THE World Bank says Zimbabwe inflation could rise to five percent this year while latest International Monetary Fund (IMF) projections see it surpassing seven percent by year end.
In its April 2018 macro poverty outlook report on Zimbabwe, the World Bank said it expects to see the government continue to finance the fiscal deficit through borrowings from the reserve bank and commercial banks, which it says should continue to push consumer prices up.
“Though the (fiscal) deficit is projected to narrow, the authorities are expected to again resort to a central bank overdraft facility and commercial bank borrowing. The former could raise average inflation rate to five percent during 2018,” the report said.
The report says the way the market responded drastically to last year’s ‘operation restore legacy’, shows how quickly perceptions can change, it added that such a change could easily translate into the rising of inflation.
“While market participants responded positively to the events of late 2017, those events also illustrated how quickly market perceptions can change. Deteriorating confidence could quickly translate into rising inflation, as parallel market transactions finance more than half of imports, which in turn are equivalent to a quarter of GDP,” read report said.
Meanwhile, the IMF, in its World Economic Outlook report of April 2018, projects average inflation in Zimbabwe for 2018 to be 5,2 percent. It projects that the “end of period” inflation rate will be 7,9 percent. The central bank says it expects inflation in 2018 to fall between three and seven percent. It expects a reduction in food imports to subdue prices and keep inflation at bay.
“The Bank will, therefore continue to closely monitor price movements, and take pre-emptive and corrective measures to contain inflation to the SADC target of between three and seven percent by yearend.
“Anticipated reduction in food imports and food prices, following the bumper harvest in the 2016/17 agricultural season, and the average 2017/18 cropping season, will dampen prices and moderate inflation during year,” central bank governor John Mangudya said in his 2018 monetary policy statement in February this year.
Government is optimistic that the risk of inflation will be suppressed by the positive sentiment in the market following the recent political shift after the resignation of Robert Mugabe in November, 2017.
“In the outlook period, the risk of inflation would be mitigated by the positive domestic and international goodwill, following the new economic and political dispensation in the country, which is already having some dampening effects on speculative tendencies, as well as on adverse inflationary expectations,” finance minister Patrick Chinamasa said in his 2018 budget statement in December last year.
The World Bank report says the recent stabilisation of the parallel exchange rate suggests that market participants are increasingly confident in the authorities’ ability to address the underlying causes of macroeconomic instability, notably the fiscal deficit.
It, however, adds that the markets appear to have accepted that a stronger fiscal adjustment shortly before an election is unrealistic, a significant adjustment is still expected later in the year.
newsdesk@fingaz.co.zw

Former president Robert Mugabe

FORMER president Robert Mugabe did not appear before Zimbabwe’s Parliament as scheduled yesterday to answer questions on diamond mining operations, a legislator said.
Temba Mliswa, who leads the parliamentary committee on mines, said the Clerk of Parliament had not written to Mugabe to invite him to appear. “It has been delayed, but that resolution still stands,” Mliswa said. “He will have to appear before the committee whether he likes it or not.”
The committee had ordered Mugabe to face legislators over his previous pronouncements that the State had been deprived of at least $15 billon in diamond revenue by mining companies.
Mugabe said in March 2016 that the country was robbed of the revenue by diamond companies, including joint ventures between Chinese companies and the army, police and intelligence services, whose operations were shielded from public scrutiny.
Specifically, he said Zimbabwe lost $15 billion from the Marange diamond fields, more than 400km east of the capital. He later expelled the companies and replaced them with a State-owned diamond firm.
Mliswa said a new date for Mugabe to testify would be set. The questioning yesterday would have been Mugabe’s first public appearance since the army deposed him last November in a de facto coup. ― Reuters

Zimra has surpass April targets. 

THE Zimbabwe Revenue Authority (Zimra) on Monday said it surpassed its April target by 6,14 percent due to significant improvement in revenue collections.  

“Gross collections for the month amounted to $361,88 million, which translates to 9,18 percent above the targeted $331,47 million.

After deducting refunds of $10,06 million, net collections stood at $351,83 million, giving a positive variance of 6,14 percent against the target of $331,47 million,” Zimra said.

Net revenue collections in April 2018 improved by 41,92 percent from the $247,90 million that was collected during the same period in 2017.

“There was a general improvement in the performance of revenue heads with Companies, value added tax (Vat) on Imports, customs duty and other taxes recording a positive performance and surpassing set targets,” the national tax collector added. – Business Live

Zimbabwe inflation edges up to 2,71 percent in April.

