- Qatar Airways, Shell sign record sustainable aviation fuel supply deal
- East Africa mulls shifting from linear to circular economy
- New forecast expects African airlines to suffer $500M net loss
- The gas project delays costing East Africa billions
- How Zimbabwe’s lifting of import ban is boosting exports
- BAK opposed to Digital Asset Tax under Finance Bill 2023
- Under President Lula, Brazil rekindles trade ties with Africa
- A huge task awaits Kamau Thugge at the Central Bank of Kenya
Author: Laurence Sithole
I am a financial services professional with a strong background in diverse areas of banking. My skill set includes among others International Banking, Trade Finance, Commercial Lending, Customer Service, Finance, Banking, Corporate Finance, and Investment Banking. Africa is my home and I am passionate about its development,
- The Reserve Bank of Zimbabwe last month began to loosen the tight monetary policy it had in place over the last 2 years to act against inflation.
- The hawkish stance of the central bank began to change when the RBZ announced that it would reduce interest rates by 50% to 150%.
- Zimbabwe's central bank's hawkish stance has resulted in a weakening economy and rising unemployment.
The Reserve Bank of Zimbabwe held the global record for highest interest rates, reaching a staggering 200%. The central bank has lowered this to 150% on the grounds that the inflationary conditions that required the significant increase have subsided. As is typical with hawkish monetary policy approaches, Zimbabwe's central bank's hawkish stance has resulted in a weakening economy and rising unemployment.
On 3 February 2023, the Zimbabwean monetary authorities issued the country's first Monetary Policy Statement via the central bank. Twice a year, the Reserve…
- The VFEX or Victoria Falls Stock Exchange is Zimbabwe's exclusively United States dollar only stock market which was launched 3 years ago.
- The Zimbabwe Stock Exchange or ZSE's main board has been shrinking because of companies migrating to the VFEX.
- Companies in Zimbabwe constantly experience a shortage of foreign exchange to support their increasingly import reliant businesses.
The number of companies that are delisting from the main board of the Zimbabwe Stock Exchange, often known as the ZSE, and moving their operations to the ZSE's hard currency equivalent, the Victoria Falls Stock Exchange (VFEX), has been growing. When the central bank eliminated the favorable foreign exchange retention levels that had been the primary draw of the VFEX, it is anticipated that the outflow from the ZSE will slow down in 2023. This comes after the central bank eliminated the foreign exchange retention thresholds.
- The capitalist class consists of less than 1% of the richest individuals in the world.
- These members of the capitalist class are worth a collective US$ 12 trillion. This is according to Forbes magazine which profiles the members of this exclusive club.
Less than 1% of the global population consists of the world's wealthiest individuals. In 2022, there were fewer billionaires than in the previous year. When compared to the rest of the globe, Africa's list of billionaires is relatively static. It is economically advantageous to have more billionaires than none. An economy is seen to be progressing if there are more billionaires than before.
- It is desirable for a country to have a growing number of members of the capitalist class among its population.
- It is a positive sign of economic growth when the number of billionaires are increasing in a country.
- To be a member of the capitalist
The two south American nations are exploring methods to increase bilateral commerce and wean themselves off the mighty US currency. Its announcement has been widely criticized since they are not a natural fit for a single currency. This is due to one country's relative economic prosperity and the other's economic upheaval. This experience between Brazil and Argentina is instructive and illustrative for African nations with comparable aspirations to develop a single currency.
- Brazil and Argentina announced early last month that they would create a joint currency to increase trade and political relations.
- Similarly Africa has expressed the same ambitions at different times. The advent of AfCFTA gives further impetus to the concept that Brazil and Argentina has reignited.
- Brazil and Argentina first came up with the idea of a joint currency in the 1980s but it never took off because economic fundamentals.
- The joint currency experiment by Brazil and Argentina
- Zimbabwe's banking and financial industry reflects the overall health of the economy.
- The country has broadly experienced capital flight and negligible foreign direct investment during the last 2 decades.
- Policy inconsistency has undermined Zimbabwe's banking and financial industry together with its capital account.
Thungela Resources set to diversify beyond coal in South Africa
Zimbabwe has been dubbed the sick man of southern Africa for the past 25 years. The country has seen capital flight and an outflow of foreign investment. There are numerous causes for this result. The primary cause has been policy blunders and so-called "flip-flopping" by government gatekeepers.
