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Zimbabwe announces new measures to aid ailing local currency

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BY NYASHA CHINGONO

 Zimbabwe’s treasury has announced measures to encourage the use of the local dollar as opposed to the U.S. dollar, in a bid to boost the local unit and tame rising consumer inflation.

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The measures include a directive that all government departments collect fees in the local currency, the introduction of a 1% tax on all foreign payments and that all customs duty be payable in local currency, with the exception of designated or luxury goods and where an importer opts to pay in foreign currency.

The Treasury will also assume all foreign currency debts from the Reserve Bank of Zimbabwe, Finance Minister Mthuli Ncube said in a statement dated May 29.

“Government shall create a debt redemption fund to service other external liabilities in line with the arrears clearance program. These will be funded through new levies and other resource mobilisation initiatives,” Ncube said.

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Zimbabwe legalized the use of foreign currencies in domestic transactions in 2020, less than a year after abandoning dollarisation. Economists estimate that 80% of the local economy is dollarized.”The assumption of the external obligations by Treasury and the implementation of non-inflationary financing of the liabilities, coupled by sourcing of additional resources, will go a long way in reducing money supply growth and its impact on exchange rate depreciation and prices increases,” Ncube’s statement said.

But some economists doubted the new measures would help the Zimbabwe dollar, which has weakened by about 70% since the beginning of this year, with the gap between the official and exchange rates continuing to widen.

 

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“They are doing this to preserve the value of the Zimdollar. Is this going to work? I say no. This is akin to using toothpaste when you have lost your teeth,” economics professor Gift Mugano said.

“It will be a miracle for us to be able to reverse the crash of the Zimdollar and ensure stability.”Mugano also criticized what he termed the government’s plan to “raid” foreign currency accounts of exporters, after Ncube said that “all export proceeds that remain unutilised after 90 days will be liquidated onto the interbank market”. SOURCE: REUTERS 

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National

ZIMRA customs officer appears in court for criminal abuse of office

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BY STAFF REPORTER 

A Zimbabwe Revenue Authority (ZIMRA) customs officer, Phillip Kuvenga, has been accused of criminal abuse of office for allegedly assisting in the importation of banned motor vehicles.

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Kuvenga, 28, who is stationed at Victoria Falls, allegedly received documents from clients, completed valuation sheets, and carried out the valuation process. However, he is accused of endorsing different chassis numbers to deceive his supervisors during the validation and approval process.

After obtaining approval, Kuvenga would capture the correct chassis numbers in the ASYCUDA World System. He would then alter or replace the documents submitted earlier to his supervisors.

The offense came to light when a motor vehicle that had not yet arrived in Zimbabwe was found to have been already registered. A thorough check by ZIMRA led to Kuvenga’s arrest.

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Kuvenga appeared in court on February 1, where he was denied bail by Magistrate Gift Manyka. He is expected to appear in court again today for another bail hearing.

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Retailers send Mnangagwa SOS as shops continue shutting down over operational woes

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BY ZIMLIVE

The Confederation of Zimbabwe Retailers (CZR) has implored President Emmerson Mnangagwa to intervene and save the sector which has seen various formal retail and wholesale businesses closing shop countrywide due to operational challenges.

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In a statement on Sunday, CZR president Denford Mutashu said the continued closure of formal retail and wholesale businesses is a direct consequence of the tough economic environment that has consistently failed to support formalised sector players who face stiff competition from informal businesses and vendors the majority of whom have no tax obligations to deal with.

Mutashu said his association was concerned that authorities continue to downplay the crisis.

“The recent closure of several outlets under the N. Richards Group, coupled with Spar Zimbabwe’s painful decision to shut down Queensdale Spar, Choppies Zimbabwe’s exit from the market, and Mahommed Mussa’s significant reduction of shop space by 60%, highlights the growing crisis.

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“As the representative association for these and other brands, CZR is alarmed that while formal businesses face enormous challenges, the authorities continue to present a different picture of the operating environment,” he said.

