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A New Currency Offers New Hope for Zimbabwe

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For many Zimbabweans queuing up outside banks last week, it must have felt like the beginning of a new era. A decade after the Zimbabwean dollar was abandoned after falling victim to years of hyper-inflation, crisp new “Zimdollars” have once again entered circulation. However, this time around the denominations come – at least for now – in two and five dollar bills, instead of the 100 million dollar notes that were printed towards the end of the last Zimbabwean dollar.

This new generation Zimdollar is the latest salvo by the government to combat the physical cash crunch and a crucial step ahead in its currency reforms. The Reserve Bank of Zimbabwe plans to incrementally inject $1 billion into the economy over the next six months, stimulating demand and production in a measured manner while keeping money supply in check.

“We will make sure that we drip-feed the physical cash into the market in order to ensure that there is sufficient cash in the economy,” said central bank chief John Mangudya. “We believe this will also help in eliminating queues at the bank where people spend countless hours of productive time queuing for cash.”

Mangudya added that the new Zimdollar would take the place of existing electronic money, alleviating the fear that the cash injection in the middle of an economic crisis would stoke inflation. Keeping price increases and speculative behaviour in check is also one of the reasons why the Reserve Bank is initially issuing lower denomination notes and coins.

For Zimbabweans, the new cash is a welcome relief. Over the past 10 years, they had to juggle a multitude of currencies and proxies. Following the collapse of the old Zimbabwean dollar in 2009, a basket of currencies became legal tender in the country, from the US dollar to the Chinese yuan. By 2015, the foreign currency notes dried up at the banks, which started the chronic cash shortage in Zimbabwe. The central bank introduced bond notes as a surrogate currency, but black market speculation quickly eroded their value, which then triggered the creation of electronic notes.

Given Zimbabwe’s disastrous state of affairs, a popular uprising ensued against the country’s long-time strongman Robert Mugabe, leading to his resignation two years ago. He was replaced by Emmerson Mnangagwa, who then won the presidential election in July 2018. He inherited a struggling economy marked by hyperinflation, cash shortages, a budget deficit, endemic corruption and a lack of monetary sovereignty.

Promising wide-ranging reforms, Mnangagwa appointed MthuliNcube as Finance Minister, a respected economist who was a professor of Public Policy at Oxford with a PhD in Mathematical Finance from Cambridge University. Mnangagwa tasked him to stabilise and transform the Zimbabwean economy so that it could achieve upper middle-income status by 2030, in line with countries such as Russia, China, Thailand, Costa Rica, Turkey and Malaysia (in fact, Zimbabwe was upgraded by the World Bank from a low income to lower middle income country in July).

Facing large fiscal deficits due to the expansion of underground economic activity and the sanctions imposed on Zimbabwe during Mugabe’s rule – which restricted access to U.S. dollars – Ncube launched the Transitional Stabilisation Programme (TSP) a year ago with far-reaching currency and structural reforms. The move was endorsed by the International Monetary Fund (IMF), with whom Zimbabwe signed a two-year monitoring programme that could earn it debt forgiveness and future financing.

In February this year, the government introduced the so-called Real Time Gross Settlement (RTGS) dollar and abandoned its multi-currency system four months later. By now, most Zimbabweans had resorted to mobile money, which became an integral part of the country’s payment system. But it too had its challenges, as wallet holders had to pay premiums of up to 50% to price-gouging mobile money agents to access their funds in cash. This contributed to the rapid depreciation of the currency and compounded the cash shortage. This month’s issuance of the physical Zimdollar bills aims to alleviate that problem, as the availability of cash will eliminate the extortionate premiums incurred when transacting through mobile money.

The new currency likely faces an uphill battle. But the government is confident, urging Zimbabweans to embrace the freshly minted bills and coins to ensure they find traction in the market. Leaders from politics, business and civil society need to play their part as well, shedding their differences and quarrels and rally collectively behind the Zimdollar.

Its roll-out comes at a critical time for the government’s reform agenda, coinciding with the presentation of Zimbabwe’s 2020 budget, which revolved around enhancing productivity, growth, competitiveness and job creation, and the passing of the Maintenance of Peace and Order (MOPA) bill, which replaced a controversial emergency law that dated back to the Mugabe era, a key demand by the U.S. government to remove sanctions.

Implementing reforms – especially after decades of mismanagement – is a painful process and Zimbabweans are tired. But with political will tangible results are gradually being achieved. The country may be on the cusp of a better future, finally putting the years of isolation behind it. Perseverance and collaboration will help to ease the way.

