Home Blog Page 244

Re-dollarization Part 2: Is this the right path forward for Zimbabwe?

TellZim News
-
0

By Zvikomborero Sibanda

Last week, I highlighted that the economy is rapidly re-dollarizing as supported by the latest official statistics. I further argued that dollarization is two-handed and that Zimbabwe needs to go through dollarization if it is to attain durable stability – a prerequisite for a mono-currency regime. This week’s part 2 seeks to explain the intuition behind this view by separating time horizons into the medium term (3-5 years) and the long term.

1. Medium-term Horizon

Zimbabwe should embrace dollarization of its economy in the short-to-medium term for the following reasons:

A Leaf from Economic History

Generally, flexible and progressive policymaking should accommodate lessons from history. A review of previous dollarization reform cases shows that dollarization is nearly permanent. Economic history also shows that forced de-dollarization always backfires. In addition, history lessons show that successful de-dollarization can only be secured through the implementation of prudent market-driven policies and robust reforms. It is relatively easier to increase market uptake of government policy and reforms in a stable macroeconomic environment. So, the guaranteed price stability from dollarization makes it a de facto policy for the medium-term horizon. This gives room for dampening government policy lags -recognition, implementation, and impact lags.

We are all dead in the long-run

Policymaking should not only be laser-focused on the economy neglecting the “human face”. Official statistics show that the Zimbabwe dollar (ZWL) erased over 80% of its value against the US dollar in 2022. The pass-through effect of inflation is affecting business predictability and eroding the real value of disposable incomes and pensions. This is deepening poverty and widening societal inequalities. For instance, the World Bank estimates that over 40% of the total population was trapped in abject poverty in 2022.
Poverty undermines human development as it fuels all forms of discrimination, drug abuse, early marriages, crime rates, and instability. Recently, the government has elevated its war on drug use, especially among unemployed youths who have found solace in substance abuse. This shows that there is a need to find a quick economic fix before the nation witnesses the derailment of the future aspiration of the youth. As I highlighted last week, dollarization brings instant exchange rate and price stability which can help attract private investment.

Quick Results

Some economic commentators are arguing for other alternatives to dollarization like the adoption of a currency board system. This system comprises a fixed exchange rate, backing requirement, legal commitment, and unrestricted convertibility. It takes time to set up a currency board as it requires adequate political will. Just as the case with ongoing high-level structured public debt dialogues between the government and its creditors, a currency board also requires both commitment and uninterrupted implementation. More so, the currency board operating guidelines must be spelled in legislation, an independent and competent panel must be established, and foreign exchange reserves mobilized. All this may consume time thus aggravating economic injury.
But dollarization is quick as it does not always require a consensus among economic agents. Dollarization can be by a de facto market process without an official decree. This gives businesses and workers an immediate cushion against exchange rate losses and clamps incessant price growth. So, while authorities are exploring long-term policy strategies, there must be an alternative for the short-to-medium term.

Investment Promotion

While there are many initial conditions to be met to bolster FDI inflows such as stable politics, consistent policymaking, and respect for property rights, the use of a stronger widely accepted currency like the USD may partly attract foreign investors. It can also promote locals to increase their investments knowing that the use of foreign currency can greatly insulate them from some major endogenous shocks. More so, the adoption of the USD in the medium term could increase forex liquidity in the official markets thus helping kick-start industrial re-tooling and importation of critical industrial raw materials.

2. Long-term Horizon

As alluded to earlier, economic history shows that dollarization is nearly permanent. To escape this vicious trap, de-dollarization must be viewed as a process, not an event. I, therefore, submit that Zimbabwe will need more time and policy actions to run a mono-currency regime, that is, use the ZWL as sole legal tender. This is because USD is costly in the long term as briefly articulated hereunder.

Loss of Autonomy

The perpetual use of USD is tantamount to the loss of the monetary policymaking arm of the government. Last week, I highlighted that this policy arm helps the government in the management of currency exchange rates and inflation as well as ensuring financial market stability. As such, losing this policy arm will constrain the government’s ability to promote local production and create decent jobs for citizens. Also, by using US monetary policy, the Zimbabwe government will lose seigniorage revenues it can accrue from the minting of coins and printing of banknotes. This revenue help governments worldwide fund national security, public services, and other development programs.
Furthermore, dollarization is unsustainable in the long term because it largely constrains authorities’ ability to respond to bank crises. Today’s world of rapid technological changes, climatic changes, and rising geopolitical tensions makes financial markets more vulnerable to shocks than ever before. So, to be able to effectively deal with such crises like liquidity crunch, authorities must be able to print money as needed. In short, dollarization cripples the lender-of-last-resort function of the RBZ.

