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New RBZ chief assumes office . . . Monetary policy statement imminent – The Herald

Fidelis Munyoro and Golden Sibanda

The new Governor of the Reserve Bank of Zimbabwe, Dr John Mushayavanhu, assumed office yesterday after his appointment was moved a month earlier amid high expectations for him to hit the ground running and announce policy measures to curtail rising inflation and stabilise the exchange rate.

This effectively means the announcement of the long-awaited Monetary Policy Statement is imminent. It is expected to address key issues related to macro-economic stability.

President Mnangagwa appointed Governor Mushayavanhu in December last year, well in advance of the formal handover from Dr John Mangudya, who was coming to the end of his second and final term. Reserve Bank governors are allowed a maximum of two five-year terms. 

Dr Mushayavanhu was scheduled to assume office on May 1.

Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube confirmed the assumption of office by Dr Mushayavanhu in General Notice 410 of 2024, published yesterday, to pave the way for him to start work. So his five-year term runs to March 27, 2029.

“It is hereby notified that His Excellency the President has, in terms of section 14 of the Reserve Bank of Zimbabwe Act (Chapter 22:15) appointed John Mushayavanhu as the Governor of the Reserve Bank of Zimbabwe for a period of five years beginning on March 28, 2024, and ending on March 27, 2029,” he said.

Dr Mangudya moved to the new Mutapa Investment Fund as chief executive.

Deputy Minister of Finance, Kuda Mnangagwa welcomed the development saying the exchange rate volatility appeared to be linked to the anxiety around the delay in the announcement of the Monetary Policy.

Writing on his X handle (formerly Twitter), he said: “We have been receiving enquiries about the surge in the exchange rate, which right now can be attributed to the anxiety and anticipation of the upcoming Monetary Policy Statement which is around the corner.

“If I were to irresponsibly give unsolicited advice, I would urge Zimbabweans with their hard earned ZWL (Zimbabwean dollars) not to hedge against it.

“Government is committed to ensuring that there will be no loss of value through the introduction of the currency stabilisation measures.” 

Economist Mr Persistence Gwanyanya applauded the move, describing Governor Mushayavanhu as a veteran, astute banker and a man of integrity fit for purpose saying.

“I have confidence in the incoming Governor, Dr John Mushayavanhu. Importantly, Dr Mushayavanhu has a good understanding of  financial and economic matters that we face as an economy today. He is not coming to RBZ to learn but to carry over from his predecessor, Dr Mangudya.”

Governor Mushayavanhu is coming into RBZ with the full knowledge of the enormity of tasks that lie ahead and Mr Gwanyanya believes the veteran banker is prepared to face the challenge.

Governor Mushayavanhu is assuming the office when mineral prices have fallen and at a time the country is confronted by drought, all of which have far reaching consequences on currency stability.

To this end, Mr Gwanyanya urged everyone to support the new man at the helm of the central bank in his new role, noting the interdependence of the RBZ. 

“Stability is our collective responsibility as Zimbabweans. We all have a role to play. I know the Governor will face criticism from pessimists but he should not look back. 

“He needs to gather the courage to press ahead with the task at hand with the full knowledge that our challenges are structural, long term and cannot be sorted overnight.”

Mr Gwanyanya said it would be remiss to talk about the incoming Governor without thanking the outgoing Governor, Dr Mangudya for the race run and the fight he fought to get the country to where it was today. “I wish both of them good luck in their new roles,” he said.

Confederation of Zimbabwe Industries president Kurai Mtsheza told The Herald in an interview yesterday, following the announcement of Dr Mushayavanhu’s appointment and commencement of duties, that the priority would be for the new central bank chief to announce the MPS.

“The priority is to announce the monetary policy statement. What it does is, traditionally, it is announced at the beginning of the year and it sets the priorities for the ensuing year so we get guidance from that monetary statement as an economy.

“It is critical that we know the thinking (of policymakers), we deduce a lot of meaning and we tune our businesses to align with that statement,” Mr Matsheza said.

The President appoints the Governor of the Reserve Bank in terms of the Reserve Bank of Zimbabwe Act and the head of the Mutapa Investment Fund in terms of the Sovereign Wealth Fund Act.

He can reappoint a governor once for a second five-year term but at the end of a maximum of 10 years there has to be a new person.

Largely referred to as a shrewd and disciplined banker, Dr Mushayavanhu will have little time to settle in his new position given that he has assumed the reins at a time when the Zimbabwe dollar has been continuously weakening both on the official and parallel markets, driving prices beyond the reach of many.

