Items filtered by date: Tuesday, 21 May 2019

Zimbabweans should brace for another hike in fuel prices as Reserve Bank of Zimbabwe (RBZ) governor, John Mangudya Monday ordered a stop in the 1:1 exchange rate window government had extended to Oil Marketing Companies (OMC).

In a statement Monday, Mangudya ordered the use of the interbank market to promote the efficient use forex and to "minimise and guard against incidences of arbitrage" in the economy.

"There shall be only one foreign exchange rate to be used in the market for the importation of all goods and services," Mangudya said.

"This means that 1:1 exchange rate was being used by OMCs for the procurement of fuel will be discontinued with immediate effect.

"The new position is necessary to promote the efficient use of foreign exchange and to minimise and guard against incidences of arbitrage within the economy."

Mangudya went on to say, as previously advised, the apex bank was proceeding with its plans to make US$500 million draw down from an offshore line of credit to supplement the country's foreign exchange receipts in order to underpin the interbank foreign exchange market for the purpose s of meeting foreign payments requirements of businesses and individuals.

"The facility will be disbursed into the economy through the interbank foreign exchange framework at the prevailing interbank foreign exchange rate on a willing buyer basis," Mangudya said.

"Over and above these initiatives, Letters of Credit (LCs) shall continue to be used for the importation of essential commodities such as fuel, grain and cooking oil.

"The LCs will also be priced at the prevailing interbank foreign exchange rates."

The central bank chief also said that banks have been directed to effectively apply the willing-seller willing-buyer principle to ensure that the interbank foreign exchange is reflective of market conditions.

"Accordingly, banks must ensure that there are no moral hazards in the operation of the interbank foreign exchange market," Mangudya said.

"In this regard, all foreign exchange requirements for banks for their own use that includes divided payments, subscription fees etc, would need prior exchange control approval for the proper conduct of interbank foreign exchange market.

"Similarly, banks should discontinue twinning arrangements for their customers as this undermines the efficient operations of the interbank foreign exchange market."

 

Credit: New Zimbabwe

Published in Economy

Malawi is going to the polls to elect a new president, new members of Parliament and local government representatives. Newly elected officials will serve for the next five years.

This is the sixth nationwide election Malawi has held since it became a multiparty democracy in 1994. It is the first poll since the introduction of a new law last year designed to regulate the registration, funding and functioning of political parties. Thabo Leshilo asked Chris Changwe Nshimbi to explain what to expect.

How many people and parties are registered to vote?

Overall, the Malawi Electoral Commission registered about 6.86 million voters for the elections. This number is down from the 7.5 million registered voters in the previous elections, in 2014. There are 17,5 million people in Malawi, of whom 8,6 million, representing 49% of the total population, are 18 years or older, and eligible to vote.

The voters have 1331 candidates across the country from which to choose 193 MPs. Thirteen of the country’s 50 registered political parties are contesting the elections.

Following the withdrawal from the presidential race of the only woman candidate, former president Joyce Banda, the electorate now has eight men, from which to choose its next President.

Who are the main contenders?

Incumbent president, Professor Arthur Peter Mutharika, is seeking a second and, hopefully, final term. He faces opposition from Saulos Chilima, from the United Transformation Movement; Lazarus Chakwera, of Malawi Congress Party; Cassim Chilumpha, of Tikonze People’s Movement; Atupele Muluzi, of United Democratic Front; John Chisi, of Umodzi Party, Peter Kuwani Mbakuwaku, of Movement for Development and Reverend Kaliya, an independent candidate.

Of the seven other presidential aspirants, Mutharika and his Democratic Progressive Party face two main contenders in Saulos Chilima, his Deputy President and leader of the newly-formed United Transformation Movement; and Lazarus Chakwera, leader of the Malawi Congress Party, a former pastor.

Chakwera, whose party is the second largest in Malawi’s parliament, has promised inclusive development if voted into office.

Chilima, Mutharika’s onetime ally and presidential running mate in the 2014 elections, shocked Mutharika in 2018 when he quit the governing party to form UTM. The former corporate executive is calling for change in the way in which Malawi is governed. Chilima says his candidacy represents a generational shift that will reverse the downward trend in Malawi’s environmental, economic, social and political trends, which seems to be “business as usual” to Mutharika.

