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ED’s Cabinet kicks up dust – NewsDay

Mnangagwa retained the bulk of his previous team and brought in a few new faces who include some relatives, has sparked feverish debate.

The Citizens Coalition for Change (CCC) has described the new cabinet appointed by President Emmerson Mnangagwa on Monday as  the worst since Zimbabwe’s independence in 1980 as it constituted “friends, family, loyalists and the least qualified”.

The Citizens Coalition for Change (CCC) has described the new cabinet appointed by President Emmerson Mnangagwa on Monday as  the worst since Zimbabwe’s independence in 1980 as it constituted “friends, family, loyalists and the least qualified”.

Mnangagwa retained the bulk of his previous team and brought in a few new faces who include some relatives, has sparked feverish debate.

Announcing the new cabinet on Monday at State House in Harare, a week after he was sworn in for a second term, Mnangagwa retained Mthuli Ncube, who will lead the re-named Finance and Investment Promotion ministry among other retained old guard.

FAMILY AFFAIR … President Emmerson Mnangagwa is flanked by his deputies Constantino Chiwenga and Kembo Mohadi as he congratulates his son David Kudakwashe Mnangagwa at the swearing-in ceremony of Cabinet ministers and their deputies at State House in Harare.

Notable additions to the previous cabinet included Mnangagwa’s son Kudakwashe will deputise Ncube, while his nephew Tongai, has been appointed Tourism deputy minister.

But the Nelson Chamisa-led CCC party described the 26-member cabinet as “illegitimate” after it disputed last month’s poll results which declared Mnangagwa the winner with 52,6% of the vote against Chamisa’s 44%.

“This Cabinet is illegitimate as it is a product of a disputed election. By going ahead with announcing the appointments, Mr Mnangagwa has revealed what has come to be associated with his autocratic regime, a casual disregard of, and contempt for people’s voice. The Cabinet, like the just ended election, fails the credibility and legitimacy test,” CCC spokesperson Promise Mkwananzi said in a statement yesterday.

CCC further criticised Mnangagwa for expanding the Cabinet by reappointing old and tired loyalists which exacerbates concerns about the lack of commitment to fresh perspectives and innovative ideas within the regime.

“It is also concerning that to accommodate friends and family, Mr Mnangagwa has expanded the cabinet from the previous 22 to 26 ministries or government departments. The bloated cabinet raises serious questions about the regime’s commitment to using the nation’s resources prudently.”

Part of the old guard and loyalists who were retained include Monica Mutsvangwa (Women’s Affairs, Community, Small and Medium Enterprises Development), Sithembiso Nyoni (Industry and Commerce), Daniel Garwe (National Housing and Social Amenities) and Oppah Muchinguri (Defence), among others.

Loyalist Christopher Mutsvangwa was brought back into the Cabinet to lead the Veterans of the Liberation Struggle Affairs ministry.

Information permanent secretary Ndavaningi Mangwana yesterday defended Mnangagwa’s appointments on X (formerly Twitter) saying: “We are lucky when in the election of MPs, there are people with professional qualifications and good experience in the pool the President has to pick ministers from. If some of those happen to be related to him, that doesn’t disqualify them for nomination on that basis only. They are also Zimbabweans.”

Meanwhile, Mnangagwa yesterday revoked the appointments of John Paradza (Environment, Climate and Wildlife deputy minister) and Nokuthula Matsikenyere (Manicaland Provincial Affairs minister) as the two are not legislators.

Paradza is a Zanu PF candidate in Gutu West, where elections are yet to be held following the death of one of the candidates, Mutonho Mutonho, in an accident in June ahead of the August 23 and 24 elections.

The President can make seven appointments to ministerial positions of non-members of Parliament.

Previously, he could appoint five.

On Monday, Mnangagwa appointed nine instead of seven non-parliamentarians to ministerial positions.

They are Matsikenyere, Mthuli, Paradza, Nqobizitha Mangaliso Ndlovu (Environment, Climate and Wildlife), Oppah Muchinguri (Defence), Ziyambi Ziyambi (Justice, Legal and Parliamentary Affairs), Amon Murwira (Higher and Tertiary Education, Innovation, Science and Technology Development), Anxious Masuka (Lands, Agriculture, Fisheries, Water and Rural Development) and Kirsty Coventry (Sport, Recreation, Arts and Culture).

Some Zimbabweans vented their anger on social media platforms, accusing Mnangagwa of rewarding his loyalists and family members.