Independent journalist covering Africa and Asia. Based in London, I write on political and economic issues.

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Africa

Lavrov, African Union Troika discuss trade and Second Russia-Africa Summit

Kester Kenn Klomegah

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On July 8, Foreign Minister Sergey Lavrov held a meeting with the foreign ministers of the African Union troika (South Africa, Egypt and the DRC). It was held to review and continue implementing some of the significant issues adopted in the declaration at the close of the first Russia-Africa Summit in 2019.

It was the first annual consultations with his African counterparts, the current, former, and future African Union chairpersons – Minister of International Relations and Cooperation of the South African Republic Naledi Pandor, Foreign Minister of the Arab Republic of Egypt Sameh Shoukri, and State Minister and Minister for Foreign Affairs of the Democratic Republic of the Congo Marie Tumba Nzeza. The consultative meeting was attended by Russian Deputy Minister of Industry and Trade, Alexei Gruzdev, Deputy Head of the Federal Service for Surveillance on Consumer Rights Protection and Human Wellbeing, Vyacheslav Smolensky and Rosatom State Atomic Energy Corporation, Alexei Likhachev.

According the reports, the Secretariat of the Russia-Africa Partnership Forum (RAPF) was established, a new mechanism for dialoguing aspects of multifaceted cooperation between the two parties. During the consultations, the participants discussed detailed ways of developing efficient cooperation between the RAPF Secretariat set up at the Foreign Ministry, with the foreign ministries of African countries and the secretariats of African regional integration organizations with a view to coordinating joint efforts on preparing for the second regular Russia-Africa Summit scheduled for 2022.

The Secretariat of the Russia-Africa Partnership Forum will, among others, coordinate daily contacts with the foreign ministries of various African countries and the mechanisms of the African Union and other integration associations in Africa. The Secretariat will oversee the organizational and practical preparations of new initiatives for the next Russia-Africa Summit scheduled for 2022 in accordance with the Sochi agreements. As part of the joint declaration in Sochi, the Heads of State decided that it was expedient to hold these summit meetings once every three years. 

The issues formulated by African partners and initiatives on the best ways to develop investment, trade and economic ties were also discussed at the Association of Trade and Economic Cooperation with African Countries. Established in June, by the Secretariat of the Russia-Africa Partnership Forum has large Russian companies are members of this association. They are interested in developing cooperation with African states. In addition to Rosatom, it brings together other companies such as ALROSA, Gazprombank, Transmashholding, and the Innopraktika development institute.

The association serves as a platform for helping Russian companies that want to work in individual African countries or with the integration associations on the African continent. It will review measures to increase industrial cooperation between Russia and Africa, both bilaterally and with the involvement of African sub-regional organizations, as well as to ensure simplified African exports access to the Russian market. It will further lay the roadmap towards the development of common economic, research and cultural roadmaps to promote Russian-African cooperation.

First, the ministers agreed to hold a second political consultation meeting of the Russian foreign minister with the three foreign ministers of the African Union in 2021. Second, it was agreed at the end of the meeting that the second Russia-Africa Summit will be held inside Africa in 2022. The Secretariat of the Russia-Africa Partnership Forum will have to work out specific dates and venues for the next round of political consultations following the election of the African Union chair for 2022.

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War is Not An Option, But the Rule of Law in Nigeria

Kester Kenn Klomegah

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In an early July interview with the President of the Congress of Igbo Leaders in the UK and Ireland, Mazi Obi Okoli, believes that Nigeria has lots of challenges implementing a system of governance that will guarantee the interests of all within the nation. According to him, many of the problems, frictions and issues faced today in Nigeria is a direct result of the defective federal system, the 1979 constitution drafted without consultation and the negative attitudes by majority of politicians toward development in Nigeria.

Why did you choose to write the book “The Lost Igbo Treasure” as part of your life?

Our journey of life must be to add value to human existence. I believe that people have to leave some positive footprints that will allow the coming generations to access truth, information and facts about their history, traditions and culture. I chose to write the book The Lost Igbo Treasure in order to document the facts of history, proverbs, language, culture, tradition and beliefs of the Igbo people of West Africa. It is my resolute belief that an informed generation are the best generation that can make positive impact to the world.

Over the years, there have been discussions about different ethnicity in Federal Republic of Nigeria. How different are the Igbos from Hausas, Yorubas and Fulanis in Nigeria?