What are the issues in the elections?

Both Chilima and Chakwera have made corruption a major issue in their campaigns, accusing Mutharika of nurturing it. Malawi has indeed witnessed scandalous high-profile corruption in the past decade. The 2013 “Cashgate” scandal, for example, saw donors withdraw financial support and aid to the country, whose national budget is 40% donor-funded.

Interestingly, corruption was a major issue that contributed to Joyce Banda losing to Mutharika in the 2014 elections. Ironically, it’s Mutharika who is being accused of corruption this time around. Whether the accusations will stick and, consequently, see history repeat itself remains to be seen after the elections.

Malawian President Arthur Peter Mutharika (79) wants a second term. EPA/Jason Szenes

For his part Mutharika has been highlighting improvements in infrastructure and the lower inflation rates Malawi has seen during his first term. He also takes the credit for having stabilised the economy, which he found in shambles in 2014, and for improvements in the country’s agricultural output.

He has promised to continue improving Malawi’s infrastructure and to subsidise agriculture, if he retains power. He has gone as far as promising to develop Malawi to the levels of Europe.

Can the elections be free and fair?

Apart from the devastating effect Cyclone Idai has had – some people lost their voter registration certificates to flooding and some candidates could not reach people trapped in evacuation camps – not many complaints have been raised by contenders about the fairness of the playing field in this year’s election.

A worrying factor is the decline in the number of voters registered for the elections. But, such apathy is not unique to Malawi. Several factors are normally cited for this, including disappointment with politicians who fail to deliver on campaign promises.

Some people have raised concerns about the 79-year-old Mutharika’s health. They doubt his ability to effectively lead Malawi for another five years, given the country’s socio-economic challenges. The landlocked country is one of the poorest and least developed in the world.

These challenges actually apply to whoever emerges victorious after this poll.

Two cases in point are agriculture and employment. The Malawian economy is predominantly based on subsistence agriculture, which is crucial for food security. The majority of people who practice this type of agriculture also live in rural area.

And that’s where most of the vote comes from. Whoever wins the hearts of rural voters will most likely carry the day in Malawi. The same applies to the candidate who offers a better promise to the nation’s many jobless young people.

Will the elections help Malawi consolidate democracy?

It’s an achievement in itself that Malawi is holding its sixth multi-party national elections since its transition from its era of dictatorship under former President Kamuzu Banda. Banda ruled the country with an iron fist for the first three decades after independence.

But beyond free and fair elections, democratic consolidation entails fulfilling electoral promises, especially those that relate to citizens’ rights to basic services like water and education. The country also needs to provide decent work for its citizens.

The eight candidates contesting for the presidency and the 13 political parties that are vying for Parliament clearly show that Malawi’s election is open. But, more could be done to promote the participation of women.The Conversation

 

Chris Changwe Nshimbi, Director & Research Fellow, University of Pretoria

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Published in Opinion & Analysis

A senior editor and 10 journalists at Russian daily newspaper Kommersant said on Monday they were resigning to protest against the firing of two colleagues.l

The two reporters, Ivan Safronov and Maxim Ivanov, quit the organisation over an article about a possible reshuffle of President Vladimir Putin’s close allies.

The resignations, involving Kommersant’s entire political staff, highlight tensions between publishers and newspaper staff members in Russia’s closely-controlled media landscape, which is dominated by pro-Kremlin state outlets.

Ivan Safronov and Maxim Ivanov said they had been forced to quit after Kommersant’s publishing house, owned by billionaire businessman Alisher Usmanov, took umbrage at an article they authored in April.

Kommersant, a leading business broadsheet acquired by Usmanov in 2006, said it was not immediately able to respond to a Reuters request for comment.

A representative for Usmanov said separately that “the shareholder does not interfere in editorial policy let alone make decisions on dismissing or employing journalists.”

Usmanov had learned about the firing of the journalists from media reports, the representative said.

The article in question, published on April 17, cited unnamed sources as saying that Valentina Matviyenko, speaker of the upper house of parliament, could be replaced by Sergei Naryshkin, head of the SVR Foreign Intelligence Service, in the coming months.

It was not clear what the disagreement over the article was.