Witwatersrand University-based political analyst Romeo Chasara said Mnangagwa’s appointments were somewhat a reaction and reflection of how he performed in last month’s election.

“He might have felt that bhora musango (protest vote) was at play. Nonetheless, there was no doubt that beyond the disputed election outcome, Mnangagwa would move swiftly to consolidate power, but doing so while sidelining or at the expense of a particular section in his party is quite dangerous, something that might come to haunt his political life very soon,” Chasara said.

“Probably this was the perfect opportunity after an election marred by irregularities for him to bring sanity in Zanu PF, instil a little confidence in a few hopefuls elsewhere by appointing well-deserving men and women to serve in his Cabinet. Lastly, this might be that own goal which might advantage the opposition.

“This is a Cabinet that does not inspire confidence at all. Some of the people appointed lack energy. I have nothing against Nyoni, but to appoint her to Industry and Commerce, what inspiration will she bring in a sector where you need to inspire confidence in investors? I have nothing against Mthuli, but Zimbabwe has a disaster in terms of the management of Treasury with a lack of accountability and government debt ballooning.”

University of London-based political expert Stephen Chan said Mnangagwa’s Cabinet lacks depth.

“It shows a marked lack of depth in the Zanu PF talent pool. Too many old faces have been recycled, and nepotism taints the younger faces. A party with so many new MPs should have done better. Ncube is re-appointed to the Finance ministry and, with him, one presumes all his old failed policies,” Chan said.

“He (Ncube) will be deputised by the President’s son who has absolutely no experience at all in national economic and financial planning. Any serious foreign investor would run a hundred miles away rather than express confidence in something that has nothing new, bold and expertise to offer.”

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Six die in plane crash

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By Staff Reporter

A plane believed to be owned by Rio Zimbabwe, has reportedly crashed in Mashava this morning killing six people.

According to state media reports, the plane was  travelling from Harare to Zvishavane when it crashed.

It is also reported that it was going to transport diamonds but developed a technical fault before it plunged into Peter Farm in the Zvamahande area.

All passengers and crew allegedly died on the spot.

Unconfirmed reports state the plane might have exploded mid-air before hitting the ground.

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RioZim owner, five others die in plane crash

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By Staff Reporter

A plane believed to be owned by Rio Zimbabwe, crashed in Mashava this morning killing six people.

According to state media reports, the plane was  travelling from Harare to Zvishavane when it crashed.

It is also reported that it was going to transport diamonds but developed a technical fault before it plunged into Peter Farm in the Zvamahande area.

All passengers and crew died on the spot.

Unconfirmed reports state the plane might have exploded mid-air before hitting the ground.

Top journalist and filmmaker, Hopewell Chin’ono said some the deceased are Rio Zim owner Harpal Randhawa and his son.

“I am deeply saddened with the passing of Harpal Randhawa, the owner of Rio Zim who died today in a plane crash in Zvishavane.

“Five other people including his son who was also a pilot, but a passenger on this flight also died in the crash,” wrote Chin’ono on X.

Chin’ono said he first met Harpal in 2017 through a mutual friend and businessman, Kalaa Mpinga who owned Mwana Africa mines.

“Through him I met many people in the business, diplomatic, and political worlds.

“My thoughts are with his wife, family, friends and the Rio Zim community,” he added.

Rio Zim company secretary Gova said a full statement will be issued.

“I am not in a position to address the media right now. We will however be issuing a statement as soon as possible,” he said.

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Leveraging our own natural resources for development – NewsDay

Zimbabwe has operational mines already producing gold, nickel, platinum, coal, chrome and diamonds.

THE growth in global demand for lithium has led to an increasing number of new mining investments in Zimbabwe. Sabi Star mine became the latest lithium extraction operation to be commissioned by President Emmerson Mnangagwa in August.

It is reasonable to expect more capital to be assigned in that sector, as Zimbabwe is ranked as having the sixth-largest lithium deposits, worldwide.

The country is also at the threshold of Coal Bed Methane (CBM) extraction. A locally-owned entity named Alabara resources is reported to be establishing a new CBM mine, after feasibility studies proved the availability of commercial quantities of the resource.

Vast CBM resources are understood to be available in the Matabeleland North province of the country, particularly in Lupane, Gwayi and Hwange.

Around five more corporations are carrying out explorations in the province, with strong indications that, they too will be into commercial production before 2025.

