Today is World International Day for Justice. Spare a thought for those who cannot get justice for injustices against them or their loved ones. Help those you can in their quest for justice. Above all, be just, always.
In today's Brew:
• It affects us all.
• Platinum boost.
• Salary installments?
In my experience, poor people are the world's greatest entrepreneurs. Every day, they must innovate in order to survive. They remain poor because they do not have the opportunities to turn their creativity into sustainable income. - Muhammad Yunus
Ruling party youths have embarked on a crusade to expose corrupt top party officials who also happen to be the country's top brass. The claim is that these individuals are fuelling the forex parallel market with RBZ governor John Mangudya on the accused list. Kudos to them (the youths) if it's really all for justice and transparency. It is a noble venture (exposing corruption) that we should probably all partake in.
Unfortunately, the 'noble crusade' has attracted some international attention. The kind of attention that in the past brought sanctions and by most indications could bring more. Financial Action Task Force (FATF) has taken a keen interest in the accusations floating around and that's pretty bad news if of course the claims are not completely unfounded.
What Is FATF?
The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 by the Ministers of its Member jurisdictions (of which Zimbabwe is a member). The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.
What Could Happen?
If in fact, there is found to be some financial wrongdoing especially around the area of the Central Bank seeing as the governor is under investigation, the FATF would then recommend the issues be fixed and if they are fixed that's the end of that at least in theory. There will always be that air of suspicion surrounding issues to do with Zimbabwe.
If unfortunately they aren't fixed or not fixed to the FATF's satisfaction, the organisaton has the power to just about block any financial transfers to Zimbabwe under the pretext that the money would be used for criminal purposes, terrorism or money laundering.
Zimbabwe is already having issues with financial inflows, and now picture a situation where flow of export revenue is limited, potential investment is restricted and even the loans government so often takes out are blocked from entering the country. That would quite simply put, bring the country to its knees. No forex means no imports. No imports means no goods and no goods means quite a bit of trouble. In addition to that whole debacle would be the government's inability to bring in credit and for a country that functions almost solely in the red; there's really no telling how bad it could get.
It's bad enough to liberate citizens of their livelihoods through corruption that affects them on a local platform but when the effects go international and the whole country's financial system is at risk, maybe it's time to stop.
These are exactly the issues that deter much needed investment. The same actions that lead to a particular destination. Nevermind the rhetoric, pick the actions. The actions that ensure the bus moves backwards regardless of the promised destination.
A few individuals holding the country's future at ransom just so they can line their pockets.
Zimbabwe accounts for the world's second largest platinum reserves but only produces 7% of the world's platinum.
There has always been a need to boost platinum production to increase the country's revenue but now more than ever, that boost has to come to fruition as there is a new-found demand for the metal and Zimbabwe is in prime position to benefit.
Lion Battery Technologies
Anglo American Platinum and Platinum Group Metals Ltd have launched a new venture, Lion Battery Technologies Inc, to, they say, accelerate the development of next-generation battery technology using platinum and palladium.
Whilst development is great, the more likely reason is the company wants to create greater demand for the platinum group metals it produces in the battery production space. A bit of a downstream focus as it were.
How's Zimbabwe Involved?
Anglo American Platinum owns Unki Mine. With their other mining ventures in South Africa already meeting current platinum demand levels, Zimbabwean platinum is likely to be used quite substantially in this new venture.
If the project does turn out to be a success and Zimbabwe is powering it all, that would translate to a significant increase in export revenue, employment and a positive outlook on Zimbabwean investments.
Zimbabwe could end up being the world's go to for batteries and with the age of electric cars coming up, who knows how well this could all turn out.
There is a reason why Anglo American Platinum have not put more into Zimbabwean platinum production and probably would not be immediately too keen.
An investment in Zimbabwe is not very safe. There are currency issues, energy issues and the occasional but pretty significant policy change.
Anglo American Platinum will probably not risk banking a new venture on Zimbabwe. Nobody's too excited for a ride on a reversing bus.
Workers everywhere are disgruntled about the value of their salaries amidst heightened inflation. Some have turned to industrial action to force employers (including government) to take action.
Simply increasing salaries is not so easy because the spike on the cost base can be incredibly hard to absorb. Transferring the cost to the consumer is an option but that also compromises sales.
What's To Be Done?
There is no simple solution but some are turning to paying salaries in advance or in periodic installments. Instead of paying monthly; maybe fortnightly or weekly. The effects of inflation aren't erased but they are dampened somewhat.
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