This Is How Much A Farmworker Earns In Zimbabwe In May 2020

How Much A Farmworker Earns

How Much A Farmworker Earns In  Zimbabwe

How Much A Farmworker Earns

Unions representing farmworkers and other workers employed in the agricultural sector have agreed to new minimum wages after negotiations with unions representing farmers in the country. The new minimum wages which were agreed on 22 May 2020, are effective from 1 May 2020.

According to the Collective Bargaining Agreement for the General Agriculture Sector, all workers in the agricultural sector will receive an increase of 118 percent. This will see the lowest paid farmworker earning ZWL$1,200 per month while the highest-paid farmworker will earn a minimum of $2,400 per month.

While the percentage increase seems generous, the wages for the farmworkers may not be that much due to skyrocketing prices and inflation.

To put these figures into perspective, ZWL$ 1 200 translates to US$20 (R350) per month on the streets while ZWL$2 400 to translates to just US$40 (R700) per month. To further illustrate just how pitiful the new minimum salaries are, a 2kg packet of Tongaat Hulett refined white sugar is now going for ZWL$135. This means that the lowest paid farm worker cannot afford to buy a carton of sugar with his full month’s pay.

The Collective Bargaining Agreement was announced by the National Employment Council for the Agricultural Industry. Announcing the agreement, NEC Agriculture said,

The social parties constituting the National Employment Council for the Agricultural Industry (NECAIZ), which are Zimbabwe Agricultural Employers Organisation (ZAEO), Zimbabwe Commercial Farmers Union (ZCFU), Zimbabwe Farmers Union (ZFU), Commercial Farmers Union (CFU) and Zimbabwe Tobacco Association (ZTA) on the employers’side and the General Agriculture and Plantation Workers’ Union of Zimbabwe (GAPWUZ) and Horticulture, General Agriculture and Plantation Workers’ Union of Zimbabwe (HGAPWUZ) on the employees’ side, have agreed on minimum wages of the General Agriculture Sector effective 01 May 2020 as follows:

Collective Bargaining Agreement: General Agriculture Sector

 

General Agriculture Sector Old Minimum Wage New Minimum Wage
Grade ZWL$ ZWL$
A1 550 1200
A2 590 1287
A3 649 1417
B1 694 1513
B2 743 1620
B3 804 1753
B4 871 1900
B5 943 2057
C1 1018 2220
C2 1100 2400

Exemptions/Reviews

An establishment or employees may apply to the National Employment Council within 14 days for an exemption or partial exemption/review from paying wages as set up in the above schedule stating the reasons why that application should be considered.

Declaration

The Employers and the Trade Unions having arrived at the agreement set forth herein, the undersigned officers of the Council hereby declare that the foregoing is the agreement arrived at and affix their signatures hereto.

Signed at Harare this Friday 22nd May 2020

How Much A Farmworker Earns
This is How Much A Farmworker Earns In Zimbabwe
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    Price Of Sugar Shoots Up As Shortages Hit Market | JUST IN

    Price Of Sugar Shoots Up

    Zimbabweans will be dismayed to learn that the price of sugar has gone up. This comes after the last couple of weeks which were marked by a severe shortage of sugar on the market.

    Sugar was largely unavailable in most supermarkets around Harare. iHarare noted that the few shops that did have sugar only had the Old Fashioned Brown Sugar variety which was retailing for ZWL 50 for a 1-kilogram packet. However, sugar was available in the downtown area in the ‘tuckshops’ where it was selling for anything between ZWL$160 and ZWL$200 for a 2 kilogram packet.

     

    Price Of Sugar Shoots Up
    Price Of Sugar Shoots Up

     

    Sugar Producer Tongaat Hulett increased the price of sugar effective 26 May 2020. According to the new price list, a 1 kilogram packet of Brown Sugar will now retail for a minimum of ZWL $63.84 while a 2 kilogram packet of brown sugar will retail for a minimum of ZWL $127.68.

    A 1 kilogram packet of refined white sugar will now retail for ZWL $67.21 while a 2 kilogram packet of white sugar will retail for ZWL $134.42.

