Here Are The New Fuel Prices In Zimbabwe Effective 05 August 2020

New Fuel Prices In Zimbabwe Effective 05 August 2020

New Fuel Prices In Zimbabwe Effective 05 August 2020

 

 

The Zimbabwe Energy Regulatory Authority (ZERA) has approved an increase in fuel prices following almost a month with no adjustment in the price of fuel. The new fuel prices are effective Wednesday, 05 August 2020.

Diesel has now gone up to ZWL $83.36 per litre, an increase of ZWL $11.74 from the previous price of ZWL $71.62 per litre. Blended Petrol has gone up to ZWL$93.15 per litre. This is an increase of ZWL $30.38 from the previous price of ZWL$62.77 per litre.

However, for those buying in foreign currency, the United States Dollar prices have not changed and remain unchanged at US$1.09 per litre of diesel and US$1.28 per litre of blended petrol.

Below is the full statement from ZERA which iHarare is publishing in its entirety.

New Fuel Prices In Zimbabwe Effective 05 August 2020
New Fuel Prices In Zimbabwe Effective 05 August 2020

 

The price of fuel has now become more stable since the Reserve Bank of Zimbabwe (RBZ) introduced the weekly foreign currency action system in June. Although the price is subject to change, it is no longer changing on a weekly basis.

The increase in the price of fuel comes at a time when fuel queues have been resurfacing across the country due to shortages.

Speaking on the recent fuel prices, Deputy Minister of Energy, Magna Mudyiwa blamed the lack of foreign currency for the fuel shortages. Speaking to state media, Mudyiwa said,

The fuel shortages are not unique to Bulawayo only but are a nationwide phenomenon. This is due to forex shortages we are experiencing. The national cake is too small; a lot of sectors need forex, and while fuel is one if the prioritised sectors, of late Government has been diverting the larger chunk of resources towards the Covid-19 fight.

So resultantly, some sectors may suffer. To access fuel at Msasa, Government must have paid for that bonded fuel. So, the public must expect such challenges as the cake is so small and must be distributed among different sectors to keep the economy functional.

 

 


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    Strive Masiyiwa Forced To Sell Massive Shares From Company After Failing To Repay Loan Debt For Defunct Kwese TV Venture

    Strive Masiyiwa Forced To Sell Massive Shares From Company

    Strive Masiyiwa Forced To Sell Shares From Company To Repay Dept After A Failed Kwese TV Venture.

    Strive Masiyiwa Forced To Sell Massive Shares From Company

    Zimbabwean business tycoon is failing to get interested buyers to take up 20% to 34% of his Liquid Telecommunications Holdings Ltd. shares for as much as $600 million in a bid to repay massive debt accumulated from a failed pay-Tv venture.

    According to a Bloomberg report, company moles have disclosed that the billionaire is struggling to repay a $375-million loan that was backed by Public Investment Corp., the continent’s largest money manager based in South Africa.

    It is understood that Strive Masiyiwa had initially offered PIC shares in Liquid Telecom as security for the loan, which had been acquired with Deutsche Bank AG.

    Masiyiwa was planning to repay the debt from the proceeds of an initial public offering in Liquid Telecom, which was scrapped because of volatile equity markets.

    However, due to coronavirus pandemic, business hasn’t been going well for the Zimbabwean billionaire who is failing to get potential investors to repay the debts.

     

    READ| Econet Announces Official End Of Kwese TV – Blames Forex Issues

     

    Buyers wanted more time to assess the economic fallout of lockdowns to contain the virus on Africa’s economies, the reports say.

    After recent developments in which PIC is demanding the issue be resolved by the end of August this year, the business tycoon would rather sell part of his 66% stake in Liquid Telecom than to surrender shares in the company at a discount to the PIC, one of the people who spoke to Bloomberg say.

    Kwese closed shop last year and left the business mogul in massive debts after the Telecom giant confirmed the prevailing economic hardships were working against its efforts to make its satellite cum Pay TV service, free-to-air TV — Kwese Free Sports — and its video on demand (VoD) service, Kwese iflix fully function.


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    Govt Orders Businesses To Display Both Zimbabwe Dollar And Forex Prices At Official Exchange Rate

    Govt Orders Businesses To Display Both Zimbabwe Dollar And Foreign Currency Prices- iHarare

    Govt Orders Businesses To Display Dual Prices At Official Exchange Rate

     Dual Prices Exchange Rate

    Businesses are now required to display prices in both local and foreign currency.

