EXPERTS CALL FOR WIDER USE OF RAND: Page 3 $6

News Worth Knowing Thriving citrus farm under siege: Page 3

June 13-19 2019 ESTABLISHED 1969 @ FingazLive www.fi ngaz.co.zw Facebook: The Financial Gazette

ZSE Report The All Share index gained 1,01 percent on Tuesday to close at ‘Currency 191,65 points. Old Mutual add- ed $0,5874 to close at $13,9864, Padenga increased by $0,0953 to close at $1,8953 and Innscor rose by $0,0571, closing at $2,3571. Delta also added $0,0353 to $3,6266. The Industrial Index was up 0,98 percent to close at 639,54 points while the Top 10 tinkering Index gained 1,41 percent to close at 184,01 points. The Min- ings Index gained 2,44 percent to close 248,51.

Currencies (Bloomberg) % change ◀ USD:ZAR 14,7602 0,63 EUR:USD 1,1323 0,03 ◀ GBP:USD 1,2755 0,24 USD: JPY 108,3900 0,12 won’t help ◀ Stock Markets ◀◀◀ ZSE (All Share) 191,65 1,01 ZSE (Minings) 248,51 2,44 14,484,00 0,11 JSE ◀◀ FTSE 100 7 339,95 0,79 ◀ 0,05 Dow 26 048,51

Commodities ◀ Gold 1 334,00 0,54 ◀ economy’ Platinum 813,14 0,27 2,47

Brent Oil 60,75 ◀ Paul Nyakazeya government to contemplate introducing a new

Grains (Grain SA) ◀ Group Digital Editor currency. White Maize ZAR 2 466,14 2.2 “Currencies work when there is confi dence, Soya ZAR 4 625,03 ◀ 0.6 ◀ HE government’s continued currency which is very low at present. It is like shares on Wheat ZAR 2 788,37 1.4 twiddling and push for a new legal ten- the stock market. For a counter to have value, Tder will not solve Zimbabwe’s deepen- it has to be backed by fundamentals that are ing economic woes, analysts have warned. consistent and point to a brighter and predict- No change in exchange This comes as President Emmerson Mnan- able future,” he said. gagwa has made a surprise announcement that He also noted that the multi-currency sys- rate policy: Nigeria the country would have a fresh currency by tem, which was adopted in 2009 to — in part NIGERIA’S central bank said year end — a declaration which saw the re- — contain infl ation, had failed to achieve that it made no change to its cur- cently-introduced RTGS dollar taking a beat- objective. rency and naira policies, after ing on both the formal and parallel markets. “Infl ation has continued to increase and it is a revision on its website led Confusingly too, Finance minister Mthuli being driven by the exchange rate. Against this some analysts to speculate Ncube had recently told Parliament that he had background, if there is nothing to back the new that it was ending a system of been misquoted regarding Zimbabwe’s plans currency, the parallel market will continue to multiple exchange rates. to introduce new money by end-2019 — high- thrive,” he added. “Nothing has changed in lighting the damaging policy fl ip-fl ops that Veteran economist John Robertson said Nigeria’s exchange rate struc- continue to dog the country’s “new dispensa- without serious foreign currency reserves, ture,” and the naira’s value tion”. Mnangagwa’s planned new currency would RICHMOND Furniture managing director Henry Ruzvidzo continues to be determined Economic experts who spoke to The Finan- not be “stable enough” to solve Zimbabwe’s takes over the helm of the Confederation of Zimbabwe Industries by trading in the Investors’ cial Gazette this week said instead of fi ddling problems. (CZI) at a time the organisation has warned of a gloomy econom- & Exporters’ FX Window, with the currency, what the country needed “We need to fi rst restore agriculture to pro- ic outlook for 2019, and also projected that industry capacity Isaac Okorafor, a spokesman badly were far-reaching structural reforms. duce all our food requirements. Having to im- utilisation will decline to 34,3 percent this year from 48,2 percent for the Abuja-based institu- recorded in November last year, as the business environment con- Batanai Matsika, research head at Mor- port most of our food for the last 20 years did tion, said in a text message. tinues to deteriorate. Picture by Freedom Mashava gan and Co, also said it was too early for the To Page 2 – Bloomberg Page 2 | June 13-19 2019 The Financial Gazette National News ‘Currency tinkering won’t help economy’