Size of the Economy

Zimbabwe is a small developing nation in sub-Saharan Africa while the United States is the world’s largest economy. Largely because of US economic dominance in global economic affairs, its stable currency faces a high global demand. Therefore, it will be unsustainable for Zimbabwe to use the USD indefinitely as this renders it uncompetitive. A stronger USD makes Zimbabwean-made goods expensive for regional counterparts using their weak currencies while making foreign-made products cheap in the eyes of Zimbabweans. In the end, this may balloon the trade deficit leading to the closure of domestic factories and associated job losses.

Thwart National Pride

Having a functional currency and competent industries with the ability to fulfil most domestic demand can be a source of national pride. This helps in boosting social cohesion thus increasing public participation and policy ownership. However, using the USD for the long term may expose domestic firms to excessive foreign competition, dumping of foreign goods, and hostile takeovers. The crowding-out of domestic firms and over-dependence on foreign companies present a great national security risk.

Cash Economy

Since RBZ will not be able to print USDs, adopting dollarization without formal approval from the issuing country can lead to severe economic consequences. This type of dollarization will be largely based on a cash economy -exchanging of real dollars in the market. However, a cash economy renders monetary policies ineffective, leads to change shortages, and promotes tax evasion, money laundering, and other illicit transactions. All these forms of externalization may result in acute forex shortages in the official markets and the creation of local USDs in the banking sector. These local USDs become the basis for multiple exchange rates in the economy which could in turn incentivize excessive speculation and arbitrage.

Conclusion

Re-dollarization of the economy was inevitable. The authorities initially followed a forced de-dollarization path despite a clear lack of durable macroeconomic stability. This pushed the USD to the epicenter again thereby completing a vicious cycle. To permanently break this cycle, authorities should pursue long-term market-driven policies that ensure the sustainability of a mono-currency regime. As such, next week the column will focus on the feasibility of recently announced government reforms to resolve the debt conundrum.

Zvikomborero Sibanda is an economic analyst and an astute researcher. He writes in his personal capacity. He can be contacted via email:

bravosibanda@gmail.com
Twitter: @bravon96

Bigger and better as Simbisa partners Troutbeck 2023

TellZim News
-
0
Bigger and better as Simbisa partners Troutbeck 2023

Branton Matondo

Popular fast food company Simbisa Brands has partnered Triathlon Zimbabwe as it seeks to become part of this year’s Bonaqua African Triathlon Cup Troutbeck 2023 Sponsor Group majored by Coca Cola.
Simbisa Brands which constitutes of Chicken Inn, Bakers Inn, Grab n GO, Creamy Inn and Pizza Inn has joined Coca Cola, Schweppes, Cimas i-Go, CFAO Motor Group, EcoCash and Rooney’s who already make up the sponsor group for the annual Troutbeck Triathlon showcase.
Bonaqua African Triathlon Cup (ATU) organiser Rick Fulton through an official statement said the partnership comes at a time when the competition is commemorating its 15th anniversary.
“We are very excited to have yet another blue-chip brand come on board for this event, now in its 15th consecutive year.
“We welcome Simbisa Brands on board and hope that this will be the start of long relationship with the sport and event. As with our entire Sponsor Group we value their loyalty and commitment to this event and we sincerely hope that they benefit exponentially from the branding, marketing and media exposure,” read the statement.
Simbisa Brands is not new to sporting partnership as it is also into football.
Meanwhile the Local Organising Committee (LOC) has speeded up efforts as the tournament takes centre stage on April 1 in Nyanga.
The 2023 Bonaqua Africa Triathlon Cup Troutbeck media team released communique released on March 9.
“In addition, the LOC are fine-tuning the various arrivals and departures of athletes from Robert Gabriel Mugabe International Airport to Troutbeck Resort and return. This exercise entails detailed planning for the Triathlon Zimbabwe ‘Meet-n-Greet’ team to coordinate the incoming international and regional athletes that will compete in the Elite Men and Women’s categories and also the Junior Elite categories for Junior, men and women,” added the statement.
This year’s edition will be one to watch as Zimbabwe’s contingent pitting Anje Van As, Makanaka and Matipa Mawere, George Ascott, Nicole Madya, Duwan Botha and the Mthethwa twins, Mandlenkosi and Musawenkosi look to forward to be added in the team.
Two time Troutbeck Elite Men’s gold medallist Ayan Beisenbayev from Kazakhstan will also be looking to top the medallist list.
Also making their way back to the much anticipated tourney are Badr Siwane from Morocco, Martin Demuth from Austria, Michal Oliwa from Poland, Meirlan Iskakov from Kazakhstan and Laurent L’Entete from Mauritius.
From the Elite women group, Shanae Williams who was the runner up in 2022, Bridget Theunissen and Jamie-Sue Vermaas all from South Africa return to compete for a position at the podium.

