much violence during the election season last year are on the civil service payroll.
Human rights activists and opposition supporters are still regularly attacked, arrested, and prosecuted in a court system that obeys Mugabe's bidding. Mobs are still invading and taking over the properties of commercial farmers. The media are still not free. And all the while, Mugabe is going about unilaterally rewriting the terms of the power-sharing agreement -- and without any sanction from Zimbabwe's neighbors.
Western governments are already providing $900 million in humanitarian aid to Zimbabwe, through the United Nations and non-governmental relief agencies. This money is literally keeping the country alive. What Biti has come to request is development aid: direct, government-to-government support that will help fill the state coffers and, in theory at least, allow basic services to resume: schools, hospitals, public agencies of all kinds.
The problem is that the Finance Ministry does not control the country's central bank, the Reserve Bank of Zimbabwe, whose governor, Gideon Gono, has funded the crudest forms of state repression. Gono admitted recently that he raided the accounts of foreign aid groups in order to pay government salaries and called on international lenders to "let bygones be bygones."
The signs are that the United States and the European Union are aware of the risks of rushing in too quickly. Mr Biti received a polite welcome in Washington DC this past week. But he was told that the donors have few problems with his plans and intentions, just his ability to deliver while the architects of Zimbabwe's misery retain control of the country's security forces, judicial system and central bank.
So, for now, the targeted travel restrictions and asset freezes on top officials of ZANU-PF will remain in place, and we are told by the United States government that any resumption of development aid will require dramatic improvement across a range of critical human rights indices: judicial reform, media freedoms, and prosecutions of those responsible for the most serious human rights atrocities. The US government and the Europeans should now explain to their taxpayers, who will have to fund any development aid for Zimbabwe, in more detail exactly what they propose to do and when.
The trick for now is for Zimbabwe's international donors to find creative ways of supporting Zimbabwe's ruined health and education systems without perpetuating Mugabe's reign of terror, abuse and corruption. That's where the conversation with Biti has started and where it must ultimately finish.
Tiseke Kasambala is Zimbabwe researcher for Human Rights Watch.
By Tiseke Kasambala Johannesburg -- Tendai Biti is not what you'd expect from a representative of the Zimbabwean government. Now the country's finance minister, he's a former human rights lawyer and ...
By Tiseke Kasambala Johannesburg -- Tendai Biti is not what you'd expect from a representative of the Zimbabwean government. Now the country's finance minister, he's a former human rights lawyer and ...
Wednesday, April 29, 2009
April 28 (Bloomberg) -- Delta Corp., Zimbabwe’s largest brewer and soft-drinks maker, may sell its 41 percent stake in Ariston Holdings because it no longer needs foreign currency generated by the company, the Herald said, citing unidentified company officials.
Delta, 35 percent-owned by SABMiller Plc, could sell its shares in Ariston for $3.2 million, the Harare-based newspaper said today.
Zimbabwe trades using the South African rand and U.S. dollar after a decade of recession and hyper inflation devalued the Zimbabwe dollar “almost to the point of no use,” Prime Minister Morgan Tsvangirai said on Feb. 20.
Delta holds the franchise for Coca-Cola products in Zimbabwe, while Ariston mainly exports flowers, fruit and vegetables.
To contact the reporter on this story: Brian Latham at firstname.lastname@example.org
Tuesday, April 21, 2009
Harare, Zimbabwe - Zimbabwe's central bank governor admits he took money from the bank accounts of private businesses and foreign aid groups without permission to keep the country's cash-strapped ministries running.
In a statement on Monday, Reserve Bank Governor Gideon Gono said he loaned the money from the private hard currency accounts to the government. He says the accounts will be reimbursed when the loans are repaid.
Gono has been harshly criticised for raiding foreign currency accounts, among other questionable practices. In his statement, Gono pleaded with his detractors to ease up.
Now that Zimbabwe has a new coalition government dedicated to reversing its severe economic decline, Gono says it's time "to let bygones be bygones."
