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Chamisa flags barren Zanu-PF leadership – Bulawayo24 News

Citizens Coalition for Change (CCC) leader Nelson Chamisa has dismissed government’s 2022 Mid-Term budget statement as a blatant certification to citizen poverty adding the fiscal blueprint was reflective of barren leadership within the current Zanu-PF led administration.

Last Thursday, Finance Minister Mthuli Ncube issued his 2022 Mid-Term Review and Budget Statement, which critics dismissed as a pro-elitist script that failed to address the fundamental disequilibrium disadvantaging ordinary citizens.

The country’s unstable economy, an albatross around the current government’s neck, suffers multiple challenges.

They include hyperinflation, exchange rate collapse, public sector wage collapse, social sector collapse, low output, deficit financing and national debt, as well as tax reform.

In a statement, Chamisa slammed Ncube’s budget as discriminatory against the country’s beleaguered public workforce whose wage buying power continues being chewed by galloping inflation, pegged at 257 percent end of July.

“The recent mid-term budget review confirms that Zimbabwe is in a serious leadership crisis and citizens are exposed to extreme poverty and suffering. I say this for the following reasons:

“At a time when inflation has reached 257% in July and people in extreme poverty are 7.9 million (49%), the budget disbursements to social (fiscus) is extremely low, e.g. ministry health has been given 27% of the budget by June instead of a minimum of 50%.

“When the consumer basket for a family of five has topped ZW $140 000, government raises the salaries of the lowest paid civil servants to ZW$35 000 (excluding the US$175) and raise the tax free threshold to $50 000, both of which are far below the consumer basket and poverty datum line,” said Chamisa.



Civil servants have repeatedly expressed their dissatisfaction with their low wages and working conditions with government often putting a half-hearted attempt to remedy their plight.

A crunch meeting with union leaders on Monday saw government promise to review civil servants’ salaries in September coupled with corresponding increase in the US dollar component.

Chamisa also said the mid-term budget, which was subjected to a more-than-100 percent review, revealed government’s fiscal indiscipline.

“There is just unrestrained indiscipline in government upon rampant galloping corruption. The condonation of ZWL$ 107 billion for 2020 and 2019 fiscal years is testimony to this.

“The government has created distortions in the foreign currency markets and now gold coins, the havens for corruption.

“We face a major economic collapse and prospects of the bleakest Christmas season this year. USD: RTGS is now at 1: approx 800. The leadership failure is dramatic, gigantic and encyclopedic,” said the opposition chief.

He urged government to immediately dollarise and abandon the multi-currency system in order to eliminate ruinous price distortions to the economy.

Chamisa said if elected to form the next government, his party will introduce a comprehensive tax reform system to reduce the burden on citizens and businesses.

The opposition chief also promised to scrap central bank’s unpopular currency auction system.

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Assessing The US$12 billion Mining Industry Target – 263chat.com

The Zimbabwean government launched an ambitious plan to transform the mining sector into a US$12 billion export industry by end of 2023. The plan was launched in October 2019 as a key pillar to sustainable economic growth. Achieving that target would represent a 275% jump from the US$3.2 billion realized through exporting mining commodities in 2018. The blueprint targeted Gold output of US$4 billion per year with Platinum coming in second at US$3 billion.

By Victor Bhoroma

Diamond mining and polishing was set at US$1 billion, equal to the combined target of Chrome, Nickel, and Steel. Coal, Hydrocarbons, Lithium, and other minerals were projected to contribute the remaining US$3 billion. Key to the above ambition is the beneficiation of minerals at source as opposed to exporting raw mining commodities. The Chamber of Mines in Zimbabwe (CoMZ) predicted that production from mining could reach $18 billion by 2030, provided the key challenges in the sector are ironed out through policy and legislative reforms.