    Using the government’s official foreign currency exchange rate, this means that a 2 kg packet is going for a massive US$5.20 (R91).

    Below is the latest price list from Tongaat Hulett.

    Price Of Sugar Shoots Up
    Price Of Sugar Shoots Up

     

    The new sugar prices follow a turbulent few weeks in which the Zimbabwe Dollar has deteriorated against major currencies.  The new prices seem to indicate that the sugar producers are using the street rate to come up with the new sugar prices.  The Zimbabwe Dollar is currently trading at a rate of ZWL$25: US$1 on the official market and anything between ZWL$55 and ZWL$70 to US$1 on the parallel market.

     

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    With The New ZWL $10 Banknote Worth Just US$0.25, Is RBZ Serious?

    Is RBZ Serious? | Terence Zimwara

     

    The Reserve Bank of Zimbabwe (RBZ) last week came through with its promise to issue higher denominated banknotes, with the first of these, the ZWL$10, coming into circulation on last Tuesday. This follows a statutory instrument issued a week earlier which gave effect to the new banknotes.

    The RBZ hopes that the new banknotes will alleviate the cash shortages without destabilizing the foreign currency markets.

     

    Is RBZ Serious?
    Is RBZ Serious?

     

    But just how much are the new banknotes worth in real terms and will they do the job? To understand the significance (or lack thereof) of the new banknotes, one has to go back to late 2016 when RBZ rekindled the Zimdollar 2.0 project.

    The first Zimbabwe Dollar collapsed in 2008 when the country went through its worst hyperinflation period. In 2009, the authorities finally threw in the towel and formalized the use of foreign currencies through what they called the multicurrency system, with the US dollar being the most dominant and popular choice for many.

    However, the use of foreign currencies rendered the RBZ a mere (almost) spectator in the economy. The monetary authorities could not intervene in the markets and more importantly, the central bank was no longer a source of easy money for the elite. Not surprisingly, efforts to restore the Zimbabwe Dollar started during the subsistence of the government of national unity (GNU) but these were largely thwarted by then Finance Minister, Tendai Biti.

    The end of the GNU in 2013 signified an imminent return of the Zimbabwe Dollar.

     

    Is RBZ Serious?
    Is RBZ Serious?

     

    Following unusually fierce resistance, the RBZ had its way, and Bond Notes came into circulation in November 2016.

    At the time, the RBZ claimed these were at par with the US dollar yet the reality was that there never was parity between the two currencies from the get-go.

    The initial disparity was marginal hence many businesses were happy to trade the minor exchange losses for the mirage of liquidity brought by the returned currency.

    To illustrate, in late 2016, the highest denomination for the local currency was a $5 banknote (or Bond Note as it was called then) while inflation was largely under control as it had been since 2009. At the time, this banknote could buy a minimum of five loaves of bread, the same as would a US$5 bill.

    Fast forward to 2020, the same Zimbabwe Dollar $5 banknote cannot even buy a quarter of a loaf. One now needs at least 7 of these local banknotes to buy one loaf of bread!

    That is not even the true extent of the Zimbabwe Dollar’s depreciation if one takes into account the fact that the current price of bread is somewhat lower than what it was five years ago. Using the so-called parallel market exchange rate of 1:50, it means a loaf of bread costs 65 cents in real terms. 

    By the way, two things are responsible for this price, government subsidies on one hand and the losses that are being absorbed by bakers on the other.

    Now using the same bread analogy, it is clear that the new $10 and $20 will not end long queues at banks or the general shortage of cash. You need at least four $10 banknotes to buy one loaf yet a note with half that value bought five loaves just 5 years ago. Even the $20 banknote cannot buy a loaf!

    When using the official exchange rate of 1:25, it means the new $10 notes are worth US$0,25 though this drops down further to 10 cents when using the parallel market exchange rate.

    Therefore the new notes are woefully inadequate to meet the actual cash demand. Shortages will persist and the practice of selling cash for a premium will continue as well.