It is a huge fact of life that the Igbo people have never been subject to one particular kingdom or caliphate like the Hausa-Fulani and Yoruba tribes who are under the monarchical leaderships of Sokoto and Ife kingdoms respectively. This exposes the reader to the mindset, characteristics, beliefs and understanding of the Igbo people as an egalitarian people. The Igbos like every other human society believe in peace, co-existential continuum of the human race.

However, the Igbos are unique in their thinking, very hard working, strong, communal, resilient, entrepreneurial mindset, freedom seeking, family oriented and peace loving. The Igbos believe in the cosmological belief of the sanctity of human life, respect and fairness in their dealing with all human persons. They hold the sanctitutional belief of “live and let’s live”. They abhor injustice and deceit in human dealings. They believe that religion is and should be a means to an end and not the end of a means. 

All the above distinguishes them from the Hausa/Fulani and Yoruba who are influenced more by religious inclination and a combination of religion/societal belief for the later.

The Igbos are unique in what they do; how they live their lives, what they eat and wear, how to beat their path of existence on earth, the peculiarities and the  songs they cherish, so also are the music, behavior and general attitude to life. It is clear that the Igbos uniquely differ from other ethnicities, in each of the above respects, in Nigeria.

Looking inside your book, what treasures have the Igbos lost in the country’s history?

The effects of colonialism, slavery, foreign religion, the genocide of 1967 have all severely impacted the Igbo society. The cherished Igbo treasures of togetherness, love and culture, tradition, language and ways of life. Our norms, values, belief, character and attitude, communal engagement, proverbs, idioms are treasures which the ancestors bequeathed to us from history have all began to elude our people and nation as a whole. Every society is alive by the presence of their unique values and traits. A loss of any of the above has great impact on the people and their society. Ndigbo must awaken themselves to the gathering storms and begin to see that our treasures are vanishing before our eyes.

How would you interpret and connect ethnicity with the federal system of governance?

This is a very difficult question. I will try not to be very academic so your readers will be carried along. The federal system of government is one that divides or shares the powers of governance between the national (federal), state and local governments. If this is true then it is imperative that this system of governance will guarantee, safeguard and protect the interests of all component parts that make up the federation.

However, over the centuries the experiment of this defective system as practiced in Nigeria has denied many ethnic nationals the opportunity to enjoy or harness the benefit of such a system if any. The travails and struggles of ethnic minority communities in Nigeria has also been that of the rest contending against both cultural extinction, politico-economic marginalization and political participation traumatization by the North with the former contending against economic expropriation, marginalization, exclusion, developmental strangulation and political “oblivionization” of the rest of the country, especially the Igbo people of the Eastern Nigeria.

These negative dimensions and conditions of ethnic minority alienation and discontent in the Nigerian federation has been indeed made worse under the present regime and further tightening of the noose continues unabated.

Therefore, the interpretation and connectivity of ethnicity with the federal system of governance is that of a resultant inherent contradictions and tensions in the evolution and operation of the Nigerian federal system. Many of the problems, frictions and issues faced today in Nigeria is a direct result of the defective federal system; the problematic 1979 constitution drafted without consultation and the negative under-developmental attitude of the Nigerian politicians.

All the above that I have mentioned, it has been made worse by the over-centralization of the governance system; the primitive refusal to recognize the complex ethnic configuration and interest; the pragmatic consensual underdevelopment of some regions, especially the Eastern part of the country; the relatively limited development of accommodative, consensual or power-sharing mechanisms; the absence or weakness of key mediatory or regulatory institutions; and the repeated distortion and abortion of democratic institutions. With the above administrative defects, it will be difficult for the nation to progress in contemporary times and be able to compete with other developing nations of the world.

Do you envisage any challenges and hurdles, for instance, if the Eastern States stand independently from the rest of the Nigeria?

The word “If” is relative. I would rather say “when” … When the Eastern States stand independently from the rest of the Nigeria there will be mountain of problems to face of which the greatest will be the problem of a mindset tabular rasa. For the new nation to triumph, we must clean up the mindset of our people from the retrogressive, corrupt, despotic attitude and character we would have migrated with from Nigeria.

We shall have the challenges of implementing a new functional system of governance that will guarantee the interest of all within the nation. We shall have the hurdles of implementing fast and modern economic policies, manufacturing strategies, progressive and meaningful educational system; effective purpose driven internal and external security measure that will safeguard, protect, defend our people wherever they live in the world.

