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FILE: A man in Harare holds bondnotes issued by Reserve Bank of Zimbabwe, Oct. 15, 2018. The introduction of bond notes - a currency Zimbabwe started printing two years ago to ease the situation -- has not helped. (C.Mavhunga/VOA)

HARARE (Reuters) - Payments to 200,000 retirees on Zimbabwe’s public pensions scheme could be delayed this month, the national social security agency said, after a foreign currency dispute erupted between local banks and a payments software vendor.

Zimbabwe is battling an extended foreign currency crisis which has affected key imports such as electricity, fuel and medicines. Many firms with foreign ownership are also struggling to repatriate dividends to non-resident shareholders.

Its National Social Security Authority, a mandatory public pension scheme, said on Thursday it could miss a June 13 deadline for paying its members because a software platform it uses to make the disbursements was demanding payment in foreign currency.

“Payouts that were due on (June 13) might be delayed as the provider of the payment platform used by the banks is demanding to be paid in foreign currency, failure of which it will suspend services to them,” the authority said in a statement.

An aurhority spokesman said the payment platform was run by London-listed investment company Cambria Africa. One of the company’s subsidiaries, Payserv Africa, provides payment solutions to banks and 5,000 corporate clients in Zimbabwe.

On Wednesday, it announced it had suspended services over non-payment of foreign currency fees.

“The Company lost U.S. $170,000 providing services to banks in March and April 2019. Banks collectively owe Payserv Africa over U.S. $470,000 for over 4 million transactions concluded since 1 May 2019. The company cannot allow further accumulation of possible losses,” Cambria said in a statement.

It said Zimbabwean banks had frustrated its attempts to maintain the U.S. dollar value of its services following the devaluation of its currency, the Real Time Gross Settlement Dollar (RTGS) dollar, on the interbank market.

The Bankers’ Association of Zimbabwe, which represents the sector, was not immediately available to comment.

In February, Zimbabwe ditched a discredited 1:1 dollar peg for its dollar-surrogate bond notes and electronic dollars, merging them into the lower-value transitional currency called the RTGS dollar.

The central bank, which has tightly controlled foreign currency payments since May 2016, has moved to relax its hold, with most external payments now going through the banks and using a market-determined exchange rate.

The RTGS dollar has slid from a starting position of 2.5 RTGS dollars per U.S. dollar on Feb. 25 to 5.91 RTGS dollars to the dollar on Thursday on the official interbank market. It was trading significantly weaker, at 8.7 to the US dollar, on the black market on Thursday. (Reporting by Nelson Banya Editing by Emma Rumney/Mark Heinrich)

Dialogue Emmerson Mnangagwa In Harare

Zimbabwe President Emmerson Mnangagwa on Friday held a meeting with several opposition parties as part of his ongoing efforts to engage different stakeholders in the country in a dialogue, to help address some of the country’s pressing problems, including the devastated economy.

Mnangagwa launched the Political Actors Dialogue (POLAD) last month, comprising mostly leaders of the 22 opposition parties that contested in the July 30th election.

Mnangagwa was declared the winner of that election by the Constitutional Court, following a challenge by the main opposition Movement for Democratic Change Alliance, which disputed the outcome.

The MDC led by Advocate Nelson Chamisa, which is still challenging Mnangagwa’s legitimacy, has refused to partake in the ongoing dialogue.

A major challenge to Mnangagwa’s presidency since taking over power from longtime leader President Robert Mugabe, who resigned under pressure from the military in 2017, has been the economy, which has been compounded by the fact that the country lacks its own currency, and has been depending on the U.S. dollar and other currencies.

Addressing those gathered at POLAD, Mnangagwa reiterated an earlier promise that Zimbabwe will soon have its own currency.

“It is more critical that we have our own currency,” said Mnangagwa. “The creation of wealth, infrastructure, we have in the country will determine the level of the supply of money in the country. So it is necessary that we have our own currency.”

Mnangagwa said the currency, once introduced, will essentially put an end to the multiple currencies currently in use in the country for most transactions, as everyone will then have to convert their foreign currency to local money, at a bank or exchange bureau, to do any transaction.

Zimbabwe has not had its own currency since 2009.

“The US dollar cannot anymore transact in the country,” declared Mnangagwa. “If you go to the UK, with your US dollar, or you go to Zambia, or you go to South Africa nearby, with your US dollar or your Euro, you cannot transact in any hotel, or in any restaurant, or in a shop. You go to the bank and they change the money and you’ll be given the rand, then you transact. You go to London, you change it and you’re given a pound to transact. You go to Zambia, you have to go and change and you’ll be given a kwacha, and then you transact. So all the money that is in the shops or elsewhere, will not work until it goes through the bank to be changed into the local currency to do transactions,” said Mnangagwa.

A consequence of the lack of a steady currency has been erratic prices on basic commodities driven by an irregular exchange rate between the local currency known as Real Time Gross Settlement (RTGS) and the US dollars.

Shortages of both the local and foreign currencies have driven up prices of basically all necessities, including fuel and a variety of food stuffs like bread, sugar, cooking oil and mealie meal, used to make the staple, sadza.

While many blame Mnangagwa’s government for failing to tame prices and penalize those who hike prices unfairly, arguing that it is within the government power to put a stop to the malpractice, Mnangagwa and his administration have distanced themselves from those hiking prices, and have even accused businesses and vendors who hike prices of taking advantage of the system.

“Honestly, a packet of sugar in a store, you wake up in the morning and the price has increased, what happened? It would be better if the prices increase, then you also increase the prices for workers (salary), then they’ll be no complaints, there’ll no complaints because they will be having buying power. And you find that some companies and shops, saying they want US dollars, but the same company, the same employer, has never paid his workers in US dollars...but he demands payment in US dollars.”

Among the opposition groups that attended the POLAD was the MDC led by Dr. Thokozani Khupe. The party’s vice president, Obert Gutu, said they have welcomed the call to dialogue, simply to help improve lives for the common people, not to endorse the government of President Mnangagwa.

Gutu said a monitoring and evaluation committee has been set up to hold the president accountable to any agreement reached at POLAD.

“We have said that by us being here, we have not come to just say what pleases the government,” said Gutu. “We are not looking for jobs, we are not even looking for a power sharing arrangement. We are simply looking to improve the situation for the people of Zimbabwe.”

Spokesperson Jacob Mafume of the MDC led by Advocate Nelson Chamisa, however, reiterated with his party’s position that there will be no dialogue until Mnangagwa accepts their stance that he is not the legitimate leader of the country, despite the outcome of the Constitutional Court.

“We are waiting and saying that the discussion we will hold must start with (President) Mnangagwa as president of Zanu, (Advocate Nelson) Chamisa as the people’s president. Once Mnangagwa agrees to meet with Chamisa, then we’ll organize how this discussion will proceed, and discuss issues of legitimacy and the economy and international relations,” said Mafume.

Mafume, who also criticized the government’s use of national resources to host POLAD, said another condition for the party to hold talks with Mnangagwa, is the selection of a neutral arbitrator or mediator, to sit in on the discussions.

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