Zim News Blog -NEWS NETWORK

Banks have commenced trading in foreign currency at a rate of 2,5 to the United States dollar following the decision by the Reserve Bank of Zimbabwe (RBZ) to float the currency on Wednesday. This rate, according to observers, is likely to bring stability to the market. RBZ governor Dr John Mangudya announced the introduction of an inter-bank foreign exchange market while delivering his monetary

Source: Mnangagwa sidelines Chamisa in talks | Daily News

HARARE – President Emmerson Mnangagwa has side-lined MDC leader Nelson Chamisa in today’s national dialogue meeting involving presidential candidates that featured in last year’s harmonised elections.

MDC spokesperson Jacob Mafume yesterday confirmed to the Daily News that the party had not been invited to the crucial meeting, but insisted that as long as Mnangagwa chairs the process they are not willing to be part of it.

This comes after the party, which is the largest opposition, snubbed the first meeting called by the president recently.

“We responded to them by way of a letter on the first invitation. We have made it clear that we will attend a dialogue by a neutral arbiter. What they are having is a monologue,” Mafume said.

He said Mnangagwa had not responded to the letter written to him by the MDC when he made the first call for dialogue, adding that this subsequently resulted in them not being invited for today’s meeting.

While many had hoped the national dialogue would be facilitated by the National Peace and Reconciliation Commission (NPRC), the organisation’s chairperson Selo Nare said the issue was being handled by the Office of the President and Cabinet (OPC).

Asked if all the political parties had been invited to the meeting, Nare yesterday said: “I am only the moderator, I do not do the invitations; the invitations are done by the OPC. I have just been asked to come and moderate or to be the master of ceremony to use a simple word.”

He added: “We are involved as per invitation”.

Civic society organisations and churches have backed the national dialogue, which they say should not be restricted to political issues only.

Dominating this dialogue however, is the issue of legitimacy, following Chamisa’s contention that he won last year’s presidential elections.

In his argument, Chamisa claims Mnangagwa should not chair the meeting and that if he is genuinely willing to enter into formal negotiations, certain conditions have to be met.

Among his demands are mediation by a neutral third party recognisable to Southern African Development Community (Sadc) and the African Union (AU), including a requirement that all “prisoners of conscience” be freed, and that there be an immediate return to the barracks by the military.

Mnangagwa wants a broader multi-party initiative, but Chamisa — who disputes results of the July 30 polls — prefers a dual engagement on the grounds that he is the only one among all the other presidential elections who is contesting results of last year’s elections.

While the MDC leader snubbed Mnangagwa’s first meeting, he attended a dialogue meeting organised by the Zimbabwe Council of Churches (ZCC) just a day after the meeting at the State House.

Some of the presidential candidates that attended the first meeting include Thokozani Khupe, Bryn Mteki, Nkosana Moyo, Lovemore Madhuku and Ambrose Mutinhiri.

Following the snub by Chamisa, Mnangagwa said the MDC leader “risked missing the bus”, if he did not pitch up for talks, further accusing the opposition front man of grandstanding and playing with the lives of the people.

Mnangagwa’s meeting with political leaders is among other things aimed at establishing four committees.

“Each political party is also being requested to e-mail to the secretariat the names of four nominees who will be considered for appointment to the four committees that were agreed to at the first meeting of the dialogue,” part of the letter of invitation for today’s meeting reads.

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Zimbabwe central bank governor Dr John Mangudya has admitted prejudicing the country’s exporters by exchanging their US dollar earnings at parity with the local bond note, when rates on the parallel market were at a 400% premium.

Source: ‘I am guilty as charged’: Zim central bank governor on overvalued bond notes | Fin24

Zimbabwe central bank governor Dr John Mangudya has admitted prejudicing the country’s exporters by exchanging their US dollar earnings at parity with the local bond note, when rates on the parallel market were at a 400% premium.

Since the southern African country introduced its local surrogacy currency, the bond note, in 2016, it had pegged it at a ratio of 1:1 with the US dollar, but this did not last for long, as foreign currency shortages on the formal market resulted in parallel market rates spiraling to unsustainable levels.

He said with effect from Monday next week Zimbabwe, would abide by an official exchange rate and market forces, through banks would determine the exchange rate.

The rate will open at 1:2.50, as per agreement with foreign currency dealers in the banks, said Mangudya.