On the other hand, Invictus Energy, an independent oil and gas company, is at advanced stages in the quest to prove the existence of oil and gas in the Cabora Bassa Basin.

A production sharing agreement was established as far back as January, 2021, with the framework on how the corporation and government will split the extracted oil between each other once discovered.

Apart from the possibility of new resources, Zimbabwe has operational mines already producing gold, nickel, platinum, coal, chrome and diamonds.

Government revenue from the extractive sector is mostly generated through royalties charged on the minerals, taxes and profit sharing, in the case where mining joint-ventures have been established between the government and private sector.

Since mineral resources are non-renewable, it is crucial for the government to establish a framework, which it will use in order to ensure that revenue from the extractive sector is utilised for economic diversification and development.

Additionally, the responsible management of funds gathered from the mining sector will permeate the creation of a resilient economy, which will be more impervious to external shocks. It will have more fiscal space to meet all budget requirements and transfer some of the mineral wealth to future generations through the Sovereign Wealth Fund of Zimbabwe.

Available channels for value creation

There are essentially three methods, which the government can use to link resource revenues to development. The methods are not exclusive, meaning that, they can be utilised as a combination.

Firstly, revenues from taxes, royalties and profit sharing may be used to finance the countries’ development agenda. If human development is a priority, then education, healthcare, provision of clean water and electricity, are likely to be the programmes of choice.

With transformational revenues, cash payments to either local communities where extraction is taking place, or to a considerable section of the country’s population, can be targeted.

Whereas, if public infrastructure or economic diversification are more urgent, then funds will be routed to those areas.

Secondly, the government can encourage “local content” policies, which promote the use of local suppliers in procurement and employment. In the case where local suppliers to the extractive sector need capacitation, revenues may be assigned towards their capacitation through investments in machinery, certifications, and other capital requirements.

For organisations, which employ locals, marginal tax concessions may be offered. It is crucial to outline that extractive projects, such as oil, gas and other minerals, characteristically take 10 or more years from exploration to significant or peak productivity.

For this reason, local procurement and employment frameworks will utilise much of the miners’ available funds, before significant production starts.

The exploration and construction phases will typically involve industrial-level procurement, specialised and general employees.

Thirdly, it has become the tradition that several extractive corporations provide local community investments in order to strengthen their “social capital” (local approval).

In some cases, companies establish roads, bridges, irrigation, schools or clinics. Government should encourage such developments wherever the corporations are operational. Collaborative effort between government and the miners is also desirable.

A case in point is when a company has enough funds to build a school or clinic but does not have the capacity or assurance that it will be able to pay recurring expenses such as  salaries.

In that regard, the company may build the infrastructure, whilst the government takes ownership of the recurring expenditures.

Defining development goals

At the outset, the government needs to set development goals, which it will to link to the inflows of natural resource revenues. This means that a predetermined portion of revenues from extractives will be directed to fund these goals. When there is clarity on the developmental targets, the connection between revenues and the development agenda is more direct and effective.

Measurability of the impact of resource revenues also becomes possible. The development targets may include spending the earned revenues on economic diversification, cash transfers, education, health, clean water, electricity, infrastructure, etc.

If the country is to achieve sustainable and robust growth, then resource revenues should be earmarked for economic diversification. A look at the experiences of Nigeria and Indonesia, describing how they invested their oil revenues, may provide pertinent lessons for Zimbabwe. When Nigeria began to experience significantly high oil revenues (1960- 1973) there were accompanying major forex inflows.

This led to a sharp appreciation of the local currency (naira).

Subsequently, agricultural and other exports, which were dependent on a relatively weaker naira, for their competitiveness, became more expensive in US dollar terms.

As a result, the agricultural sector suffered terribly, which drove the nation to be even more dependant on oil. On the other hand, in Indonesia, the oil and gas revenues were used to subsidise the agricultural sector through the provision of fertilisers, irrigation, roads and other rural infrastructure, where agricultural activity was concentrated.

The strengthening of the local currency, therefore, had limited impact on reducing the competitiveness of agricultural products in both the local and foreign markets.

Thus, farming thrived in Indonesia and continued to grow until it became a major agricultural nation, globally. From comparable starting points, before the discovery of oil, it eventually took Nigeria, until 2008, to reach the level of human development that Indonesia reached by 1980.