Mining in Zimbabwe

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Zimbabwe is endowed with two prominent geological features namely the rich Great Dyke and the ancient Greenstone Belts (also known as Gold Belts) which are home to billions worth of reserves in Chrome, Gold, Nickel, Diamond, Iron Ore and Platinum. The country has a massive competitive advantage in the mining sector with a highly diversified mineral resource base of over 40 commercially exploitable minerals. Foreign Direct Investment (FDI) figures and enquiries are heavily biased towards mining, highlighting the importance of the sector to the country’s growth prospects in the medium to long term. The mining sector has an estimated 850 operating mines across the country and these range from international mining houses to small scale mines.

In terms of employment, over 100,000 workers are employed directly and indirectly in downstream businesses. The sector is also home to over 600,000 Small Scale and Artisanal Miners who are mainly engaged in gold and chrome mining. Economic instability and lack of viability in Agriculture has contributed to the surge in the number of artisanal miners in the past 4 years in mining towns such as Gwanda, Zvishavane, Shurugwi, Kwekwe, Kadoma, Mazowe, Chinhoyi, Bindura and Chegutu among others.

Indigenization Law Amendments

The changes made in March 2018 with regards to the enforcement of the Indigenization and Empowerment law (Through the Finance Act) to allow for over 51% foreign ownership of mining assets has improved foreign appetite for investment into the country. This has resulted in notable investment in Platinum Group of Metals (PGMs) smelting, acquisition of dormant or ailing Gold mines and investment in Lithium exploration.

PGMs Rally

There has been significant growth in the production of Platinum Group of Metals (PGMs) over the past 3 years due to policy incentives (tax holidays) from the previous government and investment in smelting by the miners. Globally, Zimbabwe is now the third largest producer of Platinum after South Africa and Russia. The major mining companies in the subsector are Impala Platinum which owns Zimplats, Anglo American which owns Unki Mine, and Sibanye Stillwater which jointly owns Mimosa Mine with Impala Platinum. The 3 firms have invested in excess of US$1 billion into new mines and smelters, and that investment has catapulted PGMs output. Platinum is likely to be Zimbabwe’s mainstay in the foreseeable future.

Managing Gold Smuggling

To curb rampant smuggling of Gold, the central bank has been giving gold producers incentives to increase the tonnage of Gold sold via formal channels. The incentives have acted as a silver bullet as deliveries and production jumped from 19 tonnes in 2020 to 29.6 tonnes in 2021. Gold production in 2022 is expected to reach 40 tonnes. The rally in Gold price on the world market also makes the country’s redundant gold mines very appealing.

Lithium Rally & Rare Earth Discoveries

As the demand for electric cars drives up demand for Lithium, Zimbabwe has seen notable investment into exploration and investment with deals worth over US$700 million. Notable deals include the US$422 million Huayou purchase of Arcadia Mine, Sinomine’s $180 million purchase of Bikita Minerals and Chengxin’s US$76.5 million buy of Sabi Star Mine. United Kingdom’s Red Rock Resources, Galileo Resources and Premier African Resources have acquired claims to prospect and mine Lithium locally, joining Six Sigma from Australia and Arkle Resources from Ireland. Rainbow Rare Earths and Premier African Resources are also currently undertaking Rare Earth minerals exploration to commercially exploit the resource.

Despite the notable progress on amending the indigenization and empowerment laws, granting national project status to mining projects, issuing more Exclusive Prospecting Orders (EPOs), incentivizing Gold production and setting policies to encourage diamond polishing; There are some persistent hurdles hat have not been resolved. These include:

Foreign Exchange Regulations

The current export retention scheme permits miners to retain 60% of the export proceeds and surrender 40% to the central bank. If the 60% is not utilized within 4 months, the central bank will confiscate another 25% to take the total surrender requirement to 65%. As a result of the wide discrepancy between the pegged formal exchange rate and the market rate, exporters are losing 35% of their earnings due to the surrender requirements. With miners paying for taxes, fuel, electricity and almost all consumables in foreign currency, foreign exchange regulations are a punitive tax to business viability and deterrent to further investment into mine development or beneficiation. Miners are currently calling for the review of the retention threshold to over 80%.