    Perhaps the scary part is that the new notes seem to be putting the beleaguered Zimbabwe Dollar under renewed pressure. Already (at time of writing) reports suggest the rate is dropping and parallel market dealers are quoting anything between 60 and 70 Zimbabwe dollars for a single US dollar.

    RBZ must abandon its current course and return to a multi-currency regime if it hopes to stop the inevitable, a repeat of the 2008 crash.

     

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    EcoCash Boss Natalie Jabangwe Being Charged Under Money Laundering Act For Fuelling Black Market

    EcoCash Boss Natalie Jabangwe Being Charged

    EcoCash Boss Natalie Jabangwe Being Charged
    EcoCash Boss Natalie Jabangwe (Image Credit: Thrive Global)

     

    The Reserve Bank of Zimbabwe (RBZ) is charging EcoCash bosses under the Money Laundering Act for allegedly fueling illegal foreign currency dealings on the black market.

    The Financial Intelligence Unit is charging EcoCash CEO Natalie Jabange and EcoCash Director Eddie Chibi in their individual capacities for allegedly failing to comply with the regulatory requirements for financial institutions.  Eddie Chibi is also the chief executive officer of Cassava SmarTech Zimbabwe, the holding company of EcoCash.

    The money authorities allege that EcoCash under the direction of Jabangwe and Chibi willfully disregarded a directive by the RBZ to freeze accounts of EcoCash agents suspected of involvement in money laundering and illicit transactions. The RBZ further alleges that the defiance calls into question Jabangwe and Chibi’s suitability to hold management positions in any financial institution.

    The central bank and EcoCash are currently at war with the RBZ accusing EcoCash of running a giant and elaborate Ponzi Scheme which is causing the rapid deterioration of the Zimbabwe Dollar. EcoCash, on the other hand, has denied the charges and has dragged the monetary authorities to the courts for making irrational and illegal directives. This comes after the Reserve Bank ordered EcoCash to freeze thousands of accounts linked to mobile money agents who which transact over ZWL$100 000 per month. This figure translates to less than US$2 000 per month on the streets.

     

    Eddie Chibi

     

    EcoCash and its executives have denied the charges saying they are being scapegoated by the authorities. Below are some of the documents from the Financial Intelligence Unit (FIU).

    EcoCash Boss Natalie Jabangwe Being Charged

    EcoCash Boss Natalie Jabangwe Being Charged
    EcoCash Boss Natalie Jabangwe Being Charged
    EcoCash Boss Natalie Jabangwe Being Charged
    EcoCash Boss Natalie Jabangwe Being Charged
    EcoCash Boss Natalie Jabangwe Being Charged
    EcoCash Boss Natalie Jabangwe Being Charged

     

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    RBZ Puts Even More Restrictions On EcoCash In Effort To Stop Illegal Forex Dealings

    RBZ Puts  More Restrictions On EcoCash 

    RBZ Puts  More Restrictions On EcoCash 

    RBZ Puts  More Restrictions On EcoCash 
    The Reserve Bank of Zimbabwe (RBZ) has put even more restrictions against the country’s biggest mobile money company EcoCash in an effort to stop illegal foreign currency dealings. The Zimbabwe Dollar has been deteriorating rapidly and the central bank blames EcoCash for the collapse.

    The Central Bank’s Financial Intelligence Unit (FIU) has now issued a directive to Steward Bank to restrict the payments into EcoCash mobile money trust accounts (MMT). This means that third parties will not be able to transfer money into an MMT account.   The directive came from 0. Chiperesa, the Acting Director-General of the Financial Intelligence Unit and is dated 21 May 2020.

     

    RBZ Puts  More Restrictions On EcoCash 
    RBZ Puts  More Restrictions On EcoCash

    Below is the full directive from the FIU to Steward Bank, which iHarare is publishing in full.