Spokesmen for Matviyenko and Naryshkin at the time dismissed the report, which is still available on Kommersant’s website, as “rumors”.

Gleb Cherkasov, Kommersant’s politics editor, said he and 10 colleagues were quitting out of solidarity with Safronov and Ivanov, an exodus that outgoing reporter Vsevolod Inutin said amounted to the newspaper’s entire political section.

“The shareholder has the right to take personnel decisions, employees have the right to not agree with them in only one way – by changing their job,” Cherkasov wrote on Facebook.

Renata Yambaeva, a deputy chief editor overseeing business news who did not resign, blamed the firings on Usmanov and one of his representatives, Ivan Streshinsky, denouncing the sackings as outside pressure on the newspaper.

“Maybe there is someone among our readers who can explain to … Usmanov and Streshinsky that right now they are destroying one of Russia’s best media,” she said.

Published in World

The Federal Executive Council (FEC) on Monday approved the rate of 0.2 per cent as the new import levy of Cost, Insurance and Freight (CIF) on goods coming into Nigeria.

The Minister of Finance, Mrs Zainab Ahmed, disclosed this while addressing the State House correspondents after the FEC meeting presided over by Vice President Yemi Osinbajo at the Presidential Villa.

She said, however, there were exemptions to the new levy.

“Council approval a rate of 0.2 per cent as the new import levy of CIF that will be charged on imports coming to Nigeria but with some exceptions.

“The exceptions include goods originating from outside the territory of member countries that are coming into the country for consumption.

“It also includes goods that are coming for aid and also it includes goods that are originating from non-member countries but are imported through specific financing agreement that ask for such kind of exemptions.

“It also exempts goods that have been ordered and are under importation process before the scheme is announced into effect.

According to her, the purpose of the new levy is to enable African Union (AU) members pay on a sustainable basis, their subscription to the AU.

Ahmed said that Nigeria knowing that what would accrue from the new levy would be more than what was required as subscription to the AU, that the balance would be put in a special account.

She said that the special account would be used to finance subscriptions in multilateral organisations such as the World Bank, African Development Bank (AfDB), the Islamic Development Bank, and institutions like that.

The minister said that if there was any excess left from that revenue pool, it would be used to finance the budget.

She said the second approval was for the setting up of the Steering Committee to be chaired by the vice president for the design and implementation of a National Single Window.

“The National Single Window is a web portal that will be able to integrate all the government agencies that are implementers in the port system or trading in the port system.

“The trading platform will enable better efficiency of port operations; also, we are projecting that it will significantly increase government revenue.

“The third approval is for the extension of the Central Bank of Nigeria (CBN) intervention that will be used to continue to support the power sector particularly, the generation arm of the power sector.

“This is based on a commitment that we signed into as a country where we gave seven guarantees to the Generating Companies (GenCos) to bridge any gap that they may have after the Nigerian Bulk Electricity Trading (NBET) Plc has settled them,” she said.

On his part, the Minister of Budget and National Planning, Sen. Udo Udoma, said he briefed the FEC on the first quarter of Gross Domestic Product (GDP) performance numbers released by the National Bureau of Statistics (NBS), a parastatal under his ministry.

He said that the GDP indicated continuing economic growth.

According to him, the economy recorded a real GDP growth of 2.01 per cent in the first quarter of 2019.

Udoma said that the growth reflected the strongest first quarter performance in GDP since 2015—a development which he said pleased the council.

“FEC is most encouraged that the economy continues to be driven by the non oil sector which affects most of our population.

“Also, Agriculture grew by 3.17 per cent and this represents the strongest growth in agriculture since the first quarter of 2017.

“FEC is also pleased to note that are improvements in other economic indicators such as the inflation rate which tend to be high during the election period but it has been stable.

“Our trade balance has also remained healthy during the period while our exchange rate to the dollar has also been stable notwithstanding the elections, there has been stability,” he said

The minister said that the council believed that the dividend arising from the peaceful elections and the re-election of President Muhammadu Buhari would lead to a further boost in economic growth.

He said that the country would expect faster growth rate as the incoming cabinet would continue to intensify work on the implementation of the Economic Recovery and Growth Plan.

Published in News Economy
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