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Zimbabwe to import 250,000 tonnes of maize from Mexico

23 June 2016 Comments (0) Africa, Business, Latest Updates from Reuters

HARARE (Reuters) – Drought-hit Zimbabwean will import more than 250,000 tonnes of maize from Mexico to fill the shortfall caused by the severe drought sweeping through the southern Africa, the agriculture minister said on Thursday.

Joseph Made said Zimbabwe would also import the staple crop from neighbours South Africa and Zambia, as well as from the Ukraine but did not give precise figures for these imports.

“We anticipate anyway upwards of 250,000 tonnes will be coming from Mexico. The other maize will obviously be coming from Zambia as well some from South Africa and Ukraine,” Made told reporters.

An El Nino-induced drought has hit southern Africa, slashing the output of the staple maize crop.

Zimbabwe’s government previously said the drought forced it to cut the 2015 growth forecast to 1.5 percent from 3.2 percent, with the 2016 output unlikely to be any better.

The U.N. World Food Programme said earlier in June that output in Zimbabwe would fall below 60 percent of the five-year average of between 700,000 and 1 million tonnes.

 

(Reporting by MacDonald Dzirutwe; Writing by Mfuneko Toyana; Editing by James Macharia)

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Takunda Chingonzo: Zimbabwe’s Youngest Entrepreneur

22 May 2016 Comments (0) Africa, Featured, Leaders

Takunda Chingonzo

Takunda Chingonzo is one of Africa’s youngest entrepreneurs. Can his technology company and his growing international exposure help to pull Zimbabwe out of the shadow of its government and penalizing trade sanctions?

Takunda Chingonzo is a remarkable person, achieving more in his 22 years than many in their entire lives. He is best known as a start-up entrepreneur, creating three innovative businesses since graduating from high school, but his talents have social enterprise at their core, working to better the future of Zimbabwe through the freedom of technology and information.

After completing his degree in quantity surveying in 2014, he went on to obtain a CISCO certification in network security. Although he does not have a traditional background in business or technical design, it is his entrepreneurial spirit that has been the driving force in his companies and in instigating social change. He has been recognized for his efforts with the Swell Award for Innovation at DEMO Africa, and was one of 100 young people selected to take part in an 8-week internship in the USA following the Mandela-Washington Fellowship program in 2014.

Trouble in Zimbabwe

Zimbabwe suffers from a series of trade sanctions and embargoes, designed to restrict governmental trade after a long history of violations of democratic processes and human rights abuses. Everything within the financial trade industry is restricted, from imports and exports to export insurance and credit. Because much of the equipment, services and finances necessary for young African entrepreneurs come from outside the continent, this only works to restrict growth in this sector.

In 2015, Chingonzo was selected to hold an exclusive on-stage Q&A with President Obama at the US-Africa leaders’ summit, which aims to increase the US’s engagement with Africa. He spoke candidly about how trade sanctions are detrimentally affecting businesses and entrepreneurs in Zimbabwe, as well as the political leaders they were supposed to be targeting. He discussed the interest that he received for his projects for importing goods and investment from American companies, which were withdrawn after they found out he was from Zimbabwe. This effectively means the people of Zimbabwe are oppressed twice, once from their government, and again from the punishment designed to penalize the leadership of the country.

Tech Start-ups

Despite this opposition, he has successfully set up Neolab Technology, a multi award-winning startup. Its biggest achievement to date is Saisai, a public Wi-Fi network, designed to bring free internet access to all by installing wireless mesh networks in public spaces and public transportation in Zimbabwe. Chingonzo has described this task as “liberating the internet.” He understands that the internet is the key to progression in Zimbabwe, with free access to information and communication being central factors for people to free themselves from oppression. From a business perspective, he believes that “the internet is the one tool that lowers the cost of doing any form of business,” also showing his commitment to business progress within the country. He went on to say “It provides access to information that people and communities can use to improve and magnify the work that they are already doing. An informed community engages more, innovates more, and, from a business perspective, makes more and spends more.”

Alongside Neolab, he is also the co-founder of NeoEffect, a social start-up working towards empowering underprivileged youths through IT literacy, and is involved with both the MX project and BOOT Africa which promote student start-ups in tertiary institutions.

