Zimbabwe says gold-backed currency stable but investor doubts persist
Zimbabwe's gold-backed currency now has more than 100% reserve cover and is stable, according to the central bank, but doubts over its credibility remain, underscored by a persistent premium in the parallel market.
The Reserve Bank of Zimbabwe on Monday kept its benchmark rate unchanged at 35%, citing a stable exchange rate as one of the reasons, and reported total reserves of $701m (R12.63bn). The bank said the portion of transactions carried out using the Zimbabwe Gold (ZiG) currency surged to 43% in May from 26% in April 2024, the month it was introduced.
Decades of economic instability and currency devaluations mean most people still use the US dollar for most purchases. But the authorities are hoping the ZiG's gold backing will give Zimbabweans the confidence to adopt it for everyday transactions.
"ZiG is our national currency, and as the central bank, we are committed to ensuring its success by maintaining all the fundamental characteristics of sound money, including its function as a reliable store of value," Reserve Bank governor John Mushayavanhu wrote in response to Reuters' questions.
"The Reserve Bank has learnt from previous currency failures that maintaining optimum money supply and ensuring monetary stability is vital," he added.
Despite the bank's assurances, the gap between the official exchange rate and parallel market rate remains about 20%.
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IOL News
3 hours ago
- IOL News
Lesetja Kganyago officially installed as Chancellor of Stellenbosch University
Stellenbosch University hosted the official 𝗜𝗻𝘀𝘁𝗮𝗹𝗹𝗮𝘁𝗶𝗼𝗻 𝗼𝗳 Reserve Bank Governor 𝗟𝗲𝘀𝗲𝘁𝗷𝗮 𝗞𝗴𝗮𝗻𝘆𝗮𝗴𝗼 𝗮𝘀 its 𝗖𝗵𝗮𝗻𝗰𝗲𝗹𝗹𝗼𝗿 in the Endler Hall of the university. Image: Ian Landsberg/Independent Media As the rain fell steadily over Stellenbosch on Friday morning, a momentous occasion unfolded within the hallowed halls of Stellenbosch University (SU). The institution proudly celebrated the formal installation of its 16th Chancellor, Lesetja Kganyago, the esteemed Governor of the South African Reserve Bank. This significant ceremony, held in the iconic Endler Hall, was not merely a formality; it was a vibrant testament to the university's rich heritage and its commitment to fostering a future of academic excellence. With stirring musical performances and a grand academic procession, the event encapsulated the spirit of transformation and leadership that Kganyago embodies, as he takes on the mantle of guiding SU through its next chapter of innovation and social responsibility. The ceremony, held in the Endler Hall, unfolded with stately precision, resounding music performances by SU's top musicians and an academic procession in full ceremonial regalia – a visual reminder of the University's rich past and vibrant future. In an impassioned inaugural address in front of dignitaries, senior management and community leaders, Kganyago said he considered it a profound honour to have been chosen to represent SU. 'I accept this role with a deep sense of responsibility, aware of the complex legacy that I inherit and the expectations that lie ahead,' he said. Drawing on the words of his predecessor, Justice Edwin Cameron, Kganyago spoke of the dignity and self-worth that universities instil in their communities. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading He called on the University to continue fostering institutions of 'curiosity, innovation and diversity of thought,' describing South African universities as catalysts for social change and ethical leadership. 'Universities reflect who we are and what we aspire to be,' he said, urging the institution to defend academic freedom and transformation with vigour. He did not shy away from the University's complex history, referencing both its role in apartheid-era South Africa and the ongoing struggle for transformation. Quoting renowned South African poet Antjie Krog, Kganyago cautioned that wounds left unconfronted would 'continue to inflict pain in the future'. He called for the University community to reject racism and resistance to change, insisting that diversity and inclusion are essential to intellectual exploration and justice. Kganyago praised the recent transformation efforts led by former Rector and Vice-Chancellor, Prof Wim de Villiers, pointing to Prof Thuli Madonsela's view that 'transformation is not for the faint-hearted'. Drawing on powerful examples of student-led activism, Kganyago referenced the Save7 initiative, which helped establish the Life Pod transplant support unit at Tygerberg Hospital. He also singled out students like Francisca Darkoh and Caitlin Lee, whose work in food security and prisoner rehabilitation has given life to the University's mission of social responsibility. 'Their work is a powerful example of how student leadership can drive real-world change,' he said. The Chancellor's speech also cast back to 1987, when South African universities protested apartheid-era controls on academic freedom. Kganyago recalled how he joined thousands in resisting state decrees that sought to limit university autonomy, a formative experience that established his view of education as a cornerstone of democracy. 'We must safeguard this freedom and honour it with curiosity, engagement and critical enquiry,' he stressed. As he concluded his address, the audience rose in standing ovation and spontaneous praise-singing, infusing the Endler with energy. Earlier in the afternoon, the formal proceedings were opened by SU's Registrar, Dr Ronel Retief, who welcomed a distinguished audience including members of the Reserve Bank, SARS Commissioner Edward Kieswetter, Stellenbosch Executive Mayor Jeremy Fasser and senior representatives from neighbouring universities. Retief outlined the symbolic and statutory responsibilities of the Chancellor, noting that Kganyago was elected by the University's Electoral College following a public nomination process. 