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The gold coin is an investment opportunity to hedge against inflation, store value and diversify risk for medium- to long-term investors, not speculation free for all. In financial markets, arbitrage happens when a market participant makes profits without being exposed to risk. Profit is normally a result of one taking some risk and reward of being a risk taker.

So for arbitrage to happen you need to simultaneously buy and sell the gold coins, resulting in locking entry price and exit price ensuring that the price cannot shift whilst the transaction is being executed. Simultaneously buying and selling an asset ensures there is no risk in price movements, assuming the buyer and seller both honour their obligations. Now coming to gold coins, such arbitrage opportunity does not exist as there is a mandatory holding period of days, in which, you have to hold on to the gold coins once you buy them.

So you cannot buy the gold coins today and sell them next week even if there was a ready buyer. The additional requirements, such as know your customer KYC make speculating and financial gymnastics less likely as the issuing authority can easily trace, who is holding the coins.

This is critical in generating market confidence and market goodwill, which is required to enhance the attractiveness of gold coins as high quality asset desirable for any serious portfolio manager, in addition to the general public, who may have excess liquidity to invest.

The gold coins are ideal for medium to long-term investors, who are seeking to diversify their portfolios and hedge against inflation. The gold coins have prescribed asset status, which means they will be highly sought after by pension funds, insurance and assurance companies.

This means these financial market players now have a wider choice to reach their compliance levels by investing in gold coins. Whilst the amount released is relatively small, what is more important is the idea and concept being introduced by the RBZ. The linking of gold to currency pushes the country towards the Gold Standard. The Gold Standard implies that a currency can be readily exchanged for gold worth the amount of currency involved.

This is exactly what the RBZ has introduced albeit at a very limited scale and without directly announcing it. It goes without saying that the RBZ, ministries of Finance and Economic Development and Mines and Mining Development need to come up with proper sustainable structure to mine and build significant gold reserves as previously most gold was being exported. A currency that is linked to a highly valuable commodity is stable and is expected to outperform just paper money, which is not directly backed by a valuable commodity.

The Russian rouble is a ready example of what happens when a currency is directly linked to a valuable commodity. If the gold coins are released in sufficient quantities on a sustainable basis, then the local currency should stabilise. This will reverse the trend, whereby holders of ZWL flee to the USD safety as there are no other ready acceptable alternatives. If done sustainably and at the correct scale, this effectively means Zimbabwe will be running a Gold Standard currency as opposed to Fiat money, which is effectively paper money backed by nothing much except a promise to pay by the Central Bank.

The RBZ needs to fine tune the mechanics around it such that the market is wide and deep enough to stabilise the local currency. A long road ahead with the usual humps and bumps! The idea behind the Gold Standard is that all the currency issued is backed by actual and real gold stored owned and controlled by the issuing Authority where. The central bank would therefore be limited from printing excess money as it is limited by the amount of gold in its reserves.

This helps to limit and avoid inflation and hyperinflation, which are phenomena driven by excessive money printing beyond the production capacity available.

As a result that currency exchange is closely related to gold as such its value and worth is stable and predictable. This is what the RBZ is pushing towards. It remains to be seen how determined the authorities are to see this vision through. In this piece I will explore how this can be done in the local governance space to position the country on a trajectory of sustainable socio-economic growth and political stability.

Importance of loca lgovernamce Having defined local governance as that sphere of interaction of policies, decisions and actions that happen at the most basic level of social and political organisation, it is also critical to then show its importance within the realm of economic development and social transformation. Ishwor Thapha in an article Local Government: Concept, Roles and Importance for Contemporary Society July , defines local government as a relatively autonomous multi-purpose institution, providing a range of services with tax raising capacity.

Local government is not only important, but imperative to locate local governance in the economic and social evolution of a nation state, especially a developmental state, such as Zimbabwe aspires to be. Local governance is important in the sustainable economic growth and development of any given polity for the following reasons:. It is that sphere of governance that is close to the people.

This is in theory anyway, because geographical proximity may not necessarily translate into actual access. The local government tier or structure provides essential services to citizens on a day-to-day basis or ideally is meant to provide critical services, such as clean water, sewer reticulation, refuse collection, street lighting, roads and other essential services. It is the basis of a thriving democracy as people are able to make decisions about issues that affect their lives on a daily basis.

I would like to argue that in the absence of well-defined local governance architecture, economic growth and social transformation can be stunted. We must as Zimbabweans rethink and reimagine our local governance landscape, correctly positioning it as an enabler of economic growth and development and ultimately a qualitative improvement in the standards of living of ordinary Zimbabweans and indeed corporate citizens.

Assuming that our collective desire as a nation is a country epitomised by sustainable economic growth, development, access to basic services for citizens and increased incomes leading to quality standard of living, it is imperative to then position local governance in this equation. Ease of doing business has been a central tenet in policy-making in Zimbabwe for over 20 years. Ease of doing business facilitates growth of economies through easier access to permits and licences for investors.

Centralisation has inhibited processes and procedures which facilitate ease of doing business and this is largely due to the fact that local tiers of government, such as local government are plagued with a multiplicity of bottlenecks, such as but not limited to:. Our quest for devolution of power to the lower tiers of government namely provincial and local government must take into cognisance that devolution is not an end in itself but a means to an end.

