Opinion: Mnangagwa’s albatross, the economic crisis, that is self-inflicted!

This is a short time coming. It isn’t a long ago the 2 % taxes on Mobile Money Transactions and other financial services came into effect in Zimbabwe. Still the ramifications has been dire and the consequences has hit all walks of life. Even Unions and Civil Servants are asking the government to get their salaries in US Dollars, than in the Bond Notes. That shows the lack of value in the temporary currency, which is still floated around and never was really a good idea in the first place.

That President Emmerson Mnangagwa tries to show some concern by writing to the Republic in the midst of credit crisis, a foreign exchange crisis and the sudden lack of imports of products because that is good. However, he is trying to say they ones tricking and finding a way to make is the issue. Not that the government haven’t done their job to monitor, safeguard and build a resilient economy. If they had done that, they would have known the consequences of their actions and would also have mechanisms that could ensure the balances of books and also enough reserves to fill the gaps. However, that is pipe-dream, as the ZANU-PF are making sure the hyper-inflation and lack of goods becomes a main-stay in ordinary life.

Here is notable quotes from what the President wrote on the matter:

Sadly, events of the past two weeks have shown this is not so. Not everyone is playing to the rules. Partly because of wanton illicit currency deals happening in what is known as the black market, our economy has been disturbed. We have suffered massive market failures, manifesting in complete collapse of the pricing framework for virtually all commodities, regardless of import component. There has been a run on the bond note. In all this, there have been no winners, given that at the end of the day we are all consumers who demand and buy goods and services at any one stage for our survival” (Mnangagwa, 2018).

Lately, our law enforcement agencies have been investigating these illicit activities. It has come to light that the money changers we see in street corners are mere “runners” who work for big currency sharks who operate from high places in air-conditioned offices. The real culprits are not these “runners” who are but a tip of a big and scandalous financial iceberg” (Mnangagwa, 2018).

Currently we have no legislation to deal with currency manipulators. We therefore need urgent and robust measures to deal with this financial menace. Of course, I am aware of what else needs to be done by way of policy changes and key adjustments in different sectors and aspects of the economy, including in the public sector. These changes and adjustments are already being done, and will continue to be done until Government plays its own part in stabilising the economy by living strictly within its means” (Mnangagwa, 2018).

Let’s be clear about the value of the currency and the inflation, these are rates that barren on the principal that the Financial Ministry and Central Bank are controlling. Such in a manner, where the Monetary Policy and the International influence are in tandem. To an such extent that they are making sure the wages, the prices and the value of currency are leveled. In a manner, where it is livable and create a fixed growth. However, in Zimbabwe it is a free-for-all. Where a single tax and a lack of oversight with the Bond-Notes, also the oversight of currency in general. Are the reason for the short-falls and lack of cash. This is done, because the state isn’t doing their job of creating sufficient mechanisms and reserves to have a baseline even for the economy. When that is created and the vacuum has to be filled, the prices on the currency is growing, the inflation’s and the higher prices is the outcome. This isn’t something new, but an old ways of lack of resources, lack of basics and the needs of the market to push prices to cover costs. This isn’t manipulations or sharks. This is laziness of the Financial Institutions and the ones not using their oversight rule.

The already weak Bond Notes, the hated ones, that never was a good idea. Has ensured this downfall of currency. Combined with higher taxes, that takes vital funds out of the market and also empties the reserves of the companies to get more foreign exchange, but also makes it more expensive to get new stocks in the shops. This is a negative spiral self-wounded by the government, by a quick trick of transactions expensive and seeing the short-fall happening as consequence.

The previous Finance Minister called the Zimbabwe Economy an Albatross, I think he was right. Because there seems to be no one caring for having reserves, thinking of a rainy-day and also thinking of the outcome of any measure done into the economy. They should have built graphs and expected certain reactions to the levied taxes. However, they seems shocked and the President has to make excuses. Instead of saying they are incompetent and not having the man-power to stabilize the economy. They are instead making the currency traders, the Forex businesses and whoever who imports goods to blame. Because they are not seeing the Albatross, and neither the consequence of their actions.

The President and his men, should have known better, but they act all holy. When they are the ones living in sin. Peace.

