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Sir Wicknell Chivayo arrested

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Wicknell Chivayo

Wicknell Chivayo has been arrested over the Gwanda Solar Power Project. Chivayo received a US$5 million advance from the Zimbabwe Power Company (ZPC)

Sir Wicknell was yesterday picked up by police detectives for questioning in relation to his dodgy business deals.

An elite corruption-busting unit, the National Economic Conduct Inspectorate (NECI), has been on Wicknell Chivayo’s case since December last year.

Police spokesperson Charity Charamba confirmed Wicknell Chivayo’s arrest yesterday.

“I do not have all the details at the moment, but I can confirm that he has been arrested and is currently assisting police with investigations. I will give you the full details when I get them,” she said.

The Zimbabwe Independent has established that Wicknell Chivayo’s company, Intratrek, will not continue with the project following the expiry of the contract as ZPC is not satisfied with how he used US$5 million meant for payment for pre-commencement work.

Last month, Chivayo wrote to President Emmerson Mnangagwa, Finance minister Patrick Chinamasa and Energy minister Simon Khaya Moyo seeking political intervention so he could be allowed to continue with the project.

The government responded by giving Wicknell Chivayo the green light to access US$52 million payment in order to continue with the doomed solar power project envisaged to feed 100 megawatts to the national grid and help ease the country’s power woes.

Chivayo blamed ZPC for lack of progress on the project but ZPC — a division of power utility Zimbabwe Electricity Supply Authority (Zesa) Holdings — is sticking to its guns and says it will not release any further funds to Wicknell Chivayo.

Energy ministry permanent secretary Partson Mbiriri also confirmed the development this week, saying the contract that bound the two parties was no longer of any force or effect.

He said in addition to the expiry of the contract, funders had blacklisted Chivayo’s Chinese business partner, CHiNT Electric, implying avenues have been shut.

This puts Intratrek’s partners in a highly unenviable position as no other company could deal with them in the future, Mbiriri said.

“The fact of the matter is that ZPC has written to Intratrek indicating that the contract on the Gwanda Solar Power Project has lapsed and there are of course implications when a contract has lapsed,” Mbiriri said, adding ZPC had not made any moves to renew the contract.

He also said Chivayo, in a recent correspondence to the government, had not mentioned anything about the renewal of the contract.

“There is no mention of ZPC wanting to extend or renew the contract.

They have simply indicated that the contract has lapsed and that is where we are.”

Mbiriri revealed that the questionable dealings between Intratrek and ChiNT have also had repercussions on ChiNT’s standing in the eyes of the African Development Bank (AfDB) which had been the major source of funding for the project.

“At the same time, the AfDB, a very important financial institution (in financing Zimbabwe-related infrastructural development projects) has blacklisted ChiNT.

ChiNT is the technical partner of Intratrek. When a company is blacklisted by World Bank, IFC, AfDB, you can only do business with that company at your own risk. This is very critical to note,” Mbiriri added.

In his letter, Chivayo tried to request a meeting with Mnangagwa, hoping to convince him the project still had a life.

“Based on that, Intratrek has been lobbying and literally writing to every office wanting to meet those that matter and are influential, and at the same time has been conveying messages about itself and its capabilities.

“The fact of the matter is the funds that are being referred to (as funds meant for the project) have been funds where Intratrek has been asking ZPC to pay and that tells you the extent of the situation that this deal is in.

There have been contradictory messages on the project, it’s funding and its progress, and we need to be wary of what we are told is obtaining with regard to this solar project,” he added.

In the wake of the scandal, Moyo has since ordered ZPC to review its procurement processes and manage all its contracts to close gaps for some unscrupulous individuals in the company.

He told the ZPC board and management during its Integrated Management System certification ceremony recently that government had its eyes on the company and instructed the entity to follow procurement rules.

He added that the level of tender-flouting scandals in the entity was overshadowing a “very functional entity”.