April 19, 2009 By Fish Eagle © zimbabwemetro.com ⋅
The International Monetary Fund (IMF) has stoked the fires with a damning report blaming Reserve Bank of Zimbabwe governor Gideon Gono for single-handedly causing a staggering 14 percent slump in Zimbabwe’s real Gross Domestic Product (GDP) in 2008, heightening calls for the embattled central bank chief’s ouster.
The statement, issued by the Bretton Woods institution after a two-week Article IV mission in Zimbabwe last month, comes as principals of the inclusive government meet tomorrow to decisively decide Gono’s future at the helm of the central bank.
A meeting of the Government Executive Committee comprising President Mugabe his two deputies Joseph Msika and Joice Mujuru; and Prime Minister Morgan Tsvangirai and his two deputies Thokozani Khupe and Arthur Mutambara at State House on Thursday sidestepped the issue of Gono, deferring it tothe crucial April 20 meeting of the three principals to the inclusive government.
James Maridadi, the Prime Minister’s spokesman said that Thursday’s meeting of the Executive Committee, also known as the ‘Top 6,’ did not discuss any substantial issues as it was an inaugural meeting whose purpose was to set ground rules of a working relationship
“All outstanding issues will be discussed when the principals meet for their regular consultations on Monday,” Maridadi said.
The IMF reports that Gono was solely responsible for causing a record collapse in the economy last yearwhich saw the GDP fall dramatically to a cumulative 54 percent, a record nine-year high.
In layman terms, GDP is a measure of the output of a national economy. “Hyperinflation driven by the Reserve Bank of Zimbabwe’s quasi-fiscal activities,” said the IMF report, “and a further significant deteriroation in the business climate, contributed to an estimated 14 percent fall in real GDP in 2008, on top of the 40 percent cumulative decline during 2000-07.
Poverty and unemployment have risen sharply,” said the IMF report, calling for central bank reforms.As pressure on Gono has grown with the collapse of Zimbabwe’s economy, he has blamed banks, the stock exchange, black market currency dealers and insurance companies. As well as firing the bankers, he blacklisted 20 investment companies last October and froze their accounts.
He has also insisted that he was taking instructions from his principal, President Robert Mugabe, as he implemented policies that have wrecked Zimbabwe’s dramatic economic ruin.
Gono printed plenty of Zimbabwean dollars, which government took out of circulation last week for one year until industrial production has been boosted from its current 20 percent to about 60 percent.
Economists say Gono was solely responsible for the dramatic collapse of the Zimdollar by relentlessly printing money, as the country, mired in disease and hunger, inflation beyond calculation and political crisis, kept on spiraling downward. Extraordinary situations call for extraordinary measures, he said.
Gono told parliamentarians last month that he engaged in non-traditional roles of a central bank because of declining capital flows, droughts, declining capacity utilisation, limited fiscal resources, political polarisation, sanctions and a failure to access balance of payments support. “People forget what they legislated,” Gono said.
“You said to me, ‘Ita zvese zvese as long as takuti ita.’ (Do whatever as long as we have instructed you to do so). So that is what I have been doing. You don’t shoot the messenger.”
The IMF report however dismisses Gono’s explanation insisting he was responsible for compounding Zimbabwe’s crisis through quasi-fiscal activities that have seen the RBZ pump millions into financing newlyresettled black farmers, most of them Zanu (PF) supporters and who have failed to produce enough food to feed the starving nation.
Under his leadership, the Reserve Bank took on myriad tasks unrelated to central banking: buying government cars, supplying farm equipment and fertilizer, setting up and supplying “People’s Shops” to sell cheap goods, setting up foreign currency shops, supplying medicines to state hospitals, mobilizing rigs to drill bore holes for clean water in the cholera crisis and a biofuels project, to name a few.
For example, Gono provided foreign currency to purchase combine harvesters, tractors, motorcycles, generators and small farming implements that were handed for free to resettled farmers by Mugabe just before elections last March, in what analysts said was a clear attempt by the Zimbabwean leader, working in cahoots with Gono to curry favour with a disgruntled electorate.