The Future

Chingonzo’s business acumen and commitment to social change seem to be a winning combination. He was featured in the Huffington Post as one of four African innovators you should know about. Last year, he graced the cover of Forbes Africa after making it on to the Forbes “30 under 30” list as part of the continent’s “next generation of billionaires.” The exposure he has received from his interview with President Obama has generated a buzz around his projects, and the burgeoning tech industry in Zimbabwe, while exposing the inequalities in the international relationship with Zimbabwe and its people. Chingonzo doesn’t just represent technology and innovation, but the will of the people of Zimbabwe and their indomitable spirit.

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Zimbabwe’s platinum industry calls for $2.8 bln in new investment

20 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

HARARE, (Reuters) – Zimbabwe could double annual platinum production to more than 900,000 ounces in the next decade, making the metal the nation’s top export earner but current producers need $2.8 billion in new investment to do so, an industry association said on Friday. The southern African nation holds the second largest known reserves of platinum after South Africa but mines have struggled with low prices, a black empowerment law forcing mines to sell more than 50 percent of the business to locals, and power shortages. Zimbabwe Platinum Producers Association Chairman Winston Chitando told the annual meeting of the Chamber of Mines in the resort town of Victoria Falls that the industry needed new investment to raise annual production by existing producers from current levels of 458,000 ounces a year. “With vast platinum reserves, the sector has potential to increase production by the current producers from about 13 tonnes (458,562 ounces) to 20 tonnes (705,479 ounces) by 2020 and to 26 tonnes (917,123 ounces) by 2025,” Chitando said.

Anglo American Platinum, Impala Platinum and Aquarius Platinum are the three companies currently operating platinum mines in Zimbabwe.

He did not comment on the separate Russian-backed project which was announced by the two governments 20 months ago for the joint development of the Darwendale mine which was projected to be producing up to 800,000 ounces a year by 2024. http://reut.rs/1Tojx6y

Work on this project was still at the exploration stage, Zimbabwe’s mining minister told Reuters in March.

Chitando said on Friday revenue from platinum, which is the third largest export earner after tobacco and gold, could become the biggest at $1.2 billion in the next four years if more money was invested. “The industry requires around $2.8 billion over the next five years to ramp up and sustain operations. Bottlenecks that undermine capital inflows include clarity on indigenisation,” Chitando said. Under the Indigenisation and Economic Empowerment Act, which was passed in 2008, foreign-owned businesses are required to sell at least 51 percent of their local operations to Zimbabwean investors. But on April 12 President Robert Mugabe said the empowerment policy was confusing potential investors and made it hard to compete for foreign investment.

Noah Matimba, chairman of Zimbabwe Gold Producers Association said at the Chamber of Mines meeting that an investment of $600 million into existing gold mines would raise production to 50 tonnes.

The mining chamber projects gold output at 24 tonnes this year, up from 18.7 tonnes in 2015.

Gold producers say weak prices and electricity shortages and high tariffs are the biggest threat to producers.

Partson Mbiriri, the permanent secretary in the ministry of power and energy development, said the country would be self-sufficient in electricity generation by 2019 at the latest.

Zimbabwe’s power demand stands at 1,400 megawatts (MW) a day, while generating ranges from 1,000 MW to 1,200 MW. The deficit is met by imports from South Africa and Mozambique.

 

(By MacDonald Dzirutwe. Editing by James Macharia, editing by David Evans)

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Zimbabwe economy ravaged by drought, needs bold reforms

4 May 2016 Comments (0) Africa, Latest Updates from Reuters, Politics

HARARE (Reuters) – Zimbabwe’s economic difficulties have deepened after drought weakened agricultural production and disrupted hydro power generation and the southern African nation needs bold reforms, the International Monetary Fund said on Wednesday.

“Unless the country takes bold reforms, the economic difficulties will continue in (the) medium-term,” the fund said in a statement after a consultation with Zimbabwean officials.

 

(Reporting by MacDonald Dzirutwe; Writing by TJ Strydom; Editing by James Macharia)

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Zimbabwe to present new IMF financing programme by November

22 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

HARARE (Reuters) – Zimbabwe will present a financing programme to the International Monetary Fund by November this year after clearing its arrears, opening the door to receiving its first loan from the Fund in nearly two decades, the finance minister said on Friday.

Patrick Chinamasa told reporters that he was optimistic an IMF executive board meeting on May 2. would accept Zimbabwe’s plan to pay $110 million in arrears to the Fund.

Another $1.7 billion would then be paid to the African Development Bank and World Bank.

Zimbabwe has not received a loan from the IMF since 1999.

President Robert Mugabe agreed last month to major reforms, including compensation for evicted white farmers and a big reduction in public sector wages. Those reforms are expected to be part of a new financing programme.