    This comes after President Emmerson Mnangagwa’s latest amendment of the Exchange Control (Exclusive Use of Zimbabwe Dollar for Domestic Transactions) Regulations, 2019, published in Statutory Instrument 212 of 2019.

    Statutory Instrument 185 of 2020 compels providers of goods and services to display dual prices in Zimbabwe dollar and foreign currency using the official exchange rate.

    The amendment reads:

    It is hereby notified that HIS Excellency the President has in terms of section 2 of the Exchange Control Act [Chapter 22:05],made the following regulations:

    1. These regulations may be cited as The Exchange Control (Exclusive Use of Zimbabwe Dollar for Domestic Transactions) (Ammmendment Regulations, 2020 No. 3
    2. The Exchange Control (Exclusive Use of Zimbabwe Dollar for Domestic Transactions) Regulations, 2019, published in Statutory Instrument 212 of 2019 are amended by the insertion of the following section after section 6—

    Dual pricing and displaying, quoting and offering of prices for goods and services

    7. (1) Any person who provides goods or services in Zimbabwe shall display, quote or offer the price for such goods or services in both Zimbabwe dollar and foreign currency at the ruling exchange rate.

    (2) Any person who contravenes subsection (1) shall be liable to—

    (a) a category 1 civil penalty if the contravention is :ompleted but irremediable; or

    (b) a category 4 civil penalty if the contravention is a continuing one

    SI 185 of 2020 comes at a time when businesses are quoting prices in local currency at a rate that is higher than the official foreign currency auction system exchange rate.

    The official exchange rate currently stands at ZWL$ 72/USD but most retailers are quoting prices in ZWL at an inflated rate of between ZWL$ 90-110 against the USD.

    SI 185 of 2020 is expected to bring uniformity in the quoting of prices in different currencies on the market at a time businesses have been quoting prices to compel consumers from purchasing using the local currency.

    It however remains to be seen whether businesses will reduce prices in ZWL to align with the USD or increase prices in USD to align with ZWL using the official exchange rate.

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    Dendairy Finally Speaks On Poisoning Claims Made By Customer

    Dendairy Speaks On Poisoning Claims 

     

    Local milk processor and one of the country’s leading dairy companies, Dendairy has broken its silence following allegations that some of its products are not fit for human consumption. This comes after an irate customer made a video alleging that he had been “poisoned” by the milk from the company.

    The irate customer alleged that Dendairy had acknowledged that the milk was off when he approached the company over the matter. However, the milk processor is alleged to have refused to pay compensation to the customer and instead threatened him with litigation when he posted his allegations on social media.

    The customer, who appears not to be backing down, then posted another video in which he used the milk from Dendairy to clean his toilet claiming that it is not fit for any other purpose. You can watch one of the videos below.

    The video which is being shared widely on social media seems to have attracted the attention of Dendairy. The company has since issued a statement insisting that the matter has been dealt with. The company also made it clear, that it is not entertaining the idea of paying compensation to the man in the videos.

     

    Dendairy Speaks On Poisoning Claims 
    Dendairy Speaks On Poisoning Claims

     

    Below is the press statement from Dendairy which iHarare is publishing in full.

    PRESS STATEMENT

    Dendairy is aware of videos in circulation made by an unhappy customer whose complaints we had attended to and resolved as public health and safety is our priority.

    We offered to have the customer examined of any medical effects, the offer was not taken up.
    Dendairy will not pay the USD$500 000 as demanded by the customer who has indicated that he will continue to post videos attacking Dendairy.

    Dendairy takes all customer feedback seriously and will continue to offer affordable, good quality products. We take pride in our manufacturing systems that have been confirmed by globally recognized authorities and local regulatory bodies.

    Dendairy Management

     

    Dendairy Speaks On Poisoning Claims 
    Dendairy Speaks On Poisoning Claims

     

    However, the statement from the company seems to have left many people unimpressed. Some social media users claimed that the statement showed the gross arrogance of the company. Below are some of the reactions from social media users,


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    Official Exchange Rate Now At $72 As Zimbabwe Dollar Continues Falling

    RBZ Speaks On Devaluing Zimbabwe Dollar

    Official Exchange Rate Now At $72 

    Official Exchange Rate Now At $72 

     

    The official foreign exchange rate for the United States Dollar (USD) to the Zimbabwe Dollar has now moved to US$1: ZWL$72.15 following the results of the latest Reserve Bank of Zimbabwe weekly forex auction which was held on Tuesday. The local currency continued its fall against the United States Dollar, moving from last week’s official exchange rate of ZWL$68.89 per USD.