ZB bank rebranding model key in growing business

TellZim News
-
0
ZB bank rebranding model key in growing business

Tinaani Nyabereka

Gweru- The move by financial institution ZB bank to rebrand its local branches into service centres has been described as a key step in growing the business to resonate with customer services.
The development was revealed by brand consultant Thamsanqa Moyo during the official launch of the Gweru Service Centre last week.
Moyo said that the branding concept was focused on shifting the position of the market through providing an all-inclusive service central point.
“The reason for the transformation was that they wanted to grow their business but in order to grow their business, they needed to change having learnt that the way they do the business has to resonate with their customers. How can you resonate with your customers without understanding what the customer need?
“To learn what the customers need, they learnt that maybe we are not configured properly without the audience. They were bold enough to then begin a transformation programme to say how do we reconfigure ourselves as an organization as a financial service, how do we transform ourselves so that we can match the needs of our customers.
He also said part of that was now brand repositioning to make their customers look at them a certain way.
“So when they did the examination to say how the market looks at us, they found out that they were synonymous with the old and slow, we were stable and strong and stiff like all other banks which are authoritative and friendly,” said Moyo.
“The organization decided to go through with the transformation. One of the things they did was to be digital, modern, want to be friendly and we want to be relevant. And now digital becomes a strong issue. They are the only ones with a mobile application that you can do banking, insurance and investment,” said Moyo.
He further said true branding was not changing the logo, but transforming the services.
“A brand is not a logo, it’s not a banner, it’s not a T-shirt, it is the gut feeling that someone has when they think of a product, service or company.
“So ZB decided to transform their brand to reflect how they want their customers to feel. What they have done is very bold world over; you will never see a financial service that will centralise the experiences of a customer.” he added.
ZB Bank Executive Head Projects and Programme manager organisational transformation, Patrick Tendai Huni said the transformation of Gweru branch into services centre was exciting as it was set on timelines.
“The transformation process was exciting, demanding and unique as it was done with set timelines. For Gweru service centre it was done on short space of time which is close to a month. In that phase, we say it is a life changing organisational transformation as it impacts on both customers , internal stuff as the same time bring convenience service to the market,” added Moyo.
The transformation brought in a new digital banking innovation which called ZB mobile application.
The application is an online convenient and secure platform to manage to money on the move around the clock. The feature packed app cater for things such as Logging into accounts from anywhere, around the world, checking account balances and transaction history, bill payments, Transfers, Viewing and assessing loans and term deposits among other services.