Reference:

Emmerson Mnangagwa – ‘Stabilising the economy: Tackling the parallel market’ 21.10.2018 link: http://www.sundaymail.co.zw/stabilising-the-economy-tackling-the-parallel-market/

Uganda: Standard Chartered Bank disowns Bank Statement purportedly belonging to its client (19.10.2018)

Zimbabwe: ZIMTA – Press Release – Demand for Salaries in Foreign Currency (19.10.2018)

Zimbabwe: Finance Minister Ncube appointed Acie Lumumba as his mouth-piece!

The strongly spoken personality and active political operative Acie Mutumanje Lumumba was today appointed by Minister of Finance Mthuli Ncube as the Chair of Communication Taskforce. Clearly, the controversial and former VIVA Zimbabwe have now gone back to the fold. He will now be the mouth-piece of the Finance Ministry. As they are in the midst of deadlock with levied taxes and lack of foreign exchange, lack of imports and long fuel ques. Clearly, these financial times will be hardship to explain the needs and be a voice of the Zimbabwe African National Union – Patriotic Front (ZANU-PF).

The Pfee will get a loyalist, even as he has just jumped back. Even when he was out, he was usually vocal of goodwill for the ruling regime. Therefore, he has been known on the outside of the Republic. Not only for the good news, but because of his attitude. That is why this is a proof that Acie is hungry and he needs to eat.

That they have hired him as he was vocal against Mugabe, shows that the new Finance Minister are seeing him as a tool and useful person to co-operate his messages. As the Ministry own Taskforce has to activate and secure their message out to the public.

This is the man, that has been disregarded, called foul-mouthed and fishing for relevancy in 2016. In 2017 he said Mnangagwa was the right man for the Zanu-PF. Now in 2018, clearly the fishing expedition of Lumumba has paid-off.

We can see what he will do, but he has to follow the program. He cannot rant and be himself. Stick to the message of Pfee and the ones in-charge. He might be the chair of a taskforce, but he will not be the kingpin. That will be Ncube who orders and says what Lumumba will sell. If it is toxic or unreal, if the loans are not happening or if they finances are worse; than what the regime wants to tell the public.

Acie Lumumba will now not be the renegade, the vocal figure, but he was only doing that for his own gain. It is not like he generated a following or anyone jumping behind him. He was speaking out his mind and another perspective, but not something that changed the narrative. The ZANU-PF did what it did.

Now they captured him and he will be the voice that Ncube needs. Peace.

Is it okay for Machakos County: That they get direct grants from the World Bank?

Today, the Governor of Machakos County appointed the County and Budget Forum. However, what was very revealing was what Dr. Alfred Mutua was implying within the documents, not who he appointed to the position. Usually that would be an important piece to look into.

However, today was the day where the Governor revealed directly that the World Bank Development secured 1bn Ksh per year for 6 years to the infrastructure building in the county. This being roads, electricity and other needed government services in the municipalities of Machakos.

Usually these sort of arrangements are done directly with the National Government or the Parliament, as to where the development is happening and where the grants are going. Which project that matter and what is sufficiently holding the standards of the stakeholders and the ones contributing the funding. Nevertheless, here the implication is that the World Bank is directly involved in all county functions from sewage to building roads. That their funding are going to do what the government is supposed to deliver. This being the natural delivery of the state and basic upkeep of the infrastructure. Instead of being tax-payers own money, they are using funds from abroad to do the needed development projects and to get the needed services in the municipalities of Machakos.

We can wonder what does the Jubilee government and Kenyatta think of this? When the Counties themselves are directly making arrangements and funding deals with the World Bank? In a republic filled to the brim of loans and lack of cash-flow, these sort of deals would be appropriate to go through the Central Government before the Local Government. However, that one has not captured the imagination. Because shouldn’t the Central Bank of Kenya or the Cabinet Secretary of Finance Henry Rotich signed it off before the County announced the loans?

That is what is bugging me, or is the counties so liberated from the Central Government now? But wouldn’t the rate of loans and grants be more uncontrolled and have less transparent system, if every Governor has the chance to grab these from Multi-National Financial Institutions and find ways to apply these locally? Even though they know directly what and where things need to be built and what is lacking. Still, they should have a rubberstamp from the CS and the National Treasury and CBK before thinking about it. Because in the mind of the Governor, he just announced it in passing together with the appointments to the different boards in his county. Peace.

