HARARE – Caledonia Mining today announced that in Q3 2021, gold production from its Blanket mine in Zimbabwe was 18,965 ounces, a new production record and an increase of 25% on the 15,155 ounces produced in the corresponding quarter of 2020.
Gold produced in the nine months to September 30, 2021 was 48,872 ounces, 14% more than the 42,887 ounces produced in the nine months to September 30, 2020.
The company said that production guidance for the year to December 31, 2021 has been narrowed at the top end of previous guidance at 65,000 and 67,000 ounces, and that it remains on track to achieve its production target of 80,000 ounces in 2022.
Commenting on the announcement, CEO Steve Curtis said, “I am delighted that this quarter we have once again set a new production record as Blanket begins to reap the rewards of the substantially increased production capacity following the commissioning of the Central Shaft in March 2021.”
“The completion of Central Shaft and the resultant increase in production also means that we are able to execute other areas of our growth strategy such as the agreement to acquire Maligreen that we announced last month. This is an exciting time for the company and I look forward to continuing to update shareholders of our progress,” he added.
Currency crisis and wrangling over exchange controls may undo early economic progress in Zimbabwe – The Zimbabwe Mail
HARARE – President Emmerson Mnangagwa’s re-engagement efforts with the European Union (EU), United Kingdom (UK) and United States (US) seem to be paying dividends — albeit on a marginal scale. In his State of the Nation address this month, he extolled these efforts and the economic achievements of his government.
In his ascendance to the presidency, Mnangagwa coined the mantra “Zimbabwe is open for business”. This was meant to signify his departure from former president Robert Mugabe’s isolationist approach and open investment opportunities with the international community.
After many false starts, Mnangagwa’s administration has doubled down on its efforts to mend relations and improve Zimbabwe’s image. But while he blows his own trumpet, the reality is more of mixed success, setbacks and sometimes going in circles.
The country’s state media is awash with reports of Mnangagwa’s impending visit to the UK after more than two decades of frosty relations. If successful, the trip — which didn’t have a scheduled date at the time of writing — could indicate that Zimbabwe is a step closer to re-establishing relations with the UK. It could also revive the country’s bid to rejoin the Commonwealth after it left the group in 2003.
International trade efforts are also bearing fruit. Recently the country celebrated the activation of the EU-East and Southern Africa interim Economic Partnership Agreement (iEPA). Zimbabwe is one of the four African countries — alongside Mauritius, Madagascar and Seychelles — set to continue benefiting from the preferential tariff arrangements. The agreement could see an increase in production activities that might boost exports to European markets. This economic milestone also indicates the potential thawing of tensions between Zimbabwe and the EU.
Mnangagwa’s administration cannot however take full credit for the iEPA facility, which has been in the works since 2007. But the image created by the EU’s recent announcement on the iEPA works in his favour.
Overall, the economy presents a mixed picture. The country is starting from a very low base and still lags behind its peers in southern Africa, such as Tanzania, which have seen modest but sustained growth trajectories.
However, good progress has been made in Zimbabwe. According to official figures, the key economic indicators — such as the inflation rate, gross domestic product (GDP) growth rate and infrastructure development — are fairly positive. This year the inflation rate dropped from a three-digit figure of 838% in July 2020 to 51.5% in September 2021. This was achieved by keeping a tight hold on money supply, as the Reserve Bank stopped printing cash.
GDP growth in 2021 is projected to be 7.8%, which is among the fastest on the continent — bearing in mind that this is off a low base. Zimbabwe has been enjoying a healthy trade balance boosted by tobacco, nickel and gold exports.
However, all these developments are underpinned by the exchange rate and price stability — and that is where things get interesting. The currency crisis is at the heart of the country’s economic struggle and threatens the gains made so far. Institute for Security Studies research showed that the problem is directly linked to Zimbabwe’s economic demise under Mugabe and Mnangagwa.
The Reserve Bank of Zimbabwe introduced the Foreign Exchange Auction System in June 2020 in a move that was initially seen as progressive. But it didn’t succeed in liberalising the foreign currency market, as the Reserve Bank interfered in the auction in an attempt to maintain control over the exchange rate.
Through this auction system, the Reserve Bank allocates foreign currency that it expropriates from exporters. As a result, the gap between the formal exchange rate and the parallel market continues to widen fast. The parallel market reflects more closely the real value of the local currency against the US dollar.
When the auction system was introduced in 2020, the parallel market rate stood at ZWL 80 (Zimbabwean dollars) for $1, and today it’s anything from ZWL 150 to ZWL 200 against the US dollar. The formal exchange rate stands at $1 – ZWL 90, which is less than half of the parallel market’s rate.
