Politics

US Geographer Steve Hanke throws toys out of the pram over new Zim currency

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WASHINGTON — US based Professor of Applied Economics at Johns Hopkins University Steve Hanke has called for the disbandment of the Reserve Bank of Zimbabwe saying it has failed to stabilize the country’s currency.

Harare has just launched a new currency, Zimbabwe Gold or ZiG-the sixth attempt in the last decade to de-dollarize. However, a bullish Reserve Bank of Zimbabwe chief John Mushayavanhu says the new currency backed by gold, foreign currencies and other minerals will be a success and will “silence all the doubting Thomases”. Hanke maintains ZiG is dead on arrival.

Voice of America’s Zimbabwe Service reporter Blessing Zulu (BZ) spoke with Professor Hanke (SH) about the Zimbabwe Gold.

BZ: Professor Hanke, what is your take on this new Zimbabwe Gold currency – ZiG?

SH: I think it’s another joke. That’s my take. It’s going to fail like all the other schemes that the government has come up with. And one reason for that is this, no one really has any trust in the government. If you’re issuing a currency, you have to have some trust. I’m not saying a lot. But you have to have some trust. I think the level of trust in the Zimbabwe government is almost zero.

BZ: But how about their assurance that this currency will be backed by gold?

SH: The currency is a joke, and that promise is a joke, too. Zimbabwe suffers from something called anime, and that is no matter what the law is or the rules they aren’t followed. No one follows the law, so, the law behind the ZiGs says that it’s backed by gold, but no one will follow that law. And one reason they won’t follow it is that they don’t have the gold to back it up. Where is the gold?

BZ: Well, they told the nation that there is a gold vault at the central bank, with just over one tonne, and 1,5 tonnes offshore and some foreign currency reserves, all totaling US$300 million. How much, really, is needed in terms of reserves by a country like Zimbabwe to have a stable currency?

SH: It’s really impossible to know because it depends on how many units of the ZiG that they issue. If they issued zero ZiGs, they’d have to have zero gold backing. You see what I mean? It’s a function of how many units of the currency they’re issuing. The only hope for Zimbabwe is to fully dollarize and get rid of the central bank. They have to really get rid of the central bank completely. And until they get rid of the central bank and dollarize, nothing good is going to happen with regard to the currency in Zimbabwe. As you know, I’ve been studying this for years and I’ve been doing this kind of work all over the world. So I’ve seen a lot of currencies and I’ve done a lot of currency reforms. I’ve stopped a lot of hyperinflations. And that’s one reason that I’m referred to as “The Money Doctor”. The “Money Doctor” says the new ZiG is already on its deathbed before it even starts. No, no one believes anything that the government is saying about currency and that’s why I said it’s kind of a joke. Zimbabwe has become a joke.

BZ: So, in the absence of a central bank what other options are there? may you explain.

SH: I think that’s the only option that would work in Zimbabwe because of this anime problem and the fact that they don’t follow any laws even their own laws they don’t follow. And I think the only possibility is to get rid of the central bank and dollarize. You did have a spell of dollarization that worked very well, but the problem was you did have the central bank. And the dollarization came to an end. Why? Because you had a central bank that was able to step in. And it’s been a complete disaster after the dollarization was dropped, after official dollarization. I mean, Zimbabwe is very dollarized defacto, anyway.

But when it was dejure, the system worked well. Biti (Tendai) was the finance minister. Things were under control or more or les. For Zimbabwe, they did very well during that dollarization, official dollarization period. And then they started experimenting with different kinds of money. And the reason that they did that is it’s, they use it as a way to tax Zimbabweans with the inflation tax. So, the government lives off two things in Zimbabwe, the inflation tax. So that that’s one reason we know the ZiG will be unsound, it will allow the country to inflate in tax. With inflation tax. And the other tax is that the government is basically stealing from the miners. Natural resources are taxed one way or another. And that’s how the government lives. Two sources of revenue. Theft from the miners and number two, the inflation tax.

