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Harambe:  Zimbabwe Seeks Investors for Dollar-Bond Years After Default | Bloomberg

(9/16/21)

Zimbabwe will seek to raise $200 million in a debut domestic U.S. dollar bond sale on its stock exchange in Victoria Falls that trades exclusively in foreign currency, according to Finance Minister Mthuli Ncube.

“We may have it in small tranches, rather than a single big issuance,” Ncube said Wednesday in an interview from New York, where he is on a roadshow to attract investment into the southern African nation. “We might put it in $30 million tranches of about six issuances.”

Zimbabwe is targeting a yield of 6% to 9% on the bonds, he said on Bloomberg Television. Yield-hungry investors in frontier markets are interested in the offering, the minister said.

Earlier this month, Bloomberg reported that the bond sale would be for $100 million. In August, Ncube said a debt offering could help meet the cost of a $3.5 billion compensation bill the country is facing after it reached an agreement with White farmers evicted from their land two decades ago.

The so-called “Zimbabwe Global Investor Roadshow” has seen Ncube travel to South Africa and Dubai to court foreign investment. In New York, Ncube will also meet with officials from the International Monetary Fund and the World Bank, ahead of an IMF visit to Zimbabwe that’s expected next month.

The government has been building up a track record of repaying its foreign debt by making token payments to creditors, including the Paris Club, Ncube said. The country defaulted on payments to the World Bank, the IMF and other multilateral lenders two decades ago.

Coupon Payments

To reduce investor risk, Ncube said revenue that the government earns in U.S. dollars, such as from mining exports, will be ring-fenced to make coupon payments on the debt.

“We also want to source some insurance to further insure the returns for the investors,” he said.

The IMF is expected to make a decision on a new staff-monitored program for Zimbabwe later this year, according to Ncube. The IMF in February 2020 abruptly ended the program saying it had “gone off track.”

The Victoria Falls Stock Exchange also known as “VFEX” was launched a year ago and last week signed a pact with the United Arab Emirates to possibly establish a gold exchange. Ncube sees the exchange helping “deal with gold smuggling and arbitrage,” as well as advertising Zimbabwe’s mineral resources.

A cryptocurrency listing on the VFEX in future is also a possibility.

“We are trying to figure out how to invest in it as an asset class,” he said. The government has no plans to use crypto as a transaction currency, Ncube added.

https://www.bloomberg.com/news/articles/2021-09-16/defaulter-zimbabwe-courts-investors-with-200-million-bond-sale

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Tishwash:  Economist: Iraq’s annual imports exceed 140 trillion dinars

The economic expert, Nasser Al-Kinani, confirmed, today, Thursday, that the main problem in each budget is the operational budget allocations, while referring to Iraq’s annual imports, according to oil prices currently, in addition to other revenues, which exceed 140 trillion dinars.

Al-Kinani said in an interview with Alsumaria News, “Next year’s budget is still in the government’s inclusion, and it is supposed to recover with the recovery of oil prices globally, given that the price of a barrel of oil currently has reached seventy dollars per barrel compared to the price in the previous budget, which was drawn on the basis of the price of 45 dollars per barrel

Which means that talking about a deficit in it is illogical according to the language of numbers,” noting that “if the price of a barrel of oil is calculated at 70 dollars, this means that the annual income from oil revenues only from crude oil is 72 billion dollars by six billion dollars. A dollar per month according to the monthly export schedules, and it may rise to larger numbers in the event of an increase in oil prices, and it may reach 75 billion dollars, meaning that the oil imports amount to 108 trillion dinars.

Al-Kinani added, “All ministries have revenues in addition to the revenues of border crossings and customs, not to mention other revenues, including oil derivatives from black oil, whose revenues exceed 10 billion dollars annually, white oil, gasoline and kerosene, all of which may exceed fifteen trillion dinars and in total revenues

All other, it may exceed forty trillion dinars annually,” noting that “the problem in every budget is the inflation of salaries, especially for the higher grades and the three presidencies, and the privileges they have for these groups. We have not seen it in any country in the world, in addition to not resolving the outstanding financial issues with a region Kurdistan And what is related to oil exports from the region and customs imports and ports there

And press statements indicated that the initial price of a barrel of oil in the next budget is 50 dollars, subject to increase and decrease, and that the total amount of the budget is not definitively estimated, but does not exceed 120 to 140 trillion dinars, which is a large number, and the deficit ratio will not be less than the 20 percent based on the supply of requests and expected revenues in the best case.   link

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Tishwash:  Al-Alusi’s example: The government can request the return of US forces if the security situation deteriorates after their withdrawal

The politician Mithal Al-Alusi confirmed: “The Iraqi government can request the return of US forces, if the security situation deteriorates after their scheduled withdrawal at the end of this year.”

Al-Alusi said in a statement to the National Iraqi News Agency ( NINA ): “The Iraqi government has the right to submit a request to summon US forces after their withdrawal, if the security situation deteriorates.”

He added, “The return request is linked to the independence of the executive government decision, political and security, free from any internal domination linked to external parties.”

He explained that: “After the US withdrawal from Afghanistan and the possibility of an Iranian-American agreement on the nuclear file, the region has become a strategic void.”

The United States of America is scheduled to end the withdrawal of its combat forces from Iraq at the end of this year  link

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