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Zimbabwe’S Re-Introduction Of The US$: The Best Test For Any Functional Currency Is A Crisis!

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on

With the COVID-19 pandemic in our midst, our government has yet again made another hurried and fishy pronouncement which has re-enabled the use of the United States dollar which they had banned only 9 (nine) months ago. 

The re-introduction of US$ into the economy has mainly been reactionary as the government gets into a panic mode because of various reasons including the fact that the major source of forex which is diaspora remittances will be heavily affected during the lockdowns being imposed by various countries. 

Even though it is common knowledge that in any functional economy, policy consistency is the key to success, our government seems to think otherwise as they have been making confusing policy pronouncements over the past two years, driven by corruption and greed.

I am going to outline what the press statement by the Reserve Bank of Zimbabwe means and the implications that it has on the wider economy as well as to businesses and the general public. 

Below are the 4 major sticky points for me:

  1. THE GOVERNMENT HAS ALLOWED THE USE OF FREE FUNDS FOR LOCAL PAYMENTS

My first question to them is: Can someone walk into the bank and withdraw USD from their Nostro Account? Personally, I don’t think that the government will allow people to withdraw USD because they know people will clean up their Nostro accounts. However, this would have been the major boost of confidence for people to trust that the policy above is genuine. Another question which they need to address is: Will they be allowing cash purchases or its just free funds? If the measure is only for Nostro, it makes the whole process another heist of the Nostro accounts. 

By allowing the use of USD as a currency, there will be a lot of implications for the economy. Firstly, the economy is going to slowly transition from being a cashless economy to being a cash (USD) economy as long as this policy is in place and by end of the year, the economy would have fully re-dollarised. The thorn in the flesh for the government when the economy becomes a cash economy is that a cash economy is difficult to monitor and to earn revenue from compared to a cashless economy. Such a development will lead to the shrinking of government revenue because there is a potential for a lot of unrecorded/unaccounted transactions in the economy as people and businesses try to evade tax. 

This, therefore, means that at one point the government is going to revert back to banning the USD and letting the already dead RTGS become the main currency or the unlikely option of making the USD the sole functional currency again.

Given the lack of trust that people and businesses have on our government, customer deposits into banks will be very low and this will mean that the government has a few USDs to play around with. Most businesses will either store value in hard cash or offshore accounts. Also bear in mind that the amount of free funds currently in banks is a very small fraction of the total cash (USD) in circulation on the parallel market

The solution to this huge problem is customer confidence which is currently almost nonexistent. Unfortunately, the solution to the customer confidence problem is political will and good governance of which our political masters have for a long time dismally failed to show forth.

  1. GOVERNMENT HAS SUSPENDED THE “MANAGED FLOATING EXCHANGE RATE” AND FIXED THE EXCHANGE RATE AT 1:25

In my previous article on this platform, I contested that there is nothing such as a “managed floating exchange rate”. I predicted that the black market will continue to thrive and this has been the case. The government had to give in and remove such a policy because it showed a lack of understanding of economic fundamentals.

Now that the government has explicitly fixed the exchange rate between the USD and the RTGS while allowing the use of the USD, it marks the beginning of the death of the RTGS. We are going to see businesses demanding USD and the black market thriving until the USD becomes the official currency again.

Fixing the USD to RTGS rate will also see those in higher powers who can get USD at interbank rates benefiting heavily and feeding the black market with forex at a huge premium.

The solution to this problem is the same as that of Point 1 (One) above, which is customer confidence.

  1. REDUCING OF STATUTORY RESERVE RATION FROM 5% TO 4.5%.

The RBZ has also reduced the amount of deposits banks are supposed to keep as reserves in order to increase the lending capacity of banks to corporates. This would have been a noble idea in a transparent functional economy. It is a public secret that the majority of businesses with access to such facilities from banks are those owned by or linked to corrupt politicians. This then provides another opportunity for looters to loot through loans. 

As such, a proper framework and a robust vetting system should thus be put in place in order to enable banks to thoroughly review businesses that they want to lend money to and then the priority should be given to key economic drivers without favour.

