Nigerians start another day of waiting on election results

KANO, Nigeria (AP) — Radios and WhatsApp groups pinged to life on Tuesday as anxious Nigerians awaited a second day of state-by-state announcements of presidential election results in a race described as too close to […]

KANO, Nigeria (AP) — Radios and WhatsApp groups pinged to life on Tuesday as anxious Nigerians awaited a second day of state-by-state announcements of presidential election results in a race described as too close to [...]

Energy Minister Jorum Gumbo speaks out as long fuel queues resurface in Zimbabwe

Hundreds of people were left stranded late Monday after a sudden shortage of fuel with public transport operators hiking fares. Reports of people walking on foot to areas like Glen Norah and Mabvuku emerged as commuter omnibus operators took their vehi…

Hundreds of people were left stranded late Monday after a sudden shortage of fuel with public transport operators hiking fares. Reports of people walking on foot to areas like Glen Norah and Mabvuku emerged as commuter omnibus operators took their vehicles to fuel queues. “Fares have gone up. It would have been better if they […]

United States issues stern warning to Mnangagwa’s government

The United States of America through its embassy in Harare has issued a stark warning to the government of Zimbabwe over the arrest and harassment of civil society leaders. The United States (US) says this […]

The United States of America through its embassy in Harare has issued a stark warning to the government of Zimbabwe over the arrest and harassment of civil society leaders. The United States (US) says this [...]

Lender of last resort facility on cards

Source: Lender of last resort facility on cards | The Herald 26 FEB, 2019 Dr Mangudya Tawanda Musarurwa Senior Business Reporter The Reserve Bank of Zimbabwe (RBZ) has announced plans to re-introduce a lender of last resort facility. A lender of last resort is an institution, usually a country’s central bank, which offers loans to […]

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Source: Lender of last resort facility on cards | The Herald 26 FEB, 2019

Lender of last resort facility on cards
Dr Mangudya

Tawanda Musarurwa Senior Business Reporter
The Reserve Bank of Zimbabwe (RBZ) has announced plans to re-introduce a lender of last resort facility.

A lender of last resort is an institution, usually a country’s central bank, which offers loans to banks or other eligible institutions that are experiencing financial difficulty or are considered highly risky or near collapse.

RBZ governor Dr John Mangudya said the lender of last resort facility will help local banks meet their monetary requirements.

“Going forward, as a bank we are going to open a lender of last resort window, an accommodation window because we know that in this market there is not too much money,” said Dr Mangudya.

“The money in Zimbabwe, just to give you statistics, the real time gross settlement (RTGS) balances are just under $1,8 billion, the rest are loans and securities. And the bulk of the RTGS balances are required for local trades, not to purchase foreign currency. So while foreign currency will be available, what may be in shortage are RTGS balances to buy the foreign currency.”

The country’s interbank market was made dysfunctional upon the introduction of the multicurrency system as confidence in the banking sector waned.

In 2010, the Government moved to restore the banker-of last-resort function of the central bank by injecting US$7 million to improve fluidity of banking operations.

And while announcing the 2015 Monetary Policy Statement Dr Mangudya announced that the local interbank market was now in operation, describing it as a “great financial milestone.”

“The interbank facility supported by the African Export-Import Bank (Afreximbank) under the Afreximbank Trade Debt Backed Securities (AFTRADES) is now operational. This is a great financial milestone,” said Dr Mangudya at the time.

“The facility would be managed by the Reserve Bank as an agent bank for Afreximbank for the purposes of managing the surplus and deficit participants’ requirements under AFTRADES.

Critically, the RBZ governor said the (interbank) “facility shall also be used as a precursor programme for the lender of last resort function by the Reserve Bank.”

Zimbabwe currently has 19 operating banking institutions.

And as at December 31, 2018, 18 of the 19 banks reported profits for the year, with a 61,06 percent increase in aggregate profits from $241,94 million in 2017 to $389,85 million, official figures show.

The lender of last resort functions both to protect individuals who have deposited funds, and to prevent panic withdrawing from banks who have temporary limited liquidity.

All things being equal commercial banks usually try not to borrow from the lender of last resort because such action indicates that the bank is experiencing financial crisis.

However, critics of the facility say it entices financial institutions to take on more risk than would be considered normal without the lender of last resort facility.

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Is Zimbabwe the Next Venezuela?