     

    21 May, 2020
    Mr. Courage Mashavave
    Chief Executive Officer
    Steward Bank
    2nd Floor, 101 Union Avenue Building
    Kwame Nkrumah Avenue Harare

    Dear Mr. Mashavave

    Restriction of payments into Ecocash Mobile Money Trust (MMT) Account

    1. We understand Steward Bank holds or manages Mobile Money Trust (MMT) account for Ecocash (Private) Limited.

    2. We have noted rampant abuse of the mobile money platforms for purposes of illicit foreign currency dealings and money laundering. We have noted huge daily inflows into the MMT account, without any apparent underlying business rationale.

    3. We have directed mobile money service providers to undertake an agent re-licencing and KYC enhancement exercise to ensure that only bonafide entities are allowed to continue transacting on the respective mobile money platforms.

    4. Pending completion of such a KYC enhancement and re-licensing exercise by the mobile money service providers, banks shall, with immediate effect, implement the following measures in respect of MMT accounts:

    (a) the bank shall not receive or process any payment into the MMT account from a third party, i.e. a person/entity who is not an account-holder with the bank;

    (b)a customer of the bank shall only be allowed to pay into the Ecocash MMT account, funds not exceeding ZW$100,000 per month (in line with the agent/bulk payer monthly limits currently in force);

    (c) Ecocash shall, from time-to-time, provide the bank with lists and details of its agents who would have undergone the re-licensing exercise, and who shall be allowed to transact at higher limits, as shall be approved by the Reserve Bank of Zimbabwe, acting in consultation with the FIU;

    (d)the bank shall exercise enhanced due diligence to satisfy itself as to the purpose of any payment into the MMT account and report any suspicious transactions.

    5. The above restrictions shall not apply to Ecocash agents/bulk payers who fall into the following categories, whose transaction limits shall continue to be managed by Ecocash, as per current approved thresholds:

    • Banking institutions;
    • Bureaux de change;
    • Listed companies;
    • International Organizations;
    • Microfinance institutions; and
    • Government and quasi-government institutions.

    6. Steward Bank shall provide the FIU with daily returns of all funds deposited into the MMT account.

    0. Chiperesa
    Acting Director-General, Financial Intelligence Unit

    cc: Mr. C. Nyamutowa, Head of Compliance, Steward Bank

    cc: Mr. J. Mutepfa, Deputy Director, National Payment Systems, Reserve Bank of Zimbabwe

    RBZ Puts  More Restrictions On EcoCash 
    RBZ Puts  More Restrictions On EcoCash

     

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    Kombis To Go For Good: Government Says Private Kombis Will Remain BANNED Even After Lockdown

    Kombis Will Remain BANNED

    Private Kombis Will Remain BANNED

    Kombis Will Remain BANNED

     

    The government has dealt a huge blow to commuter omnibuses, Kombis in local parlance, after announcing that they will not be allowed back on the roads. According to the government, the kombis will remain banned even after the lockdown has ended because the government wants to bring sanity to the transport sector.

    The weekly publication the Sunday News reports that Local Government and Public Works Minister July Moyo confirmed to the publication that the ban on private commuter omnibuses will be made permanent. The only way the kombis will be allowed to operate is if they register with and fall under the Zimbabwe United Passenger Company (Zupco).

    Speaking to the publication, Minister Moyo said,

    “What we are doing is we want to bring sanity into the transporting sector like what we have done with the haphazard vending that was in the Central Business Districts. The President told us that this is the time for us to bring sanity to some sectors during this lockdown. What the kombi owners can do is register their vehicles with Zupco together with their drivers and they will be good. Actually, Zupco is paying them more than what they are making right now.

    “We have partnered with a young gentleman from the Harare Institution of Technology who has given us an application that can help us monitor all buses and kombis under Zupco. The application monitors fuel efficiency and when a bus goes off route, it can automatically cut the engine off. This is honestly the direction we want to take as a Government, which is what used to occur back then, we are simply reviving an old system,”

    “This won’t be an easy task; we will obviously have a lot of challenges but we are committed to making this work. As I said earlier, operators must realise that they will make more money, as I am speaking in Manicaland some operators who are under this scheme have made a donation of close to $10 million for the fight against the Covid-19 pandemic,”

     

    Kombis Will Remain BANNED
    Kombis Will Remain BANNED

    However, Kombi operators say the government’s move is unconstitutional and have vowed to approach the courts if the directive is not reversed.  Tshova Mubaiwa chairperson, Mr Atlas Moyo told the publication.