ZIMBABWE’S consumer price inflation gained 0,03 percentage points to 2,71 percent on an annualised basis in April, the Zimbabwe National Statistics Agency said today.

On a monthly basis, the inflation rate gained 0,33 percentage points on the March rate of – 0,25 percent to 0,08 percent.

South African, Kevin Wakeford

TOP South African businessman and one of the region’s foremost economic commentators, Kevin Wakeford, will be the guest of honour at this year’s prestigious Top Companies Survey function to be held in Harare on June1.
The annual survey is published by The Financial Gazette in partnership with financial services group Old Mutual Zimbabwe.
A former South African Chamber of Business chief executive, Wakeford currently serves as chief executive  of the Armaments Corporation of South Africa — the Defence Department’s multi-billion rand procurement firm — in addition to chairing a number of company boards.
Other noteworthy portfolios that the trained economist and accomplished speaker has held include being chairman of Simmer & Jack Mines and chief executive officer of the Eastern Cape Development Corporation.
In recent years, Wakeford has also advised Pretoria’s Home Affairs minister and the Eastern Cape premier, and was adjunct professor at the Nelson Mandela University’s business school.
The Top Companies Survey has always attracted top executives, with internationally-acclaimed motivational speaker and South African entrepreneur Vusi Thembekwayo gracing the occasion last year.
Other speakers to have headlined the event include African Export Import Bank regional manager for southern Africa Gift Simwaka as well as reputable architect and author Thebe Ikalafeng.
Launched in 1980, the Top Companies Survey has been credited with fostering a strong corporate sector by promoting excellence in corporate performance.
It also seeks to promote good corporate governance, ethical conduct and corporate social responsibility, while providing a platform for networking among industry captains, leaders and invited guests.
A team of judges and analysts have since completed the evaluation of leading companies for this year’s event that will be featured in a magazine to be distributed by The Financial Gazette on June 7.
newsdesk@fingaz.co.zw

British business, Nicholas van Hoogstraten is the majority shareholder in CFI

THE High Court has quashed the results of a November 2015 extra-ordinary general meeting (EGM) at CFI Holdings Limited (CFI) and a subsequent one late last year to discuss, among other things, the reversal of Langford Estates (Langford)’s disposal.
This comes as regulatory authorities, including the Zimbabwe Stock Exchange (ZSE), have intensified their scrutiny and supervision of goings-on at the beleaguered company which has been the subject of a nasty tussle between Nicholas van Hoogstraten and a slew of companies linked to Hamish Rudland.

Read full story in The Financial Gazette paper

Reserve Bank of Zimbabwe Governor, John Mangudya

ZIMBABWE’S foreign payments backlog has risen to over $600 million from $570 million in September last year, central bank governor John Mangudya has said.
The governor dismissed assertions from pockets of the banking sector and industry that the international payments backlog had surged to $900 million.
The five percent increase comes despite the central bank having secured since 2016 more than $1 billion facilities from Cairo-headquartered trade finance institution, the African Export Import Bank (Afreximbank) to boost exports and support international payments.

Old Mutual’s share has been a perennial top pick on the ZSE by many stock brokers since the economy was formally dollarised in February 2009.

OLD Mutual plc plans to delist its shares from the Zimbabwe Stock Exchange (ZSE) on Friday June 29 as part of the group’s managed separation aimed at enhancing shareholder value by separating its businesses.
The delisting is subject to shareholders’ approval.
The plan to finalise the managed separation will be done in three phases and would require Old Mutual plc shareholders and United Kingdom (UK) Court approvals.
“These phases can only be implemented if the requisite approvals, including approval by Old Mutual plc shareholders, are obtained,” said Old Mutual Plc in a statement.

First Lady Auxillia Mnangagwa

ZIMBABWE’S parliament has rejected a proposal to pay allowances to President Emmerson Mnangagwa and his two vice presidents Constantino Chiwenga and Kembo Mohadi’s spouses on the basis that it was illegal and unsustainable.
The development comes as Mary Chiwenga — Vice President Chiwenga’s wife — has reportedly won a multi-million dollar contract to manage government’s travel arrangements locally and abroad.
“The spouse of a president shall be entitled to an allowance calculated at fifty per centum of the salary and allowances payable in terms of section two to the president,” reads a proposed amendment to the Presidential Salary and Allowances Act, which was tabled before the august house recently.