“Between September and November Zimbabwe will work feverishly to come up with a new country financing programme, on the basis of which we hope, if we clear our arrears, we should get new financing,” Chinamasa said.

Reserve Bank of Zimbabwe governor John Mangudya said on March 16. he expects a loan from the IMF in the third quarter of this year, after paying off foreign lenders by the end of June.

 

(Reporting by MacDonald Dzirutwe; Editing by James Macharia)

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Sinosteel cedes half its chrome claims in Zimbabwe to state

19 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

HARARE (Reuters) – China’s Sinosteel Corp Ltd’s business in Zimbabwe has ceded half its mining claims to the government, complying with Harare’s demands to chrome producers to give up some of their claims, a company official said on Tuesday.

The Southern African nation holds the world’s second largest deposits of chrome, which is smelted to produce ferrochrome, a raw material used in the making of stainless steel.

Zimbabwe’s mines minister last year asked Sinosteel’s Zimasco and Zimbabwe Alloys, which owned 80 percent of all chrome mining claims, to release some ground for distribution to new investors. The companies were owned by Anglo American until 2006.

The government has previously said it wants to redistribute some claims to several local investors as part of its black economic empowerment drive and would not pay compensation.

Zimasco held 45,900 hectares of claims before giving up half to the government, Clara Sadomba, the company’s general manager for administration told Reuters.

“It is accurate regarding Zimasco in that we have indeed ceded 50 percent of our chrome claims to the government,” said Sadomba.

Zimbabwe Alloys officials would not say whether they had also given up some of the company’s claims.

Zimbabwe holds more than 950 million in chrome reserves, according to ministry of mines data.

In 2014 Zimbabwe produced 260,000 tonnes of high-carbon ferrochrome, which was 2.3 percent of global output. Zimasco produced 68 percent of Zimbabwe’s ferrochrome in 2014.

 

(Reporting by MacDonald Dzirutwe; Editing by Alexander Smith)

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Zimbabwe’s central bank says excessive demand causing cash crunch

8 April 2016 Comments (0) Africa, Business, Latest Updates from Reuters

HARARE (Reuters) – Zimbabwe’s banks are limiting withdrawals as an excessive demand for cash has lead to shortages, the central bank chief said on Friday.

Zimbabwe ditched its currency in favour of the U.S. dollar after hyper-inflation scaled 500 billion percent in 2008, leaving it unable to print its own money.

A shortage of notes surfaced at the beginning of March, which the Reserve Bank of Zimbabwe (RBZ) initially said was caused by financial institutions underestimating demand and failing to improve distribution to branches.

On Friday, RBZ Governor John Mangudya told a parliament committee that the government had injected $145 million worth of cash into the financial system between Jan. 1 and April 6, while banks had imported $118 million.

“We don’t think the money is circulating … that money is not there in the banks,” Mangudya said. “There is excessive demand for cash. The appetite for holding cash in this country is very high.”

Banks have been limiting withdrawals to as low as $200, causing frustration among customers and discouraging deposits.

Most Zimbabweans earn a living in the informal sector and prefer cash transactions. Confidence in banks was also dented after hyper-inflation effectively wiped out savings.

In February Mangudya said companies and individuals in Zimbabwe had illegally exported $1.88 billion last year. He capped daily withdrawals at $10,000, saying amounts above that would require central bank approval.

Besides the U.S. dollar, Zimbabwe also allows use of South Africa’s rand, pound sterling, the euro and China’s yuan.

 

(Reporting by MacDonald Dzirutwe; Editing by Stella Mapenzauswa and Janet Lawrence)

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We can’t pay: Zimbabwe farmers resist compensating evicted white landowners

22 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

HARARE (Reuters) – Zimbabwe’s plan to win back international funding by paying compensation to white farmers forced off their land faces a major snag: the black farmers expected to stump up the cash say they don’t have it.

The new occupants working the land, many of who had few farming skills when they were resettled, say they can barely make ends meet, let alone pay an extra levy.

Their agricultural output is a fraction of the level seen before 2000, when President Robert Mugabe – saying he sought to correct colonial injustices – introduced land reforms which led to thousands of experienced white farmers being evicted.

They are also being hammered by Zimbabwe’s worst drought in a quarter of a century and toiling under a stagnating economy that has seen banks reluctant to lend and cheaper food imports from the likes of South Africa undermining their businesses.

“Are farmers able to pay? I will say no. Is the land being productive? I will say no again,” said Victor Matemadanda, secretary general of a group representing war veterans who led the land seizure drive in 2000 and are now farmers.