Zimbabwean economy contracted by biggest-ever margin last year, IMF reveals
Printer friendly version Zimbabwe's economy contracted by its biggest-ever margin last year as the economic meltdown, seen in world record-breaking inflation of 231 million per cent officially, continued unabated, a report by the International Monetary Fund said.The IMF report says Zimbabwe's GDP went down by 14 per cent in 2008, adding to a cumulative decline of over 40 per cent between 2000 and 2007.The IMF report put pressure on the coalition government to sack the country's central bank governor, Gideon Gono, who it blamed for pursuing quasi-fiscal activities resulting in the 14 per cent slump of the country's GDP last year. President Robert Mugabe reappointed Mr Gono for another five-year term in March, sparking protests from the opposition. "Hyperinflation, driven by the Reserve Bank of Zimbabwe's quasi-fiscal activities, and a further significant deterioration in the business climate, contributed to an estimated 14 percent fall in real GDP in 2008, on top of the 40 percent cumulative decline during 2000-07. Poverty and unemployment have risen sharply," the IMF said.The release of the IMF report comes ahead of a crisis meeting between the country's political leaders: President Mugabe, his deputies; Joice Mujuru and Joseph Msika, prime minister Morgan Tsvangirai and his two deputies; Arthur Mutambara and Thokozani Khuphe, over the issue of Mr Gono.International finance institutions and western countries have put pressure on the young coalition government to remove Mr Gono before any direct aid starts flowing in, but Mugabe has dug in his heels and said he will not go.Mugabe says Mr Gono saved Zimbabwe from total collapse and the ensuing chaos by bursting sanctions through excessive money printing and quasi fiscal activities when the government could not access lines of credit from international finance institutions.Britain's Africa minister Lord Malloch-Brown has also called for the dismissal of Mr Gono before the country could be eligible for budgetary support. Lord Malloch-Brown said he did not trust the people who signed the cheques at the central bank.
Saturday, April 18, 2009
Reserve Bank governor Gideon Gono
HARARE - President Robert Mugabe is reported to be adamant he will not disappoint Reserve Bank of Zimbabwe (RBZ) governor, Gideon Gono, despite the pressure exerted by the Movement for Democratic Change (MDC) on him to sideline his loyal ally from a strategic position at the central bank.
The MDC has pushed for Gono’s removal from the helm at the RBZ on the basis that his recent re-appointment was irregular, as it was made outside the agreed consultative agreement as enshrined in the Global Political Agreement (GPA) signed by Zanu-PF and the two MDCs.
Mugabe signed the agreement as Zanu-PF leader, while Morgan Tsvangirai signed as president of the mainstream MDC and Professor Arthur Mutambara weighed in as leader of the smaller faction of the MDC.
Finance Minister, Tendai Biti, the chief architect of the push for Gono’s removal, once described the central bank governor as “the country’s Number One enemy” and also as an economic saboteur.
Sources say recent efforts to heal the rift between Gono and Biti have yielded very little as the MDC secretary-general has insisted that Gono should go.
The two held a press briefing recently where they attempted to feed the media the line that they were “two sides of the same coin” and to dismiss reports that they were fighting as “mere media speculation aimed at fitting into the matrix of establishing a rift between us”.
There were few takers, given the well-documented litany of exchanges between the two officials, mainly emanating from the office of the minister.
Sources close to the cabinet say Mugabe was expected to put up a spirited defence of Gono during a meeting to discuss the outstanding issues in relation to the implementation of the Global Political Agreement.
Gorden Moyo, the Minister of State in Prime Minister Tsvangirai’s office told The Zimbabwe Times yesterday the issue of Gono was regarded as one of the issues still outstanding.
“The issue of the governor of the Reserve Bank of Zimbabwe has been set aside for discussion by the three principals. It was not a matter for discussion in the cabinet meeting today (Wednesday) as previously speculated.
“There is a meeting of the principals that will be convened soon where Gono’s issue, the Attorney General, and that of the appointment of permanent secretaries, ambassadors and other appointments will be discussed.”
The sources said Mugabe would stick to his well defined stance because Gono is viewed as Mugabe and Zanu-PF’s only pillar of strength financially through diverting funds from core RBZ activities to Mugabe’s party.