Farmers use sand, urine to control army worm

TellZim News
-
0
Farmers use sand, urine to control army worm

…as they resort to indigenous knowledge system

Courage Dutiro

Communal farmers in Masvingo district have resorted to using women’s urine and river sand in controlling the devastating Fall Armyworm that perennially affects their crops during the rainy season.
Due to a shortage of free agricultural inputs like pesticides, Moses Mutoko a farmer in Wendedzo area of Masvingo North said they have resorted to using river sand in fighting against the destructive fall armyworm.
“This year we received few inputs, those who afford to buy chemicals are using chemicals to control worms but those who cannot afford are using river sand to save their crops from the Fall Armyworm.
“The Armyworm damage corn plants mainly during the vegetative and tussling stage,” said Mutoko.
He also said the late planted crops are under attack and farmers are struggling to control the ‘second generation’ of the worm.
“Those who planted late (in January) are struggling to control the armyworm. Their crops are so far under attack.
“I think the worm hatched during the first planting phase and now the second generation of worms is attacking the late planted crops,” he said.
The farmer also lamented water logging as another problem that is going to affect the quality and yield of crops.
He also added that some of the crops that were planted using the Pfumvudza way were affected by the dry spell that prevailed in January.
During the 2022 Masvingo agricultural show, Onias Murove a farmer in Summerton area (ward 6 Mayo) in Masvingo district said women’s urine was one of the solutions that they were using to control army worms.
“We have resorted to non-chemical ways of controlling the worms; we are using women’s urine and sand to reduce the army worm’s intensity. Pouring urine and sand at the maize plant help to reduce the attack,” said Murove.
During the provincial show, Murove won a wheelbarrow and 5 kilograms of maize seed under the Pfumvudza category.

Shot in the arm for Manicaland Arts and Culture sector

TellZim News
-
0
Shot in the arm for Manicaland Arts and Culture sector

Branton Matondo

Creative artists and the rest of the arts sector from Manicaland province are set to benefit from a nationwide European Union (EU) funded programme enforced by Culture Fund which will see individuals, institutions, culture organizations, focal groups and unions receive funding for their projects.
The official European fund tagged at €2 million is expected to finance projects from approved proposals received across all ten provinces.
Minister of Youth, Sports, Arts and Recreation Kirsty Coventry on February 24 launched the nationwide programme dubbed Creative Actions 2.
Addressing arts and culture personnel from Manicaland at Courtauld Theatre in Mutare on March 9, 2023, Culture Fund Executive Director Farai Mupfunya said the programme will go for 36 months as it seeks to target projects tackling challenges affecting Zimbabwe’s arts and culture industry.
“The response has been very good. The programme targets not just artists but creators from academics, teachers and instructors of music. We also expect that those who come and attend the sessions also go and equip others with the necessary knowledge. The response has been productive looking at the fact that people ask technical questions on how to apply and seek clarity on issues that are supported and not supported.
“In line with stipulations of the fund, interested individuals will have their proposals assessed by a panel of delegates from the local and regional cultural front,” said Mupfunya.
He added that Creative Actions 2 targets an array of sectors though there are other sectors on the fall out.
“People have raised talk on whether Creative Actions 2 supports the construction and refurbishment of culture hubs or not but unfortunately the fund does not support that because there are a lot of complications in that sector not forgetting that they are complicated to manage. Hence the programme is mainly for activities that are that span to a maximum of 12 months” he added.
Culture Fund Programme Facilitator Simbarashe Mudhokwana highlighted that Creative Actions 2 runs under three mantras which are capacity building, innovation and policy development (National Development Strategy 1).
Responding to government lobbying support on the culture sector, Mupfunya said it is a priority to have government come in and add resources to the project meant to facilitate the change of arts and culture in Zimbabwe.
“We are not government but we really expect government support in putting more money and resources. We have argued our case to the Ministry of Finance and Economic Development and the Culture Fund delegation will head to Murehwa Cultural Centre in Mashonaland East, Marondera, Bindura and Chinhoyi. Besides the funding of projects, Culture Fund also supports training courses, festivals, book launches, exchange programmes, culture based technological innovations, e-commerce and a plethora of sectors,” said Mupfunya.
National Arts Council (NAC) Provincial Manager Caroline Makoni said the programme by Culture Fund is equally beneficial to women as it is to men.
“The programme is important to women as it is equally important to men but specifically to women because we know that their participation of in the arts sector is limited. We encourage women to participate and get funding because it gives them an incentive which is important for them as a marginalized entity.
“Most of the challenges being faced by our fellow colleagues revolve around the issue of funding. There is a big gap in terms of funding projects in Manicaland. In terms of infrastructure, we are looking at offices, rehearsal space and spaces where they can operate from,” said Makoni.
Redwing Traditional Dancers group Director Tupele Mudhala who benefited from the first grant which spanned from 2020 to 2021 said the fund is a great opportunity which should be utilized by artists.
“As has been said in the meeting today the major challenge facing creative artists is infrastructure or innovation hubs. You find out that many people have standing projects that lack a physical platform. I have been a beneficiary of the fund in the past. I have managed to change the sector of operation in Penhalonga because l bought resources from the funds,” said Mudhala.
Zimbabwean culture and arts industry has over the years been hampered by lack of resources which has seen promising talent being wasted.