Power Cuts

After a period of relative stability, Zimbabwe has rolled back 6-to-12-hour power cuts to manage domestic demand. However, guaranteed power supply is critical to optimal production in the mining sector with demand expected to rise to 2100MW by 2025. Currently Zimbabwe is producing 1120MW, with a peak shortfall of at least 500MW. Part of the shortfall is being augmented through imports from Mozambique, Zambia, and from the Southern Africa Power Pool (SAPP).

Transparency & Corruption

The biggest impediment to the US$12 billion mining target is lack of transparency and systemic corruption in the mining value chain. There is massive red tape and bureaucracy in the processing of mining certificates, verification of applications and awarding of EPOs. Added to it, there is disregard for rule of law by connected miners and deliberate delays in the settlement of legal disputes. For a long time, Diamond mining has remained a murky affair due to the involvement of several controversial foreign investors and the army. The impact of corruption is that the country loses millions in potential tax proceeds while billions are externalized out of the country through illicit financial flows (IFFs). To address this, Zimbabwe needs to join the Extractive Industries Transparency Initiative (EITI) and implement its global standards on mining transparency. These standards can be customized to Zimbabwe’s context. Joining EITI ensures that the government commits to full disclosure of information on beneficial owners of mining claims, claims size and number of minerals assets, minerals output, revenues, tax contributions and other information pertaining to minerals marketing.

Mining legislation

The government has approved the Mines and Minerals Amendment bill with several changes to it. The Bill was first tabled 2015 and some of its provisions were implemented individually. The bill amends and reinforces the archaic Mines and Minerals Act of 1963 which is currently being used. The current mining law lacks on provisions that plug mineral revenue leakages and tax evasion and consolidates tax payments by miners. The government has failed to close revenue leakages especially in Diamond, Gold and Granite mining where smuggling and illicit trade is rife. Most importantly the current law promotes opaqueness in licensing, corruption by state institutions that oversee mining and secretive side marketing of precious minerals. The new bill should also decriminalize and formalize Small Scale and Artisanal mining to ensure proper reporting, private sector financing, improve taxation, minimum safety standards, inspections, and environmental management. The bill should be expedited as it is key in ramping up production and increasing transparency in the industry.

 Untapped reserves

Zimbabwe remains under-explored when it comes to mining. Investment and tax incentives to boost exploration capacity should play a crucial role in quantifying the amount of mineral reserves. On paper, the country has over 4,000 recorded Gold deposits in the Greenstone Belts, an estimated reserve of 2.8 billion tonnes PGMs ore and over 30 deposits of Nickel in the Great Dyke, over 12 billion tonnes of coal in the mid Zambezi Basin and the Save-Limpopo basin and several kimberlites of Diamonds in Manicaland and Masvingo.

The surge in commodity prices on the world market has seen Zimbabwe increase its export value while of late export incentives to Gold producers have done magic to improve formal Gold production. It is fair to point that most of the targeted international investors have adopted a wait and see attitude on the political and economic landscape in the country. Risk takers (mostly Chinese investors) have taken the lead to secure local assets while established miners have ploughed back their profits in a measured manner. Despite this, the target to create a US$12 billion export industry from mining now seems unattainable as exports from the sector were US$5 billion in 2021. The actual will likely be at most 60% of the overall target. Even though there has been investment and billion dollar promises, the anticipated FDI inflows have not quite materialized in the last 3 years.

Victor Bhoroma is an economic analyst. He holds an MBA from the University of Zimbabwe (UZ). Feedback: Email vbhoroma@gmail.com or Twitter @VictorBhoroma1.

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Senditoo Partners With Money Transfer Business Access Forex – 263chat.com

International remittance company Senditoo has partnered with Access Forex to implement an infrastructure that will enable it to process cross-border transactions.