He is also expected to provide an update on the exact nature and operational modalities of the structured currency announced by President Mnangagwa earlier this year, as one of the interventions authorities are pursuing to bring down inflation and engender stability in the exchange rate.

Dr Mushayavanhu has over 30 years 

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experience in the financial services sector, 26 of them with FBC Holdings, which he has grown during his tenure to be one of the most successful indigenous banks, anchored on a good business model and corporate governance.

Under Dr Mushayavanhu, FBC did not only solidify its position within Zimbabwe but also reached beyond the borders with the establishment of FBC Reinsurance Botswana in 2022, among others.

The acquisition of Standard Chartered Bank Zimbabwe stands testament to the bold and assertive stance the group has embodied — adding another feather to its cap.

One of the biggest strengths of FBCH during Dr Mushayavanhu’s tenure has been the group’s ability to survive in a rapidly changing operating environment, where others failed.

He holds several educational qualifications, including a Master’s Degree in Business Administration and a PhD in Business Administration.

The President recently appointed Dr Mangudya as the chief executive officer of Mutapa Investment Fund, formerly known as the Sovereign Wealth Fund of Zimbabwe.

Mutapa is a State-owned investment fund established from the balance of payment surpluses, official foreign currency operations, the proceeds of privatisation, Government transfer payments, fiscal surpluses and resource earnings. It manages at least 20 parastatals and State-owned entities.

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Breaking News: Starlink instructed to shut down in Zimbabwe by government – Technology Zimbabwe

Techzim can reveal that the government of Zimbabwe has instructed Starlink to shut down services in the country. Users of the service received an email from the satellite internet service provider today, advising them it had been directed to disable services.

Said the email:

You are currently using Starlink in an unauthorised territory, As a result. Starlink has been directed by the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) to disable your service.

We will continue to work with POTRAZ to obtain the necessary regulatory approvals to turn on Starlink services in Zimbabwe as soon as possible. We encourage you to contact POTRAZ at the.regulator@potraz.gov.zw or +263 242 333032 to communicate your support for Starlink to obtain the necessary regulatory approvals in Zimbabwe.

As described In your Terms of Service, Starlink does not guarantee when or where its Mobile or Mobile Priority Services Plans will be available. Use of such services Is dependent on many factors, including obtaining or maintaining the necessary regulatory approvals which are subject to change.

You may pause service and billing by following the Instructions here or continue service and use your Starlink service in an area we currently serve (see map here), If you opt to pause service, you can reach out to support and we will issue a service credit for any remainder of the current billing period.

Starlink shut down in Zimbabwe email

Techzim can confirm several users in Zimbabwe have received the email. One user of the service user we spoke to said their terminal is still working but they think it’s just a matter of time before it’s disabled.

Effectively what’s supposed to happen next is that the terminals will stop working. This would mean even Starlink customers that are just visiting the country and have brought with their terminal, will not be able to use it. Or maybe allowed to just a few days per visit. We’re not sure.

The notice suggests Starlink is aware these devices were bought, registered, activated for the purpose of use in Zimbabwe, as it does not mention the need to return the terminal to the country of origin.

To use Starlink, Zimbabweans would mostly buy the kits from unofficial importers of the kits who bring them in from from countries where the service is sold legally (like Mozambique, Zambia, Eswatini etc..). The prices would range from about $600 to $1500 depending on the seller. Installing the kit is generally easy and to operate it in Zimbabwe, they set their account to a roaming service.

The price of unlimited internet from Starlink with the roaming is about US $38, which customers would pay to the company directly. Ultimately, the service is popular in Zimbabwe because the price of an unlimited internet package by the country’s internet providers is at least US $140.

That and the fact that Starlink can work literally anywhere in the country – even the remotest pockets of the country where people there’s no infrastructure for other types of connectivity.

A source Techzim has spoken to, who has been involved in selling internet services in Zimbabwe, estimates there are about 5,000 Starlink terminals in Zimbabwe.

Why it is Illegal to use

In 2023, POTRAZ issued a statement warning Zimbabweans that using Starlink was illegal. Zimbabweans were ofcourse incentivised to ignore this, and the black market for terminals continued to thrive.

Coming under pressure from the market to explain why a more useful service was illegal to use, POTRAZ said they had no issues licensing Starlink as long as the company complied with the country’s laws – read fees, taxes, and ability for government to snoop on the traffic or disable the service at wish if the politics demanded it. Licensed operators in the country pay these costs (part of why the internet is so expensive in Zimbabwe) and allow government to intercept the internet when it wishes.