    The highest bid rate for this week was ZWL$82.17: USD 1 while the lowest bid was ZWL$55.00: USD 1. However, the lowest bid rate which was actually accepted is ZWL$70.00: USD 1. This resulted in a weighted average of ZWL$72.1470: USD 1.

    Last week’s edition of the weekly forex auction system saw the official exchange rate move from ZWL$65.88: USD 1 to ZWL$68.89: USD 1.

    A total of US$20, 316, 134.74 was received in bids and US$14, 853, 708.88 was successfully allotted. This means that 73 per cent of the bids managed to get the foreign currency they needed. The US$14, 853, 708.88 which was successfully allotted is a decrease from last week’s total allotment of US$15, 998, 219.59.

    This highest allotment for this week was US$7,4 million which went to raw materials. Last week raw materials also got the highest allotment at US$5,6 million. Below is how the rest of the money was allotted.

     

    PURPOSE AMOUNT ALLOTTED US$
    Raw Material 7 417 479.47
    Machinery and Equipment 2 309 655.89
    Retail and Distribution 1 299 934.90
    Consumables 1 122 315.00
    Pharmaceuticals and Chemicals 696 875.00
    Services (Loans, Dividends and Divestments) 752 000.00
    Paper and Packaging 614 995.57
    Fuel, Electricals and Gas 640 453.05
    TOTAL 14 853 708.88

     

    Official Exchange Rate Now At $72 
    Official Exchange Rate Now At $72 : USD 1  Following Fifth Edition Of Weekly Foreign Currency Auction System Held on Tuesday

     


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    Making Gold Ownership For Everyone With the Blockchain

    Making Gold Ownership For Everyone With the Blockchain | Terence Zimwara

    Making Gold Ownership For Everyone With the Blockchain
    Image Credit: Getty Images

     

    Gold is a highly sought after precious metal, with both ordinary people and governments vying to get their hands on it.

    Logically, it should be available to everyone since it also occurs naturally yet the reality is that only a few can possess this resource.

    Governments and those in privileged positions dominate the global gold market while an average person faces barriers that are specifically created to keep him out.

    Some resource-rich countries often impose restrictions or legislate on who gets to buy or store gold and in what quantities. For example, the South Africa government imposes restrictions of who must own or buy such minerals as gold.

     

    Who owns the gold

    While the logic for the controls is sometimes justified, it would seem, however, that the laws or regulations unfairly disadvantage ordinary folks. The so-called foreign investors or the wealthy are not unduly restrained by such regulations it would seem.

    Meanwhile, in Zimbabwe, the government has made one institution the sole buyer of gold. Accordingly, anyone caught violating this policy risks serving jail time. However, monopolizing ownership has unintended consequences, the proliferation of black market and smuggling cartels.

    Still, authorities regularly enforce this policy by raiding illegal mines and arresting unlicensed buyers. The message is clear in both instances, an average person cannot or should not possess gold!

    However, the question still stands, why do people seek to possess gold or any other precious metal for that matter?

    Well, it seems demand for gold stems from its consistent ability to outperform currencies and stocks. Gold has a finite supply and cannot be copied. Gold is acquired through an expensive extraction process that cannot be avoided.

    It is this knowledge that breeds confidence in the metal. This is in turn gives it the value it has today.

    It is the same confidence that had countries backing their currencies with gold in the first place. This of course changed in 1971 when then United States president, Richard Nixon triggered a global abandonment of this system.

     

    Why the gold option

    Yet, over the years, the fiat currency system has developed own problems. The problems only make the initial decision to dump the gold standard look very unwise.

    At the core of the problem is the sometimes unbridled reliance on printing of money to solve problems. Such creation of money hurts confidence but it appears there is no end stopping. Just recently, governments across the world created money to boost economies hurting from the effects of the global pandemic.

    Naturally, this has a negative impact on the value of currency in the long term.

    So logically, possession of gold is partly a way to shield individual or national wealth from inflation and currency depreciation. However, this option is more often available to nation-states than individuals as history will attest.

    For instance, in the world’s s richest country, the United States only 12% of the population reportedly owns gold. A combination of factors is stopping Americans from possessing the precious even as they have the wherewithal to do so.

