The latest price hike announced by energy regulators on Saturday is the second last week and comes 48 hours after Zimbabwe Finance Minister Mthuli Ncube increased the excise duty on fuel by 45%.
Gasoline now costs Z$9.01, up from Z$7.55, and diesel costs Z$9.06, up from Z$7.22, and reflects a 19% and 25% increase respectively from the Zimbabwe Energy Regulatory Authority.
Ncube said fuel prices were too low in the southern African nation and needed to match the exchange rate between the local currency and the US dollar. On the official interbank market the rate is 9.28 per US dollar.
The hike in diesel, the most used fuel by companies and businesses which rely on it to operate generators, comes as power cuts lasting as much as 18-hours daily persist and is certain to put a further strain on business operations.
Econet Ltd, the largest mobile phone carrier in the country, said in a July 28th statement it needed 2 million liters of diesel monthly to run its 1,300 base stations, but fuel shortages meant it only had a quarter of its requirements met.
Government is calling for partnerships between local and foreign investors to set up generic drug manufacturing plants to improve drugs availability and create jobs.
Further, Government believes such investments will help generate foreign currency from the sale of generic drugs across the region.
This was said by Mr Godfrey Chanakira, the Permanent Secretary in Vice President Constantino Chiwenga's office, during the public health supply chain conference and exhibition in Harare on Tuesday.
"The Government of Zimbabwe advocates for improved availability of healthcare consumables and sustainable pricing structures of drugs," said Mr Chanakira.
"The TSP (Transitional Stabilisation Programme) acknowledges the technical and financial requirements in the sector, hence its call for new partnerships between domestic and foreign investors for setting up generic drug manufacturing plants in Zimbabwe in the course of this year.
"The joint venture partnerships envisaged are expected to benefit the country through technology transfer, among others."
He said such an approach results in value chain development, which comes with the creation of jobs for locals as well as generation of foreign currency through regional exports.
"In this regard, there are tremendous opportunities for the private sector to complement and partner the public sector towards the goal of achieving substantial improvements in drugs procurement efficiency and commodity availability.
"Although the private sector is often held up as a benchmark for efficiency for the public sector, this may be unfair as it ignores the unique challenges and constraints that public sector procuring entities often face such as greater public scrutiny and lengthy procurement procedures," said Mr Chanakira.
He said the National Health Strategy put in place by Government contains various programmes to direct and institutionalise stakeholder participation in the healthcare delivery system, maintain the momentum of private-public cooperation and create an enabling environment for those who want to come on board.
Mr Chanakira added that the key to any successful health system is the supply of medicines, the availability of essential commodities and equipment to enable testing, treatment, care and support.
"Nevertheless, within the public sector, procurement of health commodities requires more flexibility and responsiveness to change (in population health and in environmental conditions) than procurement of other products.
"Thus, ineffective procurement in public health institutions compromises the quality of national disease responses, interventions and programmes.
"Inadequate planning, forecasting and procurement methods often contribute to high commodity costs, long lead times, stock imbalances and overall, commodity insecurity," he said.
Source: The Herald
Zimbabwe won’t hesitate to raise interest rates above their current level of 50% to deal with speculative borrowers, Finance Minister Mthuli Ncube said on Monday.
Zimbabwe hiked its overnight lending rate to 50% last month after making its interim RTGS currency the country’s sole legal tender.
Central bank Governor John Mangudya said on Monday that Zimbabwean individuals and companies held around $1 billion in foreign-currency accounts, around three months’ import cover.
Eskom says it has received payment from Zimbabwe.
The power utility confirmed that payment reflected on Tuesday.
“Eskom confirms that the payment made by Zimbabwe is reflecting in its account today,” Eskom said in a media statement.
Eskom did not disclose how much was paid but said it would work with Zimbabwe's state-owned power utility for solutions.
However, Zimbabwe's state-owned power utility owes Eskom more than US$40-million (R564-million) for electricity borrowed over the years.