Senditoo, which has a presence in several countries, has plans to expand services into the US and Canada in the coming months, having established its international headquarters in the UK, Guinea, Zambia, South Africa, and Zimbabwe.

Senditoo’s money transfer service will allow for £2 flat-fee remittances with complimentary exchange rates and real-time transaction monitoring.

The company has grown in the last four years, starting with airtime transfers before extending its service offer to include money remittances and enabling customers to pay their bills. They have also introduced an online grocery delivery service.

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Access Forex, meanwhile, established in 2016, is an investment banking business set up to bridge the gap in the market for international money transfers for Zimbabweans living in South Africa and the United Kingdom.

Today, the company’s portfolio of services supports over five million Zimbabweans to manage their money transfers.

Takwana Tyaranini, Senditoo Co-founder, said: “This partnership cements our commitment to being the remittance service provider of choice for Zimbabweans living abroad and locally.

“Senditoo was set up to connect the African diaspora to loved ones at home. In line with our strategic priorities, we have partnered with some of the most reputable businesses and organisations across Zimbabwe, South Africa, Guinea, and the UK to create a strong presence – ensuring our customers have fast, simple, and hassle-free international transfers”.

“We are continually working on our product and service delivery to provide customers across Zimbabwe with accessible payout points that are convenient and cost effective.

“We have ambitious growth targets and teaming up with Access Forex means we will not only be able to scale up but give our customers a premium and quality service.”

Raymond Chigogwana, Chief Executive Officer of Access Forex, said: “We are delighted to be able to lend our valuable distribution network and secure payout portal to more customers.

We have enjoyed working closely with Senditoo to switch their full portfolio of services back on and ultimately, ensure that Zimbabweans locally and abroad get cash to where it is needed most. By the time we roll-out fully, everywhere you see an Access Forex, you can now also access Senditoo.”

The partnership means that Senditoo’s services will be available at approximately 200 payout points across the country.

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Think Daily 11 August 2022 – ThinkMarkets

In Wednesday’s trading session in local markets, the JSE Top 40 closed the day down 0.96%. The Resources 10 Index fell by 0.86%, the Financial 15 Index rose by 0.12%, the Industrial 25 Index contracted by 1.39%, and the South African Listed Property Index rose by 0.16%. The Rand last traded at R16.22 against the U.S Dollar, R19.81 against the Pound, and R16.71 against the Euro. In local stock markets this morning, MTN released its interim results for the six months ended 30 June 2022. The Group reported a strong set of numbers, with Group service revenue growth of 12.8%, and Group core profit growth of 15.1%. In line with company policy, no interim dividend was declared however the Group expects to pay an annual dividend of 330 cents per share, which would represent a 10% increase in its dividend. Old Mutual released a trading statement for its six months ended 30 June 2022. The financial services group expect results from operations to have increased by between 77% and 97%, and headline earnings to have increased by between 53% and 73%. Adjusted headline earnings which excludes earnings from operations in Zimbabwe and the impact of restructuring is expected to increase by between -17% and 3%.

Figure 1: MTN Group (MTN) Share Price Performance (Year to Date)

On the commodities front, Brent Crude oil last traded at $97.05 a barrel and WTI Crude oil last traded at $91.62 a barrel, trading down as worries over more supply of crude coupled with weaker demand linger. Gold Spot is currently trading at $1786.11 an ounce, while Platinum Spot and Palladium are trading at $950.50 and $2241.52 respectively.

Across the globe, all three major U.S indices traded up for the day. The S&P 500 closed the day 2.13% up, the Dow Jones rose by 1.63%, and the Nasdaq closed 2.89% up. The FTSE 100 closed the day up 0.25%, the DAX closed 1.23% up, and the CAC40 closed 0.56% up. In Asian markets, the Nikkei is currently trading down 0.65%, and the Hang Seng is currently up 2.07%. Consumer prices in the U.S eased slightly lower in July, as the annual inflation rate moderated to 8.5% following lower petrol prices.
 

Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.

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