We shall have the challenges of defining and implementing a robust manufacturing regime that will make us a competitive export oriented nation. The hurdles of corruption transfer, religious dependency on spirituality instead of hard work, the integration of our culture, tradition, norms and values lost in the euphoria of colonialization and sojourn in the plantations of Nigeria shall be hurdle that we must surpass to emerge a strong nation.

How sustainable is the economy, and resources available to support the needed development there?

The economy of the Eastern region is enormous and can definitely support and sustain the development of a new nation. There are abundant and available human, material, agricultural, industrial and technological resource which will be perfectly combined with the positive resilience of our people will catapult our nation in 20 years to a progressive global economic player.

Can it help bridge the development gap and what are future perspectives for the Igboland?

It will help bridge the developmental gaps and we hope to see a positive future prospect not just for the Igbo people, Eastern Nigeria but the world at large. A new nation of Eastern Nigeria will become the pride of all black people globally.

As the President of the Congress of Igbo Leaders in the UK and Ireland, how can you describe the popular sentiments of your fellow members there? Do they support the Eastern States to break away or rather advocate for national integration?

As you would expect in every organization you will have the pessimists, the rational and the progressives. In Congress of Igbo Leaders UK, we have divergent opinions. That is the beauty of such an organization blessed with the best minds, leaders and citizens of Igbo nation.

We endeavor to have healthy conversations, agree to disagree on pertinent issues. Overall, all our people want is to have a nation that all can be free. A nation where equity, fairness, justice, respect for the rule of law, absence of security operative brutality, respect for the fundamental human rights of her citizens, the right of life, education and movement without  hindrances, harassments and intimidation. I must say that if Biafra offers us such an opportunity, there will be no Igbo person who will reject such an opportunity. One thing that is clear from the opinions of some of our members, war is not an option.

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Ethiopian Naval Ambitions

Ankit Malhotra

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Ethiopia is gradually and steadily opening up doors and minds to international relations. Testament to this was when French President Macron sealed a deal with Ethiopian Prime Minister Abiy Ahmed when they met in March 2019. The French signalled plans to invest 2.8 Billion Euros in  hopes of awakening a sleeping African giant that Ethopia is. The agreement also includes a military component which includes provisions air-force cooperation, joint exercises, equipment purchases and as well as, most ambitiously, goals to reconstruct an Ethiopian Navy. But, there is just one problem, Ethiopia is a landlocked nation.

History is witness to Ethiopian naval ambitions and is also witness to the Ethopia’s loss of coastal territories to Eritrea, which is in the north of Ethopia. In a bitter border conflict that resulted in independent Eritrea, also spelled the dissolution of the Ethiopian Navy. Ever since, there was little reason to reconsider a navy but all that started to change in 2018.Sincecoming to office Ethiopian Prime Minister Abiy Ahmed has been putting his country’s affairs in order. He has worked on a peace deal with Eritrea and has been able to integrate Ethopia more closely with Djibouti, Somalia and Sudan. There has been significant process to liberalize parts of the economy, and all this has been doing while maintaining inter-ethnic tensions.

Nonetheless, the country still has a long way to go for Ethopia to rise from the ashes as an African a heavyweight power in East Africa. Their flourishing economy now ranks as Africa’s fastest growing and the vast human population of 102million citizens has grabbed the attention of great powers in line with the emerging role of Ethiopia the Prime Minister who wants to remake his country asa regional hub for commerce and trade. However, in order to reassure investors that the waters around the Horn of Africa are secure, especially considering the incidents of piracy, Adis Ababa feels obliged to step up and protect its maritime trading routes in order to perpetuate feelings of security and trust amongst its investors. This also happens to be one of Ethopia’s long-term geopolitical objectives.

What one can infer from the arguments presented above is that a naval entourage will carve the way forward for Ethopia. Re-establishing a maritime force to its overall drive will allow the country to push itself as a major player connecting Europe and Asia.

If Ethiopia believe they can convince European and Asian business by re-establishing a navy that the Horn of Africa is open for business at first glance it, they are mistaken. That is because a landlocked nation should seek a navy but, surprisingly, landlocked navies exist in many parts of the world. This is particularly relevant in countries where a river or a lake forms a national border. Thus, with the exception of the Caspian nations, landlocked navies operate strictly in major lakes or rivers. What makes Ethiopia’s case unique isthe fact that the State is seeking a blue water fleet to operate along the coast of the Horn of Africa. The Horn of Africa is spread over 727,000 mi².