  1. THE ISSUANCE OF OPEN MARKET OPERATIONS (OMO) CORPORATE BILLS.

These bills have been used to steal from companies quite a number of times and I hope companies are now wiser. Currently, no wise company will buy bills from the government given the current world economic status.

After the COVID-19, most economies including first world counties are going to require bailouts and because of that, it is important to understand that a bailout can only succeed with a strong currency and we all know that the RTGS is not a currency at all. 

That is the reason why the government has made this panicky policy which is half-backed and rather too late. 

If our nation is hit by this virus very hard like what’s happing in Europe and recently in the United States of America, our economy will collapse and need resuscitation. 

Unfortunately, the RTGS will not be able to do that job since it is not bankable anywhere in the world and this means that we will need a stronger currency like the USD, which is the reason why there has been this sudden shift in policy by our government.

In conclusion, our economy is like an ailing human body whose organs are failing one by one until the body shuts down. We are nearing the shutdown and as such, immediate genuine attention is required to save the little that’s left to talk about in our economy.

By Gilbert Kamusasa

Tony Elumelu Foundation Alumni

Young African Leaders Initiative Alumni

SEED STARS Alumni

ACT Alumni

Continue Reading
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Business

Jagjit Singh’s Inspirational Journey of Hope, Determination and Excellence in The Corporate World: South Africa Award Winning Serial Entrepreneur

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South Africa Award Winning Serial Entrepreneur, Jagjit Singh's Inspirational Journey of Hope, Determination and Corporate Excellence

The journey of life has its own twist and turns, as well as its own highs and lows, but despite all that, some people can still manage to display amazing hope, great determination and a touch of excellence to what they do in the pursuit of their wishes and dreams.

One good example of such people who has shown great willpower regardless of their circumstances until they achieve their goals is South Africa’s award winning serial entrepreneur Jagjit Singh who owns The Royal India Group.

The Royal India Group has business interests across various sectors of the economy including hospitality (high-end restaurants), minerals (diamonds) and energy (petroleum).

Jagjit who is originally from Punjab in India came to South Africa in search of greener pastures after he completed his tertiary education where he studied to be an Electronics and Telecoms engineer.

Even though he is now a celebrated entrepreneur pursuing various business interests in different fields not related to what he studied at school, Jagjit had a tough early encounter with life in South Africa because of hardships associated with culture shocks and unemployment.

Despite having studied for Electronics & Communication Engineering, when he arrived in South Africa, he had to start life as a waiter in an Indian Restaurant and later on rose through the ranks in the hospitality business until he started his own enterprise.

Currently, under The Royal India Group among other businesses, Jagjit runs The Royal India Restaurant, a prime food outlet in South Africa’s flamboyant Sandton suburb.

The restaurant has over the years hosted various prestigious events and is also a favourite venue for filming South African telenovelas such The Family Secrets.

Besides the hope and determination that he exudes in the pursuit of his goals in life, fellow entrepreneurs and even his clientele believes that Jagjit has a rare touch of excellence in conducting his business affairs.

The founder of Lavo Wines who is also the CEO of Polyzomba Rail Contractors which specializes in Rail construction and maintenance, Ms Lerato Pretorious describes Jagjit as a “Royal Man”.

While giving a speech at Jagjit’s birthday two years ago Lerato said “JJ, you are a true Royal Man. You command respect and you are confident. You demonstrate your leadership skills to both well established and new businesses. I admire your hard and smart work.

Such great business leadership and management qualities as acknowledged by fellow entrepreneurs such as Lerato Pretorious and others has resulted in Jagjit getting several awards of recognition for his input to both the field of commerce and society at large.

Recently, a leading business publication, CEO Insights named Jagjit among the Top 10 Indian Leaders in South Africa (2022) and cited him as an entrepreneur who ‘overcame countless challenges before achieving success’.

CEO Insights’s Managing Editor, Sujith Vasudevan, said that The Top 10 Indian Leaders in South Africa is an annual recognition that showcases exceptional Indian origin leaders in South Africa who guide the country’s business landscape to its future by setting benchmarks across several key parameters.

