Zimbabwe’s President Emmerson Mnangagwa on Sunday extended a lockdown to contain the spread of the new coronavirus by two weeks, but will allow mining companies to get back to work.
Mnangagwa said the lockdown would continue because the country had not yet met conditions set down by the World Health Organization to lift the measures.
Three people have died from the virus out of the 25 confirmed infected in the southern African country, but health experts expect the figures to rise once authorities ramp up testing.
“It has been a very hard decision that my government has had to take reluctantly,” Mnangagwa said in a live television broadcast.
Mnangagwa said the government would allow mining companies, which generate the most foreign currency, to resume full operations while manufacturers would work at limited capacity. Mining companies operating in Zimbabwe include local operations of Impala Platinum Holdings and Anglo American Platinum.
Zimbabwe began a 21-day lockdown on March 30, which has confined most people to their homes. But in poor townships, people are venturing out in search of staples like maize meal, leading to long queues at the shops.
The lockdown has left many citizens without an income and food at a time the country is grappling with the worst economic crisis in a decade, marked by shortages of foreign exchange, food and medicines.
In the capital Harare, city council officials, with the help of police and soldiers, were on Sunday tearing down illegal market stalls used by informal traders in townships.
The move was strongly criticised by citizens in the country where more than 80% of the working population have no formal jobs and eke a living from informal markets.
City authorities defended the move saying it was necessary to restore order in the city and that informal traders would be relocated to new and better facilities.
Zimbabwe's Government has started disbursing money to vulnerable groups that were affected by the 21-day lockdown, with the first beneficiaries in Harare and Bulawayo receiving their payouts yesterday.
The Ministry of Women's Affairs and Small and Medium Enterprise Development has availed a database of 129 000 SMEs to be considered for the Government bailout.
This was said by Public Service, Labour and Social Welfare Minister Professor Paul Mavima during yesterday's post Cabinet briefing.
"We have other databases of those who are marginally food insecure with almost 3,5 million people, but we have to look at the neediest out of those so that we can reach the one million whom we have budgeted for and the disbursement are already underway," he said.
In a separate interview, Prof Mavima's deputy, Lovemore Matuke said payouts for beneficiaries from other provinces will be ready by tomorrow.
Government has availed $600 million through Treasury to cushion vulnerable households whose sources of income were largely affected by the 21-day national lockdown aimed at curbing the spread of Covid-19, while a separate package was being worked on to cushion SMEs and vendors.
Finance and Economic Development Minister Professor Mthuli Ncube announced the facility two weeks ago.
Government said it would ensure the beneficiaries were not charged transactional costs when cashing out.
It recently said it would continue to implement selected priority programmes and projects to sustain the economy, but more resources would be channelled towards saving lives.
Further, the two percent intermediated money transfer tax (IMTT), which is ring-fenced for social protection and capital development projects, will be channelled towards Covid-19 related mitigatory expenditures.
Government has also availed a number of tax incentives for production and importation of essential drugs and health related capital equipment, as well as other medical supplies.
Treasury has suspended duty and tax on various goods and services related to testing, protection, sterilisation and other medical consumables to boost the country's state of preparedness against Covid-19.
Source: The Herald
The COVID-19 pandemic has left Zimbabwe in an extremely difficult situation. As of early April, the number of infections and deaths from the pandemic appeared low, although the available data isn’t necessarily reliable.
President Emmerson Mnangagwa announced a 21-day lockdown which began on 30 March, in a bid to contain the spread of the coronavirus. The decree ordered all citizens to stay at home, “except in respect of essential movements related to seeking health services, the purchase of food”, or carrying out responsibilities that are in the critical services sectors.
Other measures include the shutting down of public markets in the informal sector, except those that sell food.
None of this will be easy to implement in Zimbabwe.
The country has an economic profile similar to that of many developing countries. The difference is that its informal sector makes up a much higher percentage of the overall economy. According to a 2018 International Monetary Fund report, Zimbabwe’s informal economy is the largest in Africa, and second only to Bolivia in the world. The sector accounts for at least 60% of all of Zimbabwe’s economic activity.
In addition to the usual problems faced by countries with large informal economies, including poor governance and low tax revenues, Zimbabwe has an added set of problems: its economy is broken.
To implement the nationwide lockdown Mnangagwa is likely to have to inflict further damage to an already extremely fragile economy.
The president did not announce a stimulus financial package to cushion business from the impact of the lockdown. This might result in the total collapse of some businesses.