    “As an association, we opened the door to our members who wanted to join Zupco, those members that have remained have made it clear that they won’t be forced to operate under Zupco.

    “We are a fully registered company and have the protection of the law. Yes, someone can say that we are barred from operating but we will fight until the end,”


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    Mthuli Ncube To Fight High Court Ruling That Invalidated Conversion Of USD Balances Into RTGS

    Mthuli Ncube Introduces Currency Stabilisation Task Force

    Mthuli Ncube To Fight High Court Ruling 

    Mthuli Ncube Introduces Currency Stabilisation Task Force
    Mthuli Ncube To Fight High Court Ruling

     

    Minister of Finance and Economic Development Mthuli Ncube has said that the government will fight the High Court judgement which ruled that the conversion of USD bank balances to RGTS was invalid. High Court judge Justice Zhou ruled that the 2018 decision to split FCA & RTGS accounts unconstitutional.

    However, Mthuli Ncube said that the government would appeal the decision at the Supreme Court because the “court failed to give a proper interpretation to the directive.”

    The controversial measures remain in place pending appeal, according to finance minister Mthuli Ncube.

    Below is the full statement by the Finance Minister which iHarare is publishing in its entirety.

     

    RE: PRESS STATEMENT ON COURT JUDGMENT ON THE EXCHANGE CONTROL DIRECTIVE NO. R120/18 ON THE SEPARATION OF RTGS FCA ACCOUNTS AND FCA NOSTRO ACCOUNTS

    The Attorney General has brought to my attention the judgment on the Exchange Control Directive No. R120/18 pertaining to the separation of RTGS FCA accounts and FCA Nostro accounts.

     

    Government and the Reserve Bank of Zimbabwe do not agree with the conclusion in the judgment to the effect that the Exchange Control Directive is unconstitutional. They take the view that the court has failed to give a.proper interpretation to the directive. In the circumstances, Government and the Reserve Bank intend to file an appeal against the judgment. They are further fortified in this cause of action by the fact that the court did not impugn the provisions of the Finance (No.2) Act, 2019 and the amendments made to the Reserve Bank of Zimbabwe Act [Chapter 22:15] which were based on the Exchange Control Directive in question.

    Accordingly, Government and the Reserve Bank of Zimbabwe wish to assure the nation that the monetary arrangements which were put in place as a result of the Exchange Control Directive in question will remain in place pending the outcome of the appeal to be noted in the next few days.

    Hon. Prof. M. Ncube

    MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT

    Former Minister of Finance and opposition politician Tendai Biti was scathing in his reaction to Mthuli Ncube’s decision to fight the High Court ruling.  Writing on Twitter, Biti said,

    But this @MthuliNcube  fellow is an absolute jerk. As the judgment itself shows, he on behalf of the regime, refused to make any substantive defence arguing that dispute was a private one between a bank & its client.More seriously you can’t honestly defend theft of pensions & savings.


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    PICS: Here Is How The New $10 And $20 Banknotes Will Look Like

    How The New $10 And $20 Banknotes Will Look Like

    How The New $10 And $20 Banknotes Will Look Like

    The Reserve Bank of Zimbabwe has announced that it will be releasing the new $10 banknote next week. The $10 note will go into circulation on Tuesday, May 19, while the $20 note will go into circulation in the first week of June. The central bank has also raised the weekly withdrawal limits from $300 to $1000. The new limit translates to approximately US$20 per week. The central bank also released images which show how the new $10 and $20 banknotes will look like.

    Below is the statement from the RBZ announcing the release dates of the new notes which iHarare is publishing in its entirety.

