Monday, 29 June 2015
Monday, 22 June 2015
Chinamasa told delegates attending the Buy Zimbabwe Summit that government "had the good mind of making local goods appealing through stiffening the terrain for all locally available imports".
"We are seriously moving to cut rebates for all locally available goods. Exports are giving locally produced goods a hard time and as government we feel it makes a lot of sense to level the playing field," he said.
A traveller's rebate is granted once in a calendar month to a person entering Zimbabwe excluding crew members. It is meant to assist travellers to import goods for their personal use.
The rebate is limited to the value of $300. Goods for resale are not covered by the rebate. Alcoholic beverages that can be cleared under this rebate are limited in quantity.
However, if government implements this move, travellers will be forced to pay duty for all imported locally available commodities.
Meanwhile, Mike Bimha, the country's Industry minister, echoed Chinamasa's sentiments.
"There is the open general import licence to control importation of goods that can be sourced locally. We recently carried out a nationwide survey to assess ration of locally produced goods on their shelves and discovered that Zimbabwean products were not even on the shelves," Bimha said.
The Industry minister said local companies also had to boost their production as sometimes they failed to meet demand, leaving wholesalers with no choice but to import.
"We are really doing all we can for local companies. Rebates for manufacturers have been put in place. This is an incentive for these manufacturers to retool and recapitalise," he said adding that government had a cocktail of measures to help the county's manufacturing sector recover.
According to figures from the Confederation of Zimbabwe Industries, the country's manufacturing sector is currently operating at 36 percent capacity due to the prevailing difficult trading environment characterised by tight liquidity.
Source: Zimbabwe moves to scrap travellers' rebates (21/06/15)
Zimbabwe dollars will be decommissioned at a rate of 35 quadrillion per US dollar (that’s Z$35,000,000,000,000,000 for US$1). Any remaining Zimbabwe dollars in circulation after September 30, 2015 will be officially, as opposed to practically, worthless. A currency is being ditched.
Withdrawing all Zimbabwe dollar banknotes from circulation officially brings an end to the era of people carrying cash around in large bags and even wheelbarrows to do their everyday shopping. In 2009, the end of the decade long recession saw the government adopt the US dollar as its main currency. Since then people have effectively used US dollars or South African rand in everyday life, while an increasingly small number of Zimbabwe dollars (with virtually no value) remained in circulation.
Zimbabwe adopted the Rhodesian dollar in 1970, following decimalisation and the replacement of the pound sterling as the currency. At the time of independence in 1980, the Rhodesian dollar was replaced by the Zimbabwe dollar, which was then worth US$1.50. Since then, rampant inflation, corruption, unresolved infrastructure bottle necks, President Robert Mugabe’s controversial land reform programme and general economic mismanagement have led to the collapse of the economy and a severely devalued currency, with many organisations using the US dollar instead.
The 20th century saw several other examples of hyperinflation making banknotes worthless – notably Germany in the 1920s, Brazil in the 1980s, Argentina and Angola in the 1990s. In Zimbabwe the highest monthly inflation reached 79,600,000,000% in November 2008, with prices doubling every 25 hours. This was just short of Hungary’s record, where the highest ever monthly inflation reached 41,900,000,000,000,000% in July 1946 (and the highest denomination bill was 100,000,000,000,000,000,000 or one hundred quintillion pengo).
Once stability returned, most countries redenominated prices by introducing a new currency: Germany introduced the reichsmark in 1924, Brazil the real in 1994, Mexico the nuevo peso in 1993 (and back to peso in 1996). In these cases demonetisation was effectively a process of redenomination – where the value of banknotes are changed, partly out of accounting convenience and partly to signal the arrival of a new era of more stable economy.
Zimbabwe’s process of hyperinflation and scrapping its currency, however, stands out. For one, Zimbabwe had previously redenominated its currency in 2006 (1 revalued dollar = 1,000 old dollars), 2008 (removing another ten zeros) and 2009 (removing a further 12 zeros). Plus, the 35 quadrillion per US dollar exchange rate at which the Zimbabwe dollar is being decommissioned is certainly mind-boggling when compared to today’s relative stability in other emerging currency markets.
But more interesting is that Zimbabwe has multiple currencies as legal tender alongside the Zimbabwe dollar. First the US dollar in 2009. Then in 2014 the Reserve Bank of Zimbabwe introduced a mix of currencies, using those of its neighbours as well as some major trading partners. Specifically the South African rand, Botswana pula, pound sterling, euro, Australian dollar, Chinese yuan, Indian rupee and Japanese yen.
While different currencies coexisting during precarious economic conditions is not rare, the combination of multiple currencies as legal tender is unusual. Most other countries that have given up on their local currency adopted a strong foreign one as the new money.
For example, Panama, Ecuador and El Salvador became fully dollarised economies in 1904, 2000 and 2001, respectively. By adopting the US dollar as legal tender they pass on the control of their money supply to the US treasury, limiting the government’s control over its economy.