After having survived some serious finance related turbulences in his own life, the award winning businessman also known as the Punjab Boy or JJ now dedicates a part of his fortune to support charitable initiatives that seek to empower communities in the country.

For supporting such noble causes, Jagjit was awarded with the highest Commendation Award of Honour in Karate by the internationally recognized South African martial arts legend and President of Karate South Africa, Mr Sonny Pillay.

This was in recognition for his continued role in sponsoring and hosting the Karate South Africa 101 Charity Awards over the years.

Mr Pillay describes Jagjit as a person with a dynamic personality who never fails to exhibit tenacity, determination and courage despite the turbulent times we live in. He also says that Jagjit has a heart of gold and will give you a t-shirt on his back even if it’s the last one when a friend is in desperate times.

While commenting on his own commitment to charity work, Jagjit says he believes in making a positive difference in the lives of others and credits such good deeds to the helping hand that he has also received from other people during the times when life was hard for him.

Last year, Africa Heritage Society (AHS) in collaboration with the C2C Initiative, the 1873 Network’s Banking on Africa’s Future (BOAF) and Salute the Champions (STC) Initiatives proclaimed his birthday, the 4th of April as JJ Singh Appreciation Day.

In their joint statement, AHS, C2C and STC, said that the JJ Singh Appreciation Day was meant for citizens to reflect on the idea of corporate citizenship and the role played by corporate actors in delivering the promise of prosperous, dynamic, inclusive, and cohesive communities.

Continue Reading

Africa

Who does a President account to in a constitutional democracy?

Published

on

Yesterday, Mr. Tichaona Mupasiri arrived late yesterday for the hearing of his application that he launched on 17 December 2021 in the Constitutional Court of Zimbabwe (CCZ) under Case Number 34/21 seeking to impeach President Mnangagwa alleging that he has breached his constitutional duties.

The case seems a forgone conclusion as it is unlikely that the Court will live up to its constitutional duty to determine independently and impartially as required by the constitution, whether the behavior of a powerful President like President Mnangagwa in the Zimbabwean context can ever be held accountable for his conduct.

Although accountability of public office bearers is entrenched in the constitution and this is what citizens demand today, it is not easy to realize.

The duties of the citizens in holding the President to account for his conduct are often not generally delineated against a backdrop of lack of information needed to understand how well the responsibilities of public offices are being discharged.

In a constitutional democracy, accountability is an implicit tenet of an accountable, transparent, and open society.

At the core of Mupasiri’s application is an attempt to test what President Mnangagwa knew of the facts and circumstances surrounding the origin and implementation of the reconstruction legislation in relation to SMM and other entities, how he got to know what he has admitted to knowing, what his interest, if any, in the affairs of the targeted entities, and details of his involvement, if any.

According to Manikai, there was a major political fallout between President Mnangagwa and Mr. Mawere that triggered a series of events including the decision to divest the latter of all his companies without compensation.

It is alleged that President Mnangagwa knowingly engaged in a wide-ranging pattern of actions that violate the constitution, laws, government agency regulations, ethical requirements, repeatedly putting his own personal political interests before the public interest.

His coterie of associates including Manikai has directly attacked the rule of law resulting in the creation of two justice systems – one for the President’s allies and one for everyone else.

As part of the systemic attack on the rule of law that began under Mugabe’s watch, the victims have been the very institutions that might hold the Administration accountable including the Courts.

Continue Reading

Africa

Did Minister Chitando steal claims? As Welshman Ncube and Prof Madhuku are put in the spotlight

Published

on

On 8 February 2022, Minister Chitando who played an instrumental role in the placement of Hwange Colliery Company Limited (Hwange) under the control of a state-appointed Administrator, was in court on allegations that he grabbed 8 mining claims.

The role of one of President Mnangagwa’s blue-eyed Ministers in undermining the rule of law is well established but his direct role in allegedly fraudulently diverting the 8 claims to a company in which he is director was not known until businessman Yakub Ibrahim Mahomed accused him of orchestrating a scheme that resulted in him losing the title, right, and interest in the claims.