    PRESS STATEMENT

    INTRODUCTION INTO CIRCULATION OF $10 AND $20 DOLLAR BANKNOTES

    The Reserve Bank of Zimbabwe (the Bank) wishes to advise the public that the $10 and $20 dollar banknotes issued on 14 May 2020 through Statutory Instrument 103A of 2020, will come into circulation as follows:

    • The $10 banknote will commence circulating on Tuesday 19 May 2020; and

    • The $20 banknote will be in circulation by the first week of June 2020.

    The features of the said banknotes will be publicised prior to the circulation of the banknotes.

    The Bank also advises that it has revised withdrawal limits upwards from $300 per week to $1000 per week with effect from 19 May 2020. Banks have been directed to ensure that the withdrawal limits are strictly observed. The Bank will not tolerate any abuse of currency and will decisively deal with any such abuse in terms of the law.

    John P Mangudya Governor 15 May 2020

    How The New $10 And $20 Banknotes Will Look Like

     

    The RBZ has since announced the safety features of the new notes and these are as follows:

    1. Visually impaired recognition feature
    2. Latent image showing the denomination
    3. Optical variable ink with colour shift from magenta to green or green to azure
    4. Security thread with “RBZ 10” and “RBZ 20”
    5. Watermark with highlighted “RBZ 10” and “RBZ 20”
    6. See-through of National Bird on either side which is in perfect register

     

    How The New $10 And $20 Banknotes Will Look Like
    How The New $10 And $20 Banknotes Will Look Like

     


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    Ecocash Directive: RBZ’s Last Hail Mary

    RBZ Now Says ALL FUEL Can Be Sold In United States Dollars

     RBZ’s Last Hail Mary | Terence Zimwara

    Ecocash Directive: RBZ’s Last Hail Mary

     

    The recent decision by Reserve Bank of Zimbabwe (RBZ) to clampdown on Cassava Smartech’s Ecocash mobile money service through another directive marks the second time in less than a year the former has made such a desperate move. This time there are even bizarre allegations that the mobile money service is, in fact, a giant Ponzi scheme!

    In round two of this duel, the central bank issued a directive that caps the value of transactions that Ecocash agents can handle to ZWL $100 000 or roughly US$2 000 per month. On top of that, it froze accounts that had already exceeded the $100 000 threshold, a figure which it unilaterally set.

    There is no doubt that this threshold is ridiculously low and inconsistent with the country’s inflation trends. Just to give some perspective, the $100 000 or US$2000 threshold used to be the daily transaction limit of an individual user when the mobile money service went live. Now the RBZ, which okayed those limits in the past, believes the figure is now sufficient for one agent’s monthly transactions!

    The directive will negatively affect the operations of many legitimate businesses that rely on this payment platform. For its part, Cassava— an Econet Wireless spin-off —has already lodged a complaint at the High Court and the RBZ may ultimately lose this battle despite presenting ‘evidence’ of alleged wrongdoing by the former.

    This rash decision by the RBZ to single out a privately owned company is a culmination of a series of moves that started with the suspension of some Ecocash agents for their alleged involvement in fueling illegal foreign currency activities.

    Next, the RBZ reacted to a video circulating on the social media of a man apparently boasting about how he got crisp five-dollar banknotes before they got to the bank. RBZ governor reacted almost immediately by appealing to members of the public for assistance in identifying the man in the video.

    Before the news that the RBZ was looking for this man could filter down the central bank had already gone a step further by issuing this new directive.

    At the time of writing at had been reported that the RBZ had this time put up a real fight in court than in the previous encounter.

    Meanwhile, the haste with which RBZ announced this decision could easily be misconstrued to be a desperate plot to fish out the now infamous forex dealer and those backing him. The directive is akin to a fish farmer who drains out the whole pond just so he can catch one misbehaving eel. He might just succeed but this will come with significant collateral damage!

    However, one has to be hopeful that the RBZ could not have taken this drastic measure just to spite this one individual as this decision inevitably inconveniences thousands of Ecocash agents. It is logical to presume that there might be a more plausible explanation for this move besides the reasons the RBZ is giving.

    One reason could be that the RBZ acted to rein in the rapidly depreciating Zimbabwe Dollar. The local currency, which traded at par with the US dollar when it first appeared in late 2016, currently trades at about 1:50 (at time of writing).