POTRAZ repeated that while Starlink had expressed interest to regularise operations in Zimbabwe, the company had not been licensed. At least 2 customers of the company were arrested this year for using the service.

Why would Starlink comply with a POTRAZ demand?

One question that people may have is if POTRAZ can technically switch Starlink off. They cannot, and in fact, that’s why they don’t want the service operating.

So if POTRAZ cannot technically switch if off, why would Starlink agree to do it? First, we don’t know if Starlink is agreeing and will go through with the disconnections. However, generally, except in very extreme situations a company would want to comply with the instructions of a government where they wish to operate in the future.

If Starlink is interested in selling to the 4 million Zimbabwean households market that may want a connection in the future, it’s in their interest to work with government and not antagonise it.

Shutdowns in Africa

Earlier this year, Starlink reportedly deactivated what was estimated to be between 300 and 400 devices in South Africa. The deactivated accounts were deemed to be “improperly” operating as they were being provided by an unofficial third party, Startsat.

There we also reports last month suggesting that users, possibly in DRC, experienced the Shut down that Starlink has issued in Zimbabwe.

It is possible that other governments observing this, will learn it’s something they too can do, and more shutdown orders may be coming.

This article was updated after publishing for clarity and additional infromation

Image credit: AFP

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Zimdollar remains legal tender until month-end — RBZ – The Herald

Nelson Gahadza-Senior Business Reporter

The Zimbabwe dollar remains legal tender for all domestic transactions until April 30, when the Zimbabwe Gold (ZiG) notes and coins will come into circulation, the Reserve Bank of Zimbabwe (RBZ) has said.

The central bank also said the recent introduction of the new currency had rendered the 10 percent trading margin by businesses economically irrelevant.

Following the announcement of the new currency last Friday, some traders, transporters and members of the public, stopped accepting the Zimbabwe dollar notes, disrupting the transacting processes.

RBZ Governor, Dr John Mushayavanhu, said the 21-day transitional period before the issuance of the ZiG notes and coins would see the bank conducting an extensive educational and awareness campaign on the new currency’s structure and security features before the notes and coins are released.

“Between now and April 30, 2024, the bond notes are still legal tender; banks can pay them out to customers, and people should be able to use those to transact and for change.

“It is only after the 30th that we will be introducing the new notes and coins,” he said during a 2024 Monetary Policy Statement breakfast meeting in Harare yesterday.

Dr Mushayavanhu said the ZiG was going to be a stable currency, noting the new money had already started appreciating after gaining in Monday and Tuesday trading sessions on the interbank market, which saw it add 0,2 percent against the US dollar since its introduction on Friday.

The central bank chief noted that due to the adoption of the market-determined exchange rate, the retailers’ 10 percent trading margin was now irrelevant.

“If you are a retailer and you put a 10 percent margin, you are most likely to be outside the market. You cannot put 10 percent on top of a stable exchange rate, so you are going to moderate yourselves,” said the Governor.

He added; “If you do not apply it and take the interbank exchange rate, you are not flouting the law, but if you apply more than 10 percent, you will be above the official exchange rate of 13,50 ZiG and (You will be around) probably 14 ZiG, hence you will price yourself out of business and will not be able to sell your products.”

The Governor noted that while the 10 percent margin was a result of a statutory instrument, due process would be required to remove it.

Statutory Instrument 185 of 2020 authorises dealers and the market to price goods and services based on the prevailing interbank market rate plus a margin of up to 10 percent.

The central bank chief expressed confidence the new currency would be able to retain value given the measures put in place, including maintaining a tight monetary policy stance, floating the exchange rate and occasionally intervening to support the currency and anchoring the currency on precious metals (mainly gold) and foreign exchange.

The RBZ’s reserve asset holdings comprise US$100 million in cash and 2,522 kg of gold worth US$185 million to back the entire local currency component of reserve money.

The Governor noted that reversing the dollarisation trend, whereby 80 percent of transactions in the economy are in US dollars compared to 20 percent in local currency, was a gradual process.

He said that through the MPS measures and new currency, the bank would create increased demand. The measures to promote the new currency would include requiring 50 percent of quarterly payment dates (QPDs) tax obligations to be payable in ZiG.

“As we approach the June QPD, everyone is going to be looking for ZiG. In addition, all the ZiG in this market is not enough to meet 50 percent of the payments.

He said taxpayers who procrastinate taking up ZiG would have to fork out more when the tax payment falls due given the currency would have appreciated.