“Discussions will continue with the Zimbabwe Electricity Supply Authority (ZESA) to find a mutually beneficial solution to the outstanding debt. Eskom is a commercial operation and will be guided by the contracts we have in place with ZESA,” Eskom added.
On Friday, Eskom said it had not the received payment from Zimbabwe.
However, Zimbabwe’s energy minister Fortune Chasi posted proof of the R139-million payment on social media.
The amount is an equivalent of $10-million.
Zimbabwe is experiencing lengthy power cuts amid an economic crisis.
Zimbabwe’s passport-issuing service has ground to a halt, officials said Monday, leaving many citizens trapped in the country as its economic crisis worsens.
Applicants for new or renewed passports face an indefinite wait as the government does not have the foreign currency to pay for special imported paper, ink and other raw materials. Officials at the Registrar General Office said that even if citizens want to pay for an urgent application for a passport, they face a minimum wait of 18 months before they can even submit their papers.
“Last month, the urgent applicants were being told to come back at the end of 2020,” said one official who spoke on condition of anonymity.
She added that non-urgent applicants were told that no date was available for when they can apply. Millions of Zimbabweans have fled abroad in the last 20 years seeking work as hyperinflation wiped out savings and the formal employment sector collapsed.
Many others are now seeking to leave as conditions worsen under President Emmerson Mnangagwa, who had promised an economic revival after he succeeding long-ruling Robert Mugabe in 2017.
Official inflation is at nearly 100 percent — the highest since hyperinflation forced the government to abandon the Zimbabwe dollar in 2009 — while supplies of essentials such as bread, medicine and petrol regularly run short.
Power cuts often last 19 hours a day.
Isheanesu Mpofu, a 23-year-old unemployed university graduate, applied for a passport last November but is still waiting.
“I went back early June to check on it, and was told to check again in August,” Mpofu said, adding he wanted to visit his family abroad.
“Besides, it is my right to have a passport so I can travel whenever I want to,” he said.
Mnangagwa addressed the problem last month, saying a dispute with the printers over unpaid bills meant that a state-owned company would take over the job.
“They said they will not print any more passports because of legacy debts,” he said, claiming the money had now been paid.
A passport office official said that only ten passports were being printed each day despite a reported backlog of 280,000.
“We have the capacity to clear the backlog in a very short time but all the machinery is lying idle right now,” she said.
Registrar General Clement Masango said that he had no comment to add to the president’s remarks
The Reserve Bank of Zimbabwe (RBZ), will print an extra $400 million in bond notes and coins to cover the gap left by the withdrawal of hard currencies, Governor John Mangudya said Wednesday.
On Monday, government, in a shock move, announced the multi-currency regime that had obtained for a decade would be abolished with immediate effect, designating the Zimbabwean dollar as sole legal tender for all local transactions.
Mangudya was however quick to allay fears of inflation indicating the RBZ is cognisant of the consequences of unguarded printing of money.
"As we move towards a cashless society, we still need about $400 million to allow people to access cash, so we are going to print that money to cover that gap left by the removal of the multi-currency system," Mandudya told a state run radio station from China.
"We will not print up to levels that will cause inflation as feared by some people."
Mangudya said Zimbabwe's economy requires around $1.5 billion in cash and currently has between $600-$800 million in bond notes that are not enough for use by the transacting public.
"Currently, we have about $6-800 million in bond notes and coins. This economy requires about 10% of all deposits in liquidity which comes to about $1-1.5 billion.
"So we will definitely bring in notes and coins in the value of around $400 million," he said.
The RBZ governor also said that diaspora remittances should continue to be received in foreign currency and no bank has been instructed not to pay customers from their Nostro accounts.
He also dismissed claims that the Central Bank will raid ordinary people and business foreign currency accounts.
"Recipients of diaspora remittances and other foreign currency payments will still withdraw in hard currencies or choose to get it in Zimbabwean dollar at an interbank rate," he said.
According to a statement from the RBZ, non-governmental organisations, embassies and other foreign organisations will not be affected and can continue paying salaries in foreign currency.
Government has paid US$10 million to South African power utility, Eskom, and paid off $20 million to Zesa Holdings to clear its debt.
