Day: October 29, 2018

Zimbabwe’s President Emmerson Mnangagwa met with business leaders Monday in an effort to assure the public his government can stabilize the sinking economy. But as one business leader explains, uncertainty about the cash supply and the currency in use makes it hard for the economy to function.

Addressing business executives at the State House, President Emmerson Mnangagwa said his government was “working day and night to stabilize the economy.”

Zimbabweans are dealing with an acute shortage of most essentials, including fuel, medical drugs, cooking oil, and clean drinking water. Prices have been rising, though not at the same rate as in 2008, when the official annual inflation rate reached 231 million percent.

Mnangagwa asked businesses to fix the shortages by bringing more products to market.

“I am advised that some manufacturers have been holding back products from retailers. This, if true, is regrettable,” he said. “The fear to lose wealth and savings as happened during the 2008 economic meltdown is currently unnecessary. I greatly appreciate and understand all your concerns and anxieties.”

The president of the Confederation of Zimbabwe Industries, Sifelani Jabangwe, told VOA if any companies are holding back goods, it is because they know getting resupplied will be impossible.

“The reality is the rates are moving and there is no [foreign] currency coming,” he said. “The manufacturer or wholesaler knows that the stock they are holding is the last, if they sell that and lose out they are finished and we have lost that company. So if there is anyone holding any product it is probably because they are waiting to understand what direction [the rate of exchange is going], but I do not think there are many companies that are doing that. A lot of companies have actually run out of materials.”

The heart of the issue is a lack of useable cash. Since Zimbabwe abandoned its own dollar in 2009, the country has mostly used U.S. dollars, the British pound and South African rand to conduct transactions.

But in recent years all three currencies have been hard to find, paralyzing the economy and forcing the country to rely on bondnotes, a currency the government began printing two years ago to ease cash shortages.

Monday, President Mnangagwa said the “multi-currency system of exchange is here to stay.” He said people’s bank balances are safe and there is no reason for people to spend or move their savings.

But the value of the bondnote is unquestionably falling. The government insists its currency trades on par with the U.S. dollar. On the black market however, a dollar is now worth close to four bondnotes.

 
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A new report says African nations are failing to create enough jobs for a booming young population even as some countries have seen strong economic growth.

The latest Ibrahim Index of African Governance sounds a warning for a continent where the sub-Saharan population is projected to double by 2050.

The report released Monday says Africa’s overall GDP has risen nearly 40 percent over the past decade but the continent’s average score for sustainable economic opportunity has increased just a fraction of 1 percent.

Africa is seeing the rise of young opposition leaders in countries like Uganda, Zimbabwe and Cameroon who are impatient with some of the world’s oldest or longest-serving heads of state. Earlier this month, some in East Africa said they would unite with like-minded colleagues in West and southern Africa to form a movement to challenge the misrule that has plagued the continent.

Experts warn of coming turbulence as about 60 percent of Africa’s population is under age 25, with birth rates among the highest in the world and health conditions improving for many. The United Nations says sub-Saharan Africa is projected to be the source of more than half of the world’s population growth between now and 2050, straining countries’ abilities to provide good education, jobs and health care.

“Africa has a huge challenge ahead. Its large and youthful potential workforce could transform the continent for the better, but this opportunity is close to being squandered,” Mo Ibrahim, the Sudan-born billionaire who leads the foundation behind the new report, said in a statement. “The evidence is clear — young citizens of Africa need hope, prospects and opportunities. Its leaders need to speed up job creation to sustain progress and stave off deterioration.”

Strong economic growth doesn’t necessarily lead to more opportunities, the new report says. Nigeria, Angola, Sudan and Algeria have some of the highest GDP in Africa but are among the lowest for job creation.

The report also warns that education in 27 countries across the continent is now on the decline, further hurting the young population’s future.

And “alarmingly, citizens’ political and civic space in Africa is shrinking,” the report adds, meaning less room for an increasingly connected, tech-savvy population to express concerns and seek solutions, with potentially explosive results.
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China’s yuan sank to a 10-year low against the dollar on Monday, coming close to breaking the politically sensitive level of seven to the U.S. currency.

The yuan declined to 6.9644 per dollar at midday, passing its most recent low in 2016 before recovering slightly. It was the lowest level since May 2008.

The currency’s weakness is one of a series of elements fueling Washington’s trade complaints against Beijing. The U.S. Treasury Department declined this month to label China a currency manipulator but said it was closely watching Beijing.

Chinese authorities have promised to avoid “competitive devaluation” to boost exports amid a tariff war with U.S. President Donald Trump over Beijing’s technology policy. But they are trying to make the state-controlled exchange rate more responsive to market forces, which are pushing the yuan lower.

The level of seven yuan to the dollar has no economic significance, but could revive U.S. attention to the exchange rate.

Chinese authorities are likely to “stand their ground” and prevent a “capitulation beyond the 7 level,” Mizuho Bank said in a report Monday.

The yuan, also known as the renminbi, or “people’s money,” has declined by almost 10 percent against the dollar since April as China’s economy cooled and U.S. and Chinese interest rates went in opposite directions. That helps exporters cope with tariffs of up to 25 percent imposed by Trump on billions of dollars of Chinese goods. But it raises the risk of inflaming American complaints about Beijing’s trade tactics.

“The last thing they will do is to escalate the tension by starting a currency war amid a trade war,” Macquarie Group said in a report last week.

A Treasury report on Oct. 17 said China failed to meet criteria to be labeled a currency manipulator, a status that can trigger sanctions. But it said Beijing was, along with Japan and Germany, on a list of governments whose currency polices would be closely monitored.

A weaker yuan also might encourage an outflow of capital from the world’s second-largest economy. That would raise borrowing costs at a time when its leaders are trying to shore up cooling growth.

The People’s Bank of China has been trying to make its exchange rate mechanism more efficient by increasing the role of market forces.

The exchange rate is set each morning and allowed to fluctuate by 2 percent against the dollar during the day. The central bank can buy or sell currency — or order Chinese commercial banks to do so — to dampen price movements.

Some forecasters say Beijing’s stance might change if Trump and his Chinese counterpart, Xi Jinping, make no progress at a possible meeting during a November gathering of the Group of 20 major economies.

The central bank tried to discourage speculation by imposing a requirement in August that traders post deposits for contracts to buy or sell yuan. That allows trading to continue but raises the cost.

Beijing imposed similar controls in October 2015 after a change in the exchange rate mechanism prompted markets to bet the yuan would fall. The currency temporarily steadied but fell the following year.

 
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In Arabic, Annisa means an unmarried woman. And in Kenya, Annisa has become the first taxi-hailing service run by women. The new service targets women who don’t feel comfortable or safe being alone with male drivers. It also gives more women an opportunity to become cab drivers. Faiza Elmasry has the story narrated by Faith Lapidus.
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