From Page 1 would stampede into a sell-off of the new unit, in most of the damage to our balance of payments a bid to preserve value through other currencies and our currency,” he said. and assets. Robertson also argued that foreign direct in- “The fiscal excesses, compounded by a cen- vestment would also continue to be low because tral bank whose footprint is too big … have been of the lack of a “clear and transparent exchange the major sources of instability in the market and rate” to fairly price the American dollar — given as long as they are not addressed, the new cur- that the local unit was not tradable elsewhere in rency will suffer the same fate as other (notes) the world. before it,” he said. “The market will not be impressed if a new And equities analyst Ranga Makwata also currency is not well supported by production said the talk of a new currency would worsen volumes. So, support has to come from strong the public’s confidence loss, and likely result in investment into farming and manufacturing, many people choosing to convert their holdings which means that government has to dramatical- to United States dollars and other assets like eq- ly improve our investment environment. At pres- uities. ent, it is one of the worst in the world,” he added. “There's so much policy inconsistency, which As a result, many experts say, Zimbabweans is feeding the confidence loss and that needs to are likely to continue rushing for the greenback be addressed to stabilise the economy, and cur- and other currencies to hedge themselves against rency,” he said. the vagaries of a local currency. “We need investment in areas that generate Brains Muchemwa, another economist, foreign currency and import-substitution sectors Arthur Mutambara was among those who believed that the market to improve availability of forex in the country,” Alex Magaisa Makwata said. “As long as we remain import-dependant, demand will remain high and the local currency will continue losing val- ue with inflationary results,” he added. But economist and former opposition kingpin Eddie Cross held a different view. “It has been a part of Ncube’s intentions from day one to introduce a local currency. It is designed to give people a reliable means of exchange,” he said. “The main policy platforms to support the currency are in place. I think the current spike in inflation and exchange rates will be short-lived,” Cross told The Financial Gazette. The plans for a new currency come as debate on the need for Zimbabwe to make greater use of the South Afri- can rand to stabilise prices and the economy — at least in the short to medium term — has re-emerged. However, it has been evident that the authorities are highly reluctant to go that route, as they deceptively argue that this would involve many technicalities, including join- ing the Rand Monetary Union. Government insiders say authorities are keen on intro- ducing a new currency, mostly on political grounds, and to give them control over monetary policy decisions — a coveted privilege that was lost nearly 10 years ago. But Arthur Mutambara, a former deputy prime minister in the short-lived coalition government, said before a new currency could be introduced, four fundamentals needed to be addressed urgently. “There is need for confidence in the system. There should be reserves to back the currency. The government should also cut down on expenditure ... fiscal consolidation is very important and the other important thing is produc- tivity,” he said. On his part, lawyer Alex Magaisa has said that while the government claims to have allowed the market to deter- mine rates through the interbank market, it has not loosened its grip on trade — which partly explained why the parallel market remained vibrant. “The government is confused as to the direction … to follow over the economy. The minister (of Finance) … is a pro-market man. He long explained his dislike of the surro- gate currency,” he said. “However, the party that he serves (Zanu PF) has other ideas. It has never been comfortable with losing control. Resources must be directed by the State purportedly for the public good, but really for the benefit of the privileged elite,” Magaisa said. [email protected] The Financial Gazette June 13-19 2019 | Page 3 National News Simbisa wins Top Companies award Calls for wider Paul Nyakazeya James Musoni, who was the guest of hon- Group Digital Editor our at the event, said the prestigious Top Companies Survey “promotes a culture of FAST food chain Simbisa Brands (Simbisa) competition and efficiency”. use of rand grow last week won the Top Companies Survey “The economic challenges and sanc- Nelson Gahadza big concern,” he said. negatively affected compet- 2019 award for best performing Zimbabwe tions imposed on Zimbabwe cause threats Business Reporter On the other hand, itiveness,” the think-tank Stock Exchange-listed company. and setbacks but they also present opportu- economist Persistence said in a research note. The survey, held under the theme “Re- nities for the private sector to think outside RESIDENT Emmer- Gwanyanya said it has been Finance minister Mthuli ality Check ― Adapting to a New Normal’ the box and produce more locally made son Mnangagwa’s government's thrust to pro- Ncube recently said govern- ― was hosted by The Financial Gazette goods. A culture of self-reliance should be government should mote the wider use of the ment is now focusing on the and sponsored by financial services giant created and sustained,” he said. P Old Mutual Zimbabwe. The envoy said the country should encourage the wider use of rand, but this has proved dif- road map to introducing a OK Zimbabwe, the country’s largest re- “continue to fight corruption and imple- the rand as part of strategies ficult due to the preference local currency and contin- tailer, was the first runner-up, while pan Af- ment policies that improve the ease of do- to stabilise the economy, ex- of the US dollar. ued use of foreign currency, rican seed company, SeedCo ― which also ing business” in Zimbabwe. perts have said. “This is happening not in particular the rand, will won the environmental and social responsi- “Corruption is a continuous fight which Zimbabwe, which only in Zimbabwe, but in defeat the purpose. bility award ― was the second runner-up. requires everybody,” he said. scrapped its currency in many countries in the re- “The rand, just like the Ecobank was capped the best bank Pilate Machadu, Modus Media ― the 2009 and only reintroduced gion, the US dollar domi- US dollar, is foreign curren- while Standard Chartered was the second publishers of The Financial Gazette ― it in February this year, uses nates against all other cur- cy. What we need is a local runner- up. chief executive, added: “The Top Com- a multi-currency system that rencies,” he said, adding that currency that will allow us Econet Wireless Zimbabwe’s EcoSure panies Survey promotes good corporate is dominated by the Amer- Emmerson Mnangagwa government’s decision to to be competitive,” he said. won the life insurance segment top award, governance, ethical conduct and corporate ican dollar, followed by Refineries managing direc- bring back a local currency He added that joining with CBZ Life coming second, while Zim- social responsibility, while providing a neighbouring South Africa tor, has also said Zimbabwe would help to do away with the Rand Monetary Union nat scooped the short term insurance award. platform for networking among industry (SA)’s rand. should encourage “the wid- the multi-currency system. has never been under con- Simbisa has consistently been among captains and business leaders”. With Mnangagwa prom- er circulation of the South “Even if we promote sideration. the top-performing companies in Zimba- Kennedy Mandevani, Old Mutual In- ising yet another local cur- African currency under the the wider circulation of However, Eddie Cross, bwe over the past two years and a top pick vestment Group’s chairman, concurred rency later this year on the multi-currency system, as the rand, it does not take an economist, highlighted on the local bourse. saying the survey “provides convenient back of massive price hikes, it is likely to bring pricing away the fact that we are that adopting the rand will The company recorded a $16,5 mil- insights into the country’s leading compa- economic analysts believe stability”. using a foreign currency,” not help the situation as lion profit after tax in the half-year ended nies’ business operations”. the rand ― as SA is Zimba- Another economist, Ant- Gwanyanya said. there is no flexibility to even December 31, 2018, up from $7,9 million Simbiso Musa, chairperson of the bwe’s largest trading partner United Kingdom-based invoice in rands. recorded in the previous corresponding pe- judging panel, said during the period un- ony Hawkins, added: “Wid- ― could be an answer to er circulation of the rand financial services firm Fitch “We need flexibility to riod, despite the tough trading environment. der review, companies were faced with Zimbabwe’s rising inflation Solutions recently advised invoice in rands, but a lot of Its revenue for the period under review a host of new challenges, which resulted will reflect the devaluation and crippling cash crisis. of the local currency and the government to join the people have already rejected increased 44 percent to $143,2 million, in them slowing down and aligning to the “Looking at the structure Rand Monetary Union to the rand, making it difficult with 40 percent of the growth coming from new reality. with the authorities pushing of our economy and trade for a local currency, I do not deal with the worsening cur- to adopt it,” he said. existing stores, while the rest came from 20 “Other matrix had to be introduced figures over the past two de- rency crisis. [email protected] new stores opened during the half year. during the judging, while others were see them encouraging usage cades, it makes more sense of the rand.” “A major advantage The group’s operating profit was up 82 phased out. We looked at consistent and and practical for Zimbabwe of this system would be percent to $27,4 million, while profit attrib- a positive financial position, sustainability He said what govern- to adopt the rand,” said ment should be clear on is that Zimbabwe’s currency utable to the owners of Simbisa increased of business model, healthy financial posi- Batanai Matsika, head of would track that of its main 99 percent to $16,2 million. tion and tangible returns to investors,” she what will happen to nostro Research at Morgan and Co. trading partners, which The best disclosure and investor rela- said. balances when it introduces “It is more feasible than would improve Zimbabwe- tions award was won by Delta Corporation. Judges and analysts ― independent of the local currency. to introduce a new currency an businesses’ competi- Crocodile skin producer Padenga Hold- both The Financial Gazette and Old Mutu- “Those with nostro ings won the best investor relations award, al Zimbabwe ― came up with the judging under the prevailing eco- funds are worried about tiveness. Indeed, the broad while the special mention award went to criteria and categories for the top awards. nomic environment,” he what exchange rate will be strength of the US dollar hospitality group, African Sun Limited. [email protected] added. used or if they will be forced against the South African Rwanda’s ambassador to Zimbabwe, See also pictures on Pages 26 Busisa Moyo, the United to close the nostros, this is a rand over recent years has Thriving US$6m citrus farm under siege