Read full story in The Financial Gazette paper

Minister of Mines Winston Chitando

ZIMBABWE’S mines Minister Winston Chitando says he will dissolve boards of underperforming parastatals under his ministry, with their replacements to be announced next week to improve performance.

The Zimbabwe Consolidated Diamond Company (ZCDC), the Zimbabwe Mining Development Company (ZMDC) and Minerals Marketing Corporation of Zimbabwe (MMCZ) will al get new boards while struggling Hwange Colliery will get additional members.

“New boards of parastatals will be announced next week and all the necessary processes have been done.  The ZCDC, ZMDC and MMCZ will have new boards and Hwange Colliery Company will have additional board members,” Chitando said in Parliament on Monday.

He said he will bring in ‘very experienced people’ in the mining sector to chair the boards.

“The chairperson of each board is required to have at least 10 years’ experience in the mining sector with one or two mining houses.  It’s not that every board member will have a mining background, but we will also need other skills, but certainly the chairpersons of each of the boards will have a strong mining background,” he said.

ZCDC is currently chaired in acting capacity by Mrs Slava Grace Chella while ZMDC is led by veteran miner David Murangari. – The Source

President Emmerson Mnangagwa

ZIMBABWE has officially applied to rejoin the Commonwealth 15 years after it quit the organisation of former British colonies. Harare’s application is the latest step aimed at reversing the country’s long isolation during the rule of Robert Mugabe.

President Emmerson Mnangagwa, who assumed power after Mugabe was deposed in an army takeover last year, made the bid for a return to the Commonwealth last week, Patricia Scotland, secretary-general of the group of 53 nations, said on Monday.

“Zimbabwe’s eventual return to the Commonwealth, following a successful membership application, would be a momentous occasion, given our shared rich history,” Baroness Scotland said.

The application comes less than two months before Zimbabwe is expected to hold its first elections without Mugabe.

Mnangagwa, formerly a staunch ally of Mugabe who served as deputy president, is pursuing a rapprochement with the UK government in particular. Britain has said it would support Zimbabwe re-joining the Commonwealth if fair elections were held.

Baroness Scotland said the Commonwealth had accepted an invitation from Mr Mnangagwa to monitor the poll, which pits his ruling Zanu-PF against the MDC Alliance, an opposition coalition. An official date is yet to be set for the election, though Mnangagwa said at the weekend that it would be held in July.

Baroness Scotland added that reports from Commonwealth monitors would form part of whether the organisation would accept Zimbabwe’s application to rejoin.

Zimbabwe left the Commonwealth in 2003, after the organisation indefinitely suspended its membership in protest at violent repression of the opposition around a 2002 poll.

Zanu-PF has a long history of ballot rigging, and western election observers were barred in the last years of Mr Mugabe’s presidency.

The 94-year-old Mr Mugabe ruled with an iron grip from independence in 1980 until last year’s palace coup, which army commanders launched to stop his wife Grace from succeeding him. Mnangagwa has promised free and fair elections and also invited EU election monitors into the country.

Nic Cheeseman, a professor of democracy at the University of Birmingham and co-author of a recent book on election-rigging practices worldwide, warned that there was not much time ahead of polling day to observe effectively the poll and expose any manipulation.

“Effective election observation would have had to begin a couple of months ago — at the latest,” Prof Cheeseman said.

“This is not to say that sending observers will not be worth it — there is still good that can come of having people on the ground. But we need to be upfront that any team deployed at this stage will have missed much about how the election is controlled.”

Analysts say that compared with previous elections, there are signs that the opposition has had greater freedom to hold rallies and that voters have been able to declare their political allegiance.

But they warn that the media remains dominated by state mouthpieces and that the army is yet to say whether it would accept an opposition victory. – Financial Times

“The RBZ is in the process of evaluating the submissions to ensure that all deficiencies are addressed ahead of time.”

THE Reserve Bank of Zimbabwe (RBZ) is assessing adherence by banks to new global accounting rules to plug loopholes in financial institutions, a senior central bank official has said.
Banks were ordered to submit reports on the implementation of the new International Financial Reporting Standard 9 (IFRS 9) rules based on the financial results for the year ended December 31, 2017, to assess their preparedness.
Clemence Chimwanda, a deputy director of banks supervision division at RBZ, told The Financial Gazette that the central bank was in the process of evaluating submissions by banks.