Zesa Holdings is also expected to get an advance of $20 million from Government, in a move expected to improve power generation.
This was said by Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa in Harare while addressing journalists on decisions reached during Tuesday’s 25th June Cabinet meeting.
“Cabinet was advised by the Minister of Energy and Power Development that Treasury has now fully paid off Government’s debt obligation to Zesa, which was around RTGS$20 million.
“A further RTGS$20 million is due to be advanced to Zesa by Treasury, in order to boost power generation by the utility. This, together with the payment of US$10 million to Eskom, should help alleviate the current power supply situation,” said Minister Mutsvangwa.
Responding to journalists, Energy and Power Development Minister Fortune Chasi said the money will go a long way in power generation to ease deficit.
“We will hold discussions to ensure that the money is applied on areas of generation, part of which is production of coal which is key to generation of thermal (energy). So that is significant, we are expecting another RTGS$20 million, we already have a plan on its utilisation. We need a plan for power in Zimbabwe, a plan that recognises we have a deficit,” said Minister Chasi.
He said the ministry’s long-term plan was to export upon generating excess power.
He commended the Government for clearing its debt, saying it had led by example.
“We need to address load-shedding which is also causing hardships to the public. I am not at the moment able to say specifically what we are going to get from Eskom. We are engaged with them, we have made a significant payment; we should get some relief from that quarter.
“If we are able to get the 400MW, that would be good. It will deal with the cycle of consumption that we experience everyday that has occasioned load-shedding,” said Minister Chasi.
“We are coming up with a programme to install meters, so that we manage our consumption. We are also looking at efforts to disengage as many as possible of our consumers from the grid during the day which means we really have to look at the issue of solar in a direct way.”
He implored Zesa consumers to pay their debts.
“It is very easy to criticise Zesa but what does it mean when there is a bill of $1,2 billion on power utility which is at the nerve centre of our economy?” he said.
He said Kariba Dam level was now at 28 percent.
Turning to Zesa management, Minister Chasi said there was need for proper governance at the power utility.
“Zesa must be properly governed and we are working on that. We need proper management by people who appreciate the work that they are involved in.
“My position is clear. If you are complicity in conduct that causes loss or damage to Zesa or people of Zimbabwe in general you must answer for it.
“We have just completed studying the forensic report and anyone who has a case must answer and anyone who must leave Zesa must do so. We want people with the national interest at heart,” said Minister Chasi.
Source: The Herald Zimbabwe
Zimbabwe and the European Union began political talks aimed at turning the page on hostile relations during Robert Mugabe’s rule, a step that could enable a resumption of direct financial aid for the ailing economy.
During Mugabe’s four-decade rule until 2017, he would routinely blame European “colonialists” for Zimbabwe’s problems and snarled at EU and US sanctions for rights and vote abuses.
The EU has only kept sanctions on Mugabe, his wife and the state arms manufacturer, but is yet to resume direct funding to the new government of President Emmerson Mnangagwa, preferring to channel money through local charities and UN agencies.
With the economy afflicted by dollar shortages, fuel queues, power-cuts, and soaring prices, Mnangagwa has said restoring ties with the West and multilateral lenders like International Monetary Fund is one of his major priorities.
At the start of the open-ended talks between diplomats and officials in Harare, EU Zimbabwe delegation head Timo Olkkonen said they would discuss issues including economic development, trade, investment, rights, rule of law and good governance.
The government has already signed up to an IMF monitoring programme where it has committed to political and economic reforms in a bid to set a track record of fiscal discipline that could earn it debt forgiveness and future financing.
At a separate event in a Harare hotel, Mnangagwa signed a new bill creating a tripartite negotiating forum intended to bring labour, business and government together to shape policy.
The 76-year-old leader is under pressure to deliver on pre-election promises and wants to avert a repeat of violent protests over a steep fuel price hike in January.
Later on Wednesday, the government is expected to start wage negotiations with public sector unions, who say a pay rise of up to 29% they received in April had already been eroded by inflation, now at a 10-year high of 75.86 %.