Zimbabwe’s economy has been shrinking since 2000, triggered by the government’s controversial land re-distribution programme of that year. The violent programme wreaked havoc on agriculture, which was then the mainstay of the Zimbabwean economy.
This was compounded by subsequent sanctions imposed by the West in response to the seizures of white-owned farms and land.
Around 6 million Zimbabweans – about 34% of the population – live in extreme poverty.
The IMF recently gave a very bleak assessment, saying that the country’s economy had contracted by 7.5% in 2019. It put the inflation rate at over 500%, meaning that the country was heading back to the traumatic hyper-inflation era of 2007/8, when inflation peaked at an official 231 million percent.
The IMF report shows that Zimbabwe’s economy performed the worst in sub-Saharan Africa in 2019. Its prognosis is disheartening, showing that if
…governance, and corruption challenges, entrenched vested interests, and enforcement of the rule of law, (were not observed) then…there is little prospect of a major improvement to Zimbabwe’s economic and financial challenges in the short to medium term ….
The dire economic situation is further worsened by the fact that the country is suffering its worst hunger crisis in a decade, largely due to an ongoing drought that started last year. The shortage of essential foods, such as the staple maize meal, often results in stampedes at the few markets where they can still be found.
Zimbabwe’s informal sector
Two decades of economic turmoil have seen Zimbabwe’s formal economic sector shrinking significantly. For example, manufacturing, clothing and textile industries have almost totally collapsed, with factories reduced to dilapidated shells.
The consequence is that the informal sector has grown exponentially. It’s estimated that a staggering 90% of Zimbabwe’s working population is employed in this sector.
I have been doing research on Zimbabwe’s informal sector for the last 12 years. I have found that it sustains many families’ livelihoods, even though the majority of participants in the sector live from hand to mouth as petty traders. This reality that confronts Zimbabwe’s informal economy is corroborated by research by the Labour and Economic Development Research Institute of Zimbabwe.
In addition, almost everyone who is employed in the formal economy augments their income through informal sector activities such as cross-border trading.
Reliable numbers are hard to come by, but a very high number of Zimbabweans eke out a living in this sector, or rely on it for food, clothing, fuel, local currency and forex.
The lockdown in Zimbabwe is going to provide a stern test for its informal economy, which is the country’s dominant economy. Most traders are subsistence traders and are already mired in extreme poverty. The jury is out on the extent to which they will observe the lockdown.
The government should immediately put in place a stimulus package that can cushion the informal economy.
Otherwise, a lot of livelihoods are going to be destroyed. The ramifications for the country and the whole region, especially neighbouring South Africa, will be grim.
Customs officials at Zimbabwe's biggest airport stopped reporting for work on Wednesday, fearing exposure to coronavirus and a lack of measures to prevent its spread, their union said.
Zimbabwe has recorded one death from three confirmed cases of coronavirus, but the opposition and critics of President Emmerson Mnangagwa accuse his government of under-reporting the number of cases. The government denies this.
The Zimbabwe Revenue Authority Trade Union said its members at the main airport in the capital Harare came into contact while dealing with the man who died from coronavirus, but they were not tested or put into mandatory isolation.
"There is very high exposure of all staff at the referred airport due to lack of proper stop-gap facilities to mitigate the possible spread of the deadly virus," said Lovemore Ngwarati, the union's secretary-general.
"The workers shall not report for duty until proper measures are taken to substantially mitigate the danger."
Faith Mazani, commissioner-general of Zimbabwe Revenue Authority, did not respond to calls for comment.
Facing its worst economic crisis in a decade, Zimbabwe is grappling with soaring inflation and shortages of foreign currency and medicines that has crippled its hospitals.
Doctors at state hospitals who ended a three-month strike in January say the medical facilities still face a critical shortage of equipment and medicine.
The Zimbabwe Doctors Hospital Association (ZDHA) said its members at Harare Central Hospital had on Wednesday withdrawn their services due to lack of protective clothing to handle coronavirus patients.
"This is not a strike. We will go back once they make available personal protective equipment," Tawanda Zvakada, the ZHDA secretary-general, told Reuters. He declined to say how many doctors were absent from work.
Zimbabwe will adopt a “managed float” exchange rate regime, Finance Minister Mthuli Ncube said on Wednesday, abandoning strict control of foreign exchange by the central bank in the latest in a series of currency reforms that have so far failed.