Zimbabwe: Press Statement by the Hon. Minister of Energy and Power Development – Dr. J. Gumbo on the use of Containers in Buying Fuel (17.10.2018)

Safaricom: Revision of Mobile Tariffs (17.10.2018)

Zimbabwe: A messed up Gumbo, a possible need for an authorization to use jerrycans for fuel!

Those using tanks, drums and jerry cans all, those forms of containers should stop and we are sending out inspectors and the Zimbabwe Republic Police and if anybody is going to be found maybe overcharging or using drums might have their licences withdrawn. We are not going to allow that…” – The Minister for Energy and Power Development Joram Gumbo (Maveriq – ‘Govt To Ban Jerry Cans, Drums, Fuel Containers At Service Stations – Energy Minister’ 16.10.2018, link: https://news.pindula.co.zw/2018/10/16/govt-to-ban-jerry-cans-drums-fuel-containers-at-service-stations-energy-minister/).

I thought the Zimbabwe African National Union – Patriotic Front (Zanu-PF) and the new President Emmerson Mnangagwa would open the Republic for business. Mnangagwa is clearly out on the line. The government have issued new taxes and the costs of everything has gone up. As well as the lack of foreign exchange is now rampant.

Since the added taxes on Mobile Money was enacted, the lack of US dollars and the imports of products have gotten worse. Even shops are lacking stocks and people were stockpiling before the shops gotten empty. With this has also started a fuel crisis. Where people are waiting in line for hours for fuel.

As this is getting worse now. The Minister for Energy Gumbo has issued statements of intent of authorization of usage of jerry cans, where you need to be Authorised and stamped by Environmental Management Agency, the District Administrator and Police Regulating Authority. Where the person who is allowed to bring a jerry can, has to write which station in question and address, also drivers license information and even how many liters of fuel is allowed to fill.

The Zanu-PF is really now making life harder, as the people using motorcycles, cars and lorries have to ask permission to fill fuel into jerry cans. This is done in 2018. If you thought things was bad during Mugabe. The rising inflation and the economic crisis of 2008 might be repeated. As the state is going even further with using tactics to stall the issue.

If the state is really doing this, they will be in a special state. Where the citizens are running between the authorities to get authority to use the jerry cans before going to the Petroleum-Station to get a refill of fuel.

This is a sign of how serious the lack of fuel is and what extent the state does to stop the usage of fuel. They wouldn’t do it, if they didn’t have issues with importing it and having enough foreign currency to afford new imports.

This crisis is created by the Zanu-PF and the citizens are paying. And they are making the matters worse. Instead of repealing the taxes to stop inflation and making things run out. They are instead making it harder for the public to get fuel in their vehicle. Peace.

Bududa Landslides: Who is really responsible for securing the land?

There has been a real tragedy again befallen on the Mount Elgon Region, as the Budabuda District was hit with another landslide. This is a district that is known for this and has had fatal landslides in the past, as the rain of October and November can create landslide in the eroded land and in the slopes of the hills, where people reside and have their small farms. Therefore, this isn’t a new problem. There are reports on the matter, but still this week was hit with it again and new losses of lives. Which is such a tragedy. In 2010, there was estimated 100 dead in Namesti Village in the district. By today, in the district the Red Cross says the number of dead is up to 42. All of which is a lot, as there are supposed to be safeguards and warning systems, also funds to secure help as the disaster happens.

After the last big landslide, the district MP Olive Wonekha wrote this: “Putting a system in place to cater for all the emergencies has not been easy. The Government of Uganda together with many well-wishers including the Red Cross Society which is at the forefront of the humanitarian aid, Development Partners are grappling with the medium and long-term solution to the issue” (AAH Uganda, 02.04.2010).

