Zimbabwe pensioners face delay in payments amid currency row – The Zimbabwean

Posted on by TSA Press

Zimbabwe is battling an extended foreign currency crisis which has affected key imports such as electricity, fuel and medicines. Many firms with foreign ownership are also struggling to repatriate dividends to non-resident shareholders.

Its National Social Security Authority, a mandatory public pension scheme, said on Thursday it could miss a June 13 deadline for paying its members because a software platform it uses to make the disbursements was demanding payment in foreign currency.

“Payouts that were due on (June 13) might be delayed as the provider of the payment platform used by the banks is demanding to be paid in foreign currency, failure of which it will suspend services to them,” the authority said in a statement.

An aurhority spokesman said the payment platform was run by London-listed investment company Cambria Africa. One of the company’s subsidiaries, Payserv Africa, provides payment solutions to banks and 5,000 corporate clients in Zimbabwe.

On Wednesday, it announced it had suspended services over non-payment of foreign currency fees.

“The Company lost U.S. $170,000 providing services to banks in March and April 2019. Banks collectively owe Payserv Africa over U.S. $470,000 for over 4 million transactions concluded since 1 May 2019. The company cannot allow further accumulation of possible losses,” Cambria said in a statement.

It said Zimbabwean banks had frustrated its attempts to maintain the U.S. dollar value of its services following the devaluation of its currency, the Real Time Gross Settlement Dollar (RTGS) dollar, on the interbank market.

The Bankers’ Association of Zimbabwe, which represents the sector, was not immediately available to comment.

In February, Zimbabwe ditched a discredited 1:1 dollar peg for its dollar-surrogate bond notes and electronic dollars, merging them into the lower-value transitional currency called the RTGS dollar.

The central bank, which has tightly controlled foreign currency payments since May 2016, has moved to relax its hold, with most external payments now going through the banks and using a market-determined exchange rate.

The RTGS dollar has slid from a starting position of 2.5 RTGS dollars per U.S. dollar on Feb. 25 to 5.91 RTGS dollars to the dollar on Thursday on the official interbank market. It was trading significantly weaker, at 8.7 to the US dollar, on the black market on Thursday.

Zimbabwean president hails Chinese firm for progress in building new Parliament building

Post published in: Business

Zimbabwean president hails Chinese firm for progress in building new Parliament building – The Zimbabwean

Posted on by TSA Press

Zimbabwean President Emmerson Mnangagwa (L, front) tours the construction site of Zimbabwe’s new parliament building in Mt. Hampden, on the outskirts of Harare, Zimbabwe, on June 13, 2019. Zimbabwean President Emmerson Mnangagwa on Thursday toured the new Parliament building that is being constructed by a Chinese firm and expressed satisfaction with progress so far. (Xinhua/Zhang Yuliang)

“I am happy that the construction project is on course and that so far no incident has happened. I hope that this good record will continue until completion,” the president said after touring the project that is being undertaken by Shanghai Construction Group.

He said Zimbabwe was grateful to China for the grant it provided for the construction of the new building in Mt Hampden on the outskirts of Harare, and the site for a new satellite city near the capital.

“This edifice will be one of the most unique parliaments in our region. Besides being unique, its demonstrative of our deepened and comprehensive strategic partnership with China,” Mnangagwa said.

The six-storey structure has a construction time frame of 32 months but the contractor is optimistic of completing the project ahead of schedule in 29 to 30 months.

According to the contractor, the project is two weeks ahead of schedule and will be spared from the ongoing power cuts affecting the nation.

Mnangagwa appreciated the fast pace at which the project is moving, and challenged Zimbabweans to adopt the work ethic of the Chinese.

He expressed hope that the Zimbabwean engineers and artisans working on the project will benefit from the skills and technology from the Chinese construction giant, reputed for building the world’s second tallest building in Shanghai.

Mnangagwa applauded the company for its reputation in Africa, and hoped it will get more infrastructure development projects in the country.

The Zimbabwe parliament building is the company’s first construction project in Zimbabwe.