An Ethiopian Navy would mean a win-win for the regional nations while the current coastal countries enjoy access to the world’s oceans but they lack the capabilities to patrol their waters and facilitate trade. Ethopia, however, has the opposite problem. It possesses the most resources but lacks a shoreline. Moreover, the regional coastal nations do not necessarily see an Ethiopian Navy as a threat but as a complementary force testament to this is acquisition of land in the island of Lamu as part of the Lamu Port-South Sudan-Ethiopia-Transport (Lapsset) project, a $24bn (£18bn) transport and infrastructure plan to link the Kenya and Ethopia. In short, the motivation for Ethiopia’s naval ambitions is it enables her to gain leverage in the regional maritime affairs and improve trading relations.

All things considered, Ethiopians would also have to develop the capabilities of their neighbors to reinforce their coastal entries so Ethiopia’s landlocked Navy would patrol and protect the waters of the Horn of Africa while also investing capital in stabilizing the coastal states. This trade-off would contribute to integrate the region economically and politically while reducing cross-border violence in an area that has been plagued for decades by territorial conflicts.

This geo-political manoeuvring is a welcomed change but we all know, talk is cheap. Constructing a navy from scratch is an expensive undertaking. If, the state of Ethopia could acquire a few dozen patrol boats and call it a day that is in fact what is most likely to occur in the next few years. And the patrol-only boats could be the Navy serving a symbolic purpose.

Eventually Addis Ababa will want a blue water Navy with military capabilities and that is when the real toil starts for it will require the state to train sailors, officers and commanders but also find suitable bases and procure larger vessels. This is a long-term project that will take decades to complete in the meantime the build-up of the Navy will be subject to future political and economic developments. And considering the long term commitment, that is required to construct a navy Ethiopia needs international partners.

The most immediate host for an Ethiopian Navy would be the Republic of Djibouti, the small but strategically important Nation which is already host to military bases from numerous countries including France, China and the United States of America. Djibouti also happens to enjoy close economic ties with Ethiopia. In fact, Ethiopia’s imports and exports go through the port of Doral, which is an extension of Djibouti port. However, the presence of foreign military bases in Djibouti means Ethiopian policymakers and Djibouti may not always have say over its own affairs and that is a security risk so even though Djibouti is where we will most likely see the first Ethiopian vessels set sail.

Adis Ababa would like to avoid putting all its eggs in one basket because if some political development results in the breakdown of relations between Ethiopia and Djibouti the Ethiopian Navy would be placed in a vulnerable position. So eventually, as the Ethiopian blue water navy becomes operational it will require basing rights in other countries convincing Eritrea will be difficult due to the their troublesome history that is still in living memory but basing rights in places like Misawa willbe necessary for the long term.

Nevertheless, in Somalia meanwhile relations between Addis Ababa andMogadishu have improved significantly and the Somalian ports of Kismayo and Pesasso are well suited for large navies. However, the activity of Al-Shabaab and the lack of infrastructure in Somalia impede close cooperation in the near future.

Countries such as Turkey, Saudi Arabia and Iran holding vested interests in the Horn of Africa, and also China and the United States there are however potential allies in the periphery such as France and the United Arab Emirates. France is the most obvious partner as its signed a deal to help re-establish the Ethiopian Navy and by doing so Paris is seeking to expand its influence beyond the francophone sphere into East Africa French multinational firms and a whole host of other defence corporations seeking to capitalize on the growing and liberalizing Ethiopian economy.

Another potential partner is the United Arab Emirates, which currently has a naval presence in Eritrea as well as unrecognized Somaliland. What is interesting here is that France operates a naval base in the United Arab Emirates, and the to maintain a strategic level of military cooperation with them.Since they operate in many of the same areas and if Addis Ababa, plays its cards right it could forge a lasting partnership with France. And the United Arab Emirates which would go along way in developing a capable Navy it goes without saying that Ethiopia’s pursuit of regional power could become a mega power in the region. This in turn would declare Prime Minister Abbey as scrupulous, hyper successful leader. He has embarked on a roadmap for reconciliation and restoration, as of now. But there remain pockets of secessionists across the country and social unrest continues to flare up from time to time as recently as June 2019, when there was a failed coup attempt. The armed forces tried to takeover a regional centre in the country.

The whereabouts of the rogue General who orchestrated the coup remain unknown. Events like these revealed that the central government still does not have full control over the domestic political situation despite all the progress being made. Therefore, beyond the obvious geographic shortcomings for a blue water navy of Ethiopia must stabilize its internal landscape or else the government may face a situation where it would be left with no choice but to hit the brakes on its ambitious naval project.

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