He also noted that when a retailer has sold their goods, they would rather keep the ZiG and maybe do certain things with the US dollar because they will need that ZiG when the next QPD arrives.

“We are on the 80-20 ratio; when we get to 70-30, certain things will also be allowed, so we gravitate towards ZiG. When we get to 60–40, more towards ZIG, and by the time we get to 50–50, you can do what you want (in terms of paying using ZiG),” he said.

Finance, Economic Development, and Investment Promotion permanent secretary, Mr George Guvamatanga, said the new currency is part of the journey towards reducing the ratio of dollarisation through increased usage of a strong local currency.

“The multi-currency regime was an agreed position between Government and industry and that is why industry is also using the US dollar as we speak today.

“So, in that journey, there will be a point where fuel will be fully sold in ZiG and all duties will be payable in ZiG. There shall be a point where all Government ministries, departments and agencies are forced to accept the currency. We are going to be forcing them very soon,” he said.

Mr Guvamatanga added that the Treasury is working on a circular to all Governments ministries, departments and agencies saying that they cannot insist on payment in US dollars.

“We have not de-dollarised, and we are still in a multi-currency system. It is a journey,” he said.

He noted that over the past two months, the central bank had reiterated the need to create a strong and stable currency.

At the meeting, Confederation of Zimbabwe Retailers (CZR) president, Mr Denford Mutashu, said there was need for a smoother transition and an alternative for people to continue transacting as banks and mobile money services were abruptly discontinued.

He said CZR was currently engaging some retailers who were refusing bond notes to ensure the currency changeover does not affect the transacting public.

“Price and exchange rate stability are very key in the retail sector,” he said.

Zimbabwe National Chamber of Commerce (ZNCC) president, Mr Mike Kamungeremu, said the business community appreciated the continued use of multicurrency and the measures taken to defend the ZiG.

“Apart from just defending the ZiG currency, we need other Government fees to be collected in the local currency and this will erode the crisis of confidence, which is a result of past experiences,” he said.

He noted that business is worried about the settlement of outstanding auction allotments set to take place over the next 24 months, indicating that it is a bit too heavy for them.

Economist Mr Nyasha Kaseke said having its currency gives the economy advantages, while another economist Dr Prosper Chitambara, said the new central bank Governor should break from the mistakes of the past and ensure the bank plays a supportive role in the economy.

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Vexed queues: Zimbabwe’s new currency suffers chaotic start – RTL Today

Zimbabwe’s new gold-backed currency got off to a chaotic start with shops accepting only US dollars on Tuesday and vexed Zimbabweans queuing up outside banks for hours to access their savings.

The ZiG — short for Zimbabwe Gold — officially started trading on Monday, just days after it was announced it would replace the Zimbabwean dollar, which has tumbled in value over the past year, pushing inflation through the roof.

But many in the country were not ready for the switch.

Most banks had their systems offline on Tuesday, as they worked to transition them to ZiG.

This caused long queues outside some branches in the capital Harare, with hundreds of people waiting for hours to withdraw cash or access their funds.

“I spent the entire morning… waiting for the bank to be back online,” one grumpy account holder told AFP.

“No success. Stranded. They say they have no idea when they will be back online.”

– Worthless overnight –

The currency swap saw old banknotes — already of little value — become worthless overnight.

In the Harare suburb of Kambuzuma, children played in the streets with wads of cash.

Other notes laid abandoned on the pavements of the central business district, no one stopping to pick them up.

Getting hold of new ones was impossible.

On Saturday, the central bank said they were still being printed and would become available only on April 30.

Some people were left stranded as Harare public transport operators refused to accept Zimbabwean dollars, charging instead a pricey flat fare of $1 — double the usual local currency cost for short journeys.

“We are being shortchanged,” complained George Goliati, a commuter.

Many stores and street vendors similarly accepted only greenbacks, giving out biscuits or candies as change, due to a shortage of coins.

Julius Muza, a shopkeeper in the capital, told AFP he stopped accepting Zimbabwean dollars after noticing customers rushing to his and other shops to “dump” the old banknotes.

The central bank hopes the ZiG, which is backed by a basket of reserves comprising foreign currency and precious metals — mainly gold — would help stabilise the long-floundering economy.

The Zimbabwean dollar has lost almost 100 percent of its value against its US counterpart over the past year — leading to sky-high inflation, which after climbing well into the triple digits, was still at 55 percent in March.

Soaring prices have piled pressure on Zimbabwe’s 16 million people who already face widespread poverty, high unemployment and a severe drought induced by the El Nino weather pattern.

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