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Zimbabwe’s new currency under strain, months after launch

Published

6 hours ago

September 21, 2024

Five months after its launch, Zimbabwe’s new currency is under strain as grain imports deplete foreign reserves, threatening the government’s ambition to make it the only currency by 2026.

Zimbabwe Gold, backed by gold, is the country’s sixth stable currency effort in 15 years. Since its introduction in April at 13.6 ZiG per U.S. dollar, it has lost about 80% of its value on the illegal market.

On Thursday, the central bank said it had injected $64 million into the foreign exchange market this month to meet dollar demand.

“Over the past weeks, the Reserve Bank witnessed a build-up in pipeline demand for foreign currency at banks, reflecting transitory foreign currency supply and demand mismatches, thus, exerting undue pressure on the foreign exchange market,” central bank governor John Mushayavanhu said in a statement.

Despite a $50 million Reserve Bank infusion in July, he said the bank would continue to assist to stabilise the ZiG. Prosper Chitambara, an independent economist, said the devaluation showed villagers’ reluctance to accept the new currency.

By raising local currency levies, Gwanyanya suggested the government may boost ZiG use. “Government more than any other should show a preference for its currency and there is need for urgent intervention by injecting more foreign currency on the market,” stated.

“The ZiG has been getting weaker so it does not make business sense to transact with it. I do not have faith in the ZiG. We have been here before with the Zimdollar,” Maynard Maketo, a street hawker selling candy and recharge cards said.

Pricecheck, an exchange rate tracking website, reports that the ZiG trades between 20 and 26 ZiG to $1 on the underground market and 13.9 on the official exchange.

In downtown Harare, grocery seller Carol Munjoma only accepts U.S. money.

“Where I buy these groceries, they do not accept ZiG. So to protect my business I charge in U.S dollars. The ZiG would have to be stable to be accepted here,” the mother of two said.

Mushayavanhu, the central bank chief, stated to Reuters in July that officials will maintain their commitments to develop trust in the new currency, which Gwanyanya also shared.

“It is too early to consider that this may be the death of the ZiG,” said Gwanyanya.

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Egypt aims to restore gas field output by 2025

Published

6 hours ago

September 21, 2024

Ifeoluwa Dada

Prime Minister Mostafa Madbouly stated on Thursday that Egypt hoped to resume regular production at its natural gas reserves by the summer of next year, indicating that the government is taking steps to pay producing companies its outstanding debt.

Madbouly stated during a press conference that the government’s debts were the reason for the decline in production. However, he did not specify the amount owed or the expected date of repayment.

The government had set aside up to $1.5 billion for payments to international oil and gas companies operating in the nation, sources told Reuters in March. The arrears accumulated during a protracted foreign exchange shortfall that has subsequently abated.

Due to the heavy demand for cooling systems during the summer, Egypt has been experiencing power outages. The majority of the nation’s electricity is produced by burning natural gas.

When certain cargoes of natural gas came in July, the administration decided to end the so-called load-shedding power outages.

“Electricity load-shedding cuts won’t return,” Madbouly said, adding the government had set aside $2.5 billion to ensure that.

Additionally, he mentioned plans to initiate the first phase of an Egypt-Saudi electricity grid link by the summer of 2025.

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Botswana grants a mining permit for its first manganese operation

Published

2 days ago

September 19, 2024

Ifeoluwa Dada

Giyani Metals, Botswana’s first manufacturer of manganese suitable for batteries, revealed that the country had granted it a 15-year mining permit.

The demand for manganese, a crucial component of batteries, is anticipated to rise due to the rise in electric vehicles and other clean energy applications.

One of the few battery-grade manganese projects outside of China is Giyani’s Kgwakwe Hill (K.Hill) project, which will process manganese oxide material on-site to generate high-purity manganese sulphate. 90% of the world’s supply of high-purity manganese is controlled by this Asian nation.

An early economic study from 2023 states that the K. Hill mine will produce 80,000 metric tonnes of high-quality manganese sulphate monohydrate annually throughout a 57-year life.

“The next step is production of battery-grade manganese from our demonstration plant, which is under construction in Johannesburg, South Africa,” the Canadian company said in a statement.

It further stated that the product from the demonstration facility will be utilised for off-taker qualification, an essential stage before the signing of offtake agreements.

The diamond industry is very important to Botswana, which produces the most diamonds globally in terms of value. The gem industry accounts for 30% of national income and 70% of foreign exchange earnings.

The nation wants to diversify its mining industry by using resources including iron ore, nickel, copper, and coal.

The nation is home to three active copper mines in addition to its two active coal mines.

The demand for battery metals like manganese is predicted to decrease the nation’s dependency on diamonds as a result of the growing need for green minerals worldwide brought on by the energy transition.