BZ: Lets step back a little, if Harare gets rid of the central bank, can they replace it with say a currency board?

SH: No a currency board will not work in Zimbabwe. I originally in my book that I wrote on Zimbabwe, “Zimbabwe, Hyperinflation to Growth” was the name of the book, was published in Harare. Alright. I recommended the following options. One was the currency board and two was dollarization. Now I’ve changed my opinion given the recent history since the hyperinflation, that book was written right before the hyperinflation. And, I changed my mind about the feasibility of a currency board, because to have a currency board you have to follow the rule of law and they don’t follow the law and anime is the enemy of something like a currency board. So, I would not recommend a currency board. You have no monetary institution. The government should have nothing to do, nothing to do with currency in Zimbabwe. You must get rid of the Reserve Bank and fully officially dollarize.

BZ: But the new central bank chief John Mushayavanhu says he sees this new currency ending market volatility. Your take?

SH: Again, do you really believe the new governor? No one does. We’ve heard them saying this song forever in Zimbabwe. It’s really a joke, at this point it’s embarrassing.

BZ: So how many months are you giving this new currency before it tanks or battered by depreciation?

SH: Oh, I think it’ll start being eroded immediately. The ZiG will zag immediately.

Source: VOA

Politics

US asserts that it is a better option for Africa than Russia and China

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IN response to China and Russia’s growing influence in Africa, the US has asserted its claim as the continent’s best choice. The three global heavyweights have recently been competing for Africa’s partnership, as the US struggles to retain its influence on the continent. However, in recent years, Africa seems to be drifting more towards China and Russia.

A recent poll found that China and Russia have higher approval ratings in Africa than America. In 2023, the United States had a 56% approval rating, China 58%, and Russia 64%.

The Commerce Secretary of the United States, Gina Raimondo, disclosed to the American news network CNN, that the United States, remains Africa’s best option.

According to her, for African countries, the United States is the ideal partner, “without strings attached.” She also pointed out that Africa is free to make its own decisions and that this notion will not be imposed on the continent.

DON’T MISS THIS: China dethrones USA as the most influential global power in Africa: Report

“We think we’re the best, we think we offer opportunities consistent with your [Africa’s] values of freedom and democracy, and so we want to be the partner that you choose to work with,” the commerce secretary told CNN’s Larry Madowo in an exclusive interview in Nairobi.

During her first official visit to Africa, she met Kenyan President William Ruto and spoke on the sidelines of the AmCham Business Summit.

“I just met with President Ruto, and we had a fantastic meeting. I said to him: we’re not here to lecture, we’re here to partner, we’re here to learn from you, we’re here to invest, in your people and in your country,” she added.

China is at present Africa’s single largest commercial partner, with bilateral commerce expected to reach a record $282.1 billion by 2023. The Belt and Road Initiative (BRI), which covers an extensive area of the continent and spends extensively on infrastructure projects, has undoubtedly helped China expand its presence in Africa and gain influence among African economies and governments.

Furthermore, Russia has been expanding its presence in Africa with its resources, training, consultancy, bilateral trade, nuclear deals, and infrastructural establishment.

Just recently, the country reopened its embassy in Burkina Faso, after over 3 decades of being absent from the country.

Source: Insider Business (Africa)

Politics

Zanu PF rocked by Chivayo-Mnangagwa alliances, as fears mount he is being roped in the succession battle

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PRESIDENT Emmerson Mnangagwa’s recent public appearances with controversial businessman Wicknell Chivayo have allegedly sparked controversy within the ranks at the ruling Zanu PF party, it has emerged.

Sources within Zanu PF, speaking on condition of anonymity, told NewsDay that Vice-Presidents Constantino Chiwenga and Kembo Mohadi were reportedly unhappy with Mnangagwa’s association with Chivayo.