Adopting multiple currencies could have been an act of economic desperation. Initially the move would have brought more cash into circulation, as a liquidity crisis meant some banks had stopped lending, making imports difficult. But it also institutionalised practices where merchants in the capital Harare priced their goods in US dollars, visitors to the Victoria Falls paid South African rands, while miners traded in Australian dollars.
Now there are eight currencies that constitute legal tender, excluding the Zimbabwe dollar. This means that there is the possibility of seeing prices quoted in US dollars, but you can pay in any of the acceptable currencies. For instance buying dinner in euros and receiving a combination of Chinese yuan and Indian rupees in change.
This might not happen often, but merchants will generally accept multiple currencies, knowing they can put them to the government. The issue of what exchange rates the merchants will impose remains open, however. A cell phone app with up to date FX rates will be a necessity for anyone living, working or even visiting Zimbabwe.
Eventually, Zimbabwe is likely to have to choose one currency to proceed with, as juggling eight different ones is unsustainable and administratively costly. The US dollar is probably the most likely outcome. But one is left to wonder whether the Zimbabwe dollar might make a comeback in the near future (or after President Mugabe gives up power).
This article was originally published on The Conversation.
Friday, 19 June 2015
Thursday, 18 June 2015
Intelligent Energy Zambia Ltd (IEZL) plans to soon start construction of a 100-MW solar park in the Southern Province of Zambia and complete it in 2017, local media reported this week.
The Kumi Kumi Zuba (KKZ) project in Livingstone represents an investment of USD 257 million (EUR 228m). IEZL chairman Richman Njovu told Zambia Daily Mail that the Energy Regulation Board (ERB) and the Zambia Development Agency (ZDA) have assured the project will have full government support.
South African firm Rhino Engineering will be in charge of the engineering work and German solar power firm Belectric GmbH will supply the modules. Zambian utility ZESCO will purchase the produced solar electricity.
Zambia has average solar radiation of 5.5 kWh per sq m per day with up to 3,000 sunshine hours annually, offering significant opportunities for solar thermal and photovoltaic (PV) development, according to the International Renewable Energy Agency (IRENA). That potential remains largely untapped.
Source: Solar Park for Livingstone (17/06/15)
Wednesday, 17 June 2015
Monday, 15 June 2015
Dube said if the beggars are not dealt with they were likely to send a wrong impression about the country and Victoria Falls to visitors.
"Just like other local authorities we have some challenges with vendors but ours is not as complex as other towns probably for two reasons.
“We're a small local authority and we're also very strict on our by-laws because we're an international destination," said Dube.
Victoria Falls is the country's prime resort centre and earns millions of dollars each year by attracting thousands of international tourists.
"Lately, we've noticed that there has been a proliferation of beggars on the streets and we're looking at ways of evicting them soon. There are street beggars almost everywhere and we need to find ways of dealing with them."
Source: Vic Falls to flush out troublesome street beggers (12/06/15)
Wednesday, 10 June 2015
The Zimbabwean government has raked in $1.6 million from a disputed 15% value-added tax (VAT) on foreign tourists.
Zimbabwe introduced the new levy early this year in a bid to widen its revenue base.
Hospitality industry players argue that the tax — levied on foreign tourists' accommodation — could make Zimbabwe a more expensive tourism destination compared to its neighbours, dampening efforts to revive the depressed sector.
Finance secretary, Willard Manungo defended the levy before a parliamentary committee on tourism on Monday, saying it was the norm in the region and they had raised $1.6 million between January and April.
At this rate, by December $4.8 million could be raised.
"Tanzania is on the upper end, applying 18 per cent, while Seychelles and Mauritius both charge 15 per cent," he said. "South Africa charges 14 per cent, while Botswana charges 12 per cent. Zambia is the only country in the region which does not have the levy in place."
The tourism industry's contribution to the economy is expected to grow to 15% at the end of 2015.
Zimbabwe Revenue Authority (Zimra) Commissioner-General, Gershom Pasi defended the levy saying it was legitimate. "It's not fair for the tourism industry to be complaining on the move to pay 15% VAT. The way it has been handled, it's like they were ambushed but this is not an ambush," he said.
Tourism players contend that the move to impose a 15% tax on hotel accommodation for foreign tourists shows high levels of desperation.
The tax, introduced in January, has reportedly prompted cancellations by foreign tourists, some of whom had made bookings well in advance.
The tourism industry, which claims to have lost $6 million in potential revenues in the last quarter of 2014 due to Ebola scare, registered 4 per cent tourist arrival growth during the nine months to September 30, 2014.
In his 2015 budget statement, Finance minister, Patrick Chinamasa said the sector was projected to grow by 4.7 per cent in 2015 as compared to 3.9 per cent in 2014, translating to about 2.1 million tourist arrivals in 2015 from last year's 2 million.
Source: Zimbabwe gets $1.5 from disputed tourism tax (09/06/15)