• Mukuru to drive adoption of digital financial solutions with support of its extensive booth and agent network
• DTMFI license to amplify Reserve Bank of Zimbabwe’s Financial Inclusion Strategy
• Cost reduction benefits to be felt by SMEs, women, youth and rural communities

Next-generation financial services provider Mukuru has been awarded a Deposit-Taking Microfinance Institution (DTMFI) licence in Zimbabwe.

This important achievement enables Mukuru to expand on its mission of driving financial inclusion in the country, especially among underserved groups such as SMEs, people with disabilities, women, youth and rural communities.

Andy Jury, Mukuru’s Group CEO, says being awarded the DTMFI licence is a significant milestone for Mukuru because its mission aligns perfectly with Zimbabwe’s National Financial Inclusion Strategy, which is spearheaded by the Reserve Bank of Zimbabwe.

“We are excited to leverage our extensive network and digital capabilities to further empower underserved communities – particularly SMEs, women, youth, people with disabilities and rural populations – and drive greater financial inclusion across the country,” says Jury.

Jury says Mukuru is uniquely positioned to bridge the gaps between formal and informal financial services in Zimbabwe by unlocking new economic opportunities through the provision of innovative financial products that enable people to send, store, spend and potentially borrow with ease.

“Relevant financial inclusion depends on the uptake of products and services. To this end, Mukuru’s trusted brand and reputation as a reliable financial services provider is expected to support the building of customer trust and drive the adoption of digital offerings,” explains Jury.

Financial inclusion in Zimbabwe is at its lowest in rural areas, where 63% of the population lives. Mukuru, which has been part of Zimbabwe’s financial services landscape for the past 20 years, serves over three million loyal customers.

Its trusted and extensive network, with digital capabilities, has 250 owned access points, with 40% of these in rural areas. In addition to this, it has more than 500 partner access points available across the country.

Mukuru Zimbabwe Financial Services CEO Doug Tait-Knight says meaningful financial inclusion uplifts communities by enabling them to access financial services and enter the mainstream economy.

“DTMFI service offerings cut out travel costs and enhance secure and inclusive practices as money does not need to be collected. Currently, more than 90% of people who receive remittances cash them out and so we are well-positioned now to help them along their digital financial inclusion journeys. Our DTMFI licence will enable us to deliver innovative digital solutions that address the specific needs of our customers, from those in wheelchairs who struggle to access cash from ATMS, to small business owners seeking to grow their enterprises. We are delighted that our strategy aligns with the national financial inclusion strategy,” he says.

Introduction

Unleashing the economic potential of any nation requires unwavering commitment and a clear vision. However, Africa, a diverse continent abundant in resources and human capital, faces numerous challenges that impede its development and progress.

Political unrest, corruption, poverty, human rights violations, and economic instability cast a dark shadow over many African nations, intertwining to create pervasive challenges that foster instability, hamper development efforts, and uproot countless lives.

These claims are supported by numerous studies, reports, and data. Indices such as the Ibrahim Index of African Governance and the Global Corruption Barometer by Transparency International shed light on governance and corruption levels, revealing systemic issues that contribute to overall distress. Reports from esteemed international organizations like the United Nations and the World Bank offer in-depth analysis, highlighting the multidimensional nature of the problems, including the impact of political instability and human rights violations on societal well-being.

To gain a clearer understanding of the economic challenges faced by African nations, we can look at the 2022 Hanke’s Annual Misery Index. This index provides insight into the economic hardships experienced by countries by considering various indicators. It is a composite measure that takes into account the year-end unemployment rate (multiplied by two), inflation rate, bank-lending rates, and the annual percentage change in real GDP per capita. The index combines these elements to yield the Hanke’s Annual Misery Index (HAMI) score, with higher scores indicating greater economic misery.

According to the 2022 HAMI scores, several African countries ranked among the 50 most severely afflicted nations. Zimbabwe claimed the unfortunate title of the world’s most miserable country with a score of 414.7, followed by Sudan (176.1) and Angola (93.518). Other countries on the list included Ghana (86.8), South Africa (83.492), Rwanda (69.192), Botswana (64.023), Madagascar (63.6), Malawi (63.5), Eswatini (63.1), Gabon (62.4), Sao Tome and Principe (62.3), Congo (Brazzaville) (61.5), Ethiopia (61), Libya (60.3), Namibia (55.7), Lesotho (51.6), Algeria (50.2), Nigeria (47.2), Tunisia (46.905), and Mauritania (45.4). These nations confront profound challenges and overwhelming hardships, with their misery index scores reflecting the weight of inflation, unemployment, and burdensome lending rates.