“It is going to be a rough ride between Mugabe and Tsvangirai. Gono’s removal will be difficult because the President calls on him time and again to help Zanu-PF with funding,” said one source close to cabinet.
“He is likely to defend him to the last and ensure that the MDC fizzles out in its war against Gono.”
Another source said Mugabe would put his foot down on the matter, relying on the argument that it would be costly to reverse Gono’s appointment contractually. He would suggest that the governor should be allowed to remain in office for the lifespan of his contract following which a replacement would then be appointed.
The source said the proposal would not go down well with the MDC which is currently trying to raise funds to foot the civil service salary bill. Some potential donors have stated unequivocally that Gono must depart before they can open their purse-strings.
The salary bill in question currently stands at US$23 million per month.
“We understand the President has asked the MDC whether it has the financial resources to underwrite the termination of Gono’s contract, given that it still has about three to four years to run. The answer has not been forthcoming given that there is no money in the treasury to foot such an expensive project,” the source added.
Although Gono has come under fire from MDC parliamentarians for his quasi-fiscal operations, he has apparently endeared himself to the same parliamentarians who were criticizing him.
Two weeks ago, he held a briefing where he explained his position on the quasi-fiscal operations - explanations this newspaper understands were not opposed by a single legislator.
It is understood most of the legislators concurred with Gono that his activities were aimed at saving Zimbabwe’s collapsed economy.
Last week, Gono announced that the Reserve Bank had offered vehicles to legislators for use while they waited for Parliament to procure its own fleet.
It is alleged that the vehicles created serious division within the MDC, with some of the legislators rushing to grab one despite warnings from the MDC leadership that the party would expel any legislator who took possession of any RBZ vehicle.
Wednesday, April 15, 2009
Given that there is a shortage of foreign currency in the country, it does seem particularly short-sighted for shops to make it worse by rejecting banknotes that have, for example, a slight tear or a small corner missing. While we understand that no shop wants to risk being stuck with, say, 100 rand or $10 US that it cannot bank, and while in-store ‘cash officers’ may issue imperious directives to till operators not to accept damaged banknotes on the basis that ‘the bank’ will not accept them, the reality is rather different.
From personal experience on 17th March, when a national retailer refused to accept two 100 rand notes each sporting a 1-cm tear, we took a shop staff member along to check with the shop’s branch bank manager. The bank manager informed us that damaged foreign banknotes remain legal tender and will be accepted by banks as long as they are clearly more than one-half of the original note and as long as no identifying/validating marks are missing. This is the same position recently enunciated by the US Embassy regarding USD, which we summarise below for your convenience.
In our view, it is not for those in positions of petty authority, such as till operators or ‘cash officers' to inconvenience paying customers with unnecessary bureaucratic rules when the principles governing the validity of foreign currency banknotes are quite clear. In the event of a dispute, we suggest you call the shop manager rather than haggle with his or her minions (who may be afraid of the petty little sawdust Caesar in the cash office). Similarly, if a bank teller declines to accept a damaged banknote, ask to speak to the chief cashier and/or the bank manager. It can do a bank’s image no good to be reputed to routinely reject foreign currency notes. And while the recipient of a tendered banknote may have the discretion whether or not to accept the note, further diminishing the stock of banknotes in circulation on spurious grounds such as ‘the bank won’t accept it, says our cash officer’ does no-one any good.
This is what the US Embassy said on the 19th February.
U.S. banknotes do not expire; older series of U.S. currency remain legal tender in the United States, and elsewhere.
Badly soiled, dirty, defaced, disintegrated, limp, torn, worn-out banknotes remain legal tender – if they are clearly more than one-half of the original note and if they do not require special examination to determine their value (presumably this refers to the denomination being readable by the naked eye, i.e. 1, 5, 10, 20, 50, 100, rather than to ultra-violet checking for counterfeit notes).
The decision on whether or not to accept any banknote is up to the potential recipient (i.e. don't invoke the US authorities).
The U.S. Embassy does not issue new banknotes in exchange for old and/or mutilated currency.