He told Reuters that many farmers could not even meet water and electricity bills and that it was the government’s obligation – not theirs – to pay the compensation.

Zimbabwe Commercial Farmers Union President Abdul Nyathi also said his members would not be able to pay compensation. “Most of the farmers face viability issues, the government will have to look at other ways of raising money,” he added.

Mugabe’s land reforms have led to about 5,000 white farmers being evicted from their land by his supporters and war veterans over the past 16 years, often violently. More than a dozen farmers have been killed.

The land seizures, along with allegations of vote-rigging and rights abuses – all denied by Mugabe – led to Zimbabwe being targeted by sanctions from Western donors. This compounded the economic plight of the country, which saw financing from the International Monetary Fund, World Bank and African Development Bank frozen in 1999 after it defaulted on debts.

The IMF’s head of mission to Zimbabwe, Domenico Fanizza, said this month that improving fiscal discipline and re-engaging the international community should be priorities for Harare. He said this would “reduce the perceived country risk premium and unlock affordable financing for the government and private sector”.

 

DIVIDED OPINION

In an attempt to woo back international donors and lenders, Finance Minister Patrick Chinamasa announced a package of major reforms on March 9, including the farm measure and a big reduction in public-sector wages. He said it had the full backing of Mugabe.

The farm plan involves 300,000 families resettled on seized land paying an annual rent – based on the size of their farms – towards a compensation fund for those evicted.

If they are unable to pay, however, it could be a major setback for the government’s plans to shore up an economy that is stagnating after a deep recession in the decade to 2008, which slashed its output by nearly half, drove hundreds of thousands abroad in search of better paying jobs and has left the jobless rate at around 85 percent.

The finance ministry did not respond to repeated requests for comment about the ability of farmers to pay the levy.

Reserve Bank of Zimbabwe governor John Mangudya told Reuters that the farmers’ situation should improve once the government grants them 99-year leases on their land, which he said would make it easier for them to secure financing from banks and to pay rent towards the compensation fund.

All agricultural land in Zimbabwe is owned by the government and, at present, farmers have no legal claim on their farms – which they say has made banks reluctant to extend loans to buy fertilisers, seed and chemicals so they can raise output. But the government says it will imminently grant the leases.

“We are saying that the land should produce, but we also know what the constraints are to increase production,” said Mangudya. “That is why we need to finalise on the 99-year land lease agreements to make them bankable so that farmers have security of tenure. With that there is no reason why farmers should not be able to pay (rent).”

Mugabe’s land reform programme is a highly emotive issue, which has divided public opinion. Supporters say it has empowered blacks while opponents see it as a partisan process that left Zimbabwe struggling to feed itself.

“The land revolution was a necessity and if the economy was running very well farmers would be able to pay the rent,” said Matemadanda of the war veterans’ group. “The prevailing economic conditions do not allow.”

The land seizures have led to a steep fall in commercial agriculture output; yields for the staple maize have fallen to an average 0.5 tonnes percent per hectare from 8 tonnes in 2000 when white farmers worked the land.

Mugabe acknowledged the skills of evicted white farmers last week, saying they had helped neighbouring Zambia to produce excess maize, which Zimbabwe was now importing.

 

ELECTIONS

A treasury ministry circular said that compensation would be paid out of rent from black farmers who benefited from the seizures. Chinamasa has not said when farmers would be expected to start paying the rents, or at what level they would be set.

When announcing the measures, he said production on black-owned farms was “scandalously low” and that the economy was under siege from the drought.

The white Zimbabweans who accounted for the majority of those evicted will be compensated only for the improvements they made to the farms, while the foreign owners forced out will be paid full compensation for land and improvements, under the plan.

Chinamasa said Harare broke bilateral investment agreements with other countries when it seized farms owned by foreigners.

Tony Hawkins, professor of business studies at the University of Zimbabwe, said the government was “going through the motions to keep the IMF happy”.

“They probably want the international community to see that they are doing something,” he said. “I doubt they will press with this ahead of the elections,” he added, referring to the 2018 general election. Farmers are an important voting block for Mugabe’s ruling ZANU-PF party.

Hundreds of evicted white Zimbabwean farmers are now farming in Zambia, Mozambique, Malawi and Nigeria, while others migrated to Europe, New Zealand and Australia.

Hendrik Olivier, director at the formerly white-dominated Commercial Farmers Union (CFU), said the government had not yet approached evicted farmers to discuss compensation, and also cast doubt on the plan’s viability.

