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Source: Plans afoot for Tugwi Mukosi water authority | The Herald March 12, 2019

Mr Mbetsa

George Maponga Masvingo Bureau
The provincial leadership in Masvingo is pushing for the setting up of an authority that will be responsible for planning developments at the Tugwi-Mukosi Dam, as Masvingo readies to accrue benefits from Zimbabwe’s largest inland water body.

No big developments have taken place at the dam since its commissioning in May 2017, but there is new impetus from Government to have the reservoir being fully utilised, with a team of ministers led by Lands, Agriculture, Water, Climate and Rural Resettlement Minister Perrance Shiri touring the water body on Sunday.

Work on the dam’s master plan is reportedly nearing completion, paving the way for full scale developments at Tugwi-Mukosi.

Masvingo Provincial Administrator Mr Fungai Mbetsa said the proposed authority will include representatives from Chivi and Masvingo rural district councils that share the dam, together with those from various line ministries with an interest in the dam project.

Some of the ministries are Lands, Agriculture, Water, Climate and Rural Resettlement; Environment, Tourism and Hospitality Industry; and Local Government, Public Works and National Housing.

“We have also sent our proposals to central Government on what we think should be done at Tugwi-Mukosi Dam in line with a baseline survey that we carried out and expect to constitute what will be contained in the consolidated master plan document,” said Mr Mbetsa.

“It is up to central Government to accede to our proposal for the creation of a combination authority involving various players with a direct interest in the project.

“The combination authority will be tasked with planning developments at Tugwi-Mukosi Dam and surrounding areas.”

Mr Mbetsa said Tugwi-Mukosi was now a national project, hence the provincial leadership had no influence on the push towards full exploitation of the dam.

“We are quite hopeful like everybody else that various projects will start rolling at the dam, we are very expectant because the dam project will alter in a big way the socio-economic configuration of the province,” he said.

“There will be new irrigation land of more than 25 000 hectares and big hotels are earmarked for the place so it’s a very big project with huge potential to change Masvingo Province.”

Mr Mbetsa said the recent visit by permanent secretaries led by Deputy Chief Secretary to the President and Cabinet Mr Justin Mupamhanga was an indication of Government’s serious interest in the dam project.

Mr Mupamhanga’s team toured the dam and other sites where projects such as a power generation plant and hotels will be built.

The team said such projects should go ahead since there had no major effects on the master plan currently being worked on.

There is growing concern and anxiety across Masvingo over the slow pace in starting to benefit from Tugwi-Mukosi water.

The nearly $260 million dam also boasts vast potential for a vibrant fisheries project billed to create thousands of jobs.

Mr Mbetsa said urban settlements such as the nearby Ngundu Halt will grow more than three or four-fold once real developments begin at Tugwi-Mukosi.

Local government experts postulate that a conurbation stretching from Chiredzi in the south-east to Rutenga to the south-east will be birthed once full utilisation of the vast reservoir begins.

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Source: ‘Inter-bank trades US$12m weekly’ | The Herald March 12, 2019

RBZ governor Dr John Mangudya

Tawanda Musarurwa Business Reporter
The inter-bank foreign exchange market is averaging trades of US$12 million weekly, three weeks after its introduction, Reserve Bank of Zimbabwe (RBZ) governor Dr John Mangudya told Parliamentarians yesterday.

Appearing before the Portfolio Committees on Public Accounts Budget, Finance and Economic Development, the central bank governor hinted that some companies have been struggling to purchase foreign currency on the official market, even at the discounted rate (compared to the parallel market) starting rate of 2,5 when the market was introduced.

The forex inter-bank market started trading on February 22, 2019 just two days after the announcement of the Monetary Policy Statement (MPS) on February 20, 2019.

“On average for the past three weeks since the inter-bank market started it has been about US$12 million that has been traded. What we have noticed is that those parents with children at foreign schools and colleges are struggling to buy foreign currency at US$1 to 2,5 (RTGS dollars) because they do not have the RTGS dollars.