As we have sadly seen from this week, that haven’t really been put in place and in order. As the government nor the stakeholders has taken charge, as they all know this. What is special is that the Bududa District even made a Development Plan in April 2011, which stated this:

Factors responsible for this phenomenon include; Human activities (steep slope cultivation, cultivation on river banks, deforestation) and excessive rains” (Bududa District – ‘Five-Year District Development Plan’ 27.04.2011). In the same plan, they have a plan for adding more forest and trees in slopes to stop erosion in the soil, we can wonder if they ever got the one road they needed and the seedlings to do so. That they could do one thing to secure the slopes and hills. As the rain pour is steady and known about in the region.

We understand why the Local Government and District has little say in the matter of disaster, as the Office of Prime Minister says they are number 12 on the list of responsible in 2010, but a technical note from 2015, says it is local government who is legal obligation. Its not strange, that their will confusion and uncertainty who has the final say and who should step into action.

OPM report on ‘THE NATIONAL POLICY FOR DISASTER PREPAREDNESS AND MANAGEMENT’ from 2010 states: “Community settlement on steep slopes and other uncontrolled land use practices increase the likelihood of landslides and mudslides prevalence. The areas mostly affected by Landslides are Mt. Elgon region, Ruwenzori region and Kigezi”. Than later it says who is the responsible institutions: “i. National Environment Management Authority (NEMA) (lead Institution)

ii. Ministry of Water and Environment

iii. Department of Geological and Mine Survey

iv. National Forest Authority (NFA)

v. Uganda Wildlife Authority (UWA)

vi. Makerere University, Geography Dept.

vii. Ministry of Agriculture, Animal Industry and Fisheries

viii. Ministry of Lands and Housing and Urban Development

ix. Ministry of Local Government

x. Ministry of Works and Transport

xi. Office of the Prime Minister – Department of Disaster Preparedness and Management

xii. District Local Governments

xiii. NARO and other Research Institutions

xiv. Community and Private Sector

xv. Ministry of Defence and other Rescue Agencies

xvi. UN Agencies and NGOs

xvii. Ministry of Health” (OPM – ‘THE NATIONAL POLICY FOR DISASTER PREPAREDNESS AND MANAGEMENT’ 2010).

A technical report commissioned by the UNDP on behalf of the Office of the Prime Minister in August 2015 states this about landslides: “Herewith each district environment committee is responsible to take necessary measures to minimise the risk of environmental degradation of riverbanks and shores. Similarly section 38 highlights the identification of hilly and mountainous areas and also places a legal obligation on local government for the assessment of such areas in terms of environmental degradation. In light of the significant landslide risk within Uganda, this element should go along way in addressing landslide risk” (OPM – ‘Governance of disaster risk reduction and management in Uganda: A literature review’ 2015).

What I have been looking into is what the reports of old is saying. Not looking into the issue of Contingency Fund, but showing a final Press Statement from CSBAG to show the lack of care from the government concerning this:

We want to applaud government’s proposal of allocating UGX 77bn to the contingency fund; this being the first time the provision of the PFMA of constituting a contingency fund is being implemented. However, the proposed allocation is below the 0.5% of the previous financial year’s budget as provided by Section 26 of the PMFA 2015 as amended, we pray that an additional UGX 66 bn be provided to fully implement the provision of the PFMA. We demand that Government respects the percentage towards Disaster response and management as required by the law under the Contingency Fund” (CSBAG – ‘UGANDA IS NOT FLOOD RESISTANT… IT’S TIME TO ACT’ 26.03.2018).

When we see it like this, the state is clearly not managing the disaster response or the funds for possibly coping with it. As the landslide this week is showing, is that the government of Uganda isn’t prepared and their citizens are paying. As well, as the local government doesn’t have the funds or ability to ensure their own 5 year development plan. Which was made a year after the biggest landslide in the recent decade. Therefore, the state knows about this, but still doesn’t act upon it.

We have to question the OPM and the other government institutions, not only the Local Government who hasn’t acted, but they might lack the budget and the expertise, that all the other responsible institutions in this manner.

What is sad is the loss of lives and the knowledge of plans and lack of inadequate funds… which could have saved lives and ensured a better disaster response. Something everyone deserves, as the government knows this region is hit with this, as the rains of September and October can make the land erosion. Therefore, time to push for the government to really act, so next time there be less loss of life and more action to ones in need when it do happen. Peace.

The Pharmaceutical Society of Zimbabwe: Statement on the Medicine Shortages and Price Distortions (12.10.2018)