If you have questions about detecting fraudulent currency, contact the U.S. Embassy Public Affairs Section in Eastgate, Harare – or visit the website http://harare.usembassy.gov
The tightening cash problem appears to be prompting the retailers to make more attempts to keep their prices competitive, but the more important influences on prices appear to be the removal of the cost of obtaining a licence to trade in foreign exchange and the reduced costs of importing stock now that duties have been suspended on a wider range of basics and most supermarket chains have started receiving discounts for bulk purchases.
Prices in general are approaching their equivalent levels in South African stores, but some suppliers, particularly those in the vehicle spares and servicing sector, still have some way to go.
In the CPI table, I have added a line of calculations showing the extent of the change in the first quarter of 2009. I will assemble a more comprehensive table showing the breakdown of each group into its major components. However, no figures have yet been compiled by the CSO to show the costs of education or telecommunications services. When these are incorporated, the fall in the overall average might be less pronounced, but we are all waiting to see whether Tel One has made the requested changes to its charges. Zesa's charges for electricity and the municipal charges for rates and services have come under as much criticism as those attempted by Tel One, but as these bodies are all labouring under severe handicaps, we should perhaps not become too hopeful of significant reductions.
CURRENT OUTLOOK AND PROSPECTS
Given its considerable potential, Zimbabwe has attracted enormous attention since the elections a year ago, particularly as they brought new people and new policy options into the ongoing debate. However, barriers and handicaps clearly designed to prevent change are far more in evidence than are the needed actions, or even proposals, that could place Zimbabwe onto a recovery path that depends on change.
To the extent that change has happened – the adoption of US dollars, the removal of price controls and the well-stocked shops that can supply almost anything we can afford – the changes have far less to do with the policy choices of new politicians than they have with the complete failure of the policies adopted before.
However, the invasive and damaging restrictions, regulations and controls were reactions to, rather than the causes of Zimbabwe’s economic collapse. The massive downturn in economic activity certainly reduced or wiped out the livelihoods, wages, salaries and savings of hundreds of thousands of Zimbabweans, but all of these resulted from more basic causes that have not been rectified. Even worse, they are still being defended. Even more seriously, some of the new cabinet ministers and parliamentarians have been persuaded to help defend them.
These causes were the destruction of the colatteral value of land that formerly supported a high percentage of commercial bank lending to the business sector and, with the damage done to physical output, property rights and business confidence, the country’s forfeiture of almost all possible investment.
From these flowed devastating losses of jobs, exports, supplies of food, supplies of many non-food agricultural products and the domestic markets for many goods and services that were formerly supported by companies and individuals who derived their incomes directly or indirectly from commercial agriculture.
Further consequesnce were the forced emigration of skilled people, the rapid fall in the country’s ability to pay for imports and to obtain credit from foreign lenders. When government weighed in with fixed exchange rates, price controls and interest rates that confiscasted the entire nation’s savings, it was trying to fix the problems without attending to their causes. And to suppress dissenting voices, it felt justified in riding rough-shod over civil rights, particularly freedoms of expression and association.
We now have no need to continue trying to warn government of the dangers of this thinking: we have all experienced the crash. But we have no excuse now for believing that the same strategies might now have a better chance of success simply because politicians from opposing sides are talking to each other.
The reality facing Zimbabwe now is that support will not be forthcoming either from productive sector investors or international development organisations before corrective measures have been taken to restore investor confidence. We need to reinstate property rights and restor respect for civil rights. The repeal of offending legislation can be done very quickly. We should not tolerate excuses for delays.
Published April 14, 2009
It was the colour of the head of Benjamin Franklin on the $100 note that alerted me that something was wrong - the background was white when it should have been grey. Closer inspection picked up other anomalies; the green colour-changing ink did not colour-change, the water mark was visible on the surface of the note and the serial numbers were the wrong font and not even in a straight line. The quality of the printing in general was below par; it looked like the ink had run on the paper. There were two more in the pile that I picked out easily. What to do? I called the foreman in who’d accepted the money but he rightly pointed out that it had come in over several days.