    Ecocash Directive: RBZ’s Last Hail Mary
    Ecocash Directive: RBZ’s Last Hail Mary

     

    And just before the country went into lockdown, the RBZ announced a series of policy changes that partially ended the so-called mono currency system while returning to fixing the exchange rate regime.

    The Zim dollar was consequently fixed at 1:25 although parallel market rates at the time had surpassed the 1:40 ratio.

    For a brief period following the start of the lockdown the rate actually receded. However, as soon people got the hang of what a lockdown really entails, some business activities resumed, the rate began to climb up again. Soon the rate was over 1:50 even as the economic activity remained generally subdued and this is what may have alarmed the RBZ.

    However, such alarm—if indeed it is was prompted this rash decision—is misplaced because it ignores the fact that any movement of Zimbabwe’s exchange rate usually mirrors the economy’s foreign currency inflows versus outflows.

    That has always been the case even though some local economic commentators now like to taper this view. These commentators argue that Zimbabwe supposedly generates more foreign currency than other countries in the region whose currencies are more stable than its own Zim dollar. Consequently, the country’s exchange rates woes have nothing to do with foreign currency generation.

    This view is flawed because it seems to take into account the reported foreign currency inflows but ignores the mismatches between such inflows and outflows. Indeed foreign currency is generated but is immediately funnelled out of the country before it can circulate in the economy. There is no way such money can favourably influence the exchange rate. An exchange rate is only determined by real money and not values that reflect in some financial statements.

     

    Ecocash Directive: RBZ’s Last Hail Mary
    Ecocash Directive: RBZ’s Last Hail Mary

     

    Therefore, the assessment that the economy is not generating enough foreign currency is more plausible. The laws of supply and demand are dictating the direction of the exchange rate based on this understanding. No amount of threats or directives will change this fact.

    Meanwhile, RBZ allegations that overdraft facilities extended to known foreign currency dealers are accelerating its depreciation do not hold water. There is a clique that is known to spirit out foreign currency at whim with absolutely no regard for the effects this will have on the economy.

    The RBZ can start to win this broader fight against currency depreciation if it starts targeting this group as well. Anything short of this will yield nothing but negative headlines.

    In the meantime, it should be noted that this unfortunate decision by the RBZ also badly affect ordinary folks that use or depend on this mobile money service for accessing cash. With the country’s cash shortages entering the sixth year, the 54 000 Ecocash agents had been the only reliable source of cash albeit an expensive one.

    However, the unrealistic transaction ceiling that has been set means a vital source of cash will become less reliable and that might cause a spike in the premium charged for customers that wish to cash out. Ecocash agents who are too eager to make up for the lost revenues will likely hike their fees and this affects the ordinary user already struggling with the resurgent hyperinflation and high taxation levels. The RBZ might not like it but this rational behaviour on the part of the agents!

    Therefore, the net effect (of the clampdown) will be more hardships for ordinary folks and waning credibility of the RBZ. In any case, it is disconcerting that the RBZ is choosing to wage a war against a homegrown and successful business at a time when it should be working hard to show that it does not easily get overawed by insignificant events like the video that went viral.

    Vindictiveness is the last thing that should drive policy!
    Of course, the RBZ might get its way this time around, however, in the eyes of its peers or of those that might want to come and do business here, it will be seen as an organization that is out of control.

    Nevertheless, as former RBZ governor Gideon Gono liked to say, there is still time for this current governor to ‘turnaround’ from this course and to start moving in a positive direction.

    In the next piece, we examine some of the options that may be open to the ordinary person.

     


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    The post Ecocash Directive: RBZ’s Last Hail Mary appeared first on iHarare News.

    Breaking News: High Court Says USD Debts Must Be Paid In USD

    Zimbabweans Excused From  Paying Rent

    High Court Says USD Debts Must Be Paid In USD

     

    High Court Says USD Debts Must Be Paid In USD

     

    In a potentially far-reaching judgment, the High Court has declared INVALID the RBZ Exchange Control Directive No. R120/2018. The directive which created FCA “nostro” accounts (as distinct from “RTGS” accounts) was declared unconstitutional on the grounds that it’s irrational to change the currency of a bank account by simply renaming it. This means that USD debts have to be paid in USD.