Mwenezi man found dead

TellZim News
-
0
Mwenezi man found dead

Beverly Bizeki

Zimbabwe Republic Police (ZRP) in Mwenezi have launched an investigation into the death of a 46 year-old man who was found dead in the middle of the road in a suspected hit and run incident.
The man Wisani Baloyi from Chief Chitanga area in Mwenezi was found dead along the Masvingo-Beitbridge highway on March 6, 2023.
Masvingo Provincial Police Spokesperson Inspector Kudakwashe Dhewa confirmed the incident and appealed to members of the public with information to help in the investigations.
“We are appealing for information from members of the public that can assist in investigations of the case. Those with information can liaise with the police at any nearest station or come through on our WhatsApp platform on 0775 996 945,” said Dhewa.
It is reported that Baloyi had met his death fate decided for him during the early hours of the day on March 6 while going home from Lundi Business Centre where he was watching a soccer match on Television.
Baloyi who was not drinking was watching football match at Tapesana Bar with Trust Makotore at around 2200 hours on March 5, 2023.
Baloyi is reported to have left the Business Centre at around 01:00 in the morning going home on his bicycle.
Police at a roadblock near Chitanga Primary School were informed of a suspected hit and run by an unknown motorist at around 0400 hours on the same day.
The police attended the scene and found Baloyi’s body in a pool of blood in the middle of the road with his bicycle a few meters away from the body.
The body had two deep cuts on the back of the neck each close to both ears.
The body was carried to Neshuro Hospital for post mortem.

Increase in rape between minors worrying-residents

TellZim News
-
0
Increase in rape between minors worrying-residents

Beverly Bizeki

Members of the public in Masvingo expressed concern over the rise in cases of rape between minors and children under the age of 18 and such cases have become prevalent in communities and common feature at the courts.
The revelation came out during the Parliamentary Portfolio committee hearing on Prisons and Correctional Service Bill and Criminal Law Codification and Reform and Amendment Bill held at Mucheke Hall recently.
Residents who attended the public hearing on the Criminal Law Codification and Reform Act rallied behind the need for government to amend the law on rape and aggravated indecent assault.
One resident at the meeting pleaded for the law to consider the rape incidents between minors following the rise in cases between minors.
“We have seen a rise in the cases of minors raping other minors yet they have to walk away scot free even though they have to receive that mandatory psycho social support but then it is not enough regarding the rise in the cases. Something must be done for the juveniles that commit rape,” said the resident.
Another resident at the meeting suggested that there should be a mandatory sentence for rape of a minor and rape of an adult.
“We are aware that there can be cues between adults but this cannot be the same with a minor, so there must be a stiffer sentence on those who perpetrate such an offense on minors,” the resident said.
Chairperson of the Parliamentary Portfolio committee on Justice, Legal and Parliamentary Affairs, Mutare Central legislator Innocent Gonese said the amendment entails the introduction of a mandatory sentence for rape where a minimum of 15 years is going to be prescribed in cases of aggravating circumstances and a minimum of five years applied to other cases.
“There is also an issue which has not been covered by the bill which is very topical and important because the constitutional court gave a ruling in May of 2022 in terms of which it ruled that the current age of consent which is pegged at 16 is unconstitutional.
“There have been voices that the definition of young person which is in the Criminal Law and Codification Act particularly section 70 which relates to the crime of sexual intercourse with a young person is going to be amended.
“Particularly there are also sentiments that the definition of extra marital be removed because it is giving license to older people to have sexual relations with minors,” said Gonese.
Recently in Masvingo, a 13 year old teenage boy who raped two other juveniles escaped a jail term after being pardoned by the court and was cautioned not to commit a similar offense over the next five years.
In a related case, a 28 year-old man from Masvingo was charged for having sexual intercourse with his alleged 15 year-old girlfriend.
There has also been a rise in cases of adults having sex with minors which the public considers should also attract a mandatory sentence.