They said Mnangagwa’s recent public appearances with the ex-convict had raised eyebrows within government and party leadership.

“The vice-presidents are wondering what is really happening. Actually, they are shocked. The worst thing is that President Mnangagwa is not even telling anyone what he is up to.

“It is just between him and that boy [Chivayo]. Do not be surprised to hear that he is now a minister. There are some favours being extended to Chivayo.

“Let’s just wait and see, but like I said, soon Chivayo is goingto be given a top position within the party,” the sources said.

Mnangagwa’s public appearances with Chivayo, including reportedly sharing a private jet, have allegedly only served to intensify scrutiny and fuel speculation within Zanu PF circles.

Chivayo, known for his flamboyant lifestyle and controversial business dealings, has been seen accompanying Mnangagwa at various events.

The two have reportedly shared a private jet, further fuelling speculation about the nature of their relationship.

However, Zanu PF director of information Farai Marapira, dismissed the allegations yesterday saying Mnangagwa has an open door policy to everyone.

He said Chivayo had been supporting Mnangagwa’s vision and policies that made him successful.

“President Mnangagwa has made billionaires out of Zimbabweans through his policies. “You look at Chivayo as one of the typical examples. He has been a success because of the policies of President Mnangagwa,”Marapira said.

He said Chivayo was also supporting Mnangagwa’s philanthropic programmes.

“Chivayo is also supporting President Mnangagwa’s vision and he is ploughing back to society.

“This shows the beauty of the President Mnangagwa policies because he encourages the youth and the young to take over the reins of the economy.

“The President is open to everyone and he is open to anyone in the county. His doors are open to each and every Zimbabwean.”

He said Mnangagwa did not bar anyone from seeing him.

“Anyone who wants to see the President is open to do so. He is listening President, if he does not open doors how can he listen?”

But political analyst Tendai Ruben Mbofana said it was not surprising that Chivayo has divided Zanu PF.

“Some Zanu PF bigwigs fear that they might be left with the gravy train, the party has never been united at all but Chivayo will further divide opinion within,” he said.

Another analyst Rejoice Ngwenya weighed in saying Chivayo has imposed himself in the Zanu PF top echelons.

“There is no doubt about Chivayo involvement in Zanu PF. He has used his money to be part of the top leadership and obviously there are people who have been part of the ruling party before independence and they will definitely feel sidelined and threatened because the young man is now close to Mnangagwa,” he said.

During the Easter holiday, Chivayo reportedly breached Zanu PF and government protocol by receiving Mnangagwa at the ZCC Mbungo shrine ahead of Mohadi.

He went on to donate US$1 million to the church to finance its national projects.

Chivayo, whose source of wealth has remained a mystery, claims he cuts multi-million-dollar deals through his company, Intratrek.

He also claims that his lucrative power and energy ventures have a presence in South Africa, among other countries.

The ruling party apologist has in recent months blessed social media influencers and popular musicians with top-of-the-range vehicles and cellphones.

Source: News Day

Politics

Chinyika Clinic sister-in-charge hubby drinks poison

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GUTU – The husband of Chinyika Clinic in Ward 10 Gutu sister-in-charge Marecha died at around 1am on Friday after drinking poison.
Kudzanai Lunga who was a teacher at Machingambi Primary committed suicide allegedly after misunderstandings with his wife.

Masvingo deputy Police spokesperson Assistant Inspector Masauso Patinyu confirmed the case to The Mirror.

He urged members of the public to resolve matters amicably by securing services from pastors, professional counsellors, Police and traditional leaders.

Lunga drank poison at 11pm on Thursday and died the following day at 1 am. The couple had tried to resolve the matter during the day with no change.
Lunga proceeded to his wife’s workplace and went into a male ward where he was seen by a security guard.

The guard found Lunga alone and the now deceased told him to call his wife and tell her that he had drank poison.

They tried to assist him at the clinic but he died two hours later.

Source: Masvingo Mirror