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Browsing: economy
In recent months, the discourse about de-dollarisation has gained momentum. The sanctions against Russia have exposed the danger of over-dependence on the US dollar in international trade. The recent foreign exchange challenges have also recharged the growing efforts to bolster other currencies.
De-dollarisation could soon become a reality. A BRICS substitute to the dollar could enjoy high prospects for success, a former White House adviser, Joseph Sullivan, has noted. Sullivan served as a staff economist at the White House Council of Economic Advisers during the Trump administration. According to him, a potential BRICS currency poses a unique threat to the dominance of the US dollar in international trade.…
The New Tanzania Investment Act 2022 has now become law replacing the Tanzania Investment Act Cap 38 RE 2015 and its amendments. While there was an expectation for major changes, the reality is that the new Act is more or less the same as the previous minus a few differences outlined below:
1. The Act is in the Kiswahili language and there is no translation of the same in English.
2. Removal of the automatic immigration quota of 5 work and residence permits for expatriates workers. While previously an investor registered at the TIC would be allowed up to 5 immigration permits and this was typically used for investors’ strategic employees, this incentive is removed which means there is no guarantee for the investor to obtain immigration permits for its strategic employees who will be treated like every other applicant.
3. Local Investors ie Tanzania nationals or companies
Because of erratic economic policy, Zimbabwe continues to be the sick man of the Southern African Development Community (SADC) region.
The country perennially goes from one economic crisis to the next. Presently Zimbabwe is battling with resurgent inflation after managing to rein it in from the hyperinflationary levels reached in the years 2019 to 2020 and during the early months of 2021, peaking at over 837%.
Currently, Zimbabwe’s inflation stands at approximately 257%. Conventionally, the origins of inflation have been and always will be excessive money supply that outstrips the rate of growth in an economy resulting in too much money chasing too few goods and services. In the case of Zimbabwe, the inflation malaise was compounded by the fact that the economy is virtually stagnant, growing only marginally.
- Zimbabwe’s economic policy has been erratic.
- The government in Zimbabwe has recently adopted a scorched earth policy against inflation by tightening
The continent in the near future will have the largest population in the world. The population of Africa is urbanizing as citizens of the nations of the continent migrate from rural to urban areas.
This addition to its vast natural resources is a potent combination for its rapid economic expansion. The world witnessed first-hand the economic miracle where China transformed itself from a rural backwater in 1949 when the modern Chinese state was founded to an economic and military superpower by 2019. The year 2019 is significant to China because the country celebrated 70 years of its founding as a communist state, and the Asian country gained worldwide recognition as a military superpower.
China put on a military parade that displayed a weapons arsenal that made the United States sit up and take notice. How was this possible? China’s economic transformation was because of several factors. One of the most …
The shrinking economy and resulting unemployment have given birth to an informal economy that has spiralled out of control. Treasury and monetary authorities have been at pains to find ways they can tax the informal sector. The informal economy is difficult, if not impossible, to absorb into the formal economy or to include in the tax pool from which the government can draw revenue.
As the formal economy shrinks, so has Zimbabwe’s effective tax revenue stream, and this problem can only be arrested and mitigated by a growing economy.
An economy characterized by slow or negative growth makes it more difficult for the government to repair its finances. This is because there is a positive relationship between a country’s tax pool and the growth of the economy. A shrinking economy brings with it the added cost of having to provide social safety nets for the vulnerable members of its society.…
The Treasury has directed Cabinet Secretaries and CEOs of parastatals to draft the 2023 budget for the fiscal year beginning July 2023 based on policies implemented by President Uhuru Kenyatta’s government, despite uncertainty about when the next Head of State would take office after Raila Odinga filed a petition at the supreme court.…
This shortage of hard currency implies that those businesses that rely on foreign exchange have often had to source it from the parallel market, where it is easily available relative to the formal market.
To mitigate the inflationary pressures caused by businesses looking for foreign exchange on the parallel market and passing on the effect of higher exchange rates to consumers in the form of higher prices, the central bank instituted the foreign currency auction system, which allocates foreign exchange to importers.
This foreign exchange shortage affects all businesses across the economic spectrum and is not limited to retailers only. Manufacturing companies import raw materials and spares. They have recently experienced viability challenges from charging prices in local currency.…