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Sunday, 26 January 2020

Zimbabwe’s central bank has frozen an account of a Chinese company it accused of manipulating the local currency, which lost ground against the dollar on the black market last week.

The southern African nation reintroduced the Zimbabwe dollar last June, ending a decade of dollarisation, but this resulted in runaway inflation, which economists say reached 520% in December.

Reserve Bank of Zimbabwe (RBZ) governor John Mangudya, in a statement late on Friday, singled out unlisted China Nanchang as a currency manipulator.

Mangudya said the RBZ financial intelligence unit (FIU) had identified Nanchang as a company that had used millions of Zimbabwe dollars to buy greenbacks on the black market, weakening the local unit.

Nanchang is the major contractor for the construction of a dam that is set to supply water to Zimbabwe’s drought-hit second biggest city Bulawayo, among other government contracts.

“The FIU has ordered the freezing of the identified account pending further analysis and is undertaking ongoing surveillance to identify more culprits involved in the parallel market transactions,” Mangudya said.

The central bank did not say if the account was held with RBZ or with another bank.

A spokesman for Nanchang could not immediately be reached for comment.

The Zimbabwe dollar was trading at 25 to the U.S. dollar on the black market on Saturday compared to 22 last week. On the official market, the local currency was pegged at 17.

Last year, the central bank temporarily froze accounts belonging to four companies over the same charges.

A weakening currency along with shortages of cash, foreign exchange, fuel and electricity are among symptoms of Zimbabwe’s worst economic crisis confronting President Emmerson Mnangagwa’s government.

 

Reuters

Published in Bank & Finance

A billionaire has offered to pay striking doctors in Zimbabwe to help end a months-long protest over grave hospital conditions as the economy crumbles, and a doctors' group on Thursday said it was encouraging members to embrace the money and return to work.

But Dr. Masimba Ndoro, vice president of the Zimbabwe Hospital Doctors Association, warned that “nothing much has changed” in the conditions at public hospitals that include the lack of basic items such as bandages and gloves.

Relatives of patients are still expected to buy such items and, in some instances, bring buckets of water as Zimbabwe's once-envied health care system reflects the southern African nation's general collapse.

“It breaks a doctor’s heart to ask a patient who clearly cannot afford bread to buy their own blades, bandages and even dressing solutions, painkillers and antibiotics,” Ndoro said.

Doctors abandoned work four months ago to press for better salaries and working conditions, saying their roughly $100 monthly pay is not enough to get by. The action became one of Zimbabwe's longest doctors’ strikes in history.

The majority of people in Zimbabwe already are battling to put food on the table, let alone afford expensive private medical care or drugs.

“It is in the interests of both the patients and the doctors to go back to work,” Ndoro told The Associated Press.

He said his organization, which represents about 1,600 junior doctors at public hospitals, is asking members to accept the offer by Zimbabwean telecoms billionaire Strive Masiyiwa.

Masiyiwa through his charity late last year offered to pay doctors a “monthly subsistence allowance” of roughly $300. Doctors are also offered transport to and from work.

The Higherlife Foundation charity announced Tuesday that it had reopened the offer, which more than 300 doctors had signed up for before it closed in December.

Ndoro said more needs to be done to fix the health sector.

Often the best a doctor can do is diagnose and write a prescription for patients who usually ask relatives for help to buy drugs at private pharmacies, where prices are steep because of shortages at public hospitals.

Critics say the collapse of Zimbabwe’s economy is making hollow President Emmerson Mnangagwa's promises to change the country's fortunes when he took power in 2017 after longtime leader Robert Mugabe stepped down under pressure.

Since then, inflation has spiked to about 500% amid shortages of gas, food and even drinking water. Electricity cuts of up to 18 hours a day have led some rural hospitals to ask relatives to take bodies to private funeral parlors or conduct quick burials to keep them from decomposing in their mortuaries.

Health Minister Obadiah Moyo on Wednesday told the state broadcaster that the situation is improving.

“They (doctors) are back in full force. We want to be able to work together as one team, everyone has a role to play,” he told the Zimbabwe Broadcasting Corporation.

But many doctors and other health professionals such as nurses seem to share little of the minister’s optimism and are looking for a way out.

“I don’t have the actual numbers but many doctors have left the country,” Ndoro said. “A lot are pursuing greener pastures. They may not yet have left, but they are definitely going to leave.”

 

AP

Published in Economy

The Federal Government of Nigeria has revealed her plan to borrow N2 trillion from the current N10 trillion pension funds to finance the development of infrastructure.

#WorldPressNews learnt that this was disclosed at the National Economic Council (NEC) meeting presided over by the Vice President, Yemi Osinbajo, on Thursday in Abuja.

Briefing newsmen at the end of the NEC meeting in Abuja, Kaduna State Governor, Mallam Nasir el-Rufai, stated that the decision of the Federal Government to pull N2 trillion out of the pension funds was reached by a NEC sub-committee.

According to El-Rufai, the country will never be able to address its road infrastructure deficit with the current budgetary allocation for road construction and maintenance. He explained that with the N200 billion in the 2019 budget and N169 billion in 2020 budget, roads cannot be properly fixed.

“In 2019 budget, N200 billion was budgeted for construction and maintenance of federal highways. In 2020, the budget is N169 billion. If we continue this way, we will never be able to fund highway infrastructure. We need to unlock funds to construct and maintain highways.“We will never be able to construct and maintain highways with N200 billion every year. Highway infrastructure and maintenance can only be done with long term funds.”

Speaking on the rationale to borrow from the N10 trillion pension fund, El-Rufai stated that the decision followed an interim report earlier presented to the council, and the decision to borrow N2 trillion from the pension fund was in compliance with the Pension Reform Act 2004, which empowers the government to borrow 20% of the fund to address national issues.

According to him, various countries of the world such as Chile and South Africa funded their infrastructure growth by borrowing money from workers’ pension funds. El-Rufai also stated that with Nigeria’s pension funds largely dominated by youths in their 30s, who still have several years ahead of retirement, utilising the funds for infrastructure would not generate any problem.

Other infrastructures mentioned by the El-Rufai included rail and power projects. According to him, the committee had identified three areas (rail, road and power) where the pension funds would be invested, He added that the borrowing would be done through bonds with private companies investing in road and rail infrastructure and paying within a period of 20 years.

While lamenting on the moribund state of infrastructures in the country, El-Rufai stated that in the last three years, the Federal Government had invested N1.7 trillion in the power sector, without any meaningful effect. According to him, the committee has thrown open consultations on how to fix the endemic crises plaguing the power sector, by inviting memoranda from the general public.

The latest move by the government shows revenue crisis in Nigeria continues to linger. In spite of Nigeria’s burgeoning debt profile, which currently stands at over N26.2 trillion, the figure is expected to hit a new height in 2020.

Published in News Economy
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