    This figure is even worse in poorer countries where most of the wealth is concentrated on a small clique of powerful individuals.

    Making Gold Ownership For Everyone With the Blockchain
    Making Gold Ownership For Everyone With the Blockchain

     

    Barriers to gold ownership

    So what are the barriers that stop even those with means from possessing this?

    Well, there are many barriers seemingly created to ensure that only a small clique will always have this privilege.

    The barriers come in many forms and they include high premiums, the logistics of moving physical gold and the costs of storing it.

    In addition to facing legal restrictions, an average person’s ignorance and lack of education or knowledge (about the metal) means they will not prioritize possession of this commodity.

    Indeed, great strides have been made in trying to change this and help make the precious available to masses. Financial instruments like digital gold electronic traded funds (ETFs) have been created.

    Yet even that is held back by the necessary but equally cumbersome know your customer (KYC) and anti-money laundering (AML) processes.

    Furthermore, centralized exchanges dealing with such funds only cater to professional traders and institutional clients. Stock markets are just too complicated for the average person.

     

    The blockchain changing the story

    However, things are changing now. The emergence of the blockchain technology might just prove pivotal to those seeking to possess the metal without worrying about the obstacles highlighted above.

    For example, Meld Gold, an Australian start-up which recently partnered with Algorand, says it has created a decentralized gold token.

    According to Meld Gold, the digital platform delivers secure, seamless access to the acquisition of gold. This allows investors or buyers to transact in real-time, reducing the volatility and risks traditionally associated with the procurement of gold.

    Furthermore, the platform removes inefficiencies, increases accessibility and stabilizes the acquisition and ownership of the world’s oldest currency.

    Meld Gold is leveraging Algorand’s open-source, proof of stake protocol to deliver gold that is traceable, fungible, transactable, transferable and redeemable. Meld Gold chose the Algorand platform because it required a technology that allowed for enterprise-scale to be built without sacrificing performance or security.

    Given the dynamics of Meld (a Digital Gold Certificate), additional Algorand features and functionality marry directly to Meld’s core proposition.

    These include estate protocol capabilities, flexibility in fee structures, high liquidity management, the delivery of dividends and the provision of targeted incentives to our partner network.

    Meld Gold is just one of the many start-ups that are attempting to resuscitate gold as currency using the blockchain technology.

     

    What the future holds

    These companies believe the dream to democratize gold may have taken a step closer to becoming a reality because of the blockchain.

    In the very near future, citizens in hyperinflation hit countries like Venezuela and Zimbabwe will have a better chance of protecting their wealth with gold tokens.

    Through the blockchain technology, an opportunity now exists to convert even meagre savings into gold without worrying about vaults or securing legal documents needed to possess this metal.

    This is unprecedented and it is happening.

     

    Terence Zimwara is a blockchain enthusiast and an Ambassador with Algorand Foundation, a technology company behind the world’s first scalable and decentralized blockchain that is based on pure proof of stake consensus. The Foundation offers funding across application development, tools & infrastructure, research, and education & community. You can contact him on Whatsapp 263 771 799 901 or tem2ra@gmail.com

     

    .

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    Econet Challenges Search Warrant Issued Against EcoCash

    Econet search warrant- iHarare

    Econet Challenges Search Warrant Against EcoCash
    EcoCash search warrant- iHarare

    Econet Wireless has filed an urgent chamber application to halt a search warrant issued against EcoCash.

    The mobile service provider says the warrant is unlawful and a violation of customer privacy.  Authorities have issued a warrant to gain access to EcoCash transactions from January 2 to June 30 this year.

    The Zimbabwe Republic Police (ZRP) issued a warrant against Econet to hand over a list of its mobile money transactions and subscribers.

    According to the warrant, authorities suspect the country’s biggest mobile service provider of involvement in money laundering.

    In the search warrant issued on Friday night, police accused Econet of creating fictitious amounts of mobile money and converting it to cash to facilitate purchasing foreign currency on the black market and transacting the money out of Zimbabwe.

    The Reserve Bank of Zimbabwe (RBZ) has made similar accusations before, which Econet has denied.