“Even some firms who are claiming that they do not have foreign currency, it (forex) is so because they cannot afford to buy it at 2,5.

The RBZ has previously indicated that 70 percent of the foreign currency traded through the inter-bank market should go towards the productive sector imports and requirements.

In respect of the guidelines for utilisation of foreign exchange, priority under the “70 percent” include: “net exporters who import raw materials or machinery; non-exporting importers of raw materials and machinery for local production that directly substitute import of essential finished goods; imports of critical and strategic goods such as basic food stuffs and fuel, (drugs) and agro-chemicals granted these goods are not available locally (to be funded through Letters of Credit and allocations from the Allocation Committee), and repayments of offshore loans procured to fund productive activities.”

Other top priorities also include payments for services not available in Zimbabwe; foreign investments (capital disinvestments, profits and dividends; remittance of rental income from properties owned by non-resident Zimbabweans and foreign investors that acquired property using funds originating from offshore and transferred through normal banking channels; remittance of pension income for non-resident Zimbabweans who formally emigrated from Zimbabwe; importation of packaging material not available in Zimbabwe; university and college fees; mining consumables, and goods and services not local available for tourism operators.

The RBZ boss reiterated that the 2,5 interbank market determined exchange rate, which banks agreed upon as a starting rate, is not fixed and will get to equilibrium levels ‘soon’.

“This is just the first month, give the inter-bank market about two to three months, the rate will reach an equilibrium, which may be lower than the 2,5,” he said, adding that the rate may shift soon with the tobacco selling season opening later this month.

Tobacco is the country’s second (single) largest foreign currency earner behind the mining sector (gold specifically).

“Tobacco auctions will begin on March 20, 2019 and we do believe that before or on that date the rate will have reached its equilibrium,” said Dr Mangudya.

Meanwhile, the RBZ governor said he has been engaging with those in the tobacco sector with a view to increasing tobacco farmers’ foreign currency retention to between 90 to 180 days.

He confirmed that tobacco farmers will retain 50 percent of their net export proceeds.

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Source: Zimbabwe central bank head hints at more weakening of new currency | Reuters

A woman harvests tobacco at a farm outside Harare, Zimbabwe, February 20, 2019. Picture taken February 20, 2019. REUTERS/Mike Hutchings

HARARE (Reuters) – Zimbabwe’s central bank governor on Monday said the exchange rate for the new transitional currency is unlikely to remain at 2.5 per U.S. dollar by the time tobacco auctions open next week, suggesting the local unit will be devalued further.

The Reserve Bank scrapped its discredited 1:1 dollar peg for surrogate bond notes and electronic dollars last month, merging them into a lower-value transitional currency called the RTGS dollar, which has been stuck at a rate of 2.5 to the greenback.

Many companies have, however, continued to hold onto their dollars waiting for the RTGS rate to weaken further, while most individuals sell their greenbacks on the black market, where US$1 bought 3.8 RTGS dollars on Monday.

Central bank chief John Mangudya said the official exchange rate was expected to change by the time auctions for tobacco, Zimbabwe’s second-largest earner of foreign currency after mining, open on March 20.

“We do believe that before or on that date the rate will have reached its equilibrium. We don’t believe it will still be 2.5 (to the U.S. dollar),” Mangudya said.

Mangudya maintained that the market would determine the exchange rate, after accusations of manipulation by the central bank. But he ruled out a sharp devaluation, which he said would result in a further spike in annual inflation.

The governor said average annual inflation was expected to fall to 10 to 15 percent by the end of this year. He also said that any huge salary increases for public workers would add to inflationary pressure.

Mangudya said an average $12 million had been traded every week at the current forex interbank rate since Feb. 22, when banks started selling dollars to large corporates.

Exporters, including miners and tobacco farmers, receive half their earnings in the RTGS currency at the official exchange rate, while the other half, which is deposited in their foreign currency accounts, must be sold within 30 days.