Robbers pounce on Mashava Mukuru outlet

TellZim News
-
0
Robbers pounce on Mashava Mukuru outlet

……get away with US $20 400, R32 000

Beverly Bizeki

A five man gang of armed robbers pounced on a Mukuru outlet in Mashava, Masvingo last night (March 13,) and got away with US$20 400 together with R32 000.

Masvingo Provincial Police Spokesperson Inspector Kudakwashe Dhewa confirmed the robbery and said investigations were in progress.

It is reported that around 1600 hours on Monday March 13 2023 a Mukuru employee Panashe Hapanyengi (36) at Balmain Centre in Mashava, got into a Toyota Wish going home after knocking off at work.

The driver of the Toyota Wish reportedly informed Hapanyengi that he wanted to stop at Energy Park Filling Station for a refilling.

While at the filling station, the driver picked up people who wanted to go to Bere Township and left them there before dropping Hapanyengi close to his home at Balmain.

After about two hours, Hapanyengi saw a grey Toyota car with five men covering their faces with mutton cloths.

One of the men dragged him by the left hand into the car and they all started beating him with open fists asking questions about his work place and found a work ID in one of his pockets.

The gang stuffed some maize leaves into the complainant’s mouth before driving off to Balmain Centre with him.

One of the accused remained in the car safeguarding Hapanyengi at gunpoint while others went into the booth.

The four men found Wonder Bvungidzire (38) a Highway Supermarket cashier and force marched him to the Mukuru safe in the shop.

The other accused brought Hapanyengi to the store and instructed him to unlock the safe.

The gang took US$20 400 and R 32 000, locked the two in the storeroom, and drove off.

Bvungidzire eventually managed to open the door with a screwdriver and the two escaped leading to a police report.

The suspects are still at large.

Gweru council procures 3 new tractors

TellZim News
-
0
Gweru council procures 3 new tractors

Tinaani Nyabereka

GWERU–City Council has acquired three brand new Holland tractors in an effort to improve service delivery.
The tractors valued at a total cost of US$ 93 000 were commissioned this week after being delivered from Duly’s Motors.
Confirming the development, Gweru Council Public Relations Officer Vimbai Chingwaramusee said the new tractors were going to enhance efficient service delivery in the city.
“The procurement of the tractors is anchored on building a sustainable, prosperous city of choice by year 2030.
“Three tractors were delivered to us today by Duly’s Motors and as a local authority, we are very much happy about this development because these tractors are going to be dedicated towards ensuring quality service delivery to our valued clients, residents and stakeholders.
“We bought these tractors at a total cost of US$ 93 000. Two of the tractors are going to be used in the engineering services department and the other tractor is going to be a slasher used by the department of housing and community services for grass cutting on road sides,” said Chingwaramusee.
She further highlighted that the new fleet was going to easy transport challenges council has been experiencing.
“Gone are the days when the local authority used to cry foul over inadequate transport to ferry equipment and employees to attend to blockages and burst pipes. However council service vehicles will be localized in the residential areas for quick and fast service provision.
“We therefore urge our valued residents to play their part by paying their bills for smooth running of the local authority and improved service delivery,” she added.

Masvingo records 7287 new voter registrants

TellZim News
-
0
Masvingo records 7287 new voter registrants

Beverly Bizeki

Masvingo Province recorded a total of 7 287 new voter registrants during the month of February, according to statistics released by the Zimbabwe Electoral Commission (ZEC) office.
ZEC Deputy Elections Officer Maxwell Ncube confirmed the statistics.
“There is an increase in numbers of new voter registrants as we move towards elections. Most people seem to have last minute tendencies.
“The trend shows the numbers have been increasing since last year,” said Ncube.
Of the new registered voters, 3 466 are men while 3 821 are women to give a total of 7 287 registrants.
The province has also recorded 2 172 transfers 1 020 of which are men while 1 152 are women.
In January, the province recorded 5 726 new voter registrants 2 764 of which are men while 2 962 are women.
In the same month the province recorded 1 630 transfers, 749 men and 881 women.
The commission also said stakeholders, political parties and Non-Governmental Organizations (NGOs) are playing a big role in getting people to register to vote.

1...243244245...960Page 244 of 960