Tag: Zimbabwe

Zimbabwe begins loadshedding

By Crecey Kuyedzwa for Fin24

Zimbabwe has started to institute planned rotational power cuts to reduce stress on its national grid, following low water levels at Kariba Dam, generation constraints at Hwange Power Station and limited imports from Eskom in South Africa and Mozambique.

Power utility Zimbabwe Electricity Transmission & Distribution Company on Sunday published load shedding schedules for the whole of the country.

“The power shortfall is being managed through load shedding in order to balance the power supply available and the demand,” it said in a weekend statement.

While Eskom in South Africa has eight stages of load shedding, Zimbabwe has announced only two stages for now.

The power supplier divided the country into seven regions, and then further into districts or suburbs. It has given each district or suburb a numerical code.

This code is then checked against a regional table which has two time periods: Morning peak – between 05:00 and 10:00, and evening peak, between 17:00 and 22:00.

When power is cut, suburbs that fall within the time period lose power.

The same suburbs or districts will not generally have power cuts over the same day’s morning and evening peaks. When load shedding moves to Stage 2 and “increases beyond the planned limit” power to additional suburbs will be cut. The power cuts will be in five or eight hour blocks in different areas of the region or district.

Zimbabwe has had to implement power cuts, in part, due to poor rainfall in 2018 and 2019 that led to reduced inflows into Kariba Dam. The dam’s hydroelectric power stations supply electricity to both Zimbabwe and Zambia

Over the years Zimbabwe has been topping up its power supply by importing an average 100MW of power from Eskom and Mozambique, but will be forced to look for more given the current crisis.

Power imports from South Africa’s Eskom also cannot be guaranteed, with the power utility facing a fair share of its own challenges.

Analysts say the impact of the power cuts will be significant to industry, which cannot easily turn to the use of generators amid limited availability of fuel.

Zimbabwe introduces new currency

Source: BBC

“Nobody knows what it is,” is the verdict of Zimbabwe’s former trade minister and now opposition politician Nkosana Moyo.

He was talking about what appears to be a new currency in the country.

It has been introduced over the last few days but its impact is not yet clear.

Why is it needed?
Zimbabwe has a troubled history with currency.

In 2009 it ditched the Zimbabwe dollar and adopted the US dollar after hyperinflation destroyed its value. At its height prices were almost doubling every day and the reserve bank printed notes worth 100tn Zimbabwe dollars to try and keep up.

But because more US dollars were leaving the country – in the form of payments for exports – than coming in, US dollar cash was in short supply. This led to long bank queues as people struggled to get their money out.

In 2016, the government introduced bond notes and coins, which were supposed to be worth the same as the US dollar, to make up for the cash shortage.

But no-one had faith that they were equivalent and, on the black market, bond notes have lost value against the dollar.

And now the government has introduced the Real Time Gross Settlement (RTGS) dollar, which is being described by some as a new currency.

RTGS dollar?
It’s not a phrase that exactly rolls off the tongue, but the initials are familiar to Zimbabweans who have been using them to describe money that has been electronically transferred into their bank accounts.

As well as paying for goods in US dollars, Zimbabweans have been able to use other foreign currencies such as the South African rand, plus bond notes, debit cards drawing on bank accounts and money stored on a mobile phone app.

But each of them had a different exchange rate, meaning that customers were sometimes charged different prices depending on what payment method they chose.

The RTGS dollar is supposed to bring together bond notes and debit card and mobile money payments to make sure that they are all worth the same.

Significantly, the government has given up on the pretence that the bond note and the US dollar have the same value. Now it is saying that the value of the RTGS dollar against the US dollar will be set by the market.

What makes a currency a currency?
While business journalists and commentators are saying that there is a new currency, the government has not used this phrase.

The Zimbabwe dollar has such a tarnished history that the government is reluctant to be seen to be returning to this.

At its simplest, a currency is something that is widely accepted as a means to buy goods and services.

From now on the government wants things priced in RTGS dollars, rather than US dollars, and people should be able to use the various payment methods denominated in RTGS – debit cards, bond notes and mobile phone money – to purchase them.

