Politics

ZiG currency goes physical, but not everywhere

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THE notes and coins for Zimbabwe’s sixth currency since independence in 1980, Zimbabwe Gold (ZiG), hit the streets this week as the government makes yet another attempt to tame inflation.

The money has coins worth 1, 2, and 5 ZiG, and notes for denominations between ZiG10 and ZiG200.

President Emmerson Mnangagwa pleased with the public’s reception of the ZiG so far.

“I commend all Zimbabweans for the manner in which we have adopted and are protecting the use of our currency,” he said.

The ZiG, according to the government, is backed by 2.5 tonnes of gold and other minerals, such as diamonds, thus making it a “structured currency”.

Reserve Bank of Zimbabwe (RBZ) governor John Mushayavanhu told the media that the ZiG was a result of wide consultations that involved experts from the World Bank.

The governor vowed that, unlike his predecessors, the business of “wantonly” printing money wouldn’t be tolerated under him.

Pay more if you pay in ZiG

The money is already available in banks countrywide with individual withdrawal limits pegged at ZiG3 000 (about R5 460) weekly for individuals.

For corporates, the weekly withdrawal is ZiG30 000 (R54 560) while schools, hospitals, clinics and local authorities can get ZiG250 000 (R455 000) monthly, and government departments can withdraw ZiG300 000 (R545 600) monthly.

For vendors, in the second-largest city of Bulawayo, there’s optimism that the currency could at least for some time be a solution.

Sandra Moyo said:

I don’t mind selling my vegetables in the ZiG, provided I won’t have issues when restocking. But for those who import goods the stability of the ZiG will make it work provided they find an official source to buy forex to restock in say, South Africa and Botswana.
The official rand to ZiG rate in Zimbabwe places the latter in a stronger position.

However, on the black market, the ZiG has already lost value barely a month since its digital introduction.

“We do simply sell our things more expensive in the ZiG so that we have room to buy the costly forex on the streets. In some cases, this discourages people from buying using the ZiG when they have forex, which is more competitive,” Moyo said.

“Therefore, as long as the ZiG does not earn the bad money tag, we are ready to trade.”

Public transport operators on local routes are yet to accept the ZiG.

“Our challenge is that we buy fuel in forex. We are comfortable charging in rands and American dollars. We don’t have a ZiG fare for now,” said Taruvinga Zhou, a transport operator.

Air Zimbabwe and Fast Jet are the only airlines accepting ZiG payments.

In 2022, Zimbabwe owed South African Airways (SAA), Emirates and other international airlines a total of $177.6 million in funds that could not be repatriated due to currency shortages.

Economists say those airlines might stick to foreign currency charges instead of ZiG.

Legacy of currency crisis

Currency woes are an all-familiar story in Zimbabwe.

At the turn of the millennium, the economy started deteriorating.

This was against the backdrop of farm invasions, government corruption, and violation of democracy and human rights resulting in international isolation of the Robert Mugabe regime through sanctions by the European Union (EU), the United States (US) and withdrawal from the Commonwealth.

Similar to past episodes when introducing a new currency, the regime in Harare slashed zeros which accumulated due to inflation that had eroded almost 80% of a currency commonly referred to as the Real Time Gross Settlement (RTGS), but denominated as the Zimbabwe dollar.

On 5 April, the RBZ announced that it was introducing the ZiG, when physical notes of the RTGS were already rejected by the public.

The highest denomination (Z$100) was not enough to buy a loaf of bread which cost, at the time, Z$30 000.

This meant that bread could be bought in rand, US dollars, or using the RTGS in electronic form.

Source: News24

Politics

Treasury warns no mess for currency exchange regulations violations

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THE Treasury has issued a stern warning to businesses, emphasizing severe penalties for those found pricing their products or services using an exchange rate higher than the official rate.

This announcement follows the removal of the legal provision allowing traders to put a 10 percent margin above the ruling interbank exchange rate.

Despite ongoing challenges in accessing foreign currency through the interbank market, Treasury officials maintain that there is no longer any justification for businesses to deviate from the official exchange rate. Any violations of this regulation will result in penalties, with a minimum fine of ZiG200,000 per offense.

The change in regulations was formalized through Statutory Instrument 81A of 2024, which also outlines civil penalties for defaulters. Additionally, there are extra penalties for delayed payments beyond 90 days.

Finance, Economic Development, and Investment Promotion Minister, Professor Mthuli Ncube, emphasized that the introduction of the new currency, the Zimbabwe Gold (ZiG), removed the rationale for setting prices above the interbank rate. He reiterated the government’s commitment to stabilizing the currency and discouraging unnecessary speculation.

However, some business leaders argue that the limited supply of foreign currency in the formal market forces them to procure forex from other sources, including the parallel market. Despite the introduction of ZiG, businesses continue to struggle with forex shortages, impacting their ability to import raw materials and maintain profitability.