I did a bit of sleuthing on the computer and there were only three customers who’d given us more than a 100 dollars in that time period. It was unlikely to have been the one who’d paid only $132 as two of the fake notes had serial numbers within a value of 5. There was another customer who’d paid in $400 as a deposit. Possible, but the most suspicion fell on one who’d given us a deposit of $2400 on a big order and who I knew was battling to find the money. Did he knowingly pass the notes on? I’d no idea and although I’d picked them out easily enough, I showed one to another customer and he admitted that he would not have noticed it was fake. Anyway, I could not prove who’d given them to us. I was more than a bit annoyed by the foreman’s lack of attention as I’d warned my staff to be on the lookout for counterfeit notes and had showed them the colour changing ink which is very difficult to forge. I told him if it happened again I’d use the notes to pay him. Then I wondered if maybe he needs glasses as he is not much younger than me.
So what to do with the money? Trevor suggested passing it on but I was pretty sure I would not get away with it though I could feign ignorance and I’m not a great actor. Trouble was where to use it? Zimbabwe being what it is I know most of the people in the places where I purchase inputs and there was no ways I could do that to them. A supermarket? Maybe, but they would be the most likely to pick up fake notes. The police? No chance, they’d just find a way to spend it! I was still mulling it over when I got home at 5 p.m. Then it suddenly hit me; WHY WAS I EVEN THINKING THIS WAY! What has this country done to me that I would even consider passing fake money on? So I guess I’ll just keep them for some rather expensive entertainment value.
Thursday, April 9, 2009
The following are the lodging fees for companies
Company Registration (minimum authorized share Capital 10 000) $700
Change or Appointment of Directors CR14 (Lodged within a month) $100
Change of Address- CR6
Name Search -CR21
So registering a company now will cost you between $900-$1 500
Nevertheless, one is well advised that its now very cheaper to maintain a company or shelf company you already have as required by the Act
Sections 125, 385 and 361 of the Companies Act (Chapter 24:03), provides that all companies must lodge an Annual Return. The sections further requires that this return must be lodged every year by not later than the end of the month, which follows upon the month within the anniversary of the date of the company's incorporation occurs. Annual Returns refer to the information that companies must submit to the Registrar of Companies as confirmation that the company is still in business and that the information provided is still valid. If a company fails to lodge its Annual Return, the Registrar of Company will institute deregistration proceedings against the company. So an Annual Return must be submitted by any registered
company. A & J Arthurson has introduced an "Annual Secretarial Fee of $75 ".
For this fee we will
register ourselves as the Secretary of your company. We will keep and maintain the Company's Register, carry out any Secretarial work pertaining to the Companies Act required during that year (In the appropriate
form and where relevant with appropriate fee) in a timely manner
For more or quotations contact
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E-mail : email@example.com
Wednesday, April 8, 2009
Tue, 07 Apr 2009 04:41:00 +0000
SOUTH AFRICA'S industry players have pledged their commitment to pump investment into Zimbabwe in an effort to stimulate the country's economy.
A high-powered delegation of executives led by billionaire entrepreneur Patrice Motsepe met with the country's leadership including Zimbabwe’s President Robert Mugabe and Finance Minister Tendai Biti.
Motsepe says the meeting was to obtain guarantees for business about the stability and consistency of the new inclusive Government's policies. President Mugabe described the delegation's arrival as yet another sign of South Africa's confidence in the inclusive Government comprising former rival factions -Zanu PF and the opposition Movement for Democratic Change formations.He said the meetings with SA business team was an "enchanting boost" to the inclusive Government and to the Zimbabwean economy."The visit makes the confidence South Africa has with us concrete. From the political side, we have the inclusive Government, and they (South Africans) are the ones who did most of the work.
"We had the confidence deriving from the leadership from South Africa, now we have the confidence from the economic side," he said.Motsepe said that he "personally (had) no doubt that in the next few months or next few years, the private sector not only in South Africa but worldwide will realise that Zimbabwe is a good place for business."The meeting comes a few days before the signing of the Bilateral Investment Protection Agreement between the two countries on April 14 in Polokwane, South Africa.
