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Zim: House of Hunger -Newsday Zimbabwe – NewsDay

Zimbabwe is literally becoming a house of hunger. Many families cannot feed themselves; violence is on the rise, alcoholism and drug abuse are becoming prevalent just as Marechera wrote. Many are left with no option, but to ‘pack their bags and leave’ mainly to rural areas or diaspora.

‘I packed my bag and left,” the opening line in Dambudzo Marechera’s most popular and award winning book — House of Hunger. Many Zimbabweans are contemplating the same post on the controversial August 2023 general elections.

Zimbabwe is literally becoming a house of hunger. Many families cannot feed themselves; violence is on the rise, alcoholism and drug abuse are becoming prevalent just as Marechera wrote. Many are left with no option, but to ‘pack their bags and leave’ mainly to rural areas or diaspora.

The country will soon face an acute shortage of food despite the production figures touted from Pfumvudza and command agriculture over the last two seasons. The government was shouting from the rooftop that Zimbabwe was food secure for the immediate future. However, with the threat of El Nino on the horizon, reality has sunk that propaganda is not good.

Finance minister Mthuli Ncube let the hunger cat out of the bag when he gave a speech on the incentive planning prices for the 2023/24 season this week in Harare.

The minister said they were giving incentives to farmers so that the country could be secure, but the sting was in the tail when he said the government had removed the duty for the importation of maize.

“We are opening up borders with immediate effect and allowing the private sector to import maize with no duty as well. The same thing applies to the household imports of maize meal which we opened a few months ago. That continues to ensure supply so private players should engage in importation of grain. We want to support our citizens,’’ Ncube told the State-controlled media.

Agriculture minister Anxious Masuka emphasised that permitting imports of maize by private players was with immediate effect and that companies with resources could import as much as they wished.

There is no tacit confirmation stronger than that proving the silos are running empty. The stark reality staring in the face is hunger — no two ways about it.

Zimbabwean inflation is mainly food inflation, the rising cost of food. Zimbabweans have to brace themselves for higher food prices and for good measure in greenbacks. Imported food using private funds will be sold in United States dollars. The re-dollarisation of the economy will be on steroids. No one can avoid food.

If the economy completely dollarises and imports rise, it is no rocket science that the local currency will further lose value against the greenback, plunging the majority of the population into abject poverty. Many will vote by their feet going into the diaspora to seek economic refuge.

However, in all this gloom, there is a sliver of light in urban areas. There are a lot of good men and women who chose not to pack their bags and leave. They decided not only to stick it out, but also chose to rebuild their country by participating in national politics at the local authority level.

The opposition Citizens Coalition for Change made a clean sweep of the urban councils. Its cadres have assumed office. They are occupying the top offices and are ready to deliver.

It is important to acknowledge that by putting Ian Muteto Makone and David Coltart as mayors of Harare and Bulawayo respectively, the opposition has shown its intention to change the fortunes of the two main cities.

Makone is a consummate boardroom player. He has in the past held senior positions such as chairperson of listed entities First Mutual Life and Colcom. He was also the first black general manager of the Grain Marketing Board and also served as managing director of Manica Freight Southern Africa. Makone has seen it all and knows what it takes to turn the fortunes of Harare.

On the other hand, Coltart is a senior lawyer at one of Bulawayo’s oldest law firms. He served as chairperson of the SDC at Petra and had a fairly good stint as Primary and Secondary Education minister during the 2009-2013 inclusive government. Coltart knows what is needed to turn Bulawayo around and has the competence.

These are men who could have packed their bags and left the country, yet they stuck around. It is expected that they will lead their caucuses in council well and craft good turnaround policies. The council administrations in Harare and Bulawayo should simply do their jobs and avoid dabbling in partisan politics.

It is also worthy to note that the new Local Government minister Winston Chitando is also a seasoned boardroom player. We hope that he would be above partisan political fray and steer the devolution agenda, facilitating that councils work as autonomously as possible within the law. Zimbabwe still needs to enact a devolution-enabling legislation and this has to be done like yesterday.

The success of Harare and Bulawayo is good for the revival of Zimbabwe’s economy. It could give a good kickstart to economic revival if well managed. There are lots of infrastructure projects that need to be implemented such as building of dams, road networks, new sewer treatment plants, schools and clinics to cater for the burgeoning populations.

However, the temptation to privatise public services should be kept at bay. At worst, they could form joint ventures where the local authorities maintain the majority shareholding, after all cities are not for profit entities. They should offer services to their residents at cost or near cost recovery costs.

The tasks ahead are not easy, but not insurmountable. At some point painful and unpopular decisions have to be made if the cities are to regain their lustre. However, consensus building and vision sharing should always be at the forefront. Residents trust and buy-in has to be earned if success is to be achieved. Otherwise, many residents as in the opening line of House of Hunger will ‘pack their bags and leave’.

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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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