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Monday 29 June 2015

Zambia Power Cuts Rise as Copper Producer’s Dam Levels Fall

Zambia will probably cut power generation by more than a quarter as poor rainfall causes dam levels to drop in Africa’s second-biggest copper producer, Mines, Energy and Water Development Deputy Minister Charles Zulu said.

The country may reduce power supply by as much as 600 megawatts from about 2,200 megawatts, he said Tuesday by phone. While mining companies will be affected the state-owned power utility, Zesco Ltd., hasn’t decided by how much they will need to decrease their usage, Zulu said.
“According to Zesco, all customers have to contribute to this,” he said.

Zambia relies on hydropower for more than 90 percent of its electricity and water levels have declined at the Lake Kariba and Kafue Gorge plants, the source of three-quarters of that supply. Reservoir levels fell to about half capacity at the Kariba dam by April 26, according to the Zambezi River Authority’s website. Glencore Plc and First Quantum Minerals Ltd. are among mine operators that use more than half the southern African nation’s power.

The country has already cut electricity supplies by 300 megawatts and will probably double this gradually over 2015, Zulu said. Peak demand is 1,900 megawatts to 2,000 megawatts, he said.
“Obviously, demand is now higher, and load shedding will increase,” Zulu said, using a local term for rolling blackouts.

Zambia asked mining companies to cut their power use by 10 percent in January 2013 as demand outstripped supply, Reuters reported at the time.

Supplies will increase from the end of the year, when two new plants are scheduled to start producing, Zulu said. The 120-megawatt Itezhi Tezhi hydropower plant will start producing power in October, while electricity generation at the 300-megawatt Maamba coal-fired power station will begin in December, he said.

Source: Zambia Power Cuts Rise as Copper Producer’s Dam Levels Fall (26/05/15)

Monday 22 June 2015

Zimbabwe moves to scrap travellers' rebates

VICTORIA FALLS - Zimbabwe is considering scrapping travellers' rebates on basic commodities to boost local industry, Finance minister Patrick Chinamasa said on Thursday.

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 finally ditches its dollar, ending an economic era

Zimbabwe dollars are being decommissioned at a rate of 35 quadrillion per US dollar, with eight alternative currencies to choose from.

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.

Historical precedent

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.

Stand out case

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.

Multiple currencies

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

Vic Falls hotels sued over $400 000 debt

VICTORIA FALLS Town Council has sued the resort town’s three leading hotels over outstanding water bills amounting to $383 896,60.
In separate lawsuits filed at the Bulawayo High Court on June 4 gleaned by Southern Eye yesterday, the local authority cited Elephant Hills, Victoria Falls Hotel and Kingdom Hotel as defendants.
Council said Elephant Hills owed it $166 457,51 for two water accounts, Victoria Falls Hotel had a debt of $125 676,32 for two water accounts and Kingdom Hotel owed $91 762, 73.
In its declaration, council stated that the three hotels were incorporated in terms of the laws of Zimbabwe to offer accommodation.
The local authority said it supplied the three hotels with water and charged them according to the Urban Councils Act.
Council said Elephant Hills had three accounts with the local authority for water and the fourth for the landlord’s charges, and all accounts were in arrears.
“The water accounts held by the defendant are account 13003270 which is in $1 977,72 arrears and account 13003281 with an outstanding balance of $33 179,08,” the declaration reads.
“The total arrears for the two water accounts is $35 156,80.
“The landlord’s charges accounts held by the defendant, account number 200327, has an outstanding balance of $27 706,26 and account 2000328 has outstanding balance of $103 594,45.”
The local authority said the total owed for the landlord’s charges was $131 300, 71.
Elephant Hills owes council $166 457,51 for all four accounts.
In the Victoria Falls Hotel case, council said the hotel had three accounts with the local authority, two for water and the third one being for landlord’s charges.
“The water account held by the defendant are account number 13004183 which is in $2 202,41 arrears and 13004184 with an outstanding balance of $25 665,17,” the declaration reads.
“The total for two water accounts is $27 867,58. The landlord’s charges account 2000001 has an outstanding balance of $97 808,74.
Defendant owes a total of $125 676,32 to plaintiff for all the accounts it holds with plaintiff.”
Kingdom Hotel has two accounts with the local authority for water and the landlord’s charges.
The local authority said in the water accounts, Kingdom owed $38 404,63 while in the landlord’s charges the hotel owed $53 358,10, bringing the total owed to $91 762,73.
Council demanded that the three hotels settle their arrears with interest calculated from the date of the issue of summons until completed and full payment costs of the suit on an attorney-client scale.
The hotels are yet to file responses to the lawsuits.