So it feels like a currency but there are no plans to have notes and coins with “RTGS dollars” written on them and you cannot use them outside the country.

How much is an RTGS dollar worth?
The government has said it wants the price of the RTGS dollar to be determined by the market.

It initially suggested that it should trade at 2.5 RTGS dollars to the US dollar, but this was significantly less than the black market rate for the bond note, which was selling at more than 3.5 to the dollar.

If the RTGS dollar is truly allowed to float without intervention then the black market should be eliminated altogether.

The government hopes that it will make things simpler as there won’t be different prices quoted according to the various currencies and payment methods.

It also hopes that prices will stay the same or even decline as stability and predictability is brought into the market.

Will this solve Zimbabwe’s problems?
Zimbabwe has been hit by rising inflation and increasing levels of government debt for many years.

But if the RTGS dollar is the solution, then the government is “misdiagnosing the problem”, opposition politician Mr Moyo says.

He argues that poor economic management is at the heart of the problem, saying that government expenditure needs to be reined in.

But Finance Minister Mthuli Ncube insists that austerity measures he introduced in last year’s budget are working and government revenue is increasing.

As long as the government does not try to manage the RTGS dollar exchange rate, then this is a step in the right direction, says the chief economist at Renaissance Capital, Charlie Robertson.

But given the history that Zimbabwe has with currencies, it will take a lot to restore people’s trust, he adds.

Zimbabwe switches off the Internet

By Brian Latham for Fin24

When the Zimbabwean government ordered Internet service providers to shutter parts of the web in an effort to curb anti-government protests, it also plunged homes into darkness because people can’t pay their utilities online.

Most people in the southern African nation use Econet Wireless Zimbabwe’s Ecocash mobile-phone payment system for daily transactions.

They buy electricity in units of $5 or less and almost all domestic users are on prepaid meters, so many buy for $1 at a time.

According to Zimbabwe’s Finance Ministry, less than 5% of commercial transactions in the country involve cash, mainly because it’s hard to find. Instead Zimbabweans use Ecocash or bank cards.

“Tonight will be spent in darkness,” said 42-year-old John Pedzesai, who sells plants on a sidewalk in the capital, Harare.

Econet, Zimbabwe’s biggest mobile-phone company, declined to comment.

Internet blackout in Zimbabwe

A core platform failure at Zimbabwe’s largest internet access provider saw Zimbabwe lose internet services for the better part of Tuesday.

The internet outage started at 11:30 and lasted until 17:00 and affected most operators that use Liquid Telecoms Zimbabwe, a subsidiary of Econet Wireless Global.

At the time of writing this story it was still unknown as to what caused the outage.

However, Econet Wirelesss Zimbabwe, which also rides on liquid, issued a statement saying: Econet Wireless apologises to its valued customers for the data outage experienced on Tuesday, December 5, 2017 resulting in customers being unable to access the internet and related data services on our network.”

Company spokesperson Fungai Mandiveyi said the outage was due a technical fault which has since been resolved.

“Econet sincerely apologises for any inconvenience caused,” he said.

Liquid Telecom is one of the fastest growing internet service providers in Zimbabwe in particular and Africa in general.

It provides state-of-the-art fibre internet which links Zimbabwe and the Southern African region to the outside world. It is the biggest internet access provider with a market share of more than 80%.

Its sister company, Econet Wireless, controls 75% of mobile phones meaning the outage affected approximately 75% of the telecoms market. Social media platforms such as WhatsApp were also affected.

The outage also affected most of the businesses that rely on online based activities including sending emails.

State owned fixed telecoms provider Telone also issued a statement saying: “This is due to faults that occurred on our main links through South Africa and Botswana.

“Our back back-up link through Mozambique has remained active with limited connectivity.”

ByCrecey Kuyedzwa for Fin24

Robert Mugabe resigned as Zimbabwe’s president on Tuesday, shortly after parliament began an impeachment process to end his nearly four decades of rule.

The 93-year-old clung on for a week after an army takeover and expulsion from his own ruling Zanu-PF party, which also told him to leave power.