This weekend’s news that protesters were gunned down at Venezuela’s border while pro-regime thugs burned trucks filled with food and medicine demonstrated just how vicious Nicolás Maduro’s dictatorship is. But those who wonder how long he can hold on to power while his nation slowly starves might want Source: Is Zimbabwe the Next Venezuela? – […]

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This weekend’s news that protesters were gunned down at Venezuela’s border while pro-regime thugs burned trucks filled with food and medicine demonstrated just how vicious Nicolás Maduro’s dictatorship is. But those who wonder how long he can hold on to power while his nation slowly starves might want

Source: Is Zimbabwe the Next Venezuela? – Yahoo News

This weekend’s news that protesters were gunned down at Venezuela’s border while pro-regime thugs burned trucks filled with food and medicine demonstrated just how vicious Nicolás Maduro’s dictatorship is. But those who wonder how long he can hold on to power while his nation slowly starves might want to visit Zimbabwe, as I did last month, for a sobering lesson.

Robert Mugabe became the president of Zimbabwe in April 1980, back when Jimmy Carter was still president. Within two years he had deployed his infamous North Korea–trained Fifth Brigade against minority tribes in Matabeleland in a campaign of deliberate killing and starvation. The organization Genocide Watch estimated that 20,000 people were ultimately killed.

Mugabe would later launch an insane seizure of white-owned farms. That led to widespread food shortages and a destructive hyperinflation that resulted in almost-worthless 100 trillion Zimbabwean dollar notes in circulation.

But henchmen from the ruling party, Mugabe’s Zimbabwe African National Union (ZANU), violently tamped down protests, and he ruled until November 2017, when a clique of his own generals worried that his wife would replace him overthrew the 94-year-old dictator in a coup. Since then, former minister of defense and current president Emmerson Mnangagwa has proclaimed that his country is “open for business,” when in reality the regime’s slogan should be “The new boss is just like the old boss.”

Last week, even Mugabe attacked his old protégé for violently suppressing protests over a doubling of fuel prices in January. At least 17 people were killed and dozens of women were raped by marauding troops. “God has his own way of punishing rogues and cruel people,” Mugabe thundered. “People should love their army, they should not fear the army.”

Ordinary Zimbabweans have every reason to fear not only the military but every part of their government. Last week the government ended the practice of pegging the value of Zimbabwe’s dollar to that of the U.S. dollar, a 2009 reform that had finally ended the nation’s hyperinflation. Fears of a new round of hyperinflation has helped reduce food reserves such that the nation’s grain-millers’ association says there is now only a week’s worth of wheat in reserve. Zimbabwe now produces less than half of its annual wheat consumption, even while having some of the most fertile farmland and one of the most temperate climates in the world.

During my visit to Zimbabwe, every local I spoke with was wary of being quoted on the record regarding their real feelings about the government. “Everyone keeps their head down for fear it will be chopped off,” said “Captain Jack,” the nickname that one of my drivers from the airport uses in dealing with visitors. “No one has any confidence these people will ever leave power.”

When I asked an employee at my hotel if he had heard of the situation in Venezuela, he just laughed. “Oh, yes, we know about them. We would only remind them that their Hugo Chávez came to power 20 years ago. Our versions came to power nearly 40 years ago.”

While blacks I spoke with were proud that they had won independence from white rule in 1980, they were embarrassed that the country has been so mismanaged since then. “Zimbabwe has all the ingredients to be a successful state — good land, minerals, hard workers, modern farming techniques, proximity to markets in South Africa,” says Rejoice Ngwenya, head of a Zimbabwean free-market think tank. “We don’t have a government that builds on that.”

George Ayittey, an economics professor at American University in Washington, D.C., and the author of the book Defeating Dictators, isn’t optimistic that the generals behind Maduro in Venezuela or behind Mnangagwa in Zimbabwe can be displaced easily. “Bad governments metastasize into criminal enterprises so anyone chosen from the ruling elites to succeed a failed president would himself be a crook,” he told me. In Zimbabwe, for example, the anti-corruption czar, Ngonidzashe Gumbo, was himself jailed for ten years on fraud charges.

Still, Ayittey admits, there are exceptions. Street protests were able to force genuine change in South Africa in 1994, in Ghana in 2000,, and in Tunisia in 2011. “I myself was one of the architects of change in my native Ghana in 2000,” he told me. He also notes the progress that Ethiopia’s new prime minister, Abiy Ahmed, has made in reforming that nation’s rancid Marxist past.

“We should always have hope,” Ayittey told me. “But dictators have far more staying power than we like to admit. There are few happy endings.”

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