Zim struggling to clear landmines 35 years after independence

Zimbabwe is still struggling to clear more than
40 000 hectares of communal and commercial land infested with landmines, more than 35 years after they were planted during the war of liberation, NewsDay has learnt.
Commander of the Zimbabwe National Army (ZNA) Corps of Engineers Mkhululi Ncube told the Parliamentary Portfolio Committee on Defence and Home Affairs on Tuesday that about 5% of the mined area had potentially rich mineral resources.
The committee is currently touring areas infested with landmines such as Sengwe, Vhumba and Forbes Border Post in Mutare.
“Zimbabwe is State party to the Anti-Personnel Land Mine Ban Treaty which came into effect in 1999, which means we were supposed to have cleared all mines 10 years ago in 2009,” Ncube said.
“We have always asked for extension. Currently, we are on the third extension and we are working on the fourth extension where we are supposed to have resurveyed the mine areas that are contaminated and come up with a plan of how we intend to tackle the problem.”
Ncube said initially landmines in Zimbabwe covered 310,65 square kilometres which translated to 850km.
He said 220km had been cleared from Victoria Falls to Mlibizi, while 130km were cleared from Mukumbura to Rwenya Koch Mine. An estimated 50km from Sheba Forest and Beacon Hill and 4,1km in Burma Valley were also cleared as so where 75km from Rusitu to Muzite Mission.
Although the ZNA has worked around the clock to ensure people avoided landmine-infested areas, animals were still endangered.
“Since 2012 our records show that 18 people were killed by landmines and explosive remnants of war while 14 incurred injuries.
It is unfortunate that most of the incidents have been attributed to the speculation that red mercury is found in mines. Such beliefs are not true as there is no red mercury in mines, it is just a myth,” Ncube said.
He said uncleared landmines had severe impact on the lives of peasant farmers’ economic activities.
“There is land pressure on the areas adjacent to the minefields, and it is evident in areas like Mukumbura where cotton farming is prohibited due to the problem of landmines.
“Loss of livestock adds to the woes of the ordinary rural peasant, as well as lack to access to water and grazing land caused by minefields,” Ncube said.
He said landmines also negatively impacted on tourism as an estimated 5 000 hectares of land ideal for game in parts of Gonarezhou National Park was infested with landmines. This made tourism development impossible in a huge area of the Great Limpopo Transfrontier Park.
The cash-strapped government has allocated a paltry $500 000 towards landmines clearance resulting in the National Mine Action Authority of Zimbabwe relying on donor support. Ncube said in the absence of resources, it would take Zimbabwe 30 years to eliminate landmines, against a 2025 deadline for the complete elimination of mines.

Solar Park for Livingstone

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

The Elephant Express, a unique safari activity in Zimbabwe

IN THE early 1900s a railway was built between Bulawayo and Victoria Falls. It cut through virgin hardwood forest, and for much of its length it was perfectly straight as it crossed the deep sands of Hwange. 
The Elephant Express, Hwange 1The area then, as now, was home to prolific wildlife – King Mzilikazi declared it his own special reserve. For the last several decades few tourists ever travelled this line, as passenger services deteriorated and the line was dedicated to freight traffic.
The Elephant Express, HwangeThis year Imvelo Safari Lodges have changed all that, with a custom-built self-powered rail carriage to transfer its guests from Impofu (Main Camp) to their lodges in the southeast, Bomani and Camelthorn.
The Elephant Express in Hwange Copyright- Imvelo Safari Lodges, ZimbabweThe railcar seats 22 passengers and is fitted with a flush loo for convenience. Finishings are elegant, with all seats window-class for unobscured game viewing. With an independent engine and gearbox at both ends of the railcar, the Elephant Express was designed to travel either forwards or backwards, for both safety and simplicity of operation.
Lion on the line in Hwange, Elephant ExpressWhat a magnificent start or end to a safari in Hwange National Park, gently rattling along in style with a cool drink, enjoying the wildlife and vast wilderness around you!
  • Images © Imvelo Safari Lodges, Zimbabwe

Monday 15 June 2015

Vic Falls to flush out troublesome street beggers

THE Victoria Falls Municipality is planning to flush out all street beggars as they have become a menace  to  international tourism destination, Town Clerk, Christopher Dube has said

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)

Thursday 11 June 2015

Zimbabwe gets $1.5 from disputed tourism tax

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)

Monday 8 June 2015

‘Santonga is not a zoo’