    This comes after Penelope Douglas Stone from The Stone/Beattie Studio represented by Tendai Biti took CABS, RBZ and ministry of finance to court over a US$142 000 deposit

    The court ordered CABS, the applicants’ bankers, to pay The Stone/Beattie Studio US$142,000 which is the amount that they held in their account in 2016 or transfer it into a “nostro” account nominated by the applicants within 7 days.

    Tendai Biti whilst arguing the matter, simply stated: “you cannot give me goats when I gave you cows.”

    Below is the High Court order,

    PENELOPE DOUGLAS STONE
    and
    RICHARD HAROLD STUART BEATTIE Trading as THE STONE/BEATTIE STUDIO

    versus
    CENTRAL AFRICAN BUILDING SOCIETY
    and
    RESERVE BANK OF ZIMBABWE
    and
    MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT

    HIGH COURT OF ZIMBABWE
    ZHOU J
    HARARE, 7 May 2019 & 14 May 2020

    Opposed Application

    T. Biti for the applicant
    G. M. Nyangwa for the first respondent
    L. Uriri for the second respondent
    Ms P. Macheka for the third respondent

    ZHOU J: This is an application for an order that the first respondent pays a sum of US$142 000.00 together with interest thereon at the rate of five percent per annum from 28 November 2016 to the date of payment within seven days from the date of this order. In the alternative, the applicant asks that the first and second respondents be ordered to pay the said sum of money jointly and severally the one paying the other to be absolved. The further alternative relief is for the Exchange Control Directive No. R120/2018 to be declared a nullity or, in the further alternative, that s 44B(3) and (4) of the Reserve Bank of Zimbabwe Act [Chapter 22:15] be declared unconstitutional. Costs of suit are in the main sought against the first respondent and, in the alternative, against all the respondents jointly and severally the one paying the others to be absolved. The application is opposed by all the respondents.

    ……

    Costs

    The applicants have succeeded in obtaining the relief which they sought before this court. There are no special reason warranting departure from the usual conclusion that costs should follow the result. The applicants are therefore entitled to recover their costs of suit.

    Disposition

    In the result, IT IS ORDERED THAT:

    1. Exchange Control Directive No. R120/2018 issued by the first respondent through its Governor on 4 October 2018 be and is hereby declared to be invalid, and is accordingly set aside.

    2. The first respondent shall pay to the applicant the sum of US$142 000.00 in the currency of the United States of America or transfer that amount into a Nostro Foreign Currency Account as may be directed by the applicants within seven days from the date of this order together with interest thereon at the prescribed rate of 5 percent per annum from the 17th October 2018, being the date of the letter of demand, to the date of full payment or transfer into the Nostro Foreign Currency Account as directed herein.

    3. The respondents shall pay the costs jointly and severally the one paying the others to be absolved.

    Tendai Biti Law, applicants’ legal practitioners
    Mawere Sibanda, first respondent’s legal practitioners
    GN Mlotshwa & Company, second respondent’s legal practitioners
    Civil Division of the Attorney-General’s Office, third respondent’s legal practitioners

    High Court Says USD Debts Must Be Paid In USD
    High Court Says USD Debts Must Be Paid In USD
    High Court Says USD Debts Must Be Paid In USD
    High Court Says USD Debts Must Be Paid In USD

     


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  • IMPORTANT NOTICE:Access LIVE News, Jobs and Exchange rates directly on WhatsApp. Send a WhatsApp message with the word HIE to +263718636522 or just CLICK HERE to try it out. iHarare is now a information one-stop-shop. Please click on the links highlighted in Red to access News, Events, Jobs, Pricecheck, Classifieds, Dating and Education services by iHarare.For any queries contact us by CLICKING HERE .

    The post Breaking News: High Court Says USD Debts Must Be Paid In USD appeared first on iHarare News.