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The Zimbabwe Doctors Hospital Association (ZDHA) said its members at Harare Central Hospital had on Wednesday withdrawn their services due to lack of protective clothing to handle coronavirus patients.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.
Zimbabwe’s central bank chief, John Mangudya, said he would introduce a new currency in the next two weeks to address biting liquidity shortages in the economy and regain monetary policy control after years of dollarisation.
Mangudya told journalists in the capital on Tuesday that the as-of-yet-unnamed currency will have denominations of coins and notes with a maximum value of five Zimbabwe dollars (US$0.25).
“We are going to be releasing money into circulation. To be precise, within the next two weeks, we will have the new currency,” Mangudya said.
He said the new currency would trade along with the bond notes and the coins and would have the same value as these surrogate currencies.
Mangudya defended the bank’s decision to have a note worth only five Zimbabwe dollars as the highest denomination in a hyperinflationary environment, saying he wanted uniformity with the denominations that were already in the market.
Mangudya said that in line with the law, Zimbabwe’s President Emmerson Mnangagwa must agree to the creation of a new monetary unit. After he assents, the minister of finance will then issue a decree, paving the way for the printing of the currency.
Zimbabwe ‘s inflation was last measured at 350% after Finance Minister Mthuli Ncube ordered the country’s statistical department to stop publishing annual inflation numbers until February of next year.
Back in 2009, soaring inflation prompted Zimbabwe to ditch its failing sovereign currency in favour of a basket of foreign currencies led by the United States dollar. But “dollarising” the economy hit a major bump in 2015 when greenbacks started vanishing from the formal banking system.
In a bid to end the US dollar shortage, Zimbabwe’s central bank introduced bond notes – a form of surrogate currency – that was backed by a US$200 million bond facility from the Africa Export-Import Bank. But black market speculation quickly eroded the bond note value, triggering a shortage that the central bank tried to offset by creating electronic notes.
Then this past February, bond notes – both physical and electronic – were merged into the Real Time Gross Settlement (RTGS) dollar.
In June, the government moved to defend the Zimdollar against speculators by banning all foreign currencies in local transactions. But the effort has largely failed after the Zimdollar quickly fell prey to black market speculation that sent its value plummeting.
“There is a misconception that once you introduce a currency, then inflation is going to increase. We are simply giving people a chance to choose between electronic balances and cash,” said central bank chief Mangudya.
Economists are not holding out hope for the new currency.
“The only worry about a local currency is excessive money printing by the central bank, which makes multiple currencies dearer options when forced to choose,” Victor Bhoroma, a Harare-based independent economist, told Al Jazeera.
“The solution for Zimbabwe does not lie in any new currencies [whether Zimbabwean dollars or foreign currencies].”
The solution, according to Bhoroma, is instituting key reforms in governance, reining in expenditures in government, creating supply-side interventions to boost production, engaging in confidence-building, and strengthening institutions – such as the rule of law, property rights, and policy consistency.
Gift Mugano, an economics professor at Zimbabwe Ezekiel Guti University, told Al Jazeera that the introduction of the currency will accelerate its own value decline.
The new currency will have the same value as the bond note and RTGS dollars circulating in the economy.
“This is a continuation of a process that started on 24 June when the central bank outlawed the use of the US dollar and introduced a new currency,” Mugano said.
“What is important to note is that they did this when economic fundamentals were very weak. The fundamentals have not improved as we speak.
“The central bank doesn’t have the reserves to back the value of the currency and has only a month’s import cover at best. It’s going to be difficult to maintain the value of the currency.”
Mugano said the bond note and the RTGS dollar, the Zimbabwe dollar’s predecessor, had failed to act as a store of value, forcing ordinary Zimbabweans and companies to buy US dollars to preserve value.
He sees companies using the new currency to acquire US dollars.
“What will happen is very simple: companies will get cash to buy US dollars and then the rate will go higher as more cash chases the few US dollars in the market,” Mugano said. “The pressure on the exchange rate will be higher.”
The RTGS dollar and Zimbabwe’s surrogate currency, the bond note, have both struggled to hold value against the US dollar as demand outstrips supply.
Once valued at 1:1 with the greenback, the currency is now trading at 1:20 against the US dollar on the black market.
“It is obvious the Zimbabwean dollar will not hold any value because of negative fundamentals in the economy which include key among them confidence deficit and high demand for foreign currency to import commodities [current account deficit],” Bhoroma said.
“It is also inevitable that the central bank will continue to grow money supply in the economy to fund runaway government expenditure. This will further weaken the local currency.”
This year alone, the economy in Zimbabwe is contracting by more than 6.5%.
