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Foreign partners ditch telecom firms

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Zimbabwe’s telecommunications companies

Zimbabwe’s telecommunications companies are being deserted by their foreign partners that service and upgrade their systems due to inability to meet payment obligations in foreign currency.

Telecommunication companies are not being prioritised in terms of foreign currency allocations by the Reserve Bank of Zimbabwe (RBZ), which has resulted in recent network problems.

However, the regulator the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz), is engaging the central bank to prioritise the telecoms sector in foreign currency allocation.

“Our networks have been facing upgrade challenges and service support partners are owed a lot of money, they want to be paid,” said POTRAZ director-general Dr Gift Machengete speaking to journalists during a sector performance briefing.

“Potraz has been engaging the RBZ to prioritise the sector on foreign currency allocations and we will continue to do so,” he said.

The country has been grappling foreign currency challenges that have affected business operations, resulting in supply gaps in some sectors such as manufacturing. The telecommunications sector has not been spared.

Of recent, the country has been experiencing network hiccups with mobile money platforms being the worst affected, causing some disruptions in transactions.

Late last year, Potraz appeared before the Parliamentary Portfolio Committee on Information Communication Technologies and Courier Services and made calls for the sector to be prioritised on foreign currency allocations as it was highly dependent on imports.

“Currently there are no local suppliers of telecommunications equipment. All spare parts are imported and supplied by foreign vendors such as ZTE, Ericson and Huawei amongst others. This requires foreign currency.

“Spare parts for telecommunications equipment are not on the priority list for international remittances.

“This has negatively impacted equipment servicing, replacement of faulty, damaged and malfunctioning equipment, network upgrades and network re-dimensioning,” said Dr Machengete.

ICT has been identified as a key enabler to economic growth with its services used in all the key sectors of the economy such as mining, agriculture, education, health as well as industry and commerce.

According to the World Bank, there is a strong correlation between ICT growth and GDP growth.

In a 2009 report titled “Extending Reach and Increasing Impact,” a 10 per cent increase in broadband penetration accounted for a 1,38 per cent increase in per capita GDP growth in developing economies.

The sector is also crucial in promoting ease of doing business especially at a time transactions are now largely skewed towards digital platforms such as internet banking, real-time gross settlement (RTGS) and other electronic platforms.

However, economic challenges such as limited foreign currency, the high cost of machinery and the current liquidity and cash crunch the country is experiencing are posing challenges for the sector as it has reduced consumer spending.

In 2018, the entire postal and telecommunications sector’s total investment went down 18 per cent to $160 million, while operating costs rose 22,6 per cent to $1 billion on inflationary pressures.

According to POTRAZ, the Average Revenue Per User per month (ARPU) for the mobile networks has gone down to $3,98 per month in 2017 from $4,97 per month in 2015.

Additionally, incremental cost studies, done in 2013 and 2014 and reviewed in 2017 revealed that Zimbabwean operators were being charged higher prices and higher interest rates for telecommunications infrastructure by international telecommunications vendors, such as Ericson and Huawei amongst others, as compared to the prices charged to operators in other countries.The Herald

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BUSINESS

Zimbabwe set to rebase economy after adopting a new currency

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Zimbabwe Economy

Zimbabwe’s Finance Minister announced the rebasing of the economy on Wednesday, following the adoption of a new currency earlier this year, and said growth would be slowed this year by a drought and a cyclone that hit eastern regions.

The Zimbabwe economy grew higher than expected in 2018, Finance Minister Mthuli Ncube told parliament.

The central bank scrapped the peg between its quasi-currency bond note and electronic dollars against the U.S dollar in February and merged them into a single transitional currency called the RTGS dollar.

Rebasing the Zimbabwe economy broadly means changing the reference points used to calculate the country’s gross domestic product.

The southern African nation rebased its economy last October boosting it by 40% to $25.8 billion and Ncube said the adoption of the RTGS$ required another rebasing exercise, which put the economy at RTGS$70.1 billion or $21 billion at the official exchange rate.

Ncube said the Zimbabwe economy had grown by 6.2 per cent in 2018 compared to an initial forecast of 3.1 per cent but he saw growth being throttled this year by “severe economic shocks”, including a drought that has wilted crops and a cyclone that hit western parts of Zimbabwe in March.

He said Zimbabwe had 876 000 tonnes of maize in strategic grain reserves, enough to feed the country for seven months.

Ncube said the national treasury’s austerity measures had meant a budget surplus of RTGS$443 million was recorded in the first quarter and added that the target of a budget deficit of 5% of GDP would be achieved this year. Reuters

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BUSINESS

Mnangagwa extends John Mangudya’s term by another five years

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John Mangudya

President Emmerson Mnangagwa on Friday appointed John Mangudya for a second and final five-year term as central bank governor, a government official said.

John Mangudya was first appointed to the post in 2014 but his term was marred by the bank’s decision to introduce the surrogate bond note currency two years later in a bid to end a severe shortage of U.S. dollars and cash.

“The extension takes effect from 1 May 2019 for another five years,” Misheck Sibanda, chief secretary to the president and cabinet said in a statement.

Mangudya’s appointment had been largely expected after Mnangagwa’s spokesman George Charamba said the governor would get a second term.

Zimbabwe is gripped by a severe shortage of dollars that has seen the country struggle to import food and medicines for hospitals. Reuters

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BUSINESS

No change in passport fees: RG

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Zimbabwe passport fees

Registrar-General Mr Clement Masango yesterday dismissed social media reports alleging that Zimbabwe passport fees are set to be increased soon, saying Government had a well-structured method of conveying such messages.

In an interview, Mr Clement Masango said production of passports resumed last Friday afternoon after a system malfunction owing to a technical fault.

“There have been reports on social media alleging that passport fees will be hiked,” he said. “That is not true. I am concerned as the Registrar- General that some people seem to thrive on creating controversy meant to instil alarm and despondency in society.

“This kind of behaviour must be condemned in the strongest terms. To members of the public, I would want to say it is not Government practice to communicate official matters through social media. There are no plans to revise passport fees upwards as alleged by the social media.”

According to the online reports, fees for a normal passport were set to rise from $53 to $253. It had also been reported that fees for an urgent passport would go up from $253 to $800.

The reports of a Zimbabwe passport fees review coincided with a temporary halt in the issuance of passports due to the technical fault.

“The stoppage was as a result of a system malfunction,” said Mr Masango. “It was rectified and by Friday afternoon production had resumed. There is, therefore, no need for members of the public to panic.

“The situation is under control and production of passports has since resumed after that temporary setback. As a department, we want to apologise to our stakeholders for the inconvenience that they went through as a result of that stoppage.”

The RG’s Office is working round the clock to clear a passport backlog which has also been spawned by escalating for the prized document.

The Passport Office has also had to contend with limited financial resources to procure consumables, thereby taking longer to clear the backlog.

The office is on record as expressing its commitment to clear the backlog, which has been characterised by long and winding queues at the Central Registry in Harare.

The long queues have also created a fertile ground for rent-seeking behaviour, with some unscrupulous people cashing in on desperate passport applicants. The Herald

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