Tobacco rakes in $470 million

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Zimbabwe has earned $470 million from the sale of 161 million kilogrammes of tobacco since the 2017 selling season opened on March 15 this year. According to the figures that the Tobacco Industry and Marketing Board released on day 63 of sales, the golden leaf is being sold at an average price of $2,92 per kg. During the comparable period last year, about 157 million kg of tobacco worth $461 million had been sold at an average price of $2,94 per kg.

The State Procurement Board has awarded CBZ Bank a tender to float energy bonds to raise $200 million for the Gwanda solar and Gairezi hydro power projects, being undertaken by State power utility Zimbabwe Power Company, with aggregate capacity of 130 megawatts. Finance and Economic Development Minister Patrick Chinamasa had written to ZPC managing director Noah Gwariro saying much of the civil works could be sourced locally. In that regard, he asked ZPC to engage CBZ bank to structure the bond save for the engineering, procurement and construction contract of procurement of generators for. CBZ Holdings chief executive Never Nyemudzo said the company had not received official communication yet on its appointment by SPB, but stressed the group would embrace the opportunity with both hands if given the assignment. – The Herald, 22 June 2017

Government has set up a team of technocrats drawn from the Office of the President and Cabinet, the Reserve Bank of Zimbabwe (RBZ) and Ministry of Finance to come up with a framework that would be used to look into the cost running ministries. This comes as over 90 percent of revenues continue to go towards wage bills. Local authorities and State Enterprises and Parastatals (SEPs) are a major drain on the fiscus because they have higher wage bills that are not in tandem with their operations. Councils have come under fire for directing over 40 percent of revenues to wages, which is against Government requirement that salaries should take up 30 percent. Speaking during the launch of the Zimbabwe Economic Update Volume 2 — a report compiled by the World Bank giving its perspectives on the economy — in Harare yesterday, Finance and Economic Development Minister Patrick Chinamasa said last Tuesday, he presented a paper in Cabinet on cost-cutting measures. He could not be drawn into revealing when the team would start work and when they would report back their findings and recommendations. – The Herald, 22 June 2017

Barclays Bank Zimbabwe managing director (MD) George Guvamatanga spent most of last year battling to block 81 low level managers from engaging Barclays Plc, to clarify a number of issues, including an interest to buy a stake in the local unit, internal bank correspondence has revealed. This was revealed by a flurry  of letters exchanged between Guvamatanga and members of the Barclays Managers Association, an ambitious group of executives who took him to task over job security, compensation, employment liability and the right to be consulted before new shareholders took over. – Fingaz, 22 June 2017

Zimbabwe’s agricultural production is expected to significantly decline in the next two years due to changing weather patterns and lack of strong economic policies. In its 2017 Zimbabwe Economic Update released yesterday, the World Bank said the country’s economic will also taper down to 0.9 percent in 2018 from this year’s 2.7 percent before plummeting further to 0.2 percent in 2019 due to low agriculture production. – NewsDay, 22 June 2017

Fiscal imbalances combined with a large volume of domestic debt are at the core of Zimbabwe’s ongoing cash shortages, the World Bank said. In a New Economic Update on Zimbabwe released on Wednesday, the World Bank said the central government’s fiscal cash deficit moved to 10% of GDP in 2016, up from 2.3% the previous year.  “The decision in 2016 to increase agriculture-related spending despite the decline in revenue and the continued growth of the wage bill substantially widened the fiscal deficit.The government’s fiscal position expanded by some 8 percentage points of GDP.” “The deficit was largely financed from domestic financial markets as external arrears prevented Zimbabwe from gaining access to international capital markets,” said the World Bank adding that cash shortages are projected to depress Zimbabwe’s medium-term growth prospects as they limit investment for an ongoing structural transformation. “The banking sector bore the brunt of the government’s financing needs, which led to liquidity shortages in the economy.” While the World Bank still expects the country’s growth rate to rebound to 2.8% in 2017, “growth rates for 2018/19 are being revised down to less than 1 percent, sharply negative in per capita income terms.” – Fin24 (Online)

By |June 22nd, 2017|Categories: Headlines|

About the Author:

Kudzanai Sharara
Kudzanai’s background in financial journalism with ZFN, combined with a continuing education in financial management, provide a solid grounding for his work in the research department.