The country, which has seen bouts of hyperinflation since 2008, has taken steps to ease its heavy reliance on the U.S. dollar, part of a raft of economic reforms by President Emmerson Mnangagwa, who replaced longtime leader Robert Mugabe after an army coup in 2017.
Last June it made its interim currency the country’s sole legal tender, ending a decade of dollarisation and taking a another step towards relaunching the Zimbabwean dollar.
The central bank has controlled the interbank forex trading market, which was introduced in February 2019.
The latest move will see banks take a bigger role in foreign currency trades, narrowing the gap with the unofficial market by allowing trade on a more transparent platform.
On Wednesday, the Zimabwe dollar was trading at 18.26 against the U.S. dollar on the official interbank market and at around 40 to the greenback on the black market.
“Zimbabwe has had no transparent and effective foreign exchange trading platform for a long time. Consequently, official rates have not been effectively determined, while a thriving parallel market has developed,” Finance Minister Ncube told reporters in Harare.
He said an electronic forex trading platform was being put in place immediately.
“This platform will allow foreign exchange to be traded freely among banks and permit a true market exchange rate to be determined.”
Economic analyst Batanai Matsika of securities firm Morgan & Co described the policy shift as a desperate measure.
“This demonstrates the desperation of the authorities to deal with the widening gap between the official and parallel market exchange rates,” Matsika said.
“But it does not address the fundamental issue, which is the supply of forex. In a managed float, you need reserves to intervene in the market. The government does not have that. We do not even have three months’ import cover.”
Economic commentator Brains Muchemwa said the latest policy might not succeed in stabilising the exchange rate if the government did not maintain fiscal discipline.
Ncube insisted that the government had managed to control its spending and had a fiscal surplus of 3.1 billion Zimbabwean dollars ($172 million) at the end of February.
Last month the International Monetary Fund (IMF) warned that delays by Zimbabwe in implementing foreign exchange and monetary reforms risked undermining the new currency and the government’s reengagement internationally on debt arrears.
On Wednesday, Ncube also announced a new taskforce, which he will chair, to implement policy reforms aimed at stabilising the exchange rate and curbing inflation, which reached 521% at the end of 2019, according to the IMF.
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.
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.”
The Zimbabwe Revenue Authority (Zimra) is investigating a number of car dealers suspected to be using underhand deals to import luxury cars in a scandal that might have cost the country millions of dollars in unpaid taxes.
Zimra believes at least 200 top of the range cars were illegally brought into the country in recent months.
A suspected syndicate involving the tax authority's employees and car dealers is said to have taken advantage of Zimbabwe's transition from the multi-currency system into the mono-currency regime to manipulate the customs clearance procedures.
Since the currency reforms began late last year, Zimra has been charging duty on certain imported cars in foreign currency, while commercial vehicles are charged in local currency.
The authority's loss control department is said to have detected the scam recently where car dealers paid duty for luxury vehicles in local currency or understated their value.
"There are many cars that have been identified as not having been processed procedurally," Zimra said in response to questions from standardbusiness concerning the scandal.
"The authority is still in the process of reconciling [the clearance of high value vehicles]. Our on-going and intensified crackdown on corruption has so far identified more than 200 high value motor vehicles."
Zimra said it was not yet in a position to discuss in detail how the syndicate operated. The authority, however, said it was plugging loopholes in its manual systems.
"Investigations are on-going and because of them, the authority is reluctant to unpack the details of how the fraud was working," Zimra added.
"We can, however, reveal that the syndicate, made up of various players, was taking advantage of a largely manual system.
"Zimra is, however, in the process of automating most of its processes in order to reduce incidents of a similar nature.
"The duty schedules are being compiled and will be available in due course. The revenue at stake will amount to millions of dollars."
Zimra said all the vehicles that were imported illegally will be seized.
"As a matter of policy, Zimra's plans and procedures in the fight against corruption include all irregularities, including but not limited to the improper clearance of motor vehicles," the authority added.
"Already our investigations have unearthed the involvement of car sales dealers."
A number of Zanu PF linked politicians and businesspeople have been importing luxury cars such as Lamborghinis.
The ruling party itself was allegedly investigated by the Zimbabwe Anti-Corruption Commission (Zacc) after it benefited from a donation of luxury vehicles imported by businessmen with Zanu PF links, including a petroleum mogul in the run-up to last year's elections.