We must rethink or re-imagine why we want devolution and what it will achieve. Section of the Constitution is a great place to start in that it outlines the following devolution imperatives:. To transfer the responsibilities and resources from the national government in order to provide solid provincial economies; and. Indeed, this framework provided by the Constitution is a good place to start in re-imagining devolution as a tool of:.

Giving the powers of local governance to the people. What does this look like? What does this mean? How can we imagine these powers and how will they be manifested in statutes of law?

How will communities manage their own affairs? How will this contribute to economic growth, equity and inclusiveness? A new legal framework has to be thought through and formulated, principally an enabling devolution Act. Also key is aligning other Acts of parliament with the desired decentralised and devolved dispensation.

Rethinking development planning The Traditional Leaders Act and the Rural District Councils Act create a framework for development planning from village to district level. In theory, development planning begins at village level through the village development committees Vidcos , which are chaired by village heads and these plans are then taken to the village assembly, which is a broader space chaired by the village head again.

Village plans then proceed to the ward development committee Wadco , chaired by the councillor before going to the ward assembly, which is chaired by the headman. Ward plans are then taken to the rural district development committee consisting of line ministries, specific councillors and heads of departments before going to the rural district council.

This development process whilst being fairly good needs to be rethought and the following changes roped in:. Village development committees and assemblies should have elected chairpersons.

Once most village heads are male it means virtually almost all Vidcos will be headed by men, which is a clear negation of the leave-no-one-behind principle seeing that women will be excluded. A clear planning template must be provided for village and ward plans. Currently an individual sitting under a tree can draw up a village plan because there is no template. Capacity and roles of Vidcos and Wadcos — a lot of village development committees have become appendages of the ruling party instead of being agents of development.

Videos and Wadcos must be trained on their roles and responsibilities so that they deliver their development role. De-dualisation of rural local governance — traditional leaders and councillors are often at loggerheads in the local development planning process because their respective roles are not well understood.

This is accentuated by the fact that at district level there is a District Development Coordinator, formerly District Administrator and Chief Executive Officer who again clash a lot of times thus affecting local development. However, economic analyst Victor Bhoroma said this does little to help the workers in both the civil service and private sector as disposable incomes were being eroded by inflation.

Economist Alice Chenjerai said revenue enhancement measures were critical as the economy was still recovering from the Covid related stress. She said any such measures, particularly through taxation, must be carefully calibrated to ensure that they do not create any disincentives against investment, consumption and production process.

It means the tax rate is increased in line with the growth rate of nominal GDP. This royalty rate will also apply to the lithium sector. Bhoroma said by reviewing the platinum royalty rate, the government was looking at extra revenue streams in line with regional practices on taxing the extractive sector. Dhlamini said the rebate on equipment for scientific research was welcome given that most tertiary institutions have innovation as part of their core mandate.

Bhoroma said the move would spur scientific research in the country considering the fact that Zimbabwe has very limited investment in research and development. Ncube also provided Vat registered operators with the option to pay duty in foreign currency to facilitate offsetting of output and input tax in the same currency.

According to Bhoroma, this was largely expected because the Treasury is looking at improving its foreign currency coffers and meet core and non-core expenditure.

However, he said, this calls for the government to institute a free market-determined rate on foreign exchange to ensure that businesses are not indirectly taxed due to exchange rate disparities that lead to foreign exchange losses. Dhlamini said this will aid the accounting of transactions for most companies by giving them that particular option.

It makes accounting and reporting on financial statements easier. Economist Justice Dzama said the issue of incorporating the US dollar component in the Vat of retailers would enable the government to collect the US dollar component from the shops without tax evasion.

Our business reporter Tanyaradzwa Nhari TN spoke to Muchanyuka on various issues including the tasks and challenges she faces in her new role. Below are excerpts:. Working for airlines gave me the opportunity to sit in leadership positions of the Tourism Business Council of Zimbabwe TBCZ where I became the president of the organisation.

To break this down, we are faced with the need to promote domestic tourism, increase regional receipts as well as to prioritise Mice meetings, incentives, conferences and exhibitions tourism.

TN: Which areas do you think require immediate attention in the tourism industry? WM: To work with enabling sectors, especially on accessibility. A destination that is not accessible becomes difficult to promote and is less appealing to potential tourists.

It is therefore critical that our road and air networks talk to the needs of tourism for both the local and international visitor. The sector has been recovering well as evidenced by the performance of the first quarter, compared to the last 24 months. There has been significant growth in the domestic market, so naturally this becomes an area of interest and will have our attention.

We will promote the ZimBho campaign. We will also be paying attention to Mice tourism promotion because we believe this is a green field. We are also trying to reposition the destination in the source markets to competitively appeal to the international traveller. This will be a position we seek to consolidate and improve. It is our plan to regain our lost position and surpass it.

In this plan, we have anchored everything on three pillars in order to achieve our set objectives and goals. These are domestic tourism, regional tourism and international tourism. We pay particular attention to domestic tourism development, promotion and culture change. This will help us to increase the earning capacity of the sector which in turn will aid the international receipts. We will use digital marketing as a tool to promote the destination to both local and international tourists.

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