Mnangagwa has promised to break with his predecessor and says his “open for business” mantra will woo foreign investors. But critics say under his rule the economy shows no signs of improvement while security forces have continued to crush dissent.
As Zimbabwe’s economy struggles and the country faces scarce fuel supplies, some businesses are refusing to accept the ever-weakening local currency, insisting on doing business in U.S. dollars.
One reason is that the local currency, known as bond notes, are not accepted outside the southern African country, making them useless for any companies that need to import goods.
This spare vehicle parts seller, Tongai Madamombe, says he wants President Emmerson Mnangagwa’s government to switch to the U.S. dollar as pricing in bond-notes has become difficult.
“For those that do not import, charging in bond-notes is not as difficult, as it is for us who import,” Madamombe said. “If you do not calculate well, you will fail to restock. We are really in difficult times. So we are now pricing in U.S. dollars, those who do not have it we use parallel market rates, as we will go there to get foreign currency to import our stock.”
Zimbabwe abandoned its dollar more than a decade ago, when hyperinflation made it worthless. Now the bond notes, introduced two years ago, are also depreciating in value.
The South African rand and British pounds are acceptable in many places, but very hard to find.
Even some Zimbabwe government departments and companies such as the National Railways have started asking for payment in U.S. dollars, partly to protect themselves against the depreciating bond notes.
Fuel is another scarce product in Zimbabwe, and the government continues to control its price. Some companies have resorted to selling it in U.S. dollars only.
Eddington Mazambani, the head of the Zimbabwe Energy Regulatory Authority, says it is only allowing fuel companies that have directly imported fuel on their own to trade in U.S. dollars, as the Reserve Bank of Zimbabwe pays foreign currency for most fuel imports in the country.
“We require documentation, if you have procured through Reserve Bank [and] you then fail to produce documentation to us, we will then take the necessary measures. You would be breaking the law, so we will take measures according to the laws in the petroleum sector,” Mazambani said.
The government says gas stations trading in U.S. dollars when they are supposed to take local currency are being stripped of their licenses. But so far that policy has not made fuel more available or stopped the practice.
Zimbabwe will not borrow externally and will cut reliance on the central bank to finance deficits during an IMF staff-monitored programme in a bid to set a track record of fiscal discipline that could earn it future funding, the IMF said.
The southern African nation owes $8.8 billion to foreign lenders, $2.6 billion of that in arrears to the World Bank, the African Development Bank and the European Investment Bank. It has not accessed financing from international institutions since defaulting on its debt in 1999.
It is also suffering from a dollar crunch, rising inflation and public anger over shortages - all issues that have piled pressure on President Emmerson Mnangagwa who has promised to revive the economy after the fall of Robert Mugabe.
His government agreed to have its economic and political reforms monitored by the IMF from May 15 to March 15 next year to try to convince foreign donors to restructure and forgive its debt.
In a report released on Friday, the IMF said Harare authorities pledged to only borrow RTGS$400 million from the central bank in 2019, down from RTGS$3 billion last year.
The treasury will also cut the government’s salary bill to 67 percent of the budget, down from 79 percent last year and slash the budget deficit to 4% of GDP, in line with earlier projections, the IMF added.
The government will remove grain subsidies next year after the central bank scrapped a subsidy on fuel and ordered oil firms to buy dollars on the open market. Economic growth in the southern African nation is, however, expected to suffer from a severe drought and a cyclone that tore through the eastern regions early this year.
The IMF said this would see the economy contracting by 2.1 % this year before rebounding to 3.3% growth in 2020. The annual inflation rate will average 80.86 percent this year but the figure would fall to 14.1% next year, it added.
“Higher than projected inflation or a continued exchange rate depreciation could increase spending pressures, while failure to enforce (performance finance management) could lead to unbudgeted expenditure,” the IMF report said.
The central bank announced at the weekend that businesses and individuals would start accessing a $500 million loan borrowed from the African Export and Import Bank - a loan that had been negotiated before the IMF programme, the body’s representative in Harare, Patrick Imam, told Reuters.