In this matter, the role of the leading Zimbabwean lawyers in prosecuting and defending the indefensible also comes under the spotlight.

The VP of the Citizens Coalition for Change (CCC) party, Welshman Ncube, and the President of the NCA party, Lovemore Madhuku are acting for Minister Chaitando.

Chitando is accused of grabbing the claims and then re-issuing them to Golden Reef Mining (Pvt) Ltd, where he is a director.

Mohamed owns Anesu Gold (Pvt) Ltd, which he claims in court papers is the registered owner of the gold claims in Mberengwa district, Midlands province, which are also referred to as Mangoro claims.

Mohamed has filed a High Court application seeking to interdict Chitando, Mines secretary Onesimo Moyo, Golden Reef Mining, and Midlands provincial mining director Tariro Ndhlovu from grabbing the mining claims.

The matter was set for hearing yesterday, but High Court judge Justice Rogers Manyangadze postponed it to February 24 at the request of Chitando’s lawyer, Takudzwa Mutomba who indicated that the minister, together with Moyo and Ndhlovu had secured the services of a new lawyer, Lovemore Madhuku who was tied up elsewhere.

Welshman Ncube is representing Golden Reef Mining while Advocate Tawanda Zhuwarara is representing Anesu Gold.

In his application, Mohamed said the mining claims were previously owned by, and registered in the name of Start Mining Services (Private) Limited, where he initially had a 70% stake with the other 30% owned by Rugare Gumbo.

Mohamed said he later bought out Gumbo and now owns 100% shareholding of the claims.

It is alleged that in 2018, Chitando sent invoices for Start Mining Services to pay mining fees for the claims.

Fidelity Printers approved that US$6,4 million must be paid to finance the applicant’s operations, including the payment of the inspection fees for the mining claims.

“This arrangement had the approval of the governor of the Reserve Bank and the permanent secretary of the Ministry of Finance and Economic Development. Fidelity gave the facility on the strength of clean and unencumbered mining claims following a due diligence process,” Mohamed’s court affidavit read.

Continue Reading

Trending

Business

Zimbabwe’S Re-Introduction Of The US$: The Best Test For Any Functional Currency Is A Crisis!

Published

on

With the COVID-19 pandemic in our midst, our government has yet again made another hurried and fishy pronouncement which has re-enabled the use of the United States dollar which they had banned only 9 (nine) months ago. 

The re-introduction of US$ into the economy has mainly been reactionary as the government gets into a panic mode because of various reasons including the fact that the major source of forex which is diaspora remittances will be heavily affected during the lockdowns being imposed by various countries. 

Even though it is common knowledge that in any functional economy, policy consistency is the key to success, our government seems to think otherwise as they have been making confusing policy pronouncements over the past two years, driven by corruption and greed.

I am going to outline what the press statement by the Reserve Bank of Zimbabwe means and the implications that it has on the wider economy as well as to businesses and the general public. 

Below are the 4 major sticky points for me:

  1. THE GOVERNMENT HAS ALLOWED THE USE OF FREE FUNDS FOR LOCAL PAYMENTS

My first question to them is: Can someone walk into the bank and withdraw USD from their Nostro Account? Personally, I don’t think that the government will allow people to withdraw USD because they know people will clean up their Nostro accounts. However, this would have been the major boost of confidence for people to trust that the policy above is genuine. Another question which they need to address is: Will they be allowing cash purchases or its just free funds? If the measure is only for Nostro, it makes the whole process another heist of the Nostro accounts. 

By allowing the use of USD as a currency, there will be a lot of implications for the economy. Firstly, the economy is going to slowly transition from being a cashless economy to being a cash (USD) economy as long as this policy is in place and by end of the year, the economy would have fully re-dollarised. The thorn in the flesh for the government when the economy becomes a cash economy is that a cash economy is difficult to monitor and to earn revenue from compared to a cashless economy. Such a development will lead to the shrinking of government revenue because there is a potential for a lot of unrecorded/unaccounted transactions in the economy as people and businesses try to evade tax. 