“The company has multiple skills in the area of construction of infrastructure. I have no doubt that the company will be selected to implement some of the projects that we are currently discussing and seeking finance for,” he said.

The president hailed China for being a solid friend of Zimbabwe, acknowledging its continued political and economic support to the country over the years.

Trade ties with China were also growing and this was good for diversification of the country’s economy, he said.

Chinese ambassador to Zimbabwe Guo Shaochun said the new parliament building was one of the largest grant-aided projects to be undertaken by China in Africa in recent years.

He said the project had come at an opportune time as it will afford Zimbabwean lawmakers an ideal environment to discuss important legislation to drive the country’s economic agenda of becoming a middle income economy by 2030.

“The new parliament building is the latest remarkable outcome of our cooperation,” Guo said, adding the infrastructure would help to prove wrong critics who say cooperation with China does not bring much benefit to African countries.

Deputy Speaker of Senate Mike Nyambuya said the new building will enable legislators to make laws and do parliament business efficiently.

The current Parliament building has become small and this was constraining the work of the lawmakers, he said.

Zimbabwe pensioners face delay in payments amid currency row
Number of Zimbabweans Seeking Medical Treatment Falls

Post published in: Featured

Number of Zimbabweans Seeking Medical Treatment Falls – The Zimbabwean

Posted on by TSA Press

But President Emmerson Mnangagwa’s government says a solution is on the way.

Fifty-one-year-old Nkululelo Mbambo broke his right ankle. He is outside Harare’s Parirenyatwa hospital after being discharged.

As the Zimbabwe economy falters, fewer people are seeking medical treatment because they can’t afford it, even with insurance.

Mbambo says he has no painkillers or any other drugs provided by the doctors to help him recover. He says his medical insurance is not being accepted by many health institutions and pharmacies.

“They said they are taking too long to pay for the services,” he says of his insurance provider. “So at times we pay cash if they do not accept these medical insurances. You know nowadays cash is scarce to get. That’s a big challenge.”

It is people like Mbambo who, according to the Association of Healthcare Funders, either limit their medical treatment or do not seek it out at all. They have medical insurance but health institutions do not accept it, or the cost of health services has gone beyond their coverage.

Herbs sold on the street

With nowhere else to turn, they seek out medical drugs or herbs sold on the street. Their sellers do not want to be identified for fear of being arrested.

This herbalist insists her products are a good replacement for medicine.

“So it is money problems and the strength of herbs which make people use them (instead of medicines). Some say medicines are now expensive but it is the strength of herbs, which bring them here after hearing from those who would have been healed.”

Herbs bought on the street are not the answer to the rising price of drugs and health care, said Dr. Norman Matara of the Zimbabwe Association for Doctors for Human Rights, in Harare, June 11, 2019, because some of the herbs have not been tested.

Herbs bought on the street are not the answer to the rising price of drugs and health care, said Dr. Norman Matara of the Zimbabwe Association for Doctors for Human Rights, in Harare, June 11, 2019, because some of the herbs have not been tested.

But Dr. Norman Matara from the Zimbabwe Association for Doctors for Human Rights says herbs are not the answer to the rising price of drugs and health care.

“Some of the herbs used have not been tested in the lab,” he said. “We do not know their effect on the liver, on the kidneys. We might actually end up having kidney failure from using herbs which have not been scientifically proven to be safe and effective.”

So what should be done?

“We really urge the government to consider investing into health care and providing national insurance scheme which is pro-poor people,” Matara said.

Government works on a solution

Zimbabwe’s minister of health and child care, Obadiah Moyo, says the government is working on the issue and it has started sourcing medical drugs. He says that Wednesday, the government of India donated drugs worth a-quarter-million dollars.

“The more medicine that we get, the less will be the cost to the client, so we are working on a plan that we fill up our warehouses, or pharmacies to the brim,” he said. “And we then shall be able to supply through that same mechanism, the private pharmacies. They will have to reduce their prices and we end up with more patients arriving at the institutions.”

