April 17, 2018 Zimbabwe in tight timeline to repay arrears, seek more funding
Zimbabwe stuck on Monday to its plan to clear its debt arrears by September with the aim to tap international capital markets by the end of the year, though that timeline would be “very fast-tracked.” Zimbabwean officials met with investors in New York in search for cash that would clear about $1.8 billion in arrears with the World Bank and the African Development Bank. Repayment would unlock more cash from the ADB and is necessary to tap other sources of development financing.
“We need to clear the ADB and World Bank before we’re able to go into a program with the IMF,” said John Mangudya, governor of the Reserve Bank of Zimbabwe, at a press event following the investors’ meeting. “What we need is a bridge financing from the likes of these investors,” he said. In 2016, Zimbabwe paid off 15 years’ worth of arrears to the International Monetary Fund. The timeline for the arrears payment and the added funding “is possible, but it would be very fast-tracked,” said Dean Tyler, head of fixed income at Exotix Capital, which hosted the meeting.
Some 40 to 50 international investors, institutions and hedge funds among them, attended the meeting, according to Tyler, and it follows a similar meeting in London last month. The pitch to investors comes shortly after Robert Mugabe, Zimbabwe’s president for nearly 30 years, was forced to resign following a de facto army coup last November.
Zimbabwe became a pariah in the West after Mugabe’s government was accused of rigging votes and abusing human rights, and over the years it has turned to China for investment to help an economy desperate for new infrastructure. Source
‘Bond notes to stay’
Bond notes will remain in circulation until Zimbabwe introduces its own currency, Finance and Economic Planning Minister Patrick Chinamasa has said. Responding to questions on the fate of the bond notes after media reports claimed they will be phased out, Minister Chinamasa said the introduction of a local currency will mark the end of bond notes.
“Nowhere did the Deputy Minister (of Finance and Economic Planning Terrence Mukupe) say the bond notes are going to go away and that is the sort of negativity that is not going to get us anywhere,” Minister Chinamasa said at a breakfast meeting in Harare yesterday. It’s not true; bond notes will stay until we have our own currency and the Governor (of the Zimbabwe Reserve Bank of Zimbabwe) and myself have been at pains to spell out the macroeconomic fundamentals that we need to put right before we can do that.
“We need to address the budget deficit; we need to address the issues of exports and we need to build foreign currency reserves of at least three months, at the moment we are at 0,7 months,” the Minister added. Minister Chinamasa said the country needs to boost production.
“This is why we are coming up with all these proposals or incentives to incentivise production so I just want to plead with you, please let’s look at the positive side, let’s not dwell on the negative, let’s not be driven by some of the falsehoods that are peddled through social media. You are intelligent enough to distinguish between an obvious falsehood and that which may have credibility,” he said. Minister Chinamasa said Government was working on a cocktail of measures to improve the economy.
For instance, Government has more than doubled export incentives for tobacco producers to 12.5 percent, from 5 percent. Gold producers will also be prioritised in the export incentives. Gold and tobacco, Chinamasa said, contribute 86 percent of export receipts.
Minister Chinamasa said Government is also cutting down on expenditure to reduce fiscal deficit. Government is also rationalising expenditure on wages and at the same time grow the economy to ensure recurrent expenditure finds its right proportion within a bigger cake. Minister Chinamasa said Government is normalising relations with the United Kingdom, The European Union and the United States. The key, he said, is normalising relations with the United Kingdom.
Moreover, an investor friendly environment is being created. The huge RTGS balances, Minister Chinamasa said, are going to be used for infrastructure development and to fund the production. Minister Chinamasa also commented on the country’s arrears clearance plan which he said is still on course. source
Zim finance minister says 'bond notes aren't going anywhere'
Harare – Zimbabwe's
finance minister Patrick Chinamasa has reportedly denied reports that the country's surrogate currency - the bond motes - would be phased out soon.
The state-owned Herald newspaper quoted Chinamasa as saying that the controversial bond notes were not going anywhere until the southern African country had its own currency.
The minister said that there were macroeconomic fundamentals that the treasury was working on before the surrogate currency could be discontinued.
"We need to address the budget deficit, we need to address the issues of exports and we need to build foreign currency reserves of at least three months, at the moment we are at 0.7 months. This is why we are coming up with all these proposal or incentives to incentivise production so I just want to plead with you, please let’s look at the positive side, let’s not dwell on the negative, let’s not be driven by falsehoods that are peddled through social media. You are intelligent enough to distinguish between an obvious falsehood and that which may have credibility," Chinamasa was quoted as saying.
The southern African country adopted the use of multiple currencies in 2009 after its currency had been rendered worthless by hyperinflation.
The US dollar had been the main transacting currency but it has been in short supply since 2015 due to low exports and externalization.
This led to the introduction of a surrogate currency in November 2016 to ease chronic shortages of US dollars, and to encourage exporters who earn the country foreign currency. source
100 Trillion Zimbabwe Dollars (Currency)
If you ever wondered what Zimbabwean One Hundred Trillion Dollars look like, you have come to the right place. Zimbabwe experienced a period of hyperinflation spanning a few decades that culminated in 2008 with the introduction of the 100,000,000,000,000 banknote! Currency in Zimbabwe was so devalued that you needed a big stack of high denomination bills to buy a loaf of bread! Only a few million copies of the banknote were ever produced up until 2009.
However Truth is the Zim Currency is not really used in their country and is currently worthless. They practically give it away in Zimbabwe.
The History of Great Zimbabwe Video
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