“ZPC has had some form of embarrassing moments. Today is not the day to talk about these, but clearly, ZPC must improve on its procurement and management of all contracts, even the small ones.

“ZPC must follow to the letter all procurement regulatory requirements and manage all, I mean all, contracts diligently.

That way, there will be no embarrassing moments on what is generally a functional statute enterprise. It’s a very functional state enterprise,” he said.

Moyo said corrupt individuals in the company were tarnishing the entire organisation.

“In a home where there are seven siblings who are all at school and there is only one thief in that home, people say that in that home there are thieves.

They ignore all the good ones and focus on the bad one. So let’s avoid a single person tarnishing our image,” he said.
The Independent

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Zimbabwe agrees to pay $3.5 billion compensation to white farmers

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Zimbabwe White Farmers

Zimbabwe agreed on Wednesday to pay $3.5 billion in compensation to Zimbabwe white farmers whose land was expropriated by the government to resettle black families, moving a step closer to resolving one the most divisive policies of the Robert Mugabe era.

But the southern African nation does not have the money and will issue long term bonds and jointly approach international donors with the farmers to raise funding, according to the compensation agreement.

Two decades ago Mugabe’s government carried out at times violent evictions of 4,500 Zimbabwe white farmers and redistributed the land to around 300,000 Black families, arguing it was redressing colonial land imbalances.

The agreement signed at President Emmerson Mnangagwa’s State House offices in Harare showed white farmers would be compensated for infrastructure on the farms and not the land itself, as per the national constitution.

Details of how much money each farmer, or their descendants, given the time elapsed since the farms were seized, was likely to get were not yet clear, but the government has said it would prioritise the elderly when making the settlements.

Farmers would receive 50% of the compensation after a year and the balance within five years. Finance Minister Mthuli Ncube and acting Agriculture Minister Oppah Muchinguri-Kashiri signed on behalf of the government, while farmers unions and a foreign consortium that undertook valuations also penned the agreement.

“As Zimbabweans, we have chosen to resolve this long-outstanding issue,” said Andrew Pascoe, head of the Commercial Farmers Union representing  Zimbabwe white farmers.

The land seizures were one of Mugabe’s signature policies that soured ties with the West. Mugabe, who was ousted in a coup in 2017 and died last year, accused the West of imposing sanctions on his government as punishment.

The programme still divides public opinion in Zimbabwe as opponents see it as a partisan process that left the country struggling to feed itself. But its supporters say it has empowered landless Black people. Mnangagwa said the land reform could not be reversed but paying of compensation was key to mending ties with the West. Reuters

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Old Mutual’s Share Price Is Focus in Zimbabwe’s Currency War

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Old Mutual Shares Zimbabwe

The share price of one of Africa’s oldest insurers is taking centre stage in Zimbabwe’s battle to bring order to its chaotic foreign-exchange system.
In the latest in a series of attempts to stabilize its currency, the government wants to eradicate the Old Mutual Implied Rate.

The gauge, used by domestic companies to determine the future cost of goods and services, calculates a potential forward rate for the Zimbabwe dollar by measuring the difference between Old Mutual Ltd.’s share prices in Johannesburg, London and Harare.

The indicator is among many “contrived phantom exchange rates” in use that “conspire to defeat fiscal policy,” the government said in a June 26 edict that halted trading on the Zimbabwe Stock Exchange and stopped most mobile-banking transactions.

The OMIR is one of the multiple exchange rates Zimbabweans use daily to navigate the nation’s myriad economic challenges, including annual inflation of almost 800%.

A perennial shortage of cash means anyone who has physical banknotes is able to negotiate exchange rates with brokers who pay the funds onto mobile-money platforms. The brokers can then sell the hard cash at an even higher rate.

That’s resulted in a widening gap between the official rate of 63.7 per U.S. dollar, and the amount at which it trades on the streets of Harare, which is now at 100.