Lower prices would be good news for people like Nkululeko Mbambo who cannot get the medications they need for a full and fast recovery.

Zimbabwe officials mull over data rollover as costs rise – The Zimbabwean

Posted on by TSA Press

Kazembe Kazembe

State officials in Zimbabwe are contemplating the introduction of data rollover to reduce the cost of data for consumers who are battling with declining disposable income.

Data rollover means any data that is not used within a specific time-frame (for example within a month) could automatically be transferred over to the next month, so it is not lost.

Mobile data costs about 1 US cent per megabyte per second in Zimbabwe, according to the country’s ICT Ministry. However, consumers believe the cost is too high, especially after inflation hit 75% in April.

The Zimbabwean ICT Ministry and the industry regulator, the Posts and Telecommunications Regulatory Authority of Zimbabwe (Potraz) have successfully pushed for infrastructure sharing as another way of keeping telecom costs down.

This follows the recent signing of an infrastructure sharing agreement between Econet and state-owned NetOne.

Zimbabwe’s ICT Minister, Kazembe Kazembe said, “I personally wouldn’t see any problem on data rollover. We need to do our best to protect consumers.”

The parliamentary portfolio committee on ICT and telecom has been pushing for a data tariff reduction, arguing that the majority of consumers are struggling to afford the current costs.

Added Kazembe: “Potraz is doing its best to protect consumers and has refused a tariff increase. It refused to allow operators to raise prices in line with the new exchange rate otherwise it would have risen to 15 cents per mbps.”

The director general of Potraz Gift Machengete said the regulator and operators are in discussion regarding data roll-over.

“From the meeting we had last time, we have been working on issues to do with roll over. We are coming up with a determination on data roll over,” he said.

In a related development, there have also been complaints from members of the parliamentary committee on ICT over the quality of service provided by telcos.

Potraz technical director, Baxter Sirewu explained that the regulator “enforces quality of service through standards that stipulate dropped calls allowable and also the success rate” of calls.

He said: “The measurements we have done show that we haven’t gone that far low – we have not yet reached the lows of 2008 when the networks were completely low.”

Number of Zimbabweans Seeking Medical Treatment Falls
Tobacco prices go up in smoke in Zimbabwe

Post published in: Business

Tobacco prices go up in smoke in Zimbabwe – The Zimbabwean

Posted on by TSA Press

A Zimbabwean harvests tobacco leaves. Picture: REUTERS

A sudden drop in the price of tobacco could not have come at a worse time for Zimbabwe. Halfway through the selling season, the price is about 37% lower than last year — at a time when, on its current trajectory, inflation could hit 100% by year-end.

It’s a blow for a country already in dire economic straits. Tobacco is a leading foreign currency earner. It accounted for nearly a fifth of Zimbabwe’s $5.3bn export earnings in 2018, bringing in almost $1bn.

It’s also a large employer: there were about 172,000 growers this year — up from 111,000 for last year’s bumper season — but only about 2,000 grow more than 2ha.

The average price at last count was $1.82/kg, against $2.87/kg a year ago, with little wriggle room. Insiders predict that, at the outside, it could rise by US20c.

The situation will put the screws on producers already under strain. According to tobacco expert and opposition MP Rusty Markham, tobacco is an expensive crop, costing about $12,000/ha to farm.

In the wake of the post-2000 land invasions, the state’s land bank collapsed. Then, as a result of the nationalisation of agricultural land in 2005, commercial banks withdrew from the tobacco market, citing a lack of security to cover loans.

It means that about 80% of tobacco operations are financed in US dollars — mainly from tobacco contractors and merchants in the US, UK and Zimbabwe. Farmers, large and small, are paid in real-time gross settlement dollars (RTGS$) — but they have to repay their funders in US currency, at a crippling rate of about RTGS$5.7/$1. Though they can later claim 50% of their earnings back in US dollars, that process has not always proved easy.

