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Zimbabwe

Tuesday 7 May 2019

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FILE ** In this April 24, 2008 file photo, trading gets underway on the Zimbabwe Stock Exchange in Harare, in this April 24, 2008 file photo.

HARARE (Reuters) - Zimbabwe’s central bank governor said on Tuesday he expected the official exchange rate of a new currency to converge with that on the black market within three months, a move that could help increase the flow of dollars into the banking sector.

The country in February ditched its discredited 1:1 official peg to the U.S. dollar, and merged bond notes and electronic dollars into a transitional currency called the RTGS dollar.

The value of that currency was on Tuesday trading at 3.3 against the U.S. dollar and at 5 to the dollar on the black market.

The mismatch has seen companies and individuals holding dollars selling their money on the black market for higher premiums. Bankers and economists accuse the central bank of manipulating the official exchange rate, charges that central bank chief John Mangudya denied.

“I think within three months we will have a convergence of these rates of parallel market and interbank market rate,” Mangudya said during the launch of an economic report by a private sector company in Harare.

Zimbabwe’s economy has been crippled by a cash crunch that has caused shortages of fuel, food and medicine.

Mangudya, who was last week given another five-year term at the helm of the central bank, said the central bank would soon stop drip-feeding the market with some dollars to allow “willing seller, willing buyer” transactions.

The dollar shortages have seen some businesses charging prices in U.S. dollars while prices in RTGS dollars have soared, pushing up year-on-year inflation to a 10-year high of 66.8 percent in March.

The central bank chief, however, said he expected inflation pressures to ease from the last quarter of this year through 2020, citing a slowdown in month-on-month inflation.

But economists say inflation levels will remain elevated due to a devastating drought that hit crops this year and pressure on the exchange rate due to expected food imports. (Reporting by Macdonald Dzirutwe, Editing by William Maclean)

Zimbabwean Villagers Resist Chinese Company Mining Project
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Zimbabwe has clamored for outside investment in recent years, but villagers north of the capital are resisting a Chinese mining project they say will spoil the environment and fail to bring them much benefit.

The villagers are from Domboshava, a rocky area north of Zimbabwe’s capital, and they are disputing a Chinese company's decision to start quarry mining.

Seventy-year-old Florence Nyamande is among those saying no to the proposed project by Aihua Jianye Company.

“The Chinese are the money mongers of Zimbabweans. They take riches here, they take it to China. They do not develop our places. So we do not need them here,” Nyamande said. “Seriously with a deeper heart, seriously with a mind, we are disappointed. We said 'No' and 'No'. That is multiplicated (multiplied) ‘No.’”

People in Domboshava,district a rocky area about an hour drive northeast of Harare are mobilizing on May 6, 2019, against a Chinese company's move to open a quarry mine here.
People in Domboshava,district a rocky area about an hour drive northeast of Harare are mobilizing on May 6, 2019, against a Chinese company's move to open a quarry mine here.

​The villagers do not think Aihua Jianye will create the 500 jobs in the area it promised. They also say the quarry mining will leave large ponds filled with dirty water.

Zimbabwe Deputy Minister of Information Energy Mutodi – who is the parliament member for the area – is also against the $500 million quarry mining project.

He says he is not going against President Emmerson Mnangagwa’s mantra that “Zimbabwe is open for business.”

“It is open to business, but not to business that is gong to affect our environment. We want to preserve the environment. We want our community to develop, yes. But let our environment remain intact. We cannot have a situation come here take the proceeds, enjoy it in other countries, yet our people remain poor,” Mutodi said.

Mutodi notes the Chinese company has advertised for only 40 jobs in the area, less than one-tenth of what it promised.

Energy Mutodi, Zimbabwe deputy information minister speaks about his opposition to the planned quarry mining project in Domboshava area on May 6, 2019.
Energy Mutodi, Zimbabwe deputy information minister speaks about his opposition to the planned quarry mining project in Domboshava area on May 6, 2019.

Percy Mudzidzwa, whose company GeoGlobal Environmental Solutions is representing the Chinese firm, rejects allegations that 20,000 people would be affected by the 33 hectare mining project.

Some locals say the project will affect a graveyard and a natural spring. Mudzidzwa says that is not so.

“Not even a grave is going to be moved. But there is a misconception. We proposed that that the graves be fenced. There is a spring, which is above the grave site, we proposed that the spring be fenced too,” Mudzidzwa explained.

Now the project waits for the country’s Environmental Management Agency to make a final call if the Chinese company can go ahead.

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