The Santonga project in Victoria Falls, which received environment impact assessment approval in 2007, has been in the news lately with tourism players divided over whether or not it should go ahead. The Sunday Mail Extra Editor Garikai Mazara spoke to Dave Glynn, chair of Africa Albida Tourism, owners of the project, about the contentious issues.
Q: What is the background to Santonga, what inspired the idea?
A: I travelled a lot with my family to different parts of the globe and visited different parks and realised that we could do a lot better in Zimbabwe. I also thought there was a need in Victoria Falls for something other than the falls as an attraction.
Then I met Professor Lee Berger, a globally renowned palaeoanthropologist, and he commented on how rich the history around Victoria Falls was. I wanted to tell the Victoria Falls story, and the idea of Santonga was borne.
Q: Some call it a zoo, is that an appropriate description?
A: When you are standing on the Santonga site looking west, to the right-hand side there is a fenced crocodile farm with more than 8 000 crocodiles and on the right-hand side of that is a chicken farm. On the left-hand side is an elephant encounter centre, which has elephants in paddocks.
Behind is the Elephant Hills Resort, which is fenced, but has wildlife roaming free on the property. We will not have any animals displayed in cages, glass boxes or pens. We call it “Santonga, the Victoria Falls story” and describe it as an edutainment park.
Whatever animals we do have will be solely for the purpose of conservation education and will be as recommended by specialists and would only likely consist of injured or orphaned animals or the like, or as otherwise advised by wildlife specialists.
We are coming from a conservation bias, in which we have taken the fundamental issue of the elimination of wildlife on the planet as the foundation principle that we would like to have a positive influence on. Wherever wildlife is involved, it would only be done in close consultation with experts, and to convey the messages of conservation. At all times there will be no display boxes, cages or pens.
Q: Those who are against the project talk of downstream job losses, that tourists will no longer go on game drives preferring one stop at Santonga. Your response?
A: Santonga will create 150 direct jobs. The World Tourism Organisation research shows a multiplier effect of 10 times, so we can anticipate 1 500 downstream jobs. We are hoping Santonga will extend visitor stay in Victoria Falls by one night. If we can achieve that, it will extend stay by 40 percent and, therefore, grow Victoria Falls economy by 40 percent.
So the converse is true; it is not about the loss of jobs, but the creation of jobs. With regards to the game drives, we don’t believe that anything we are doing will compete in any way whatsoever with these. We will be quite happy to promote other activities from the site.
Q: There are suggestions that if such a project has to be undertaken, it should be done in Europe, America — places where wild animals do not occur naturally, not here in Africa. The argument being that tourists come to Africa to see animals in the wild. Your side?
A: They will still see that wildlife. The wrong impression has been created of Santonga. Very little of what you see will be on game drives. We are largely talking about the little animals, the birds and even the insects that are lost to view.
According to a recent WWF report, 52 percent of all wildlife on the planet has been wiped out in the last 40 years and the pace of that is ramping up.
If we just take elephant, as an example, more than 100 000 elephant — out of a maximum population estimate of 640 000 — have been poached in Africa in the past three years. A great many species is in trouble and their story is not being told.
At Santonga we are including wildlife both because they are such an integral part of the Victoria Falls story, and to educate visitors on the plight of the species. Again, everything we do here will be guided by specialists.
Q: There are also questions as to why you would want to replicate Great Zimbabwe; won’t you be killing Masvingo as a tourist destination?
A: Quite the contrary, we believe Great Zimbabwe is unusually under-exposed. In no way would we be able to replicate Great Zimbabwe, but what we do want to do is tell the great trading story of Great Zimbabwe, trading as far afield as China, Arabia and Europe 500 years ago; and the vast extended stone structures throughout Zimbabwe and the region, that all connected in various ways at various times. We believe this will heighten interest in Great Zimbabwe.
Q: What will happen to the present corridor animals use to get to the Zambezi River, especially in view of other proposed projects in and around Santonga that will make the corridor impassible by the wild animals?
A: There are two substantial game corridors that exist on either side of Santonga, and those are being completely preserved, so there will be no blockages of those corridors. We are not aware of any other developments around Santonga that might have that impact, but Santonga won’t block those corridors.
Q: What is the present project status? Has it been approved, awaiting approval or been turned down?
A: Santonga was fully approved in 2007 having completed full project status via the Victoria Falls Municipality and multiple relevant Government departments, including a full EIA (environment impact assessment).
Q: You mention that the EIA was approved in 2007. Why did it take eight years to start building?
A: We actually launched Santonga at the main travel show in Southern Africa, Indaba in Durban in 2008, but you will recall the economic and political conditions that followed both locally and globally so that tourist arrivals declined.
Arrivals are now back to a viable level plus the advent of the upcoming Victoria Falls airport plus the new Kaza Univisa , these things have allowed Santonga to come back onto the table. Santonga needs a throughput of 120 000 visitors annually to be viable.
Q: So what is unique about Santonga?
A: There is an extraordinary history around Victoria Falls that has never been told, and that is a considerable focus, and the area of most of the investment at Santonga. It is a great African story. Santonga, will tell the Victoria Falls story from its very beginnings four billion years ago.
As well as history, and wildlife, it will tell the story of the people — with four villages showcasing the different tribes, so visitors can learn about their history, culture and traditions.