Deputy Finance Minister, Terrence Mukupe says government could help the situation by putting in place legislation to arrest corruption

By Chris Mahove
ZIMBABWE is losing an average $4 billion annually to corruption due to bureaucratic bungling, a local economist Prosper Chitambara has said.
Chitambara said the country’s institutional fabric had been eroded over time, adding that this applied to both economic and political institutions, a situation he said created a fertile breeding ground for corruption.
“So if you consider the fact that Zimbabwe is a $16 billion economy and 25 percent of that is lost, then you can actually project that in Zimbabwe we are losing about $4 billion through corruption. So that is very huge,” said Chitambara.

Zimbabwe relies on imports for drugs and hospital consumables. It imports about $400 million worth of basic drugs each year.

PRICES of vital drugs in Zimbabwe have gone up by about 15 percent over the last few months, health care industry players have disclosed.
The surge has significantly affected patients and insurance companies who are facing high out-of pocket costs.  Fears abound that many patients could be missing life-saving treatments because they are failing to afford buying the drugs.

Read full story in The Financial Gazette paper

Finance and Economic Planning, Minister Patrick Chinamasa

ZIMBABWE’S budget deficit is set to remain above $1 billion despite government’s efforts to rein in fiscal spending, economists have said.
For years, a persistent fiscal deficit has been the underlying cause of macroeconomic instability in the country, with the previous administration’s fiscal indiscipline being cited as the main culprit.
President Emmerson Mnangagwa’s government, which took office in November last year after the resignation of Robert Mugabe, had expressed interest to deal with the problem first and foremost, but its efforts have not yet yielded any immediate results.
Research firm, BMI Research forecasts that the country’s fiscal deficit will come in at $1,4 billion, which is more than double government’s target of $672 million.

Read full story in The Financial Gazette paper

President Emmerson Mnangagwa

A CREDIBLE election is the only answer for unlocking foreign investments, economic growth and Zimbabwe’s return to prosperity, business lobby groups and industry captains have said.

With President Emmerson Mnangagwa vowing to deliver a clean ballot – anticipated in July – key trading blocs such as the European Union, and the Zimbabwean leader himself, have emphasised real support and capital will only come after the watershed polls.

Chris Mugaga, the Zimbabwe National Chamber of Commerce chief executive, told The Financial Gazette that there was a serious correlation between democracy, violence-free elections and economic development.

Read full story in The Financial Gazette paper

RBZ governor John Mangudya

FOREIGN currency black market rates have remained range-bound at post-new year rates for the greenback, despite pronounced shortages that forced the central bank to increase its foreign currency allocation for fuel imports.
Analysts said black market rates were failing to break outside recent ranges because the market could not absorb further cost increases.
The country has experienced an uptick in inflation, which is feared to strengthen due to an expected increase in civil service salaries, as well as pressure from global oil prices, which have trended north for the past two weeks.

Read full story in The Financial Gazette paper

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President Emmerson Mnangagwa

ZIMBABWE last year experienced renewed land expropriations, with an increase in cases of powerful politicians and their cronies evicting beneficiaries of the land reform programme, especially those on prime agricultural land and wildlife sanctuaries.
A few remaining white farmers were also targets of the evictions, according to a State of Human Rights report compiled by the Zimbabwe Human Rights NGO Forum.
Some of the farm seizures were halted by the emergence of a new government led by President Emmerson Mnangagwa, which came into power after a military intervention forced former president Robert Mugabe to resign in November.

Read full story in The Financial Gazette paper

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Industry, Commerce and Enterprise Development Minister, Mike Bimha.

THE country has witnessed price increases of most essential consumer goods as foreign currency shortages persist amid high cost of packaging.
Retailers have been forced to source the elusive United States dollars from the black market at high premiums.
A survey conducted by The Financial Gazette this week revealed that a new wave of price hikes reminiscent of last year which resulted in Industry Minister Mike Bimha confronting retailers, has once again resurfaced.

Read full story in The Financial Gazette paper

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Zimbabwe Revenue Authority commissioner general, Faith Mazani

ZIMBABWE’S tax amnesty programme, which was launched three months ago, has brought in a tiny fraction of millions of dollars government hoped to collect to boost government coffers, The Financial Gazette can report.
Without mentioning figures, Faith Mazani, the commissioner general of the country’s tax collection agency, the Zimbabwe Revenue Authority (ZIMRA), confirmed last week that very few companies have responded to the amnesty. The slow uptake means ZIMRA will have to back to the drawing board and find new ways of getting non-compliant companies into the tax net.

Read full story in The Financial Gazette paper

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