Like to the rest of the world, Zimbabwe's banking system reflects the activity of the actual economy. Banks and other financial services institutions serve as financial mediators for real economy players. This indicates that banks serve as a vital link between surplus and deficit units.
In economic terms, this means…
- Thungela Resources Limited has been busy with mergers and acquisitions to grow its geographic footprint and diversify from its pure play coal business.
- The JSE listed miner recently made the news when it agreed to purchase an Australian coal miner called Ensham.
- The acquisition of Ensham is an all cash transaction wherein Thungela is taking a 65% interest.
The Johannesburg Stock Exchange (JSE) listed pure play coal mining company which was created from the demerger of Anglo American’s coal assets has been on a mergers and acquisitions spree. Thungela announced earlier this month that it had acquired an Australian coal mine. This move has been read by market analysts as a risk mitigation move by diversifying away from South Africa. It also bought out its Black Empowerment partners in a US$ 60 million transaction.
Green Bonds: A possible solution to the Zimbabwe power crisis
On the M&A front, Thungela bought …
- Zimbabwe is experiencing crippling power outages characterized by black-outs that can extend to as much as 19 hours a day.
- The electricity shortage is now common place with South Africa recently announcing Stage 6 power cuts.
- The debt capital markets, specifically the issuance of green bonds is a possible solution to rolling black-outs.
Zimbabwe is in the middle of a power crisis that can be attributed to the low water levels at the country’s Kariba Dam which has in times past been used to supplement the country’s power needs. Power outages are a part of every day living in the country.
However, the latest power crisis seems to be more intense threatening to scupper economic growth. Businesses and citizens have had to adjust to erratic power supply schedules. It is now commonplace for people to wake up at midnight to iron their clothes and use their electric appliances as this …
- Shares of Tesla the pioneer of electric vehicles fell spectacularly in 2022. This trend was the same for auto shares which list substantial amounts of value during the year.
- Tesla despite its anemic showing in terms of share price performance managed to deliver a record number of EVs.
- The EV company increased production of its products by as much as 40%.
- This impressive development by Tesla failed to excite the market which hammered the share price resulting in the EV company shedding 64% of its value in 2022.
- Notwithstanding the skepticism from the market Tesla has been making positive strides with its Gigafactory initiatives.
- Africa has been the focus of the Gigafactory initiatives by Tesla. A Gigafactory is a massive manufacturing facility that aims to speed up and scale up the manufacture of electric vehicles.
- The Gigafactory concept will contribute substantially to the economic wellbeing of African countries where Tesla
The continent as always, has great promise. This was the unanimous conclusion from the just-ended World Economic Forum, which is traditionally held at the Swiss resort town of Davos every year. However, significant obstacles stand in the way of the continent reclaiming its mantle of economic growth.
- The World Economic Forum held in Davos every has just ended. This year’s conference ran under the theme of Collaboration in a fragmented world.
- Africa was on the agenda of the World Economic Forum as is frequently the case.
- Discussions on Africa at the conference mainly centred on how the continent can regain its growth trajectory.
The World Economic Forum (WEF) identified four principal factors causing economic headwinds in Africa and will stall its economic growth as a continent unless dealt with. The so called “stallers” of Africa’s economic growth are and will remain as conflict, COVID, climate, and cost of living.
- Elon Musk, Tesla, and SpaceX command a cult following from legions of fans worldwide.
- Musk’s fortune tumbled by a staggering 60% in 2022 according to reports by Forbes and Guinness.
- Forbes magazine broke the news that Musk, the Tesla boss was no long the wealthiest person on the planet. He lost this position to Bernard Arnault of LVHM.
The billionaire’s interest in electric car maker lost more than half of its value in 2022 as shares in Tesla lost over 60% according to a report by Forbes which was quickly adopted by Guinness. Amazingly, despite the substantial loss of value of Musk’s Tesla shares he is still the second wealthiest person on the planet.
This is likely attributable to the high valuation that the market still attaches to the electric car manufacturer’s shares. Shares of the EV company began to tumble when investor’s lost confidence in the billionaire’s ability to …