Zimbabwe National Chamber of Commerce CEO, Chris Mugaga, emphasized the importance of addressing the entire supply and demand chain for foreign currency, rather than focusing solely on currency stability. He highlighted the challenges faced by businesses in accessing forex from banks, leading many to rely on the black market.

There is confusion within the business community regarding the new regulations, with some interpreting them to allow pricing based on the exchange rate at which forex was purchased from banks. Central Bank Governor Dr. John Mushayavanhu indicated that a clarification statement would be issued in response to these concerns.

As the government seeks to enforce exchange rate regulations, businesses must navigate the evolving economic landscape to ensure compliance while addressing their operational needs in a challenging forex environment. – Business Weekly

Politics

Delta Corp. Reports Impressive Profit Surge of 59.2% to US$100.5 Million

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HARARE – Delta Corporation, Zimbabwe’s leading beverage manufacturer, has announced a significant surge in profit for the full year ending March 31, 2024.

The company reported a remarkable increase of 59.2%, with profits reaching US$100.5 million compared to US$63 million in the previous year. This substantial growth was driven by a substantial rise in revenue, which jumped by 43% to US$767.6 million.

Operating income for the fiscal year 2024 amounted to US$152.3 million, reflecting a substantial increase from US$99.7 million recorded in the same period the previous year. Furthermore, the earnings before interest, tax, depreciation, and amortization (EBITDA) surged to US$166.9 million, up from US$112.6 million in 2023.

Delta Corporation attributes this impressive financial performance primarily to record sales in the larger beer segment and significant growth across other key product lines. Lager beer remained the cornerstone of Delta’s revenue, contributing US$318 million in the fiscal year 2024, a 43% rise from the previous year.

The company witnessed remarkable growth in its sorghum beer business, with revenue increasing by 40% to US$250.8 million. This segment was buoyed by both local and international demand, with sorghum beer volumes increasing both domestically and in foreign markets such as Zambia and South Africa.

Sparkling beverages also saw substantial growth, with revenue increasing by 59% to US$146.7 million, and volume sales rising by 29% year-on-year. In the wines and spirits category, Delta recorded a 26% year-on-year increase in revenue, further solidifying its diversified portfolio.

Delta Corporation’s strategic investments in production capacity expansion projects across all product lines have played a significant role in driving volume growth and improving customer service. Cumulative investments over the past two years amount to approximately US$100 million.

The company’s associates, including Schweppes and AFDIS, reported positive volume gains, demonstrating Delta’s successful expansion into new markets and its ability to cater to diverse consumer preferences.

Despite the challenging economic environment, Delta Corporation has demonstrated resilience and adaptability, leveraging its strong brand portfolio and robust distribution network to achieve record financial results. – Herald

Politics

Drake Leads Nominations for Next Month’s BET Awards, Followed by Nicki Minaj

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Drake has emerged as the top nominee for the upcoming BET Awards, with seven nominations announced on Thursday. His latest album, “For All the Dogs,” has earned him a nod for Album of the Year.

Additionally, his collaboration with J. Cole on the track “First Person Shooter,” which has fueled his recent rivalry with Kendrick Lamar, is up for an award.

Nicki Minaj closely follows with six nominations, including one for Album of the Year for her eagerly awaited release, “Pink Friday 2.” Her collaboration with Ice Spice on “Barbie World,” featured in the hit “Barbie” soundtrack, has also earned her two nominations.

Victoria Monét, another prominent nominee with five nods, is slated to perform at the awards show, scheduled for June 30 in Los Angeles.

Beyoncé has received four nominations, including Best Female R&B/Pop Artist. Her tracks “Texas Hold ‘Em” and “16 Carriages” from the “Cowboy Carter” project have also been recognized. Her collaboration with Kendrick Lamar on “America Has a Problem (Remix)” is in contention against songs by Minaj, Usher, Cardi B, and Drake.

Drake’s song “Rich Baby Daddy,” featuring SZA and Sexyy Red, is competing for Best Collaboration and two other awards.

The BET Awards honor achievements across music, film, acting, and sports. Beyoncé’s tour film, “Renaissance,” released last year, is nominated for Best Movie.

Other artists with multiple nominations include Usher, 21 Savage, Megan Thee Stallion, Doja Cat, and Tyla, who won the inaugural Best African Music Performance at the Grammy Awards.

Alongside Monét, J. Cole, Sexyy Red, and SZA each have five nominations. Sexyy Red is also set to perform, alongside Muni Long, Latto, Glorilla, and Shaboozey.

This year’s film nominees include “American Fiction,” “Bob Marley: One Love,” “Renaissance: A Film by Beyoncé,” “Spider-Man: Across the Spider-Verse,” “The Book of Clarence,” “The Color Purple,” “The Equalizer 3,” and “The Little Mermaid.”

In the sports categories, nominees include Simone Biles, Naomi Osaka, Steph Curry, LeBron James, and Patrick Mahomes. – AP