In the same manner, Treasury in Zimbabwe should focus on strengthening other sectors of the economy, such as export-agriculture, strategic manufacturing (niche or key products such as oxygen, textiles, tobacco processing, fertilisers), etc.

With regards to export-agriculture, funds may be availed for extension services, contract farming, transportation, storage and administration. This will increase forex-inflows and uphold both local employment and economic growth.

Unlike funding subsistence farmers, which drains fiscal revenues, yearly, export-oriented farming will yield income for both government and households, which preferably, should be rural-based.

The Sovereign Wealth Fund of Zimbabwe can drive these diversification programmes.

A portion of the revenues may be used to make cash transfers to local communities where the extraction of resources is occurring. This may be particularly desirable for peri-urban and rural areas, as the additional income will ignite economic activity in the isolated regions.

With substantive cash payments, the areas may become industrialised or contribute significantly towards reversing urbanisation and pressure on public services in the cities.

As an example, paying a monthly stipend of US$2 per each individual in the rural areas may have a direct cost to Treasury of US$22 million per month, or less.

Rural inhabitants are around 11 million; using an estimated country population of 16 million, according to the World Bank, with the rural portion making 67,4% of the figure.

If commodity revenues are transformational (major), the payments seem possible. Such disbursements may be exactly what it takes to spark burgeoning rural economies. With vigorous rural economies, Zimbabwe’s overall economic potential will be fully unlocked.

In 2022, the Amalgamated Rural Teachers Union of Zimbabwe (Artuz), published a research document titled Beyond geographies of inequality: Public Education Financing in Post-Covid Zimbabwe.

The findings of the research were that 63% of rural pupils dropped out of school in 2022, and most of them are girls. The cost of education remains restrictive, especially to the less-affluent urban and rural residents.

A lack of reading and numeracy skills was also observed in rural pupils, with an incidence of 85% and 86%, respectively. Further, the educational infrastructure and quality of teachers is not up to par, whilst the lack of access to clean water and electricity do much to compound the experiences of students subject to rural education.

The impetuous challenges, which these circumstances will bring to the students and their communities, in the next few years, include poverty, unemployment, social isolation, inequality and underdevelopment.

If the government is keen on reversing or mitigating some of these challenges, then a portion of Treasury’s income from the extractive sector needs to be channelled to rural areas.

When there is fiscal capacity (extra revenue), this should be a priority area. Government spending may earmark, completely free education in those parts of the country.

Additionally, incentives such as free meals, books, and, or, uniforms, will motivate the pupils to complete their classes, at least from grade one, to Ordinary Level.

Leveraging resources in this manner will offer multiple direct and indirect benefits, including the reversal of urbanisation and subsequently, pressures on public services such as water, electricity and waste management in the cities.

Deepening investments in reliable electricity generation, provision of clean water and public infrastructure will also be viable designations of the resource revenues.

Managing risks and expectations

In some cases, the citizens may wrongly interpret that a discovery of new resources directly means that they are to immediately shift from poverty to wealth. Therefore, when there is no management of such expectations, there is bound to be discontent, which, in worst cases, may break into insurgency.

This has been the situation in the Niger delta, where local communities feel deprived of the region’s oil resources. Closer to Zimbabwe, armed-conflict broke out in Cabo Delgado in Mozambique, on the same basis.

It is thus vital for government to convey the delays that should be expected by the public in enjoying the effects of new resource discoveries.

A number of risks also need to be managed, for the prudent administration of revenues. Chiefly, it is vital to resist spending revenues before they are earned. This can be done when a government borrows, with the target of using future income from the extractive sector, as a means to repay the borrowed amount.

In 2012, Zambia borrowed US$750 million to fund projects in energy and transportation, with the expectation that copper production would continue to drive economic growth.

However, just two years later, copper prices fell by 30% and the local currency (Kwacha) depreciated. Further, the country’s credit rating was downgraded, owing to concerns over its ability to service its growing public debt. Zambia is now on an IMF programme to resolve its debt overhang.

Since prices of commodities are volatile, it is judicious to forecast revenues based on average or lower price-levels. Using highest-possible prices in revenue forecasting is not advisable.

Additionally, for commodities with extremely volatile prices, revenues must not be committed towards recurring expenditures. Rather, once-off or capital investments are suitable in such cases. Ultimately, it is crucial for government to maintain policy consistency, from the time when exploration for resources commences to the construction of mines.

Without consistency in government policy, investments will be delayed or rerouted to other destinations, apart from Zimbabwe.


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