Given the situation, Mutashu said, only President Mnangagwa can rescue the troubled sector.

“CZR therefore calls for urgent intervention from His Excellency, President Emmerson Dambudzo Mnangagwa, to rescue what remains of the formalized retail and wholesale sector,” said Mutashu.

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He said the sector was in urgent need of rescue.

“While CZR acknowledges the continued support from the Ministry of Industry and Commerce, it is clear that the root causes of these challenges are fiscal and monetary in nature. These require urgent and decisive action to ensure the survival of formal businesses.

“CZR therefore appeals to the Presidium to prioritize interventions aimed at saving jobs and mitigating the ongoing wave of shop closures and retrenchments,” he said.

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Crisis in Zimbabwe Coalition vows to resist term limit changes

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BY WANDILE TSHUMA

Zimbabweans are speaking out against proposed constitutional amendments that would extend President Emmerson Mnangagwa’s tenure beyond the constitutional limit of two five-year terms.

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A stakeholder engagement meeting convened by the Crisis in Zimbabwe Coalition today brought together a diverse group of stakeholders, including labor, church, and business representatives, to devise a collective strategy against the proposed amendments.

“The participants firmly argued that such changes would significantly undermine the spirit and collective will of the Zimbabwean populace,” the meeting noted.

They characterized the amendments as “self-serving maneuvers orchestrated by a small clique of politicians pursuing personal ambitions over the broader interests of the nation.”

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“This clique’s pursuit of power undermines the very foundation of Zimbabwe’s democracy,” the meeting emphasized. Furthermore, the participants noted that the proposed amendments “fundamentally contradict the democratic principles enunciated in the country’s constitution.”

The meeting expressed concern that enacting such changes would exacerbate the lingering legitimacy crisis, leading to increased international isolation and a further decline in Zimbabwe’s global standing.

The participants also reflected on how these ongoing attempts to alter the constitution demonstrate a profound disregard of the will of Zimbabweans, as expressed in 2013 when they unanimously voted for the supreme law.

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The meeting further noted that the relentless efforts to amend the constitution will continue to limit the democratic space in Zimbabwe. “The shrinking environment poses a serious risk of consolidating authoritarian practices and eroding the fundamental rights and freedoms of the citizens,” the meeting warned.

In addition to the constitutional amendments, the meeting highlighted the ongoing economic crisis in Zimbabwe, which has severely impacted the daily lives of ordinary citizens. “As inflation spirals and basic necessities become increasingly scarce, many families struggle to meet their fundamental needs,” the meeting noted.

The participants expressed concern that political elites and a small group of individuals with close ties to the government are exploiting the nation’s resources for their own gain. “This systematic looting occurs with little regard for the welfare of the populace, exacerbating the country’s economic plight and contributing to widespread hardship among the general population,” the meeting emphasized.

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To resist these developments, the meeting resolved to:

– *Build a Broad-Based Movement*: Unite various stakeholders to defend democratic space and resist the proposed constitutional amendment. This comprehensive approach seeks to unite stakeholders, including the media, diplomats, community mobilizers, and rapid response teams, to ensure ordinary Zimbabweans are empowered to engage in this righteous and noble cause.
– *Mobilize Nationally*: Prioritize community consultation to safeguard the constitution and nurture a culture of constitutionalism. This mobilization effort must extend across all political affiliations and should commence without delay.
– *Convene a National Convention*: Organize an inclusive national all-stakeholders convention that incorporates all stakeholders to prepare for a united response, specifically a collective VOTE NO campaign, should a referendum be called regarding any constitutional changes.
– *Employ All Permissible Channels*: Utilize mass mobilization initiatives, organize demonstrations, engage in diplomatic discussions, and pursue public interest litigation to challenge and stop the encroachments on democracy.

The Crisis in Zimbabwe Coalition emphasized the urgency of mobilizing citizens across the country to defend democratic ideals and resist any proposed amendments to the constitution.

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