The consequences of these elevated misery index scores extend widely within the affected countries. Scarce resources that could otherwise be invested in infrastructure, education, and healthcare are diverted towards addressing immediate needs, impeding long-term development efforts. Additionally, political instability and human rights abuses erode social cohesion, intensify societal divisions, and constrain opportunities for dialogue and progress. Also, the displacement of millions of people places added strain on already fragile systems, burdening host communities and affecting regional stability.

Furthermore, these consequences transcend national boundaries. The high misery index scores contribute to a negative portrayal of the continent, potentially dissuading foreign investment and impeding economic cooperation. Consequently, the perpetuation of stagnation and economic hardships fosters a cycle of poverty, constraining opportunities for future generations and impeding the achievement of sustainable development goals.

Addressing the complex challenges facing Africa necessitates a comprehensive approach involving good governance, anti-corruption measures, poverty reduction strategies, human rights protection, economic stability, regional cooperation, and technological innovation.

By confronting political unrest, corruption, poverty, and economic instability while drawing inspiration from successful models, African nations can pave the path toward sustainable economic development, social stability, and improved livelihoods.

The following sections will delve deeper into each challenge, exploring their root causes, examining their implications, and discussing potential strategies and solutions.

By recognizing and understanding the hurdles faced by African nations, we can foster informed discussions and contribute to the formulation of effective policies that foster inclusive growth, shared prosperity, and the safeguarding of human rights, thereby transforming Africa’s economic landscape.

Economic Challenges in African Countries

The economic challenges faced by African countries are a matter of concern, with various nations experiencing significant difficulties. This section explores the economic struggles of Zimbabwe, Sudan, Angola, Ghana, and other African nations, shedding light on their specific challenges and rankings on the Misery Index.

This index, developed by Steve Hanke, a professor of applied economics at Johns Hopkins University, takes into account both the economic performance and the socioeconomic conditions of countries’ populations.

Additionally, it highlights the contrast between countries facing misery and those achieving greater happiness, underscoring the uneven progress across the continent.

1. Zimbabwe’s economic challenges and unfortunate ranking

Zimbabwe’s economic challenges have led to an unfortunate ranking as the most miserable country in the world for the second consecutive year, according to the 2022 Hanke’s Annual Misery Index.

Several factors contribute to this ranking, notably the country’s staggering inflation rate, which reached 243.8% in 2022. Such high inflation erodes the value of the local currency, making it increasingly challenging for individuals to afford basic necessities and maintain a stable standard of living.

Moreover, Zimbabwe faces the hurdle of high lending rates, standing at 131.8%. These elevated borrowing costs make it difficult for businesses and individuals to access affordable credit, hindering investment and impeding economic growth. The lack of adequate financing opportunities stunts the economy’s expansion, resulting in stagnant development.

Trade integration, or rather the lack thereof, is another critical aspect impacting Zimbabwe’s economic situation. The decline in trade integration has restricted the country’s ability to acquire new technologies and attract investment. Trade integration plays a vital role in facilitating the sharing of knowledge, resources, and innovation among countries, which significantly contributes to economic growth. Without this avenue for collaboration and access to new opportunities, Zimbabwe finds it challenging to develop and improve its economic prospects.

The burden of debt and arrears to international financial institutions (IFIs) further exacerbates Zimbabwe’s challenges.

The country’s substantial level of debt, coupled with its inability to make timely payments to IFIs, hampers its capacity for investment and development. Instead of directing resources towards productive sectors and infrastructure, Zimbabwe must allocate a significant portion of its income to debt repayments. Furthermore, the accumulation of arrears makes it increasingly difficult for the country to obtain new loans, thereby limiting its potential for growth.

Consequently, a considerable portion of the Zimbabwean population is grappling with severe financial difficulties, struggling to meet their basic needs.

The combination of high inflation, exorbitant lending rates, limited trade integration, and a significant debt burden has created a challenging environment for individuals and businesses alike. Addressing these issues through effective economic policies and reforms becomes crucial to alleviate the financial hardships faced by Zimbabweans and foster sustainable development.

2. Sudan’s Economic Challenges and Political Instability

Sudan has been grappling with a range of significant economic challenges that have had a substantial impact on the country. One of the primary concerns is the soaring inflation rate, which reached a peak of 220.71% in April 2022.

However, according to projections by the African Development Bank, there is hope for improvement, with inflation expected to moderate to 83.2% in 2023 and further decrease to 75.5% in 2024.

Simultaneously, Sudan has witnessed a rise in the poverty rate, which reached 66.1% in 2022. This increase is partly attributed to the high unemployment rate of 20.6% during the same year. The economic hardships faced by the Sudanese population are further exacerbated by political instability.