Zimbabwe has also been given a special slot at the World Economic Forum scheduled for Cape Town, South Africa, next month, where the country is expected to market itself as an investment centre.Drumming up support for ZimbabweThe South African government is encouraging local businesses to invest in Zimbabwe as one of the various instruments South Africa is using to assist the newly formed inclusive Government.That country's Deputy Finance Minister Nhlanhla Nene said last week that one of the ways the SA government would assist Zimbabwe was in encouraging private SA investors to invest in Zimbabwe.
Addressing accountants in Durban last, Nene said the response from the business community had been very positive.
"We have had a number of meetings with a number of organised business. There is a lot of appetite for that," Nene said.
It was pleasing that so many businesses struggling in the neighbouring state had remained in the country and retailers were filling up their shelves again, he said.
Nene said the state was lobbying South African banks to lend to bankable projects in Zimbabwe. It was also urging the International Monetary Fund to write off debts owed by the country.
"It will be a win-win situation for everyone when the new government succeeds. We are accused of having fathered peace in Zimbabwe, and it is for a very good reason. When there is no peace in your neighbour's house, you will have sleepless nights," Nene explained.Neren Rau, the chief executive of the SA Chamber of Commerce and Industry, said the organisation had not been approached by the government. However, it had started its own initiative, urging business to expand to Zimbabwe.
Rau added that the chamber was looking at small-scale mining for now. Generally, business people were reluctant, but the chamber was selling the idea as an option for growing the firms during the financial crisis.
Media reports have said Zimbabwe needs U$1 billion (R9.6 billion) in the short term for urgent humanitarian needs. It also requires $3.3 billion in the next six years to boost electricity generation capacity.
The R300 million South Africa is assisting Zimbabwe with will come from the African Union Renaissance Fund, to be given in three installments by June.TZG/SABC/BR
Tuesday, April 7, 2009
I realized yesterday that, faced with a tumult of orders and expenses, I needed to make up a budget. This would be the first budget in a very long time. That in itself is progress; budgets in multibillion percent inflation are nigh impossible to do. It quickly became apparent that I needed to spend quite lot of money to get the nursery up to the stage where it could cope with the influx of orders. Now another question was raised; what was the bare minimum I needed to spend? I am not pretending that all is well in Zimbabwe and investments will be realized in due course. Oh no. We definitely have not progressed that far and I don’t think the current surge in orders is anything more than just that – a surge.
The Tobacco Research Board out by Harare Airport was once a highly respected organization regionally if not internationally. It is a shadow of its former self now and not a pretty picture to those who knew its illustrious past. Greenhouses lack plastic, seedling trays are piled haphazardly and weeds abound but it was the trays I’d come for. Sold off used at a dollar a piece they were not exactly a bargain but at least they were available and in fair condition. The employee who’d come to help us load the trailer was grumbling that he was still paid in Zim dollars. I’d no idea what he was going to spend them on so not ignoring his hints I brought him a small packet of vegetable seedlings when I returned for the second load. He was very appreciative. He could only have wondered on the injustice of selling seedling trays (donated by UNEP) for real currency to me while he was paid in useless currency.
Monday, April 6, 2009
Saturday, April 4, 2009
Zimbabweans have seen a slight fall in the price of everyday items since the government allowed shops to abandon the local currency in favour of the US dollar, government figures indicated.
The data showed consumer prices fell in the first two months of the year, media reports on Friday said, raising hopes that there could be an end to the country's rampant hyper-inflation.
Data from the Central Statistical Office showed inflation at -3.1 per cent on a monthly basis in February and -2.3 per cent in January.
The last time official figures showed a month on month fall in inflation was in mid-2005.
The 2009 figures were the first using US dollars so there was no annual comparison and analysts remain cautious.
"Things are slow, we are really struggling to get started," John Makumbe, a political analyst, said.
"The change that the people of Zimbabwe expect is not going to come through easily because basically Zimbabwe doesn't have the money to finance the change processes," he said.
"It is a fact that without some really big money coming into the government of Zimbabwe there will not be any meaningful change, or visible change that will occur because [the country] is clearly bankrupt."