    The police ordered Econet to provide a list of all subscribers, mobile money transactions and financial statements covering January 2 to June 30 this year “for the purpose of investigating or detecting a case of money laundering.”

    iHarare publishes the warrant below:

    WARRANT OF SEARCH AND SEIZURE
    Issued In terms of Section 49 (b) and 50(1) (a) of the Criminal Procedure and Evidence Act (Chapter 9:07) as read with section 288 of the said Act.
    TO THE PEACE OFFICERS AND OTHER OFFICERS OF THE LAW, PROPER TO THE EXECUTION OF CRIMINAL WARRANTS.
    WHERE AS, from information taken upon oath before myself. there are reasonable grounds for believing that ECONET WIRELESS (PVT) LIMITED is in possession or control of documents. information or records which are required in order to afford evidence in a criminal docket and that are necessary for the purpose of investigating or detecting a case of Money Laundering as defined in section 8(1)(a) of the money Laundering and proceeds of crime Act chapter 9:24.10 examine the documents and records and make extracts from and copies of all such documents and records.
    Section 50 (1) (a) reads: as article referred to in Section forty-nine shall be seized only by virtue of a Warrant issued-(a) By a Magistrate or Justice of Peace if it appears to the Magistrate or Justice from information on oath that there are reasonable grounds for believing that any such article is in the possession or under the control of any person, or upon or in any premises, within his/her area of jurisdiction;
    It is therefore directed that ECONET WIRELESS (PTV) LIMITED should within 7 working days provide the following: i) A list of all subscribers/customers both registered and unregistered in the Econet Wireless (Pot) Ltd database with full subscriber details for the period 2 January 2020 to 30 June 2020.
    ii) Summary of transient e-money/airtime credit service posted on the platform through airtime loans for the period 2 January 2020 to 30 June 2020.
    iii) All financial statements for the period 2 January 2020 to 30 June 2020 showing the entire inflow and outflow monetary transactions.
    These are therefore. in the State’s name to command you to proceed to ECONET WIRELESS ZIMBABWE there from immediately obtain and take into your custody the above-mentioned documents. records. or information take them to a police station or other place of safety until the matter is finalized or until you further receive further orders from Court.

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    Digital Currencies: Zimbabwe Must Embrace The Inevitable

    Zimbabwe Must Embrace The Inevitable

    Zimbabwe Must Embrace The Inevitable | Terence Zimwara

    Zimbabwe Must Embrace The Inevitable

     

    The very idea that digital currencies like bitcoin can be used as currency for everyday transactions seems farfetched for some. There are many ways this cannot work opponents argue.

    For starters, there is an argument often put forward that Zimbabwe’s internet penetration levels and level of sophistication makes this dream impossible. As such, any currency of this nature would turn out to be something for the elite only and this goes against the very notion of such innovations as bitcoin.

    Secondly, cryptocurrencies, as some have come to know, are just too volatile. This level of volatility renders them unsuitable for purposes of storing value.

    While stock markets can be volatile as well, they however, come embedded with inbuilt circuit breakers to minimize losses. Cryptocurrency markets have not developed to such levels. As such that if a negative sentiment were to permeate through this market the losses suffered will be considerable. Similarly, big gains will be made if there are strong sentiments to that effect.

    In that sense, it seems not feasible to use bitcoin as a medium of exchange. Or is it?

    What about the rural population

    Still, others question just how a generally disadvantaged rural population can ever attain the level sophistication needed to use a cryptocurrency wallet. These are the somewhat valid arguments opponents of bitcoin adoption usually put forward.

    Nevertheless, too often the arguments made against financial innovation often expose the level of ignorance of those peddling such. It would seem early adopters of these technologies are not doing enough to share knowledge with those ignorant.

    Furthermore, not enough technology or blockchain start-ups spend time educating or raising awareness about the technological breakthrough. It is only when there is a sizeable part of the population that understands and is knowledgeable can a deployment of any such technology be successful.

    Yet, this lack of knowledge does not in any way postpone what is certainly inevitable now, the coming disruption of financial services as we know them. Digital currencies are coming and more will still come in the future.

    Countries that have demonstrated smart leadership in the past will not wait for the technology to foist itself. They are anticipating the disruption that will ensue and are planning accordingly.

    Still, the question lingers, is this doable?

    How Ecocash did it

    Zimbabwe Must Embrace The Inevitable
    Zimbabwe Must Embrace The Inevitable

     

    Well, to understand if this financial innovation has any chance of succeeding, we need to look back and see how a different financial technology achieved what seemed improbable at the time.

    In 2011, Zimbabwe’s largest mobile network operator (MNO), Econet Wireless Zimbabwe, began an experiment called it called Ecocash.

    Ecocash, a mobile money service, was created with a vision of it becoming a service that brings financial inclusivity.