The CFU, which once boasted 4,500 farmers who produced 90 percent of Zimbabwe’s export crops, including tobacco and horticulture produce until 2000, now only has 300 members.

“It’s a huge step forward, lets acknowledge that. In the past the government has said that it won’t pay compensation,” Olivier told Reuters.

“But if you are talking about new farmers paying a levy, that’s not gonna work, that’s not gonna pay our compensation.”

 

(By MacDonald Dzirutwe. Editing by James Macharia and Pravin Char)

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Zimbabwe expects first IMF loan in nearly two decades this year

16 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

HARARE (Reuters) – Zimbabwe expects a loan from the International Monetary Fund(IMF) in the third quarter of this year, the first since 1999, after paying off foreign lenders by the end of June, the central bank governor said on Wednesday.

President Robert Mugabe’s government last week agreed to major reforms including compensation for evicted white farmers and a big reduction in public sector wages as the government tries to woo back international lenders.

Central bank governor John Mangudya said the IMF would decide the exact amount of the loan to issue at a later date. The fund had agreed to double the amount available for Zimbabwe, known as a financial quota, to $984 million, he said.

“We are talking about the third quarter, that’s when you see most of the action happening,” Mangudya told Reuters in an interview, referring to when Harare expected the loan.

Zimbabwe would also receive an $896 million loan from an unnamed country to pay off arrears to the World Bank.

In addition, the African Export-Import Bank would provide $601 million for Harare to clear arrears to the African Development Bank (AfDB).

Zimbabwe would then receive the same amount as a grant from the AfDB, Mangudya said.

The Southern African country’s foreign debt stands at $8.3 billion, of which $1.8 billion is arrears.

Zimbabwe is trying to emerge from years of international isolation, largely blamed on Mugabe’s policies, including the seizures of farms from white farmers.

The worst drought since 1992 has left 4 million Zimbabweans facing hunger.

Mangudya said the drought had forced the government to lower its growth target for 2016 to below 2 percent from 2.7 percent. The IMF and World Bank forecast growth of 1.4 percent and 1.5 percent respectively.

Once Zimbabwe clears its arrears, it would be ready for rating by international ratings agencies, with a view to issue international bonds in future, said Mangudya.

Mangudya said he supported the government’s decision to take over diamond mining in Marange because the government was receiving little money from the operations.

“After the rating we will then go for the Eurobonds and all to raise money on the international capital markets,” he said.

The government had issued $250 million in treasury bills to raise money for its operations in 2015, Mangudya said, adding that the bank would soon start holding public auctions of treasury bills to enhance transparency in state borrowing.

The central bank also issued $1 billion in bills last year to creditors of the bank, which owes $1.35 billion.

 

(By MacDonald Dzirutwe. Editing by James Macharia and Tom Heneghan)

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Zimbabwe needs up to 8% growth in next decade to revamp economy

10 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

HARARE (Reuters) – Zimbabwe needs an annual growth rate of up to 8 percent over the next 10 to 15 years to revamp its economy, Finance Minister Patrick Chinamasa said on Thursday, in addition to other reforms agreed with an International Monetary Fund delegation.

On Wednesday, Chinamasa said President Robert Mugabe had agreed to major reforms, including compensation for evicted white farmers and a big reduction in public sector wages as the government tries to woo back international lenders.

Chinamasa said that new loans from international lenders will only come if the drought-stricken Southern African nation showed the capacity to introduce a raft of economic reforms.

“Any reform agenda is painful. The journey we have travelled has been difficult and will remain difficult,” Chinamasa told a forum discussing Zimbabwe’s future prospects.

Chinamasa and Reserve Bank governor John Mangudya are leading Zimbabwe’s re-engagement with international lenders and the finance minister has previously said he has had to overcome divisions within Mugabe’s cabinet to pursue that process.

Zimbabwe is trying to emerge from more than a decade of isolation that saw the IMF, World Bank and African Development Bank freeze lending in 1999. Western powers imposed sanctions on Mugabe’s government over allegations of vote rigging and human rights abuses. Mugabe rejects the charges.

The IMF executive board will on May. 2 consider Harare’s plan to repay $1.8 billion in arrears. Chinamasa said he was seeking clear commitments from the IMF that clearing the arrears would trigger new financial aid.

“As I stand before you I am in buoyant spirits because I know that the measures that we are taking will exploit and realize the full potential of this country. We just need an uninterrupted process of reform,” said Chinamasa.

 

(Reporting by Macdonald Dzirutwe; Editing by James Macharia)

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