Businesses are opting to price goods based on the parallel market rate because the ZWL is overpriced. To deal with this, the Reserve Bank implements a litany of measures, including the arrest and freezing of bank accounts of those using exchange rates outside the auction system, or abusing the auction system.
This penchant for government control won’t resolve the currency crisis. Instead, it worsens it, making life more difficult for ordinary people. A Harare-based economic analyst shows the impact of this distortion using the cost of cement as an example. On 11 October 2021, a bag of cement pegged at $10 was worth ZWL 1,600 at the parallel rate. At the official exchange rate, this translates to $18.
At the core of this economic challenge is the ruling party’s command and control approach to the economy and monetary policy. This anti-market stance is vulnerable to abuse, arbitrage and corruption.
The exchange rate quagmire threatens any gains the economy has made. The currency crisis was the undoing of the Mugabe regime and threatens to stump Mnangagwa’s Vision 2030. Disaster could be averted if the exchange rate was allowed to freely float, determined by market forces without government control. And this needs to be combined with fiscal discipline and political will to ensure the independence of the reserve bank. Daily Maverick
'Empower Bank Exclusionary': Rights Groups – New Zimbabwe.com
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By Felix Matasva
LOCAL human rights groups have rapped Empower Bank for failure to serve ordinary youths it purports to serve due to its exclusionary requirements which must be met for the young to be eligible for a loan.
Empower Bank, was formed two years ago, and is a registered deposit-taking micro bank under the confines of the Microfinance Act and is regulated by the Reserve Bank of Zimbabwe.
The bank offers loans for youth-led businesses in all sectors, asset finance, guarantees, and savings accounts across urban, peri-urban, and rural areas in the southern African nation.
The premier relationship micro bank is aimed at empowering marginalised communities and small businesses to upscale through wealth creation.
Zimbabwe Environmental Law Association (ZELA) programmes assistant, Fadzai Midzi said since the government’s National Development Strategy 1 (NDS1) speaks to youth empowerment, it is imperative to probe the type of youths being targeted by Empower Bank.
She said the bank is too exclusionary in nature since its terms of reference do not target the marginalised people who often lack securities like vehicles and houses.
“The requirements for one to get a loan from Empower Bank are exclusionary, especially for youths. For one to get a US$5 000 to start a business will need collateral be it a car or a house,” she said.
“It is unreasonable since there are very few youths who own a car or a house,” said Midzi adding the requirements for accessing loans discourage the youth empowerment drive.
For one to apply for a loan from Empower Bank, security is needed while without immovable or movable assets can utilise guarantees from institutions or individuals.
Zimbabwe Coalition on Debt and Development (ZIMCODD) official Justice Muzondiwa said interest rates when borrowing in Zimbabwe are too high compared to other countries in the region.
“It is very difficult for youths to access loans from Empower Bank due to lack of collateral and high-interest rates. For instance, if one needs a US$5000 loan he will have to back at an interest rate of 44% per annum which amounts to US$7200,” Muzondiwa bemoaned.
He told NewZimbabwe.com the government must adopt the Botswana way of empowering youths.
“Botswana youth development fund states that one will get 50% of the total applied for as a grant by virtue of being a citizen. One will only have to pay back 50% of the loan,” he said.
“The interest rates are very low than the 44% per annum charged on ours. In Botswana, the information can be accessed online and one will download the forms on the internet whilst officials will respond in 45 days. I applied for one and it’s two years now they have not responded.”
Muzondiwa also called for the decentralisation of the Empower Bank from major cities and towns to marginalised areas for everyone to access the financial institution.
ECONET Wireless Ltd., the biggest telecommunications operator in Zimbabwe, said an erratic power supply has led to an increase in carbon footprint and the cost of doing business.
The company is reliant on emissions-heavy diesel generators to supplement what it can draw from the national grid, chairman James Meyers said in the annual report.
“We continue working to enhance our green footprint and reduce carbon emissions by increasing the number of solar-powered base station sites,” he said.
Econet plans a 61% increase in the number of such stations to 278 next year from 172.
Power outages of as many as 12 hours a day are commonplace in Zimbabwe. The cuts are due to rehabilitation work at the Kariba South hydropower plant, constraints at the coal-fired Hwange plant and limited power imports, according to the Zimbabwe Electricity Supply Authority.
A total of 1,195 megawatts was being produced by plants in the country on Monday, according to data from the state-owned power company. Demand is at 1,700 megawatts.