Industry insiders, including Markham, predict the low price will leave top growers in debt. “They will not cover costs — and will therefore not be able to pay back all the money they borrowed from contractors to grow their crop. The [exchange] rate will also hit them hard,” he says.

Those in the know doubt that defaulting growers will be closed down ahead of the planting season, as the tobacco merchants and contractors need to ensure continuity of flavour and quality in their products. But there must surely be a limit to that patience.

Some contractors employ former tobacco farmers — many of them evicted from their farms in the land grabs — to supervise and help growers so they do well enough to pay back their loans.

But part of the problem is the contractors/merchants themselves. The auction system no longer works for the large growers, who produce about 80% of the crop. So they are beholden to merchants — China’s Tian Ze, British American Tobacco through Northern Tobacco, and several other local and international buyers — and the prices they dictate.

It’s unclear what exactly is pushing the price down, but industry speculation points to the US-China trade war, a glut of Zimbabwe’s main flavours on the market, contractors punishing the government for paying growers in RTGS$, and fewer people smoking, including in Asia, the primary export market.

The potential fallout of the price drop does not seem to have sunk in yet. Some speculate that this is because of the glut of other bad news, including load-shedding — 10 hours a day — which will continue at least until the end of the year.

But until the country’s currency woes are resolved, it’s unlikely that the bad news cycle will be arrested.

Ashok Chakravarti, an economic adviser to the government, points to the need for dramatic changes in “the rate” in the coming months. He and other industrialists and retailers, who meet regularly and call themselves the “round table”, believe the market must be left to determine the rate of exchange as a precursor to Zimbabwe launching a new currency. It’s a move that will substantially diminish the power of the Reserve Bank of Zimbabwe, bringing it in line with conventional central banks.

Rural teachers in Zimbabwe brace for strikes – The Zimbabwean

Posted on by TSA Press

“School workers remain incapacitated, with parents unable to afford fees and learning materials for their children,” writes the Amalgamated Rural Teachers Union of Zimbabwe (ARTUZ), in an open letter to the government published by Newsday.

“The ruling elite and their allies in the business world have launched a brutal onslaught on the working class under what has become known as anti-people austerity measures,” fumes ARTUZ.

Harare in ZimbabweWikimedia Commons

The union highlights a disturbing finding by a survey that 60 percent of rural teachers were unable to secure bus fares to travel back to their work stations for the reopening of the second term.

In the letter, the union also regrets the freezing of salaries at a time when prices of basic goods and services are up by 400 percent, which in their view has “condemned the working class to extreme poverty”.

A direct consequence is the growing number of schools, which have asked for permission to increase their fees, while some private establishments demand payments in US dollars.

Long winter looms over Zimbabwe’s education sectoreduc/co.za

School fees in foreign currency

“We have all these discussions in the markets where parents have had to pay their children’s fees in forex”, says Wisdom Mdzungairi, editor of the Harare-based NewsDay newspaper which publishes the full version of the rural teachers union’s letter.

On the teacher’s key demand to have their salaries paid in US dollars, Mdzungairi says it is unlikely that President Emmerson Mnangagwa will cave in, at a time his government is working towards the unveiling of a new national currency in six months.

Unionists in danger

The NewsDay editor also discusses allegations by ARTUZ that the government is behind a campaign of abductions, torture, detentions and harassment of its members who dare speak out about the catastrophe facing the country’s education sector.

Wisdom Mdzungairi reacts to a paradox underlined by the union, which he claims discredits the government’s plans to address the challenges confronting Zimbabwe’s workers.

Business as usual

“While the government has consistently celebrated an over $100 million budget surplus in the past four months, it is blowing the revenue in executive luxuries, including the chartering of private planes for Presidential visits,” ARTUZ says.

“There is too much talk and less action,” says Mdzungairi, who criticises the absence of good will, when it comes to dealing with endemic corruption within government and the ruling ZANU/PF party.

In theNewsDayeditor’s opinion, ARTUZ and other workers’ organisations are using the dithering as a rallying point against Mnangagwa’s government.