This, therefore, means that at one point the government is going to revert back to banning the USD and letting the already dead RTGS become the main currency or the unlikely option of making the USD the sole functional currency again.

Given the lack of trust that people and businesses have on our government, customer deposits into banks will be very low and this will mean that the government has a few USDs to play around with. Most businesses will either store value in hard cash or offshore accounts. Also bear in mind that the amount of free funds currently in banks is a very small fraction of the total cash (USD) in circulation on the parallel market

The solution to this huge problem is customer confidence which is currently almost nonexistent. Unfortunately, the solution to the customer confidence problem is political will and good governance of which our political masters have for a long time dismally failed to show forth.

  1. GOVERNMENT HAS SUSPENDED THE “MANAGED FLOATING EXCHANGE RATE” AND FIXED THE EXCHANGE RATE AT 1:25

In my previous article on this platform, I contested that there is nothing such as a “managed floating exchange rate”. I predicted that the black market will continue to thrive and this has been the case. The government had to give in and remove such a policy because it showed a lack of understanding of economic fundamentals.

Now that the government has explicitly fixed the exchange rate between the USD and the RTGS while allowing the use of the USD, it marks the beginning of the death of the RTGS. We are going to see businesses demanding USD and the black market thriving until the USD becomes the official currency again.

Fixing the USD to RTGS rate will also see those in higher powers who can get USD at interbank rates benefiting heavily and feeding the black market with forex at a huge premium.

The solution to this problem is the same as that of Point 1 (One) above, which is customer confidence.

  1. REDUCING OF STATUTORY RESERVE RATION FROM 5% TO 4.5%.

The RBZ has also reduced the amount of deposits banks are supposed to keep as reserves in order to increase the lending capacity of banks to corporates. This would have been a noble idea in a transparent functional economy. It is a public secret that the majority of businesses with access to such facilities from banks are those owned by or linked to corrupt politicians. This then provides another opportunity for looters to loot through loans. 

As such, a proper framework and a robust vetting system should thus be put in place in order to enable banks to thoroughly review businesses that they want to lend money to and then the priority should be given to key economic drivers without favour.

  1. THE ISSUANCE OF OPEN MARKET OPERATIONS (OMO) CORPORATE BILLS.

These bills have been used to steal from companies quite a number of times and I hope companies are now wiser. Currently, no wise company will buy bills from the government given the current world economic status.

After the COVID-19, most economies including first world counties are going to require bailouts and because of that, it is important to understand that a bailout can only succeed with a strong currency and we all know that the RTGS is not a currency at all. 

That is the reason why the government has made this panicky policy which is half-backed and rather too late. 

If our nation is hit by this virus very hard like what’s happing in Europe and recently in the United States of America, our economy will collapse and need resuscitation. 

Unfortunately, the RTGS will not be able to do that job since it is not bankable anywhere in the world and this means that we will need a stronger currency like the USD, which is the reason why there has been this sudden shift in policy by our government.

In conclusion, our economy is like an ailing human body whose organs are failing one by one until the body shuts down. We are nearing the shutdown and as such, immediate genuine attention is required to save the little that’s left to talk about in our economy.

By Gilbert Kamusasa

Tony Elumelu Foundation Alumni

Young African Leaders Initiative Alumni

SEED STARS Alumni

ACT Alumni

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published.

Business

Jagjit Singh’s Inspirational Journey of Hope, Determination and Excellence in The Corporate World: South Africa Award Winning Serial Entrepreneur

Published

on

South Africa Award Winning Serial Entrepreneur, Jagjit Singh's Inspirational Journey of Hope, Determination and Corporate Excellence

The journey of life has its own twist and turns, as well as its own highs and lows, but despite all that, some people can still manage to display amazing hope, great determination and a touch of excellence to what they do in the pursuit of their wishes and dreams.

One good example of such people who has shown great willpower regardless of their circumstances until they achieve their goals is South Africa’s award winning serial entrepreneur Jagjit Singh who owns The Royal India Group.

The Royal India Group has business interests across various sectors of the economy including hospitality (high-end restaurants), minerals (diamonds) and energy (petroleum).