That requirement, which has been criticized by companies, is now being reviewed to allow exporters to keep their dollars for longer, Mangudya told a parliamentary committee.

Mangudya said last week that the central bank had borrowed $985 million from pan-African banks against future gold export earnings. He said on Monday that Zimbabwe was repaying $5 million every month.

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Source: IDBZ recapitalisation gathers pace | The Herald March 12, 2019

IDBZ

Business Reporters
THE Infrastructure Development Bank of Zimbabwe is looking at hiring a financial advisor to help raise as much as $1 billion in fresh capital through a partial privatisation.

In tender published in the Government gazette last Friday, the State-owned bank said the advisor will be expected to provide advice and support for the implementation of the recapitalisation transaction in line with the Government’s privatisation policy.

The financial advisor will also propose recapitalisation options and make appropriate recommendations, prepare the necessary transaction documentation to relevant stakeholders in canvassing foreign and local strategic institutional investors.

The recapitalisation of IDBZ would be done in phases; firstly, raising $500 million in the short to medium term and secondly; further capitalising the bank with the same amount in the long term.

In addition to scaling up the bank’s capital base, the recapitalisation would bring on board investors aligned to IDBZ’s developmental mandate.

The investor will also be expected to facilitate access to long-term capital suitable for infrastructure projects.

“The Government of Zimbabwe has approved the partial privatisation of the bank to facilitate the desired recapitalisation,” IDBZ said. “Bank now wishes to engage reputable consulting firms to undertake financial advisory services for its recapitalisation.”

Minimum criteria for short-listing of the advisor shall entail, among other things capital markets experience and proven networks within development financial institutions, Multilateral Finance Institutions Sovereign Wealth Funds and Investment Funds. IDBZ is among State-owned entities which the Government listed for immediate privatisation. Some of them include Tel One, Net One and People’s Owns Savings Bank.

Last year, the Government injected $150 million equity capital into the bank to help the institution discharge its mandate of providing long and medium term funding for infrastructure projects.

A strong capital base for IDBZ will enhance its efforts in championing infrastructure development through high impact investment energy, water and sanitation, information and communication technology and housing sector.

The bank’s interventions in these sectors include providing technical capacity building in project preparation, contract negotiations, implementation monitoring, resource mobilising and implementation, knowledge generation and sharing.

Zimbabwe has an estimated infrastructure backlog of $30 billion, according to the Africa Development Bank, after years of little investment into the sector.

Between 2009 and 2016, the Government spent a total of only $2 billion on infrastructure projects, the amount analysts say should have been spent on an annual basis.

The huge debt overhang and arrears to the multi-lateral financial institutions, including the International Monetary Fund and the World Bank also made it difficult for the country to raise long term capital critical for infrastructure projects.

In the absence of significant lines of credit from multi-lateral financial institutions, Zimbabwe has been operating on a tight budget.

The bulk of revenue going towards paying wages, leaving it with little or virtually no money for infrastructure.

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Source: Broadcast costs derail Afghanistan’s proposed Zimbabwe tour | Euronews

HARARE (Reuters) – Afghanistan’s proposed tour of Zimbabwe for five one-day international matches next month has been cancelled because of broadcast costs, Zimbabwe Cricket (ZC) said on Monday.

The Afghanistan Cricket Board (ACB) had asked Zimbabwe Cricket to host the series in Harare to help their team prepare for the World Cup in England.

“Although the two boards had agreed to share the tour expenses, the prohibitive costs of broadcasting the matches live on television – which the ACB was insisting on – unfortunately derailed the proposed series,” ZC said a statement on Monday.

Afghanistan have pre-World Cup warm-up ODIs scheduled against Scotland, Ireland, Pakistan and England before they begin their campaign against Australia in Bristol on June 1.

Zimbabwe did not qualify for this year’s World Cup.

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