In addition to these challenges, Sudan has been grappling with an ongoing armed conflict since 2011. This protracted conflict has resulted in significant human casualties, with over 500 lives lost, and has displaced more than 1 million individuals.

Furthermore, Sudan is confronted with environmental challenges, including land degradation, temperature increases, droughts, floods, erratic rainfall, and locust invasions. These environmental factors have had a detrimental impact on agricultural output, impeded GDP growth, and destroyed livelihoods.

Despite these formidable challenges, Sudan boasts abundant natural resources, such as arable land, livestock, and minerals. However, the full utilization of these resources has been hindered by financing deficiencies.

Effectively addressing the economic challenges faced by Sudan and overcoming political instability are pivotal steps towards improving the country’s economic prospects and enhancing the well-being of its citizens.

3. Economic Challenges in Angola, Ghana, and Other African Nations

The 2022 HAMI rankings provide insights into the economic challenges faced by Angola, Ghana, and several other African countries. Angola is ranked 13th with a HAMI score of 93.518, struggling with a high unemployment rate of 29.6%, an inflation rate of 13.9%, and a bank lending rate of 20.118%. Similarly, Ghana holds the 15th position on the Misery Index, burdened by an alarming inflation rate of 54.1% and achieving an index score of 86.8.

These challenges are not unique to Angola and Ghana. Many other African nations also grapple with significant economic hurdles. South Africa, positioned 16th on the Misery Index, records an index score of 83.492 primarily due to high unemployment rates. Rwanda, ranked 20th, achieves a score of 69.192 with inflation being a major contributing factor. Botswana, at the 21st spot, has an index score of 64.023 mainly influenced by elevated unemployment rates.

Moreover, countries such as Madagascar, Malawi, Eswatini, Gabon, Sao Tome and Principe, Congo (Brazzaville), Ethiopia, Libya, Namibia, Lesotho, Algeria, Nigeria, Tunisia, and Mauritania also face economic difficulties characterized by high unemployment rates, inflation, or lending rates.

The HAMI rankings shed light on the economic challenges experienced by various African countries, highlighting the need for targeted measures to address unemployment, inflation, and lending rates. It is crucial to alleviate the hardships endured by their populations. The situations in Zimbabwe, Sudan, Niger, Togo, and other African nations serve as poignant reminders of the urgent need to tackle economic instability and implement effective policies across the continent.

Recognizing the profound impact of high inflation rates, unemployment, and other economic challenges on individuals’ well-being, it becomes imperative to prioritize sustainable development, job creation, and economic reforms. These steps are crucial for uplifting the lives of African citizens and ensuring a brighter and more prosperous future for all.

4. Contrasting Happiness and Economic Struggles in Africa

It is indeed disconcerting to observe that four African countries—Zimbabwe, Sudan, Angola, and Ghana—are ranked among the top fifteen “most miserable” countries. However, it is worth noting the significant contrast that exists within the African continent. As evidenced by the 2022 HAMI, Niger and Togo were among the top ten “happiest” countries.

This striking disparity highlights the uneven progress made by different African nations in their pursuit of greater happiness and well-being. While some countries have made strides towards improving their conditions, many others continue to face substantial economic challenges, leading to a state of ongoing misery.

The varying experiences of African countries in terms of happiness and well-being underscore the need for concerted efforts to address the underlying economic factors that contribute to misery. By identifying and tackling these challenges head-on, African nations can work towards creating more equitable and prosperous societies for their citizens.

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The new rates took effect on 19th of May 2022.

Below are the old and new tariffs respectively, according to this report are:

New tariffs:

Old Tariffs:

Pindula News had earlier reported the plan by Econet to increase its tariff after issuing statements to the customers.

Dear Customer,

Please note, we will review our Voice, Data & SMS bundle prices effective, Thursday 19 May, 2022.

To access Voice & Data bundles dial *143#

To access SMS bundles dial *140#

Visit www.econet.co.zw/services/bundles for more information.

*All other prices remain unchanged.

In Nigeria, Mobile Network Operators (MNOs) have also asked the industry regulator – the Nigerian Communications Commission (NCC) – to approve a 40 per cent increase in the cost of calls, SMS and data.

The operators under the umbrella – The Association of Licensed Telecommunication Operators of Nigeria (ALTON) –  said the telecommunication companies based their request for 40 per cent hike on tariffs for data and calls on the rising operational costs in the country.

ALTON in a letter to the Nigeria Communication Commission (NCC), titled ‘Impact of the Economic and Security Issues on the Telecommunications Sector,’ said the decision to hike charges was based on an increase in energy costs, which has raised their operating expenses by 35 per cent.

Their proposal means the price cap on phone calls will increase from N6.4 to N8.95, while SMS costs will also increase from N4 to N5.61 (READ MORE HERE).