    Similarly, when this was being rolled out, questions were also asked. Would the rural population be able to use this ‘complicated’ technology? What if there was no cashing out agent nearby, what would happen to funds trapped in the mobile account?

    The list of questions then was also endless. The questions were naturally driven by a fear of the unknown, a typical reaction to anything new or transformational.

    However, it seems that Econet anticipated this pushback and had prepared accordingly. It deployed hundreds of peer educators across the country to help get the message about this innovation across.

    At the same time, a drive to recruit mobile money agents also commenced. In certain instances, Econet had to offer incentives to potential agents just so they would come on board.

    Yet some three years after commencing, the project had taken shape as early adopters were now also spreading the word. The network effect took hold..

    Today, the Ecocash project has become a behemoth accounting for about 95% of Zimbabwe’s mobile money transactions volumes.

    The statistics get even scarier when one realizes that mobile money transactions now constitute about 80% of all national retail payments.

    In just under a decade, the Ecocash mobile money service has grown to become an influential player in the country’s financial services.

    Perhaps some of the problems that Ecocash now faces have a lot to do with its success than with allegations made.

     

    Lessons from Ecocash

    Zimbabwe Must Embrace The Inevitable
    Zimbabwe Must Embrace The Inevitable

     

    The success of Ecocash has important lessons for those quick to dismiss any novel idea. It is better to prepare for a coming change than having to play catch up.

    Econet knew mobile money was the incoming technology as experiences elsewhere had shown. For example, in Kenya, another MNO, Safaricom had engineered a great success with its MPesa, a mobile money wallet. Econet thus knew it could achieve the same in Zimbabwe.

    The same thing again is happening with respect to currency. Those preparing for this inevitable eventuality will fare better than those that choose to deny it will happen.

    Digital currencies that are backed by the blockchain are coming and preparing for this is a better option.

    Attempting to use political muscle to stop innovations is just denialism that may prove ill advised in the long term. This is appears the case with Facebook’s Libra stablecoin project which has been slowed in its tracks by politics.

    The US Congress has used its immense power to scuttle a roll out of Libra but that has not stopped the yearning for a currency that espouses a similar vision.

    It has to be noted that the Libra project is not simply an imagination or desire of its promoters to create a financial giant. The idea for the Libra stablecoin is also a response to a growing reality that the global financial order must evolve and reform.

    Across the globe, many people are hoping that new financial technologies will continue giving them access, something conventional financial institutions have failed for decades.

    To illustrate, according to the last World Bank Financial Index survey (2017), it seems mobile money was the innovation of the past decade. This service may have played a part in reducing the number lacking financial services or the unbanked from over 2 billion people to the current 1.7 billion.

    This figure is still too high and now it appears it is the turn of a different financial technology to play a part. Technology is the blockchain technology.

    As we showed above, forward-looking countries and central banks have realized this and they are planning accordingly.

    For instance, central banks like Sweden’s Risibank have answered this call to reform by creating own digital currency. Others like The Republic of Marshal Islands have chosen to partner with private companies like Algorand to create a central bank digital currency.  Algorand’s blockchain has demonstrated a capacity to support a national digital currency.

    These two examples show a determination to move with times.

    Similarly, Zimbabwean financial authorities can follow in the footsteps of other forwarding looking countries by starting its own digital currency project.

    Waiting until private players pounce will result in irreparable damage to financial regulators’ ability to influence financial markets. Tools like monetary policy will be less effective if steps are not taken now to embrace change.

     

    Terence Zimwara is an Ambassador with Algorand Foundation, a technology company behind the world’s first scalable and decentralized blockchain that is based on pure proof of stake consensus. The Foundation is offering funding across application development, tools & infrastructure, research, and education & community. You can contact Terence on Whatsapp 263 771 799 901 or tem2ra@gmail.com

     


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    Zimbabwe Ruling Party Reaffirms Decision To De-List Old Mutual From Stock Exchange

    Zimbabwe Ruling Party Reaffirms Decision To De-List Old Mutual

    Zimbabwe Ruling Party Reaffirms Decision To De-List Old Mutual

    Zimbabwe’s ruling Zanu PF has reaffirmed its decision to have one of the country’s biggest financial services groups, Old Mutual Zimbabwe, de-listed from the local stock exchange.