Hyper-inflation has destroyed the value of Zimbabwe's own dollar, but the new unity government of Robert Mugabe, the president, and Morgan Tsvangirai, the prime minister, has raised hopes of rescuing the once prosperous country.
Previous official figures showed inflation at 231 million per cent in July, but economists said it rose far higher.
Tendai Biti, the finance minister, last month projected inflation would fall to just 10 per cent by the end of this year as the use of foreign currency would help to stabilise prices.
US-based Foreign Policy magazine called Biti's comments the "wackiest of all" government claims.
Thursday, April 2, 2009
April 01, 2009
It's a dubious honor, but the African nation of Zimbabwe continues to have the worst inflation rate in world economic history. Officially the inflation rate is at 231 million percent, but the Feb. 2 issue of the London (England) newspaper The Times estimated the true rate to be an astronomical 5,000,000,000,000,000,000,000 per cent.The AFP News Agency quoted Reserve Bank of Zimbabwe Governor Gideon Gono as wryly saying, "Yesterday's trillionaires, I am sorry, will not be able to buy their favorite drink today."The Zimbabwe government lobbed 12 zeroes off each of its bank note denominations on Feb. 1, continuing a familiar pattern in the economically destitute nation. This means the Z$1 trillion bank notes issued during January are now worth Z$1 each. This was the 35th new bank note denomination introduced into Zimbabwe in the past year. On Feb. 1, the date of the introduction of the newest currency reform, the U.S. dollar was valued at between Z$3 trillion and Z$4 trillion.New bank notes were issued in denominations of Z$1, Z$5, Z$10, Z$20, Z$50, Z$100, and Z$500. No coins were issued, nor will any coins likely appear considering the purchasing power of the Zimbabwe dollar decreased by the hour.The announcement of the new bank notes did not include any information regarding their designs, but such vignettes as a laughing hyena or a dodo bird come to mind as being appropriate.In a prepared statement Gono said, "This Monetary Policy Statement unveils yet another necessary program of revaluing our local currency, through the removal of 12 zeroes, with immediate effect."Gono is, however, trying some new tactics to stabilize the Zimbabwe currency once and for all. Some foreign exchange controls have been relaxed, gold producers can now sell their bullion directly (in the past all gold had to be sold to the central bank), while workers can now be legally paid in foreign currencies. Businesses are allowed to charge for goods and services in foreign currencies. The Zimbabwe stock exchange is also allowed to trade in foreign currencies.There are problems even with these changes. Most gold mines are closed due to soaring costs and a lack of electricity. Unemployment in Zimbabwe is more than 90 percent, so there are few workers who can be paid in a foreign currency. As of the beginning of February the nation's stock exchange has not been open in more than two months.Paying workers in foreign currencies is also a problem, since it encourages people to use anything as money other than the Zimbabwe dollar. Harare-based economist John Robertson was quoted by the Reuters News Agency as saying, "It would appear he [Gono] is trying to restore the Zimbabwe dollar, but given the choice of multiple currencies, who would want to trade in Zimbabwe dollars?"Using foreign currencies in Zimbabwe has a political undertone as well, since Zimbabwe President Robert Mugabe came to power by kicking the British colonials out of the country. Now the British pound is one of the currencies being widely accepted in commerce.An unnamed Western diplomat was quoted in the Feb. 2 The Times as saying, "It's vastly symbolic, but Zimbabwe needs more than just their bank notes. Mr. Mugabe, the great freedom fighter who secured Zimbabwe's independence, has reduced his country to utter dependence on Britain, America, and the rest of the world."Mugabe and his political rival Morgan Tsvangirai were until late January in a political stalemate that was further paralyzing the nation and any economic recovery that might be planned. The two finally agreed to a joint coalition government, although the future success or failure of that coalition government won't be known for some time. Taking the view of a numismatist, the question has to be raised: If the gold mines are going to be allowed to sell their gold directly to the market, why not introduce a gold bullion coin which would coincidentally assist in stifling inflation? No one in Zimbabwe appears to be considering this possibility.