Saturday, August 9, 2014

Zimbabwe will soon run out of money: Baz

 Zimbabwe will soon run out of money: Baz - DailyNews Live


HARARE - Bankers Association of Zimbabwe (Baz) has warned that Zimbabwe will soon run out of money to sustain imports.


Joseph Mverecha, Agribank divisional director, speaking on behalf of Baz president Sam Malaba at the Gweru Agricultural Show business conference last week, said Zimbabwe's depressed economic performance was ominous.


"The trade deficit that we are experiencing, sooner or later, we will run

out of money to finance it," Mverecha said.


He said since 2010, Zimbabwe's import bill had ballooned from $1,5 billion to about $6 billion in 2014.


"Since dollarisation, our current account has drastically increased and at

some stage we will fail to pay for those imports," Mverecha said. He

predicted that the country would witness a decline in imports soon.


The influx of imports into the economy has been met by insignificant

exports which are largely in raw form, hence noncompetitive on the

international market.


Imports in Zimbabwe increased to $528,18 million in June of 2014 from

$510 million in May of 2014.


Mverecha said Zimbabwe needed fresh money to shore up the economy.


"We need fresh capital into the economy," he said.


Zimbabwe has failed to attract the much-needed foreign direct investment (FDI) due to a cocktail of government policies hostile to investors, chief among them the Indigenisation and Economic Empowerment Act, which requires foreign firms to cede 51 percent to locals.


Targeted sanctions against some political leaders in Zimbabwe were actually hurting ordinary people

In a rare one-on-one stage interview he held with US president Barack Obama, Zimbabwean technology entrepreneur, Takunda Chingonzo, told Obama that the supposedly targeted sanctions against some political leaders in Zimbabwe were actually hurting ordinary people.Chingonzo said technology entrepreneurs looking to get technology or funding from US-based companies often hit a brick wall because of the sanctions."In our work, we got to a point where we needed to import a bit of technology from the United States. And so we were engaging in conversation with these US based businesses, and the response we got time and time again was that unfortunately we cannot do business with you because you are from Zimbabwe. I was shocked. This doesn't make sense," explained Chingonzo to Obama.In response, Obama said that the US is facing the challenge of balancing helping the people of Zimbabwe with what he termed "repeated violation of basic democratic practices and human rights" in the country. Obama agreed with Chingonzo that what was was needed were initiatives that enhance as opposed to retard the progress of the Zimbabwean people.The US president then suggested that projects be explored by Zimbabwean entrepreneurs together with the US to ensure Zimbabweans are not affected.He was adamant, however, that the US is set on sending the strong message about good governance in Zimbabwe.Chingonzo is in the US on the Young African Leaders programme. The founder of wireless internet startup, Saisai, had the one-on-one with Obama on stage yesterday at the US-Africa Leaders Summit in the US. - See more at:

THE Zimbabwe Stock Exchange (ZSE) industrial index declined

THE Zimbabwe Stock Exchange (ZSE) industrial index declined by 6,9% to 188,08 points in July from the December figures as the bourse took a battering from the slow performance of the economy, latest statistics have shown.

The industrial index was at 202,12 points on December 31.
Market capitalisation for the local bourse declined by $203 129 to $5 billion from $5,2 billion in December 2013.
This means that $203 129 in shareholder value was lost on the stock market.
Market capitalisation is the total value of the issued shares of a publicly traded company.
During the month of July the stock market indices increased due to the performance of stocks of Econet, Seed Co and Bindura Nickel Corporation.
The industrial index increased to 188,08 points up from 186,57 points in June while the mining index increased to 95,00 points in July up from 61,32 points in June.
Turnover value for the bourse increased to $28,5 million in July from $25,2 million in June.
Turnover volume for the ZSE increased to 322 407 141 shares during the month of July compared to 178 469 676 shares in June.
EFE Research said Hippo, OK and SeedCo were the top risers as Hippo recovered 3,3% to 62 cents while OK Zimbabwe and SeedCo were up 5,82% and 1,27% to
18 cents and 80cents respectively.
MMC Capital said the industrial index rose in July because there was a period during the month when demand at the market increased because of the demand of Delta, Econet and OK share prices.
The mining index increased to 95,00 points due to the strong performance of Bindura Nickel Corporation share price which has been on a growth trajectory since June this year.
In May, the turnover value decreased by 31% to $35,9 million compared to $51 million in April. The turnover volume was down to 235 704 129 shares from
429 086 166 shares.
The performance of the ZSE is a mirror of what is happening in the economy. The economy is weighed down by liquidity constraints and low investor confidence.
This has forced Finance and Economic Development minister Patrick Chinamasa to revise downwards the growth projections to 3% from 6,1% earlier projected.