    This comes after Old Mutual released a statement seeking clarification after President Emmerson Mnangagwa’s party announced that it had endorsed a decision to “eject Old Mutual from the financial system”. Old Mutual has attracted the ire of the ruling Zanu PF party which accuses the company of fuelling the rise in the black market foreign exchange rates due to the Old Mutual Implied Rate (OMIR).

     

    Below is the full statement from Zanu PF regarding the de-listing of Old Mutual from the Zimbabwe  Stock Exchange.

     

    ZANU PF STATEMENT CLARIFYING ITS POSITION ON THE TRADING OF OLD MUTUAL SHARES ON THE ZIMBABWE’S STOCK EXCHANGE

    For a better appreciation and understanding of the position taken by ZANU PF at its 341st session of the Politburo on Friday the 9th of July 2020, we give below the prevailing situation, the concerns of ZANU PF as well as the decision that ZANU PF is directing government to implement.

    PREVAILING SITUATION

    • Old Mutual Limited is a global conglomerate operating in 14 countries Zimbabwe included and is the conglomerate listed on the Zimbabwe Stock Exchange (ZSE).
    • Old Mutual Limited is listed on the Johannesburg stock exchange (SA) Africa, London Stock Exchange, Zimbabwe Stock Exchange, Stock Exchange of Namibia and on the Malawi Stock Exchange
    • Old Mutual limited shares which are listed in all these countries are the same and can be transferred across the various exchanges i.e they are fungible. Fungibility of the Zimbabwean shares was suspended for 12 months in February 2020
    • Old Mutual dividends are paid in SA Rands which therefore represents foreign earnings for the country in respect of the shares on the Zimbabwean register
    • Old Mutual has 65 718 552 shares listed on the ZSE with a market value estimated at SAR849million
    • In Zimbabwe, Old Mutual Limited has 30 168 shareholders made up of pension funds, local institutions and individuals
    • The shares listed on ZSE trade in local currency i.e Zimbabwean dollars
    • Other fungible shares on the ZSE include PPC listed on JSE and Seedco International which is listed on the Botswana Stock exchange
    • Old Mutual Zimbabwe Limited is a subsidiary of the Old Mutual Limited and is not the one directly listed on the ZSE

    CONCERNS OF ZANU PF REPRESENTING THE PEOPLE OF ZIMBABWE

    Stock Exchanges primary function is to raise capital in the productive sector and continuing opportunities to build wealth in the secondary market.

    ZSE has not had any new listings and this is of grave concern to the Party. As a result, the ZSE is now being used for speculative purposes which is harmful to the economy.

    Distortions have risen emanating from the Old Mutual share being traded on multiple stock exchange counters. The distortions emanate fundamentally from differences from the relative strengths of the underlying economies in which the Old Mutual shares are listed.

    This fact alone has created an opportunity for fungibility to generate arbitrage gains. Fungibility creates an opportunity for speculation as there are arbitrage opportunities to trade the share between Zimbabwe and other stock exchanges. This speculation may distort the foreign currency market.

    Fungibility is open to the risk of being abused as has been the case in Zimbabwe and has become a vehicle to externalise capital out of Zimbabwe.

    Allowing the Old Mutual share to be traded on multiple stock exchanges has given rise to the Old Mutual Implied Rate (OMIR).

    Fungibility has created an opportunity for the determination of the foreign exchange rate in Zimbabwe to be determined from activities emanating from actions of speculators operating on the stock exchange.

    Share prices react to investor sentiment and exchange rates react to demand and supply of foreign currency by importers and exporters.

    A share price can therefore not be substituted as a reference indicator for exchange rates because it is not driven by similar fundamentals, i.e speculators versus importers and exporters are dissimilar.

    ZANU-PF is surprised that the fungibility of the shares of one organisation is used as a benchmark for the exchange rate.

    This makes this counterpart of the drivers of the mirage of economic problems centred on our parallel market.

    This clandestine trade in the dollar has forced the Black Market Rate to keep pace with the OMIR condemning our people to destitution as their wages and salaries are eroded every day.

    There is no employment creation, no products on our shelves neither do we see a rise in the standard of living of our people from speculative wealth creation by a few.

    ZANU PF is at a loss to understand how the government of the day can run an economy where the fungibility of the shares of one company create money, externalise funds and determine the rate of exchange.

    Zimbabwe Ruling Party Reaffirms Decision To De-List Old Mutual
    Zimbabwe Ruling Party Reaffirms Decision To De-List Old Mutual

    ZANU PF CLARIFIES AND REAFFIRMS ITS POLICY POSITION

    ZANU PF is totally opposed to the fungibility of the Old Mutual Shares and to this end it reaffirms its policy position that the ZSE should compulsorily de-list the Old Mutual Limited shares from trading on the ZSE.