To stabilise the market, Mangudya said the RBZ would arrange foreign lines of credit, since demand would be greater than the supply of foreign currency.

“We need to cloud seed the market with foreign currency,” he said.

Before the new foreign currency management measures, gold miners were surrendering 70% of their export earnings and tobacco farmers 80%, while manufacturers and tourism were keeping 100% of their earnings.

Platinum and chrome miners were surrendering 80% of their export earnings “to ensure effective administration of foreign exchange”.

In exchange for the foreign currency, the central bank would pay the exporter using Real Time Gross Settlement, crediting the exporter’s account with local currency at parity.

This caused distortions on the market, with some exporters, such as listed gold miner RioZim, threatening to shut down operations if the foreign currency disparities were not addressed.

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Source: ZCDC to explore diamonds in Mahusekwa | Daily News

Zimbabwe Consolidated Diamond Company is set to carry out diamond exploration activities on 450 hectares in Mahusekwa’s Chihota Communal Land.

In a statement the diamond company said the proposed project area was once explored by De Beers in the late 90s to early 2000s but the results were never made public.

ZCDC said exploration will be done using ground penetrating radar to locate areas of potential which will then be studied in detail by drilling and trenching selected points away from homesteads.

“Bulk samples will then be collected using excavators. These samples will be processed on site using a 10tph mobile DMS plant. All excavation waste material will then be used to backfill all the opened pits,” the statement read.

Some potential positive impacts will reportedly include employment creation and community infrastructure development.

The company said potential negative impacts are deforestation, destruction of animal habitats, loss of aesthetic value, noise and dust pollution while mitigation measures will include protection of sacred sites and endangered flora and fauna.

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Source: Can Zim learn from history, the pain of yesteryear? – NewsDay Zimbabwe February 22, 2019

Editorial Comment

CENTRAL bank opens up currency trading, reads a headline in a State-owned daily newspaper. The Reserve Bank of Zimbabwe (RBZ) has liberalised the foreign currency market by introducing an interbank trading system that will result in exchange rates being determined by the forces of supply and demand to encourage inflows into the formal market, the story read. Individuals, embassies and other institutions will now sell their foreign currency to banks and other authorised dealers on a willing-buyer/willing-seller basis, it added.

Sounds familiar? Yes, because that was on May 1, 2008. The central bank governor was Gideon Gono, while then 84-year old Robert Mugabe had just lost the election held in March to MDC leader Morgan Tsvangirai, but by a margin enough to force a run-off in June, which the Zanu PF leader “won” with an 85% vote after his opponent withdrew, citing violence against his supporters, which left over 200 people dead.

By December of the same year, inflation topped 500 billion percent, according to the International Monetary Fund data, obliterating Zimbabwe’s dollar along with its pensions and savings. The country had the fastest shrinking economy in the world outside of a warzone.

The country faced an acute shortage of basic commodities such as food, fuel and cash, hospitals ran out of medicine and Fidelity Printers and Refinery was printing worthless currency in denominations of $100 trillion, Mugabe succumbed to international pressure and, under regional mediation, embraced his nemesis to form a government of national unity (GNU).

It is 2019, the RBZ chief is John Mangudya and the President is Emmerson Mnangagwa, Mugabe’s long-time aide. Zimbabwe is again facing the growing threat of inflation, which accelerated to 56,9% in January this year from 5,4% in September last year.

The relative financial stability of the GNU period, which ran from 2009 to 2013, has unravelled in the last three years as acute foreign exchange shortages have led to shortages of medicines, fuel and some goods, including bread.

Meanwhile, the government announced in October last year that the money in banks was no longer US dollars, the currency it adopted in 2009 when it abandoned its hyper-inflation-ravaged Zimdollar. On Wednesday this week, Mangudya confirmed a return to the local currency known as RTGS dollars as the government, again struggling to tame high prices, get US$ to pay for critical imports and deal with high inflation, after a stubborn few months was forced to ditch the 1:1 parity fallacy.

As in 2008, the fluid nature of the exchange rate of Zimbabwe’s new currency has seen some shops begin leaving prices off commodities, saving themselves the potential trouble of changing them every day.

An election held last July to confirm Mnangagwa’s five-year term is being disputed by the opposition MDC which, despite losing a challenge in the Constitutional Court, continues to question his legitimacy, adding to the political risk of the country.

Can Zimbabwe learn from history? Government actions suggest the country’s leaders are terrible students of yore.

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