Egypt, Elsewedy review progress on Ain Sokhna phosphate complex    US employment cost index 3.6% up in year to June 2025    Egypt welcomes Canada, Malta's decision to recognise Palestinian state    Pakistan says successfully concluded 'landmark trade deal' with US    Sterling set for sharpest monthly drop since 2022    Egypt, Brazil sign deal to boost pharmaceutical cooperation    Modon Holding posts AED 2.1bn net profit in H1 2025    Egypt's Electricity Ministry says new power cable for Giza area operational    Egypt's Al-Sisi, Italian defence minister discuss Gaza, security cooperation    Egypt's FM discusses Gaza, Nile dam with US senators    Aid airdrops intensify as famine deepens in Gaza amid mounting international criticism    Egypt exports first high-tech potato seeds to Uzbekistan after opening market    Health minister showcases AI's impact on healthcare at Huawei Cloud Summit    On anti-trafficking day, Egypt's PM calls fight a 'moral and humanitarian duty'    Egypt strengthens healthcare partnerships to enhance maternity, multiple sclerosis, and stroke care    Egypt keeps Gaza aid flowing, total tops 533,000 tons: minister    Indian Embassy to launch cultural festival in Assiut, film fest in Cairo    Egyptian aid convoy heads toward Gaza as humanitarian crisis deepens    Culture minister launches national plan to revive film industry, modernise cinematic assets    I won't trade my identity to please market: Douzi    Sisi sends letter to Nigerian president affirming strategic ties    Two militants killed in foiled plot to revive 'Hasm' operations: Interior ministry    Egypt, Somalia discuss closer environmental cooperation    Egypt's EHA, Huawei discuss enhanced digital health    Foreign, housing ministers discuss Egypt's role in African development push    Egypt reveals heritage e-training portal    Three ancient rock-cut tombs discovered in Aswan    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Egypt's Irrigation Minister urges scientific cooperation to tackle water scarcity    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Economic crisis deepens in Zimbabwe
Published in Daily News Egypt on 29 - 10 - 2018

Zimbabwe's economy is in dire straits. President Emmerson Mnangagwa has promised to stabilize the economy ‘soon' but not everyone is optimistic.Inflation and prices are on the rise, there is a shortage of foreign exchange and supplies of fuel, food and pharmaceuticals are drying up. The opposition is calling for a transitional government to resolve the worsening economic and political crisis hitting Zimbabwe. President Emmerson Mnangagwa is increasingly under pressure to act swiftly.
On Monday, October 29, 2018, Mnangagwa met with the country's business community. The president assured them that he was "working day and night to stabilize the economy." Signs in Zimbabwe are pointing to a possible rerun of the massive crisis that engulfed the country about a decade ago. Among them is a sudden surge of the country's stock exchange's industrial index in October, which now stands at the relatively high market valuation of $22 billion (€19.3 billion), a sudden gain of more than 50 percent in a matter of days.
Betting on the stock market
According to the market's spokesperson Tapiwa Bepe, the surge is a consequence of the country's profound crisis. "The political and economic environment is volatile. The heightened activity on the stock market was therefore investors scrambling to take positions in real assets by disposing of cash and bank balances," Bepe told DW. Foreign investors and national investors believe that stocks and shares offer more security.
But brokers like Itai Chirume say it has become extremely difficult to take out money locked in electronic bank balances from the stock exchange. "What we have seen is that foreigners have been taking their money out through the medium of fungible shares," investing them in foreign companies, he said. That way the money is leaving the country through legal means.
Mnangagwa promises to act
The situation was acknowledged by President Mnangagwa: "The fear to lose wealth and savings as happened during the 2008 economic meltdown is current but unnecessary. I greatly appreciate and understand all your concerns and anxieties," he told the business community.
The 76-year-old leader said that Zimbabwe would continue using the multi-currency system which the country adopted in 2009 after abandoning its worthless currency. But the hard currencies – mainly the US dollar and South African rand -, making up the system together with government issued so called bond notes, have been hard to find lately on the formal market. And many in Zimbabwe believe that the time has come to scrap bond notes altogether. Economist John Robertson explains why it is a mistake not to: "The existence of the bond notes caused the US dollar to go out of circulation." An end to the bond notes would bring back in the US dollar, which would be good for the economy, Robertson told DW.
Blaming the private sector for the shortages
Bond notes, a currency Zimbabwe started printing about two years ago to ease cash shortages and help fight hyperinflation, have been losing value lately. They were supposed to trade at par with the US dollar, but are now almost four against the greenback.
Some aspects of Monday's meeting displeased the business community. Sifelani Jabangwe, president of the Confederation of Zimbabwe Industries, was upset by Mnangagwa's claims that manufacturers are hoarding stock so as to be able to increase prices. "If anyone is holding back his stock, it is probably because they are waiting to understand the direction (of the economy)," he told DW. Jabangwe went on to explain that many companies have run out of raw materials themselves. "And the panic buying did not affect only customers, it also affected industrialists. Just recently, there was panic buying even of cars."


Clic here to read the story from its source.