All of you – including the white people too.
Especially the white people. And not just to anywhere in Africa, but to one place in particular.
Take a good long look around and see for yourselves the inevitable consequences of electing a socialist, antiwhite-racist Third World dictator who believes in “redistributing the wealth,” namely Robert Mugabe, to rule what was once a civilized and fairly prosperous country.
One man, one vote, one time.
Our readers will already be familiar with the financial situation in Zimbabwe, in which the Zim dollar succumbed to hyperinflation and was finally abandoned entirely. Thus far, every attempt to set up a new currency has failed because nobody trusts the government to make good on its promises. Currency from neighboring countries and other regions, including the euro and the US dollar, has become the medium of exchange.
No one wants to loan money to the Zimbabwe government, so now it is trying to blackmail banks that operate in Zimbabwe into buying its T-bills at a low interest rate. Sound familiar?
Zimbabwe plans to force banks operating in the country to buy its Treasury bills after attempts to sell the first central bank securities since 2008 failed, the governor of the bank said.
The Reserve Bank of Zimbabwe on Oct. 4 offered its first Treasury bills since the country abandoned its currency and adopted the dollar in a bid to curb inflation estimated by the International Monetary Fund at 500 billion percent. That offer of 91-day securities failed with all bids rejected by the central bank. The bank rejected all bids in two subsequent sales including an offering of $30 million on Nov. 4. An Oct. 26 offering was partially successful.
“All the issues have met with some form of resistance,” Gideon Gono, the central bank governor, told businessmen in Harare, the capital, today. “‘Extraordinary circumstances require extraordinary measures. We will be introducing a battery of measures that will ensure compliance. A snub begets a snub.’’
Units of Barclays Plc (BARC) and Standard Chartered Plc (STAN) operate in the country while South Africa (SBK)’s Standard Bank Group Ltd. and Nedbank Group Ltd. (NED) also have operations. In a Nov. 3 interview Tendai Biti, the country’s finance minister, said he would compel banks to buy negotiable certificates of deposit if they didn’t support the Treasury bill program.
Biti and the central bank are trying to kick-start the country’s capital markets after a decade-long recession ended in 2009 when the 15-nation Southern African Development Community negotiated a settlement that ended a political dispute. A coalition government between President Robert Mugabe’s Zimbabwe African National Union-Patriotic Front and the Movement for Democratic Change of Prime Minister Morgan Tsvangirai was then formed.
At the Oct. 26 sale of $15 million of the bills the central bank accepted $9.9 million of bids at an average yield of 8.51 percent.
Sam Malaba, deputy president of the Bankers Association of Zimbabwe, was said to be unavailable when his office was called. Calls to unit of Barclays and Standard Chartered in Harare weren’t answered.
‘‘Banks are resisting because they’re not sure government will be able to repay the T-bills,” John Robertson, an independent economist in Harare, said in an interview. “There’s a lack of credibility with government and the banks don’t have much of a gambling instinct.”
Zimbabwe’s government has debt of $10.7 billion. according to the finance ministry.
“Government likely wants to borrow at about 4 percent and its likely that 8 percent to 10 percent would ultimately be acceptable to the banks,” Robertson said. Lending rates between banks are as high as 25 percent, he said. Annual inflation in Zimbabwe was 3.2 percent in September, according to the national statistics agency.
Barclays Bank of Zimbabwe’s shares have fallen 42 percent over the past year to 29 cents, giving the company a market value of $62 million, according to data compiled by Bloomberg. The Zimbabwe Stock Exchange Industrial Index (ZHINDUSD), the benchmark, rose 7.7 percent over the same period.
Zimbabwe’s economy entered recession and inflation began to surge after President Robert Mugabe in 2000 backed an often violent program of seizing white-owned commercial farms and redistributing them to black subsistence farmers.
Production of tobacco, then the country’s biggest source of foreign currency, collapsed as did output of agricultural exports ranging from roses and paprika to mange-tout peas. Corn production also slumped, forcing imports of a staple food the country had been self-sufficient in. Several years of famine followed and millions of its citizens moved to neighboring countries including South Africa and Botswana.
The economy contracted by about 40 percent between 1999 and 2003, according to the International Monetary Fund.
Attempts to encourage investment in the country’s platinum industry have been hindered by a law that compels mining companies to sell 51 percent of their local operations to black Zimbabweans.
While Biti and Gono have not detailed how they will compel the banks to lend to the country, Robertson that during the recession they were at times forced to buy bills.
“If the banks bought them voluntarily, they could do so on a short-term basis, but if the banks resisted, they’d be 270-day bills, and that frightens the sector,” said Robertson.
To contact the editor responsible for this story: Antony Sguazzin at email@example.com
But wait, there’s more:
- AllAfrica Nov. 4: Zimbabwe: Mugabe Faces Revolt
- AllAfrica Nov. 4: Zimbabwe: Mugabe’s Peace Call Falling On Deaf Ears
- AllAfrica Nov. 1: Zimbabwe: MDC-T Treasurer and Wife Severely Assaulted By Zanu-PF
- The Zimbabwe Situation – Zimbabwe news updated daily
Have you any doubt that the 2012 US election was stolen,
just as elections are routinely stolen in Zimbabwe?
- Gates of Vienna: Cowards Lose
- Pundit Press: Fraud in PA: Obama Got Over 99% of Vote at Polls Where GOP Inspectors were Removed; Turnout Somehow “30%” Above Gov’t Numbers
- The Wilderness of Mirrors: Serious Question here… What if….
- WHITE HOUSE INSIDER: “SHUT UP. MOVE ON…OR NOT.”
- Lady Raven: Needing some help here
- Rep. Allen West loses to Democrat Patrick Murphy amid reports of election fraud