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Zimbabwe Faces Worst Economic Crisis In A Decade

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Zimbabwe Faces Worst Economic Crisis In A Decade

As Zimbabwe plunges into its worst economic crisis in a decade, gas lines are snaking for hours, prices are spiking and residents goggle as the new government insists that the country — somehow — has risen to middle-income status.

After ousting the repressive Robert Mugabe almost a year ago following more than three decades in power, and peacefully electing President Emmerson Mnangagwa in July, many hoped the country would emerge from turmoil and return to prosperity.

Instead, it appears to be imploding in the days since the new finance minister announced a “stabilisation programme”. Over the weekend long lines for fuel reappeared, sometimes stretching for several kilometres.

Anxious residents rushed to stores, where prices skyrocketed for dwindling stock and shop workers began removing price stickers. People have started joining any line in sight.

“You ask what the queue is for later. The important thing is to get in the queue, there might be something there,” said Yvet Mlambo, a resident of the capital, Harare.

‘At least allow us to drink’

Basic items such as bottled water are now being rationed, even as the capital faces a cholera epidemic that has killed more than 40 people and spread into the countryside.

Even beer is rationed, to some outrage.

“At least allow us to drink. How else can we drown our sorrows?” one man shouted as he stared at a notice limiting customers to two beers per purchase. Drinkers have formed WhatsApp groups to share tips on where favourite brands can be found.

More worryingly, drugs are in short supply in a country where the health system has long been on the brink of collapse.

Outside a pharmacy, Bridget Chikwimba shook her head. “I bought these same allergy pills for a dollar last week, today they are $13,” she told The Associated Press. “I waited five minutes while they calculated the new price.”

Zimbabwe

Pharmacist Luckmore Bhunu speaks in Harare about drug shortage in Zimbabwe as many essential drugs, including those for diabetics and hypertensive patients, are unavailable. (AFP)

The country’s Retail Pharmacists Association describes the shortages of medicines as “severe”.

Unity government

Many fear the current crisis, induced by foreign currency shortages and a ballooning debt, could spiral into the kind of collapse seen a decade ago when Zimbabwe’s hyperinflation reached 500 billion %, according to the International Monetary Fund.

Plastic bags of 100-trillion Zimbabwe dollar banknotes were not enough to buy basic groceries, forcing Mugabe to form a “unity government” with the opposition and adopt a multi-currency system.

Since then, daily transactions have been dominated by the US dollar. But the new currency shortage has forced most people to use a surrogate currency called bond notes, bank cards and mobile money, all of which are devaluing quickly against the US dollar on the black market.

Retailers said the soaring rates for US dollars on the black market, where they source most of their foreign currency, are making it difficult for them to restock. Some businesses have been forced to close.

“The parallel market is unsustainably high and has decimated confidence. Prices have been going up while margins are eroded,” Denford Mutashu, president of the Retailers Association of Zimbabwe, told the AP.

Economic pain

In the days leading to the implosion, new Finance Minister Mthuli Ncube, a former lecturer at the London School of Economics, announced the “stabilisation programme” that included commitments to cut borrowing. He also plans to cut government spending, repay foreign loans to unlock fresh credit and expand the revenue base.

On Friday, Ncube surprised many by announcing that after rebasing the gross domestic product and taking into account the large informal sector, Zimbabwe is now a middle-income economy.

“Our economy is bigger than we think,” he told reporters, but he warned of “pain” to achieve desired growth. “At the end, we will be glad.”

Zimbabwe

A young boy walks past empty shelves, including those for bread and meat products, in a groceries store in Harare as Zimbabwe is experiencing renewed shortages. (AFP)

But Zimbabweans have reacted angrily to one of the new measures, a tax on transactions conducted with mobile money and bank cards. Labour unions and others say the poor, without access to US dollars and largely reliant on electronic transfers, will be hardest hit.

Protests have erupted, and more are planned this week, as people say they can’t endure the economic pain any longer.

‘There is no other way’

The crisis could lead to social unrest unless a political settlement is reached between the ruling Zanu-PF party and the opposition, which narrowly lost the presidential election and unsuccessfully challenged the results in court, said Harare-based political analyst Alexander Rusero.

“Zanu-PF should swallow its pride to realise that they desperately need the opposition for the way forward,” Rusero said.

Both parties are instead playing hardball despite efforts by churches and others to bring them into negotiations.

Meanwhile, the popularity of the new president, who was cheered by thousands for replacing Mugabe, is dropping. Once-popular campaign slogans are being mocked.

The road to a more secure future in Zimbabwe is “long, winding and at times bumpy”, Mnangagwa replied in a statement posted on Twitter this week. “But there is no other way.”

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Ghana Opens First Round Of Bidding For Exploratory Licenses

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Ghana Opens First Round Of Bidding For Exploratory Licenses

President Nana Akufo-Addo announced the opening of the country’s first open and competitive round of bidding for energy exploration licenses, with three offshore blocks being offered. Previously, Ghana had awarded leases through a closed negotiation process.

All of the blocks are located in ghana’s central basin. To undertake the exploration and extraction.

Bidders have to show financial capacity and technical expertise and present a timetable for their exploration and development program.

President Akufo-Addo also announced a review of all licensing agreements covering blocks that were inactive, where concession holders had not undertaken the required exploratory or development work.

This move could see a number of blocks re-enter the market, either through competitive bidding or direct negotiations, generating further interest in the upstream component of the industry from both independent operators and major players.

Although the development of these offshore sites will require significant investment, rising international oil prices could well justify the expense.

Development of major offshore oilfields is set to boost export earnings and stimulate investment inflows.

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Namibia National Council Chairperson Tasks MPs On Safe Driving

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Namibia National Council Chairperson Tasks MPs On Safe Driving

As the Namibian National Council adjourned for the holidays on Thursday, chairperson margaret mensah-williams gave an unusual advise to members of parliament. She asked them to take the lead by being safe drivers and obey traffic rules.  She especially harped on obeying speed limits.

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Angola Admitted Into Gas Exporting Countries Forum As Observing Member

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Angola Admitted Into Gas Exporting Countries Forum As Observing Member

Angola has been admitted into the Gas Exporting Countries Forum as an observer member. GECF is an international governmental organization based in Doha, Qatar.

The group brings together the world’s leading gas producers and supports the sovereign rights of member countries over their gas resources.  It also helps them with their rights and capability to manage, develop, use and conserve those resources in a way that is sustainable, efficient and environmentally friendly.

Executive Chairman of African Energy Chamber, N.J. Ayuk said this is a step in the right direction for Namibia, and it’s in line wth the country’s  economic goals and projects.  He also said this would help in expanding economic diversification.

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