Monday, December 9, 2013

China and Zimbabwe

The rise of China in Zimbabwe:

"Closer economic and diplomatic ties between China and Zimbabwe have had wide and far-reaching effects. Not only has Beijing been vetoing plans by the West and European capitals to take sterner action against Harare at the United Nations Security Council for her alleged human rights violations, but its capital has also come in handy for Zimbabwe.

State-owned Chinese firms, supported by their powerful State apparatus and employing low-cost but efficient labour are not only outbidding contractors from other parts of the world for African projects, but are now controlling a formidable slice of telecommunications, textiles, construction and mining deals in Zimbabwe..."


RBZ and Min of Finance got all the banks together in a meeting yesterday to tell them that they have until the 1st March to restore their correct Loan to Value limits and Reserve limits or they will be shut down. Some banks like Kingdom are scrambling around trying to arrange a merger to fix the books in a sense, but have been told that merger will have to tick all the right boxes to be considered legitimate. There are about 5 banks most likely to be caught out by this hard line approach, and have been told if they can't reach the targets they will have to operate as microfinance companies.

2012 will be a shake out for the banks and probably a difficult year to find capital. CABS is a relatively safe bet but have reached their 20% mortgage lending limit already so not issuing mortgages anymore. Interesting times.


Mugabe rules out exception for foreign firms in Zimbabwe

Mugabe rules out exception for foreign firms in Zimbabwe

Mugabe rules out exception for foreign firms in Zimbabwe
HARARE, Dec. 8 (Xinhua) -- Zimbabwean president Robert Mugabe said on Sunday that no sector will be spared from the indigenization law, quashing recent media reports that platinum miners could be exempted from the rule if they establish a refinery.
Zimbabwe's law enacted in 2010 requires foreign businesses operating in the country to cede at least 51 percent of the share- holding to black Zimbabweans. Implementation started first from the mining sector which is a pillar to the country's fragile economy.
Addressing mourners at the burial of a senior military official at the national shrine, Mugabe said there will be no exception in the 51/49 indigenization threshold which seeks to give Zimbabweans greater control in foreign companies operating in the country.
"I have heard in some quarters that there can be exceptions but I am saying no. We are saying 51/49 percent. It's very clear, that is our stand," he said.
Mines minister Walter Chidhakwa was recently quoted in the media saying platinum miners could have a lower indigenization threshold if they build platinum refineries in the country since Zimbabwe currently sends platinum ore to South Africa for processing.
Platinum miners in Zimbabwe argue that it is not yet viable to establish the refinery as less than 500,000 tonnes is currently produced in the country.