Jagjit who is originally from Punjab in India came to South Africa in search of greener pastures after he completed his tertiary education where he studied to be an Electronics and Telecoms engineer.

Even though he is now a celebrated entrepreneur pursuing various business interests in different fields not related to what he studied at school, Jagjit had a tough early encounter with life in South Africa because of hardships associated with culture shocks and unemployment.

Despite having studied for Electronics & Communication Engineering, when he arrived in South Africa, he had to start life as a waiter in an Indian Restaurant and later on rose through the ranks in the hospitality business until he started his own enterprise.

Currently, under The Royal India Group among other businesses, Jagjit runs The Royal India Restaurant, a prime food outlet in South Africa’s flamboyant Sandton suburb.

The restaurant has over the years hosted various prestigious events and is also a favourite venue for filming South African telenovelas such The Family Secrets.

Besides the hope and determination that he exudes in the pursuit of his goals in life, fellow entrepreneurs and even his clientele believes that Jagjit has a rare touch of excellence in conducting his business affairs.

The founder of Lavo Wines who is also the CEO of Polyzomba Rail Contractors which specializes in Rail construction and maintenance, Ms Lerato Pretorious describes Jagjit as a “Royal Man”.

While giving a speech at Jagjit’s birthday two years ago Lerato said “JJ, you are a true Royal Man. You command respect and you are confident. You demonstrate your leadership skills to both well established and new businesses. I admire your hard and smart work.

Such great business leadership and management qualities as acknowledged by fellow entrepreneurs such as Lerato Pretorious and others has resulted in Jagjit getting several awards of recognition for his input to both the field of commerce and society at large.

Recently, a leading business publication, CEO Insights named Jagjit among the Top 10 Indian Leaders in South Africa (2022) and cited him as an entrepreneur who ‘overcame countless challenges before achieving success’.

CEO Insights’s Managing Editor, Sujith Vasudevan, said that The Top 10 Indian Leaders in South Africa is an annual recognition that showcases exceptional Indian origin leaders in South Africa who guide the country’s business landscape to its future by setting benchmarks across several key parameters.

After having survived some serious finance related turbulences in his own life, the award winning businessman also known as the Punjab Boy or JJ now dedicates a part of his fortune to support charitable initiatives that seek to empower communities in the country.

For supporting such noble causes, Jagjit was awarded with the highest Commendation Award of Honour in Karate by the internationally recognized South African martial arts legend and President of Karate South Africa, Mr Sonny Pillay.

This was in recognition for his continued role in sponsoring and hosting the Karate South Africa 101 Charity Awards over the years.

Mr Pillay describes Jagjit as a person with a dynamic personality who never fails to exhibit tenacity, determination and courage despite the turbulent times we live in. He also says that Jagjit has a heart of gold and will give you a t-shirt on his back even if it’s the last one when a friend is in desperate times.

While commenting on his own commitment to charity work, Jagjit says he believes in making a positive difference in the lives of others and credits such good deeds to the helping hand that he has also received from other people during the times when life was hard for him.

Last year, Africa Heritage Society (AHS) in collaboration with the C2C Initiative, the 1873 Network’s Banking on Africa’s Future (BOAF) and Salute the Champions (STC) Initiatives proclaimed his birthday, the 4th of April as JJ Singh Appreciation Day.

In their joint statement, AHS, C2C and STC, said that the JJ Singh Appreciation Day was meant for citizens to reflect on the idea of corporate citizenship and the role played by corporate actors in delivering the promise of prosperous, dynamic, inclusive, and cohesive communities.

Continue Reading

Africa

Who does a President account to in a constitutional democracy?

Published

on

Yesterday, Mr. Tichaona Mupasiri arrived late yesterday for the hearing of his application that he launched on 17 December 2021 in the Constitutional Court of Zimbabwe (CCZ) under Case Number 34/21 seeking to impeach President Mnangagwa alleging that he has breached his constitutional duties.

The case seems a forgone conclusion as it is unlikely that the Court will live up to its constitutional duty to determine independently and impartially as required by the constitution, whether the behavior of a powerful President like President Mnangagwa in the Zimbabwean context can ever be held accountable for his conduct.

