2011 — the ups and downs


For the third year running the country continued to use multiple currencies despite renewed calls for the re-introduction of the moribund Zimbabwe dollar from some quarters.

Others went as far as calling for the use of the Chinese Yuan.

Most businesses were hit hard by the liquidity crunch associated with usage of the US dollar. There was the re-emergence of hire purchase and credit facilities, much to the delight of the transacting public that has had to endure years of paying for everything in cash.

The recent Zanu PF National People’s Conference held in Bulawayo made a key resolution to return the worthless currency into circulation. All businesspeople and ordinary members of the public wait to see if this will happen in 2012.

Reads one of the resolutions by Zanu PF: “To instruct government to work out modalities for the reintroduction of domestic currency alongside the multi-currency system in order to address the current liquidity crisis and to enable our people to carry out their transactions.”

Government dumped the Zimbabwe dollar in 2009 at the height of hyperinflation. During the course of the year, Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono even expressed regret at excessive printing of money.

The RBZ governor launched a veiled attack on Indigenisation minister Saviour Kasukuwere following his threats to cancel licences of Barclays and Standard Chartered banks if they failed to submit plans on how they propose to transfer majority stakes to locals.

“Tendencies towards firing harmful verbal economic gunpowder must be minimised by all stakeholders in the interest of the economy and the Reserve Bank of Zimbabwe Board forewarns people playing with economic gunpowder to leave the game to those well-trained in its use and safe custody, lest the unintended will happen, to everyone’s future regret,” Gono said in a damning statement.

“This is necessary in order to avoid fly-by-night, reckless and excitable flexing of muscles and decisions that overlook certain fundamentals that could irreparably harm the nerve-centre of our recovering economy.”

This year also saw the government launch the Medium-Term Plan (MTP) that is expected to give impetus and direction to the country’s economic growth and national development in the next five years.

The blueprint approved by Cabinet in May this year requires at least $9 billion from the government if objectives set out in the plan, including the attainment of an average growth rate of 7% and a single-digit annual inflation of between 4-6%, are to be attained.

For the benefit of the nation, one hopes the blueprint will not gather dust in some office, just like its predecessors.

The much-awaited Bilateral Investment Protection and Promotion Agreement between Zimbabwe and Botswana was finally signed paving way for the unlocking of $70 million lines of credit.

Botswana had set the agreement as a precondition for Zimbabwe to access lines of credit from the neighbouring country. However, to date no funds have been made available.

Chinese Vice-Premier Wang Qishan visited Zimbabwe where he announced the extension of a $700 million worth of loans to the country to assist resuscitate the economy shattered by a decade-long political crisis.

The loans from China’s Export-Import Bank will fund sectors such as agriculture, machinery and equipment acquisition, health and water reticulation systems.
The duration of the loan shall not exceed 20 years.

Other loan agreements signed were that of development and rehabilitation of municipal water and sewerage treatment works for Harare, the supply of agriculture equipment and comprehensive agriculture development and that of medical equipment supplies.

The Africa Export Import Bank (Afreximbank) and the Zimbabwe government unveiled a $70 million joint loan facility to revive the country’s economy.

Afreximbank was expected to contribute $50 million, with the remainder coming from the government. The Confederation of Zimbabwe Industries has been at the forefront campaigning for the disbarments of funds as most companies are in dire need of capital injection.

Tourism and Hospitality Industry minister Walter Mzembi was crowned the 2010 African Tourism Minister of the Year in a colourful ceremony held in South Africa.

This was in recognition of personal and collective efforts towards the resuscitation and marketing of Southern Africa as the most preferred tourism destination and Zimbabwe as the wonder of the world.

In February the Royal Bank of Zimbabwe reopened its doors to the banking public months after having been re-licensed (by RBZ). It became the second of the three re-licensed banks to open after Trust Bank.

Royal Bank was closed seven years ago after the banking sector crisis of 2004.

RBZ last year reinstated the licences of Trust Bank, Barbican Bank and Royal Bank
Not much activity was recorded in terms of mergers and acquisitions.

Tiger Brands Ltd, South Africa’s largest food company, increased its stake in Zimbabwe’s National Foods Holdings Limited as the company expands into other countries on the continent.

Tiger Brands raised its holding in the country’s largest milling and cooking oil company to 37%, after purchasing an additional 11% from Innscor Africa.

Another SA retail giant, Pick ’n’ Pay, obtained government approval to increase its stake in TM Supermarkets from 25% to 49%.

The retail giant plans to inject fresh capital towards the recapitalisation and rebranding of TM.

The Kimberley Process finally approved the sale of diamonds from Marange. Despite this, the US has since placed two diamond mining firms, Mbada and Marange Resources, on the sanctions list.