    To protect the interests of the 30168 shareholders of Old Mutual Limited, ZANU PF is recommending to its government that it sets up a stock exchange which will trade only in US$.

    Old Mutual Limited can then be allowed to migrate, find home and trade on such a foreign currency-denominated counter in Zimbabwe. Trading on other counters has been normal and the Party is recommending that trading be resumed.

    Setting up a foreign exchange denominated stock exchange is an appropriate institution for raising and attracting foreign direct investment into Zimbabwe.

    Companies that want to invest in Zimbabwe and requiring foreign currency would then list on such a stock exchange to attract foreign direct investment in foreign currency for investment.

    The details of implementing this recommendation are left to government including the timeframe within which this recommendation can be implemented.

    It is the desire of ZANU PF that implementation is in the shortest possible time to avoid undue disruption to inflows of investment capital.

    ZANU PF says an emphatic NO, to self-enrichment through speculative trading and externalisation.

    ZANU PF also wishes to commend government for the decision that it has taken to allow mobile money operators to be overseen by the Reserve Bank of Zimbabwe through the Zim-Switch platform.

    As a matter of fact, ZANU PF considers this decision to be a masterstroke which will give an invisible hand to the government to manage and direct the country towards a common good.

    The channelling of all mobile money transactions through this platform is the right thing to do and will, in the end, restore stability and sanity to the banking sector.

    Mobile money transaction platforms had become a law unto themselves making rules for banks and others to comply with.

    ZANU PF thus supports the measures that the government has taken in this regard as it considers them necessary medicine to cure our economy which is under siege.

    The measures will no doubt in due course become a sound basis for strategic sustainable nation-building, a platform for robust employment creation for our people, stabilisation of the exchange rate and resuscitation of our key productive sectors.

    It is high time that Zimbabwe corporates and foreign corporates working in Zimbabwe put Zimbabwean Interests First and deploy their resources to the productive sectors that generate employment, goods and services.

    Cde P.A Chinamasa

    Acting Secretary for Information and Publicity & Party Spokesperson

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    Official Exchange Rate Now At ZWL$68.89 As Zimbabwe Dollar Loses Again

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

    Official Exchange Rate Now At ZWL$68.89

    Official Exchange Rate Now At ZWL$68.89

     

    The official foreign exchange rate for the United States Dollar (USD) to the Zimbabwe Dollar has now moved to US$1: ZWL$68.8879 following the fourth edition of the Reserve Bank of Zimbabwe’s weekly forex auction system on Tuesday. The Zimbabwe Dollar continued to lose ground as it depreciated from ZWL$65.88 for every USD to ZWL$68.89 per USD.

    The highest bid rate for this week was ZWL$85:USD 1 while the lowest bid was ZWL$40.00: USD 1. However, the lowest bid rate which was actually accepted was ZWL$64.2: USD 1. This resulted in a weighted average of ZWL$68.8979: USD 1, a slight increase from last week’s ZWL$65.88: USD 1.

    Last week’s edition of the weekly forex auction system saw the official exchange rate move from ZWL$63.74 for every USD to ZWL$65.88 for every dollar.

    A total of US$18, 719, 664.66 was received in bids and US$15, 998, 219.59 was successfully allotted. This means that 86 per cent of the bids managed to get the foreign currency they needed. The US$15, 998, 219.59 which was successfully allotted is an increase from last week’s total allotment of US$13.6 million.

    This week’s highest allotment was $5,6 million for raw materials. Below is how the rest of the money was allotted.

     

    Purpose Amount Allotted(US$)
    Raw Materials 5 623 684.60
    Machinery and Equipment 3 016 110.90
    Retail and Distribution (Incl. Food, Beverages, etc) 2 476 441.00
    Consumables (Incl. Spares, Tyres, Electrical) 1 416 913.67
    Pharmaceuticals and Chemicals 1 264 842.70
    Services (Loans. Dividends and Disinvestment) 900 526.72
    Paper and Packaging 761 500.00
    Fuel, Electricity and Gas 528 200.00
    TOTAL 15 988 219.59

     

    Official Exchange Rate Now At ZWL$68.89
    Official Exchange Rate Now At ZWL$68.89 (Image Credit: Reserve Bank of Zimbabwe)

     


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