Zimbabwe’s President Emmerson Mnangagwa on Friday described Western sanctions as a “cancer” sapping the economy, and his supporters denounced the measures during marches held around the southern African country.
Mnangagwa’s opponents stayed away from the demonstrations, saying they were a distraction from the president’s mishandling of the economy, which is grappling with 18-hour daily power cuts and shortages of foreign exchange, fuel and medicines.
Mnangagwa has so far failed to unify the country since taking over from the late Robert Mugabe, who was ousted in a coup in 2017. Hopes of a swift recovery have faded as the economy struggles to exit its deepest crisis in a decade.
Mnangagwa, like Mugabe, blames the sanctions imposed by the United States and European Union since 2001 for the economic ills and sees them as a tool to remove the ruling ZANU-PF party from power.
“Every part and sector of our economy has been affected by these sanctions like a cancer,” Mnangagwa told a few thousand supporters inside a 60,000-seater national stadium. “Enough is enough, remove them. Remove these sanctions now!”
Earlier, 7,000 government supporters led by Mnangagwa’s wife Auxillia and bussed from across Zimbabwe marched for 5 km to the national stadium in the capital Harare.
Singing and dancing, they waved placards inscribed “No sanctions, no discrimination, sanctions new version of slavery,” and “Enough is enough, remove sanctions now.”
“We have no jobs because of the sanctions. America wants to remove ZANU-PF from power through sanctions but we will defend the party and our president,” said 32-year-old Martin Mafusire.
Similar marches were held throughout Zimbabwe after Mnangagwa declared Friday a public holiday.
The EU and United States imposed financial and travel bans on ZANU-PF and top military figures for alleged human rights abuses and electoral fraud. The government says the measures are punishment for its seizures of white-owned farms.
ZANU-PF supporters condemn the sanctions while the main opposition Movement for Democratic Change says they are not the cause of the country’s economic crisis.
The regional Southern African Development Community has rallied behind Zimbabwe’s call for an end to sanctions.
While the government ran documentaries and articles in the official press criticising sanctions, the U.S. and EU embassies took to social media to rebut the official narrative.
U.S. Ambassador Brian Nichols wrote an article in a private newspaper on Thursday saying “the greatest sanctions on Zimbabwe are the limitations that the country places on itself”.
He said the United States remained the biggest donor to Zimbabwe but corruption and lack of reform had dragged down the economy.
Harare says the U.S. sanctions have been the most devastating. These bar U.S. officials at the International Monetary Fund and World Bank from voting for debt relief or fresh lending for Zimbabwe.
In March, President Donald Trump extended by one year sanctions against 141 entities and individuals in Zimbabwe, including Mnangagwa.
Zimbabwe's militant teachers' group, Progressive Teachers Union of Zimbabwe (PTUZ) says its members will from today start reporting for duty only twice a week as they could no longer afford transport fares to and from work.
This, they announced through a Friday letter they addressed to Public Service Commission chairperson, Vincent Hungwe.
PTUZ secretary general Raymond Majongwe said teachers under his 15 000-member union will also be abandoning formal dressing during their course of duty as they can no longer afford the clothing.
He said teachers' earnings have been eroded by continued price increases that have propelled the country's inflation to an alarming 591 percent, according to top world economist Steve Hanke.
"We hereby give our notice of incapacitation and with effect from Monday the 21st of October 2019 our members will be reporting for duty twice a week at most," Majongwe said.
"Mr Chairman, teachers would also like to advise and notify you that because of their plight, they will no longer be able to abide by the Strict Dress Code Rules as the little pittance they are getting is not adequate to feed them and their families, let alone buy formal clothing."
Majongwe said teachers under his organisation will only resume full time duty when government starts paying their wages based on the US dollar interbank rates, which on Friday stood at $15.8 against USD$1.
"Our humble and honest request to government is simply a radical adjustment of teachers' salaries to the last USD salary paid, at the current interbank rate, that is pegged at $15.8 today," he said.
The pending job action by the radical teachers group comes as junior doctors working in the country's public hospitals Friday went into Day 47 of their crippling strike demanding a review of their wages and allowances based on interbank rates.
The doctors insist they were prepared to report for work, but they were financially incapacitated to do so.
Government has offered the critical health staff a 60 percent wage hike which has been turned down by doctors who want their salaries pegged against the US dollar.
According to latest wage talks, government Friday revised the offer to 100 percent.
President Emmerson Mnangagwa Thursday accused the striking doctors of being used by the enemy to advance a regime change agenda against his under-fire administration.
Credit: New Zimbabwe