Top economics professor, Tony Hawkins, says its is unlikely that more local companies will disinvest from the country's cash parched and struggling economy.
Vast Resources, a gold miner in the Chegutu area has announced that it has reached an agreement to dispose of its stake in the Pick-stone Peerless gold mine, citing political uncertainties, restrictive exchange control regulations and the introduction of bond notes.
The bond notes, now about $73 million in circulation in the country, are a local currency backed by a $200 million bond from Afreximbank and they have equal value to the United States Dollar.
“We are deleveraging our exposure to Zimbabwe – a decision I believe to be prudent given the prevailing political and economic uncertainties of that country,” said Brian Moritz, Chairman of Vast Resources.
However, Professor Tony Hawkins said although companies are grappling with currency and liquidity issues in Zimbabwe, it was unlikely that more firms would disinvest over the usage of bond notes.
He added that local are more worried about the mismatch between hard cash that is available in the economy and that which is electronically circulating.
“I can’t see companies disinvesting because of bond notes. More and more companies are saying the problem is more to do with the Real Time Gross Settlement (RTGS) accounts (the system that allows individual and corporate account holders to transfer funds across banks inside Zimbabwe).
“There is about $1.2 billion in the RTGS. There is a mismatch in cash in the system and actual cash and that is more of a problem than the bond notes,” Hawkins explained.
The uncertainty has been mounting for mining and other companies in the country, with Zimplats, a unit of South Africa's Impala Platinum, now having about 12 days to object to a plan by the government to take over its land claims.
According to Moritz, proposed new mining taxation to increase the tax receipts by the state from the mining sector and the required forfeiture of base metal and precious metal mining claims to the state supports (de)leveraging the Zimbabwe assets.
Zimplats also disclosed in its December quarter trading update released Tuesday that it has paid about $34 million in “advances to the Reserve Bank of Zimbabwe” although it did not further clarify.
Zimbabwean miners and some industries already advance funds to the state power utility to cover for electricity imports.
Zimbabwe is experiencing acute forex shortages that have threatened sustainable supplies of electricity, medicinal drugs and other key imports.