Although accountability of public office bearers is entrenched in the constitution and this is what citizens demand today, it is not easy to realize.

The duties of the citizens in holding the President to account for his conduct are often not generally delineated against a backdrop of lack of information needed to understand how well the responsibilities of public offices are being discharged.

In a constitutional democracy, accountability is an implicit tenet of an accountable, transparent, and open society.

At the core of Mupasiri’s application is an attempt to test what President Mnangagwa knew of the facts and circumstances surrounding the origin and implementation of the reconstruction legislation in relation to SMM and other entities, how he got to know what he has admitted to knowing, what his interest, if any, in the affairs of the targeted entities, and details of his involvement, if any.

According to Manikai, there was a major political fallout between President Mnangagwa and Mr. Mawere that triggered a series of events including the decision to divest the latter of all his companies without compensation.

It is alleged that President Mnangagwa knowingly engaged in a wide-ranging pattern of actions that violate the constitution, laws, government agency regulations, ethical requirements, repeatedly putting his own personal political interests before the public interest.

His coterie of associates including Manikai has directly attacked the rule of law resulting in the creation of two justice systems – one for the President’s allies and one for everyone else.

As part of the systemic attack on the rule of law that began under Mugabe’s watch, the victims have been the very institutions that might hold the Administration accountable including the Courts.

Continue Reading

Africa

Did Minister Chitando steal claims? As Welshman Ncube and Prof Madhuku are put in the spotlight

Published

on

On 8 February 2022, Minister Chitando who played an instrumental role in the placement of Hwange Colliery Company Limited (Hwange) under the control of a state-appointed Administrator, was in court on allegations that he grabbed 8 mining claims.

The role of one of President Mnangagwa’s blue-eyed Ministers in undermining the rule of law is well established but his direct role in allegedly fraudulently diverting the 8 claims to a company in which he is director was not known until businessman Yakub Ibrahim Mahomed accused him of orchestrating a scheme that resulted in him losing the title, right, and interest in the claims.

In this matter, the role of the leading Zimbabwean lawyers in prosecuting and defending the indefensible also comes under the spotlight.

The VP of the Citizens Coalition for Change (CCC) party, Welshman Ncube, and the President of the NCA party, Lovemore Madhuku are acting for Minister Chaitando.

Chitando is accused of grabbing the claims and then re-issuing them to Golden Reef Mining (Pvt) Ltd, where he is a director.

Mohamed owns Anesu Gold (Pvt) Ltd, which he claims in court papers is the registered owner of the gold claims in Mberengwa district, Midlands province, which are also referred to as Mangoro claims.

Mohamed has filed a High Court application seeking to interdict Chitando, Mines secretary Onesimo Moyo, Golden Reef Mining, and Midlands provincial mining director Tariro Ndhlovu from grabbing the mining claims.

The matter was set for hearing yesterday, but High Court judge Justice Rogers Manyangadze postponed it to February 24 at the request of Chitando’s lawyer, Takudzwa Mutomba who indicated that the minister, together with Moyo and Ndhlovu had secured the services of a new lawyer, Lovemore Madhuku who was tied up elsewhere.

Welshman Ncube is representing Golden Reef Mining while Advocate Tawanda Zhuwarara is representing Anesu Gold.

In his application, Mohamed said the mining claims were previously owned by, and registered in the name of Start Mining Services (Private) Limited, where he initially had a 70% stake with the other 30% owned by Rugare Gumbo.

Mohamed said he later bought out Gumbo and now owns 100% shareholding of the claims.

It is alleged that in 2018, Chitando sent invoices for Start Mining Services to pay mining fees for the claims.

Fidelity Printers approved that US$6,4 million must be paid to finance the applicant’s operations, including the payment of the inspection fees for the mining claims.

“This arrangement had the approval of the governor of the Reserve Bank and the permanent secretary of the Ministry of Finance and Economic Development. Fidelity gave the facility on the strength of clean and unencumbered mining claims following a due diligence process,” Mohamed’s court affidavit read.

Continue Reading

Trending

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