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Where is the president?

Source: Where is the president? – The Zimbabwean

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Kariba Deputy Mayor Councillor Farai Mageva has become the latest person to have their nu_de images circulating on social media after the images leaked through a political group last week. Some residents are up in arms against Mageva and have been demanding that she should apologise over the images. However, a defiant Mageva has stood […]

Source: Solution to Zim's problems is political, says Hawkins | Daily News

INTERNATIONALLY-ACCLAIMED local economist Tony Hawkins says Zimbabwe’s economic revival hinges on the building of consensus between the ruling ZANU PF and the country’s main opposition party, the MDC.

Hawkins, an economics professor who founded the Graduate School of Management at the University of Zimbabwe, made the remarks at a recent breakfast meeting hosted by the Institute of Directors Zimbabwe (IoDZ) to unpack the latest monetary policy statement delivered by Reserve Bank Governor John Mangudya.

“Ultimately the solution to Zimbabwe’s problems is political.  You can fiddle around with the economy as much as you like but you are not going to get a lasting solution without some form of political and social consensus,” said Hawkins.

The respected economist pooh-poohed ongoing talks between President Emmerson Mnangagwa and opposition parties which have been boycotted by the MDC Alliance.

“There is no point in dialoguing with guys who got less than 0, 5 percent of the votes. You really gotta dialogue with the Alliance (MDC Alliance) which had something like 44 percent of the vote,” he said.

Hawkins said an agreement between Zanu PF and MDC has become inevitable because of the deteriorating economic situation.

“Whether it will be in the form of transitional authority or government of national unity, I am not a politician so I will not go down that road.

“But it seems to me that as the economic conditions become more difficult in 2019, government will be pushed more and more towards looking for a solution along these lines. That is what happened in 2008 remember. There is also international pressure for that kind of solution,” the respected economist said.

According to Hawkins, the worsening economic situation has forced Mnangagwa’s government to re-strategise due to their failure to get a much-needed international bailout to address its sagging foreign position.

“The exchange rate endgame, if there is such a thing, requires an international bailout, the prospects for which have receded quite a lot since the elections. Government has subsequently shifted from Plan A which is international re-engagement to Plan B which is trying to borrow from the East which is China, Iran, Russia and Belarus looks to be most unlikely place to borrow money.

“Plan C, which is probably where we are today, is to try and build some kind of domestic consensus through dialogue,” he said.

Hawkins foresees an economic collapse if Mnangagwa’s government fails to build national consensus.

“There is a risk; some will call it a probability that the shutdown in January was the beginning of increasingly bitter exchanges between a cash-strapped government and angry urban work force.

“Angry because real wages are down by a third, the cost of living is rising sharply and the service conditions under which they operate under are deteriorating,” he said.

Given the worsening economic situation, Hawkins is not convinced that the government will religiously implement its austerity programme.

“At some point the government will have to try and buy off the urban electorate who voted heavily against them in the last election, which may mean wage increases, subsidies and perhaps a fuel cut though not in the near future. It may mean delaying increases in the price of electricity and so on, in other words making Zesa lose even more money than it is losing at the moment.

“We have a very serious issue. We have an extremely fractured and polarised society. We have a rural electorate which supports government and we have younger and urban voters demanding change. How this plays out no one can tell. All we can say is I think the social and political climate will probably worsen as unemployment rises and it will, as poverty increases and it will. Exacerbated by the rise in inflation and the fall in real wages, the polarisation will worsen,” the University of Zimbabwe economic professor said.

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Source: Alternative currencies still legal tender: Veritas – NewsDay Zimbabwe March 26, 2019

BY TATIRA ZWINOIRA

Legal think tank Veritas says the use of alternative currencies remains legal as Statutory Instruments (SIs) 32 or 33 of 2019 do not prohibit their use for pricing, recording debts, accounting and settlement of transactions.

Both SIs 32 and 33 of 2019 were introduced shortly after the 2019 Monetary Policy Statement to legalise the local currency and underscore its uses. However, Veritas said even if a currency was legal tender, that did not mean its uses should be all inclusive.

“In summary, these provisions say that real time gross settlement systems (RTGS) dollars are currency and that they are legal tender. Neither statutory instrument goes further to say that RTGS dollars must be used for pricing, recording debts, accounting and settlement of transactions. That is important because the fact that a currency is legal tender does not mean that it must be used for all purposes,” Veritas said.

“Legal tender means a currency which, if offered in payment of a debt, discharges the debt unless the creditor and the debtor have specifically agreed otherwise. So, if a debtor owes a creditor $20, say, the debtor can normally repay the debt by offering $20 in RTGS dollars (because they are legal tender).

“If, however, the parties have agreed that the debt should be repaid in US dollars, then the debtor must repay it in those dollars. There is no law in Zimbabwe which invalidates a contract that stipulates payment in a foreign currency. Similarly, there is no law in Zimbabwe that requires prices to be marked up in legal tender or accounts to be drawn up in legal tender.”

According to Veritas, only paragraph 2,3 of the Reserve Bank’s Directive RU 28/2019 makes mention of what RTGS dollars should be used for, stating: “The RTGS dollars, shall be used by all entities including government and individuals in Zimbabwe, for the purpose of pricing of goods and services, recording of debts, accounting and settlement of domestic transactions.”

However, Veritas argues that though the central bank’s directive repeats the Reserve Bank of Zimbabwe governor John Mangudya’s statement about the compulsory use of RTGS dollars, the same specific statement did not appear in either SI 32 or 33 of 2019.

SI 33 of 2019, 4 (1) sub section D, states that: “For accounting and other purposes, all assets and liabilities that were immediately before the effective date, valued and expressed in United States dollars (other than assets and liabilities referred to in section 44C(2) of the principal Act) shall, on and after the effective date, be deemed to be valued in RTGS dollars at a rate of one-to-one to the United States dollar”.

Further, Veritas added that the RBZ directive was not a generally binding law.

“Directives issued by the Reserve Bank become binding only if they are published in the Gazette or if they are served on the persons to whom they apply, or if it is proved that the persons concerned actually knew about them [see section 39 of the Exchange Control Regulations, 1996],” the Veritas analysis read.

“Although this directive seems to have circulated on social media, it has not been published in the Gazette nor has it been served on all traders, accountants and other people who are presumably expected to abide by it. Hence, the directive is not binding on them.”

Already, despite SIs 32 and 33 of 2019, some companies are not adhering to these pieces of legislation, among them the National Foods Holdings Limited, Innscor Africa Limited and Truworths Limited, who have all reported their earnings in United States dollars.

Other companies, such as Simbisa Brands, are also charging in US dollars.

Even the public accountants and auditors board is still deliberating on how the company should compile its financial report in light of SIs 32 and 33 of 2019.

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MDC-T spokesperson, Linda Masarira, who came under fire for wearing Zanu PF regalia has defended the controversial pic arguing that she got the regalia from her sister in-law as she had forgotten her own wrapping cloth in Harare. “The Muroora went kumusha kunoratidzwa ndokubva adii paya ndokukanganwa Zambia kuHarare. Muroora Abi angu ndokundipa ravo, ndaigodii […]