'We thank you for accepting this call to serve,' she said with a big smile. Vice-Chancellor Prof Deresh Ramjugernath praised Kganyago as a leader of 'exceptional courage, wisdom and steadiness', aligning his public service record with the University's institutional values of compassion, accountability and equity. 'At Stellenbosch University, we believe that education must serve a greater purpose: to uplift, to enlighten, and to empower,' he said. 'Chancellor, we are deeply honoured that you have accepted this role. Your wisdom, stature and service-oriented leadership will be a source of inspiration to our students, staff, alumni and partners,' Ramjugernath concluded. Chair of SU's Council, Dr Nicky Newton-King, who led the official investiture, described Kganyago as 'a formidable and thoughtful champion of rigorous analysis and independence'. She also introduced the University's newly designed Chancellor's gown that incorporates the 'Hope' pattern and ceremonial emblem as a symbol of transformation forged in dialogue with students, staff and alumni. Messages of congratulation followed from SU alumna Deputy Minister of Higher Education Dr Mimmy Gondwe, read by Prof Nico Koopman, Vice-Chancellor: Social Impact, Transformation and Personnel. Gondwe praised Kganyago's steadfast leadership under pressure, calling his appointment 'a glowing reference to the University's commitment to excellence and value-based leadership'. She acknowledged the difficult context facing universities – from funding constraints to the disruptive rise of artificial intelligence – and noted the value of Kganyago's experience at a time of national uncertainty. A warm and reflective felicitation from Prof Rudolf Gouws of the Chancellor's Circle confirmed Kganyago's international stature and quiet resolve. Recalling their first meeting more than three decades ago in the ANC's Department of Economic Planning Gouws told Kganyago: 'Ons het 'n lang pad gekom, Lesetja.' ('We've come a long way, Lesetja.') He lauded the new Chancellor's policy clarity and principled resistance to populist pressures. 'We are proud to be associated with you,' he said. 'You have remained steadfast in your defence of the Bank's independence, and the country – and this University – is better for it.' The event closed on a soaring note with the Invitational Choir, conducted by Prof Johan de Villiers, delivering a triumphant rendition of Handel's Hallelujah Chorus from Messiah followed by some more joyous notes from the SU Brass Quintet. SU's Chancellor serves a five-year term and may be re-elected once for a consecutive term.
IOL News
4 hours ago
- IOL News
Denel's turnaround strategy shows promise as it seeks foreign contracts
Denel told Parliament it is looking to secure new revenue streams, improve management, commercial skills, and governance, as well as to source other funding sources. Image: Siphiwe Sibeko / Reuters State-owned manufacturing company Denel told Parliament on Friday that it was making good progress in revenue generation. Briefing the Joint Standing Committee on Defence, CEO Tsepo Monaheng said they were concluding contracts amounting to billions. 'We hope this trend continues. The countries that place orders with us have trust in that Denel has turned the corner. We can't disappoint in terms of non-performance, so performance is critical for us,' Monaheng said. Speaking on the entity's turnaround plan, Monaheng said they have looked at restructuring the business to get cash. 'One of those areas was to ensure we go through Section 189 and have the right people in the business,' he said. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Although he did not go into detail on the retrenchments, the presentation to the committee indicated that Denel has completed the initial Section 189 process and filed critical vacancies. 'Further Section 189 process is going to be initialised,' reads the presentation. Monaheng told the MPs that Denel has lots of debtors and that debt was still a challenge. 'Even when we make money, the creditors take the money, while the banks demand their payments. It makes it difficult for us to execute the turnaround strategy,' he said, adding that their debts were four to five years old. 'When they threaten us with liquidation, we prioritise them. It hampers our progress.' In its presentation, Denel said it was looking to secure new revenue streams, improve management, commercial skills, and governance, as well as to source other funding sources, including the collection of outstanding debtors such as Armscor. Monaheng said they were looking for partnerships in new markets and develop innovative products. 'We are careful who we partner with.' He told the MPs that the sale of non-core assets and shares in associate companies did not materialise. 'We were not able to sell non-core assets, but we have started a process to make sure they are value-creating,' he said, adding that they planned to achieve shareholder control at Rheinmetall Denel Munition and Hensoldt. Monaheng stated that they were reviewing the cost of sales and operating costs as well as implementing cost containment measures. 'We have to spend better and spend on value creation.' On Denel's business performance, Monaheng said in 2015/16, Denel posted R8.4 billion in revenue, but this went down to R1.3 billion in 2021/22. In 2023/24, they were sitting at R1.3 billion with R223 million in profit. Monaheng said their target was to reach the R8 billion and that was possible if they could get more contracts. 'We have to make sure at operational level, the business is profitable. We want to make sure we move to sustainable profitability.' He reported that during the 2023/24 financial year, R1.4 billion orders were placed with Denel, and this increased to R4.3 billion in 2024/25. 