Protesters barricade the main street to Zimbabwe’s capital Harare from Epworth Township, January 14, 2019J Njikizana/A

Ultimatum

The Amalgamated Rural Teachers Union of Zimbabwe says the government’s failure to safeguard the education sector from collapse has pushed them up against the wall.

ARTUZ urged all teachers to “go back to their stations, log in, but not to undertake any duties”, while it finalises consultations on a calendar of rolling protests.

A country on the edge – The Zimbabwean

Posted on by TSA Press

Protesters march against Zimbabwe’s new bond notes as a currency, in Harare, Zimbabwe. Picture: AFP/Jekesai Njikizana

The glitter of Zimbabwe’s gold sector is dimming. A perfect storm of factors — not least of which is soaring inflation — is tipping the key industry downwards, taking with it the country’s prospects of production growth and an escape from a gripping foreign exchange shortage.

Gold is a significant contributor to Zimbabwe’s economy. The Chamber of Mines’ most recent “State of the Mining Industry” report, released in November, reveals that the sector generated 45% of the country’s mineral exports last year — up from 40% in 2017. In the course of the year it produced 33t of gold, worth more than $1bn.

It’s also a large employer, accounting for about 30% of all formal mining jobs last year, with as many as 500,000 small-scale and artisanal miners plying their trade across the country.

In the face of numerous challenges, capacity utilisation in the industry fell to 71% in 2018 from 74% in 2017, by chamber estimates. And in the first quarter of 2019, gold production was down 10% — the biggest slump across the minerals sector — says chamber CEO Isaac Kwesu.

It’s problematic for an industry that has the capacity to boost an ailing economy — and for government’s ambitions for the sector. It’s looking to increase annual bullion output to 100t a year by 2023, in the hope the sector will raise much-needed forex to fund vital imports such as fuel, medicine and electricity.

But it is the forex crunch itself that gold producers blame, in large measure, for the state of play.

Zimbabwe’s central bank pays gold miners 55% of their earnings in foreign currency, with the balance paid out in local currency — real-time gross settlement dollars, or RTGS$ — at the official exchange rate (about $1/RTGS$5, against a parallel-market rate of $1/RTGS$9). But delays in accessing foreign earnings are concerning, says the mines chamber.

Metallon, one of the country’s large producers, previously told the FM that it was feeling the effects of “the delay of payments for gold deliveries, and foreign currency shortages for securing key inputs”. And it’s been reported that Metallon chair Mzi Khumalo is suing the Reserve Bank for failure to access foreign currency earnings — a reason another large miner, RioZim, previously closed its operations.

It’s not just the large miners that are struggling under the currency rules.

Small-scale miner Philip Nyazvigo owns gold claims in Mazowe, just north of Harare. “As miners, we bring in a lot of foreign currency,” he says. “We used to be OK when [the central bank] was giving us 70% in forex and 30% was put into local currency. But now we are worse off — we get only 55% in forex and the rest in local currency, which is useless. Everything we do is in forex … [There is] a mismatch, because we have a lot of expenses, such as transport, employees and other inputs.”

Besides the forex crunch, rolling power cuts present a new threat to the industry — despite miners paying a premium for uninterrupted power.

Batirai Manhando, outgoing president of the Chamber of Mines, says the blackouts are a recent phenomenon, and the mining industry still gets priority in terms of power allocation. However, he says “there has been some load-shedding in some gold mining houses”.

Smaller miners in particular are more vulnerable to issues around mineral claims and inadequate infrastructure.

Nyazvigo points to the effects on production of unclear rights allocations. “Disputes over gold claims are very common, especially among small-scale miners,” he says. “The mining certificates we have use approximate location so you end up having people coming every day to say: ‘This is my claim.’ This disturbs operations.”

Moving ore to processing centres is also problematic, as producers are forced to use roads considered unsafe. It costs them as much as $150 to move 5t of ore. And with the national rail agency now adjusting freight charges to match inflation, production costs across the board will rise.

Government is consulting on increasing ground rental fees, according to industry insiders — likely to eat further into margins.