Zacc was alerted that the businessmen did not pay any duty for the large fleet, but the investigation reached a dead end after Zanu PF rushed to pay the taxes only a couple of weeks ago.
Several Zimra officers were arrested at the Plumtree border post recently for their allegedly involvement in a syndicate that illegally imported over 50 vehicles without paying duty.
Smuggling at Zimbabwe's points of entry is rife due to rampant corruption.
Source: Zimbabwe Standard
Zimbabwe President Emmerson Mnangagwa’s government will scrap its plan to remove grain subsidies next year, a move it says will protect impoverished citizens from rising food prices, state media reported on Thursday.
The country is experiencing its worst economic crisis in a decade, marked by soaring inflation and shortages of food, fuel, medicines and electricity.
Half of Zimbabwe’s population needs food aid after a devastating drought across the southern Africa region, worsened by an economy expected to shrink by 6.5% this year and month-on-month inflation at a four-month high of 38.75%.
Zimbabwe’s grain agency buys grain from farmers and releases it onto the market at subsidised prices, costing the treasury tens of millions of U.S. dollars. The government had planned to remove the subsidy in its 2020 budget.
Mnangagwa was quoted in the state-owned Herald newspaper as saying that would no longer happen.
“We cannot remove the subsidy,” he was quoted as saying. “So I am restoring it so that the price of mealie-meal is also reduced (next year).”
The removal of the government’s grain subsidy would have seen a 10 kg bag of maize meal, the country’s staple, costing 102 Zimbabwean dollars (about US$6.30), against 60 Zimbabwe dollars now, in a country with 90% unemployment.
Last week, the government removed import controls on maize and wheat flour to try to prevent food shortages.
Zimbabwe’s reintroduction of a local currency after 10 years of dollarisation, coupled with the removal of subsidies on fuel and electricity, unleashed inflation, triggering frequent and sometimes deadly protests against Mnangagwa’s government.
Rights groups say at least 17 people were killed and hundreds were arrested in January, after security forces cracked down on protests against fuel price increases. Police have banned further protests.
Early hopes that Mnangagwa, who took over from the long-ruling former president Robert Mugabe after a November 2017 coup, would revive the economy are fast fading amid a worsening economic crisis and slow-paced political reforms.
Local banks started the issuance of the new Zimbabwean dollar coins and notes as of this morning following a ZWL$30 million allocation to banks by the Reserve Bank of Zimbabwe (RBZ), 263Chat Business can report.
The new notes are expected to ease liquidity crisis in the market resulting in people paying more to get cash which is usually sold at a premium on the black market.
A survey by this publication revealed that most bank clients were being issued the new ZWL$2 coins with notes less visible.
The withdrawal caps however, remain stuck at $ 50 at most banks in line with RBZ drip-feed strategy of the new cash to monitor new money effects in the market.
"I have just received the new cash in $2 coins. I'm however saddened that we came here with high hopes of securing all our money but they still restrict us to just $ 50. What tangible thing can I buy with $ 50?," said Allan Kodzaimaoko, who had just come out of one banking hall.
The Central Bank announced that it will still cap the weekly withdrawal limit at $ 300 in order to maintain money supply balance in the economy and only up until a time it feels the economy is in balance it will then raise the limit.
Authorities also say banks are expected to start feeding the cash into the automated teller machines (ATMs) soon to improve convenience for customers.
Zimbabwe has been reeling from serious cash shortages for over two years now but the Central Bank intends to increase cash threshold from current levels of four percent of broad money supply to just above 10 percent.
The shortage of cash has been creating serious problems in the economy, hence high cash premium were being set against all forms of electronic money transactions.
This has had adverse effects particularly on the exchange rates.
But analysts are skeptical of monetary authorities' remedial action citing deficiency of confidence in the banking sector as the biggest threat to the economy.
"Money moves from formal to informal sector; it gets trapped there," RBZ Governor, Dr Mangudya conceded.
Some have also raised concern of the small quantities of notes in a market in hyperinflationary mode.
"I must say I'm worried about the fact that the highest denomination is going to be $ 5. You cannot buy a loaf of bread with $ 5 yet it's the highest denomination. Actually it's going to be costly for them because the nominal value of the $ 5 is less than the cost to print it," said economic analyst Brain Muchemwa, in a local radio station interview yesterday.
Zimbabwe's economy is predominantly informal, making it difficult for money to circulate in the formal banking channels and this is a challenge authorities will have to urgently address to bring stability in the financial sector.