Wild celebrations broke out at a joint sitting of parliament when speaker Jacob Mudenda announced Mugabe’s resignation and suspended the impeachment procedure.

The origin of Mugabe’s sudden downfall lies in rivalry between members of Zimbabwe’s ruling elite over who will succeed him, rather than popular protests against his rule. The army seized power after Mugabe sacked Zanu-PF’s favourite to succeed him, Emmerson Mnangagwa, to smooth a path to the presidency for his wife Grace, known to her critics as “Gucci Grace” for her reputed fondness for luxury shopping.

Mnangagwa, a former security chief known as The Crocodile, is expected to take over as president.

Source: Business Live

Zimbabwean elections probably won’t be held as scheduled, Rashweat Mukundu, an analyst with the Harare-based Zimbabwe Democracy Institute, said on Wednesday.

“The military is going to determine the shape of Zimbabwean politics, although they’ve tried to say this is not a coup,” he said. “This may result in the creation of a new unity government which will involve the opposition.”

The armed forces seized power in Zimbabwe after a week of confrontation with President Robert Mugabe’s government and said the action was needed to stave off violent conflict in the southern African nation that he’s ruled since 1980.

The Zimbabwe Defence Forces will guarantee the safety of Mugabe, 93, and his family and is only “targeting criminals around him who are committing crimes that are causing social and economic suffering in the country in order to bring them to justice,” Major-General Sibusiso Moyo said in a televised address in Harare, the capital. All military leave has been cancelled, he said.

Denying that the action was a military takeover, Moyo said “as soon as we have accomplished our mission we expect the situation to return to normalcy.” He urged the other security services to cooperate and warned that “any provocation will be met with an appropriate response.”

The action came a day after armed forces commander Constantine Chiwenga announced that the military would stop “those bent on hijacking the revolution.”

As several armoured vehicles appeared in the capital on Tuesday, Mugabe’s Zimbabwe African National Union-Patriotic Front described Chiwenga’s statements as “treasonable” and intended to incite insurrection. Later in the day, several explosions were heard in the city.

The military intervention followed a week-long political crisis sparked by Mugabe’s decision to fire his long-time ally Emmerson Mnangagwa as vice president in a move that paved the way for his wife Grace and her supporters to gain effective control over the ruling party. Nicknamed “Gucci Grace” in Zimbabwe for her extravagant lifestyle, she said on Nov. 5 that she’s prepared to succeed her husband.

Economic crisis

The events unfolded as Zimbabwe is in deep crisis. The economy has halved in size since 2000 and the nation has no currency of its own, using mainly the dollar as legal tender. Lines of people waiting to make bank withdrawals snake around city blocks in Harare. Some sleep in the streets to ensure they’re served. An estimated 95% of the workforce is jobless and as many as three million Zimbabweans have gone into exile.

The country is now under military rule, said Alex Magaisa, a Zimbabwean law lecturer who is based in the UK and helped design Zimbabwe’s 2013 constitution.

“When you see a man in uniform reading news on national television, you know it’s done,” he said in a text message. “There are no more questions. Authority is now in the hands of the military.”

Mnangagwa, who said he fled Zimbabwe because of threats against him and his family, had been a pillar of a military and security apparatus that helped Mugabe emerge as the nation’s leader after independence from the UK in 1980. He was Zimbabwe’s first national security minister.

Liberation war

Mnangagwa’s dismissal signalled Mugabe’s break with most of his allies who fought in the liberation war against the white-minority regime of Rhodesia, leaving his 52-year-old wife’s so-called Generation-40 faction of younger members of the ruling party in the ascendancy.

While Zanu-PF named Mugabe as its presidential candidate, he’s appeared frail in public, sparking concern among his supporters that he wouldn’t be able to complete another five-year term.

Moyo, in the statement, told members of parliament that the military’s “desire is that a dispensation is created that allows you to serve your respective constituencies according to democratic tenants.”

Bloomberg via Fin24 

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My Office News Ⓒ 2017 - Designed by A Collective


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