The result has been cutbacks and a scaling down of operations. Large companies such as Metallon, for example, have put workers on short working weeks, while others are retrenching miners, says Tinago Ruzive, president of the Associated Mine Workers Union of Zimbabwe. “There is a lot of compromising of safety measures as workers have to work without sufficient protective wear and gear.”

Mines minister Winston Chitando had not responded to questions at the time of going to print. But the Zimbabwean central bank is trying to boost production — and discourage smuggling — through an incentive system. It was paying an output incentive of about $1,368/oz for gold, against a fluctuating spot price of about $1,327 at the beginning of the week.

But the problem, according to a finance manager at a large gold mining company, is that there is little willingness to address underlying challenges affecting the industry.

There’s also been little to no investment for expansion.

“There are no new gold projects and investment into capacity expansion is very limited,” says a board member of a local gold company, speaking on condition of anonymity. “The gold sector is struggling and we see this as reflecting in the first-quarter output decline for gold which, if we are not careful as a country, may continue for the remaining quarters.”

3 Months Later, Zimbabweans Still Feel Effects of Cyclone Idai – The Zimbabwean

Posted on by TSA Press

Ursula Mueller said the situation in the cyclone-hit areas of Zimbabwe is still “devastating and distressing.” She said people are still food insecure and cannot access basic health care.

“This is particularly distressing for people living with HIV who face a double dilemma of being unable to access drugs,” she said. “Even if they can access them, not be being able to absorb them on an empty stomach.”

Mueller, who is visiting Harare, said the U.N. and its partners have received just 40 percent of the $294 million they appealed for to respond to the effects of Cyclone Idai.

That is certainly not good news for people like 79-year-old Everisto Gambire, whose home was totally destroyed by Cyclone Idai. He survived, but not his four grandchildren.

“It’s still painful up to now,” he said. “They had grown up and I could manage to send them to do some chores like cleaning dishes when their grandmother was not around. The loss is still troubling my mind. My son Mathew is really hurt too for his loss of children. He is suggesting of relocating. Remaining here in this place is troubling him.”

El Lovemore Utseya, the councilor for Chimanimani, says he has been overwhelmed by people, like Gambire, who want to be relocated.

“They are really pleading, asking for new places to settle as it is now difficult to live in hilly areas,” said Utseya. “All their fields and grazing lands were wiped out by the heavy rains and winds.”

Mueller said it is “very important that there are plans and actions to resettle these people in areas that are not disaster-prone.”

But with the lack of funding for the relief efforts, it might take time for people like Gambire and his family to find a new home.

A country on the edge
Zimbabwe demands right to sell ivory to fund game reserves

Post published in: Featured

Morning Docket: 06.12.19

Posted on by TSA Press

Donald Trump Jr. (Photo by Win McNamee/Getty Images)

* Donald Trump Jr. is going to have a closed-door hearing on a limited number of topics for a limited amount of time before the Senate Intelligence Committee today. Should be an informative romp around the invocation of the Fifth Amendment. [POLITICO]

* The House Judiciary Committee will sue AG Bill Barr and former White House counsel Don McGahn for refusing to comply with subpoenas related to receiving an unredacted copy of the Mueller report on Russia’s efforts to influence the 2016 election and President Donald Trump’s possible obstruction of justice. [NBC News]

* “When it comes to corporate power, bigger is not always better.” In case you missed it, 10 states have filed suit to put an end to the Sprint-T-Mobile merger deal, claiming that consumers will be hurt price wise due to the lack of market competition. [Reuters]

* Alabama Law isn’t quite through with Hugh Culverhouse Jr. just yet. Professor Ronald Krotoszynski has some wise words to share over how untenable large class sizes would have been for a school that has tried to right-size since the recession severely impacted law graduate employment. [Washington Post]

* Ever since CKR Law started having trouble paying its partners, causing some to flee as a result, the firm has stopped growing at the speed it once was. Duh? [New York Law Journal]

Staci ZaretskyStaci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.