“People have relied on making money from buying and selling Zimbabwe dollars, and not from any real production,” said John Robertson, an independent economist based in Harare. “It’s what has created these distortions.”

The OMIR also feeds into the black-market Zimbabwe dollar rate, which the nation’s bourse uses, along with the official rate, to determine the value of stock prices.

Old Mutual, founded in Cape Town in 1845, is not involved in determining the rate. Market participants take the company’s share prices in South Africa, the U.K. and Zimbabwe, convert each of them into the U.S. dollar, which should typically trade near par.

The finance minister, however, in March restricted trading in the shares of Old Mutual and two other companies by making the stocks no longer fungible or regarded as being equal in value to those traded on other exchanges, in a bid to prevent outflows caused by the dual listings.

Despite the move, investors poured into Old Mutual, using it as a proxy to the U.S. dollar because of its offshore listings, pushing the Zimbabwe-listed stock up 90% since the beginning of May. The shares in Johannesburg and London were little changed, resulting in the implied rate doubling to 122 as the gap between the securities widened.

Zimbabwe’s benchmark industrial index has risen more than sevenfold this year, reaching a record on June 24, and giving the overall bourse a market value of about 229 billion Zimbabwean dollars ($3.6 billion). None of the stocks in the 57-member index has declined this year as Zimbabweans seek a haven from runaway price increases and the weaker currency, which has slumped to 63.7442 per U.S. dollar after a 25:1 peg put in place since March was abandoned.

Suspend Listing
Authorities now want to eliminate the OMIR before allowing any trading to resume on the Zimbabwe Stock Exchange, people familiar with the matter said, asking not to be identified because the talks are private. The OMIR was the focus of various meetings on Monday between members of Zimbabwe’s stockbrokers’ association, the stock exchange, the Securities and Exchange Commission and the Treasury, the people said.

Measures being considered to include suspending Old Mutual’s shares from the Harare-based bourse, having the securities traded only in dollars, or moving the listing to the Victoria Falls Stock Exchange, a market that will only trade in foreign currency once it opens later this year, the people said.
Nick Mangwana, the government’s spokesman, referred queries to the finance ministry. Several calls and text messages sent to Finance Minister Mthuli Ncube and central bank Governor John Mangudya seeking comment weren’t answered.

“There has not been any official communication from authorities in Zimbabwe to Old Mutual,” the Johannesburg-based company said in an email “We have asked our local subsidiary to reach out to our stakeholders in Zimbabwe to try and understand the circumstances around ZSE closure and other related matters.”

Discussions over the halting of trade on the stock exchange are ongoing and the outcome is still uncertain, SEC Chief Executive Officer Tafadzawa Chinamo said by phone. Zimbabwe Stock Exchange CEO Justin Bgoni said on Sunday that the bourse would wait for guidance from regulators.

In comments at a briefing after a cabinet meeting on Tuesday, the finance minister said that stockbrokers should assure their clients that their investments in the stock market are safe and that the bourse will reopen once investigations are complete. Bloomberg

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Zimbabwe government suspends mobile money transactions

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Nick Mangwana

Zimbabwe government has, with immediate effect, suspended all monetary transactions on phone-based mobile money platforms to facilitate investigations that will lead to the arrest and prosecution of people responsible for sabotaging the economy.

In a statement this evening, Secretary for Information, Publicity and Broadcasting Services, Mr Nick Mangwana, said the measures will include the suspension of all trading on the Zimbabwe Stock Exchange.

The suspension will be in place until mobile money platforms have been reformed to their original purpose and when all the present phantom rates have converged into one “genuine rate that is determined by market forces under the foreign currency auction system which was launched by the Reserve Bank of Zimbabwe” on June 23. Operational modalities and details of the envisaged measures will be announced by the relevant monetary, regulatory and law enforcement authorise in the next few days.

The government will ensure that prudent measures are put in place to mitigate and prevent any collateral damage that the interventions may cause to the innocent public that was using the mobile money platforms. The Herald.

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