'If we continue on this trajectory, we should realise the Denel we want. This is dependent on the happiness of the customers. We are ready to get more orders. We hope to continue on this trend.' Earlier, Monaheng observed that Denel had asked for bailouts, but things have changed. 'If it operates well, it should fund its operations, and that can be achieved through foreign businesses we get because the margins are better.' He also said one of the reasons that Denel collapsed in the past was due to the weak internal controls. 'We are building to make sure that there are no leakages in the business. We do want to make sure we do what we are supposed to do and we are compliant all the times.' Monaheng stated that Denel had operated without leadership, resulting in instability at the entity. 'We have a full team except the CEO of Denel Dynamics.' While MPs welcomed the presentation by Denel, they were concerned about the scant detail in the presentation. ANC MP Tidimalo Legwase wanted to know about its plan to reach the planned revenue targets. Freedom Front Plus' Tammy Breedt said the presentation was of a high level and filled with lots of fluff and a to-do list. 'We don't see how you will address internal control issues that have been an issue,' Breedt said. She also said Monaheng had, in his presentation, stated that Denel started taking a nose dive in 2020 during Covid-19, but the entity was last profitable in 2015/16. 'What was the reason for the initial five years of Denel not being profitable?' Breedt asked. Defence Minister Angie Motshekga said the term of office for the current board of directors was due to expire. 'We are consulting in government structures and the department in a strong Denel board,' Motshekga said. She also said the board chairperson, Gloria Serobe, has handed a letter asking to be released from the company.
The Citizen
7 hours ago
- The Citizen
Denel presents its turnaround strategy to parliament, blames Covid-19 for poor performance
Retrenchments are on the cards for workers at Denel says CEO. The leadership of Denel appeared in front of the joint standing committee on defence. Picture: Reuters Workers at the state arms company Denel could be retrenched as part of the company's latest turnaround strategy. Denel CEO Tsepo Monaheng appeared before parliament on Friday to present his plans to save the ailing company. Since 2019, Denel has received around R10 billion in bailouts from the government. 'We are looking at restructuring the business so that we get cash into the business and one of those areas is to make sure that we go through the Section 189s and have the right people in the business,' he said. Despite Denel's ongoing battles with unions over wages, Monaheng said the company is forced to prioritise paying off its debt. Some of the debt goes as far back as 2019. 'Denel still has a lot of debt even when we make money the creditors take the money and the banks want their money so it makes it difficult for us to execute our turnaround strategy,' he said. He said the company had even considered selling some of its non-core assets to replenish its cash reserves. He said another part of the revenue-generating strategy is to ensure that the company secures more international contracts. 'The countries that are placing orders with us they have trust that Denel has turned a corner and we cannot disappoint by nonperformance, so performance is critical for us.' Monaheng said it is critical for the business to spend money in a justifiable manner as part of the turnaround strategy. 'Denel has incurred a lot of costs and in many cases, it is costs that we cannot even justify. If we had managed our money better at least we would be a break-even business.' He said the company hopes to derive more than 60% of its revenue from international contracts. 'Most of the export contracts if we execute them well the profits are good,' he said. He said another turnaround move is to ensure that customers all over the world trust the products that have been produced by Denel. When was the last time Denel made profit? Monaheng said the last time Denel was profitable was around 2016. 'The problem with loss making is that you are not generating cash so this means you are getting deeper and deeper into trouble because we do not have cash to fund our operations so that is why we had to go ask for money.' Monaheng blamed the Covid pandemic and internal problems for its poor performance over the years. He said the company depends on its foreign contracts which were difficult to obtain during the pandemic. He also pointed out that staffing problems in senior management positions had made accountability difficult. 'The other reason besides Covid that contributed to Denel's collapse in the past few years is the collapse of internal controls. 'So we are fixing that to make sure that there are no leakages in the business and we are doing what we are supposed to be doing at all times,' he said. ALSO READ: Adequate emergency reserves in place for occasional system constraints – Eskom MP's reaction to Denel's presentation Meanwhile, some parliamentarians demanded clarity on when Denel started failing since Monaheng had listed Covid as one of the factors. 'The first presenter said Denel started taking a nose dive in 2020 with Covid and that they have not been able to recover from Covid but it was also said the last time Denel was profitable was the 2015/16 financial year. 'But Covid happened in 2020 not in 2015 so what was the reason for the initial five years of Denel not being profitable?' said the parliamentarian. Wage increases This week workers at the company affiliated to the National Union of Metalworkers of South Africa (Numsa) protested outside the company's offices in Pretoria over the implementation of a past wage agreement They are demanding a 7% salary increase. NOW READ: Victory for Transnet: more cash incoming, union accepts salary increase