Tabitha Mutenga Chitando and Agriculture minister Perrance Shiri. Available information also shows that Smithfield has 450 Features editor “Regardless of whether the miners have valid mining hectares of food crops, including maize, potatoes, soya and rights ... the mining is taking place without the landowners’ wheat under irrigation, which combined or rotational activi- ZIMBABWEAN citrus exporter, Pellier Enterprises consent and is a violation of the Mines and Minerals Act,” he ties translate into a US$6 million annual turnover. (Pellier), has petitioned the government after its thriv- said, adding “the property constitutes land that has been well And as the nation awaits to feel the full extent of the Aing Smithfield Farm (Smithfield) lemon plantations prepared for permanent crops and miners cannot operate on Mashonaland Central fiasco, the toxic occupation of Pellier’s in Mazowe were invaded by a group of marauding artisanal farm holdings that have been cleared for cultivation, espe- property also comes as the Harare government has barely miners, documents show. cially without the owner or president’s written approval in survived the effects of the Gaika Mine debacle and reckless This comes as President Emmerson Mnangagwa’s gov- respect of state land”. actions. ernment has been desperate to project an image of a property While the country’s laws ― and specifically mining pol- In that violent incident, scores of Zanu PF youths, and rights-respecting administration and that land invasions were icy ― favour sitting tenants or owners over mining rights, bigwigs had forcibly taken over the China Africa Investment a thing of the past, as part of its re-engagement efforts with Pellier says it was pleading for “urgent interventions to stop and Duration Gold-owned mine, in a development that has the West. this wanton destruction and irreversible harm to the planta- severely damaged the country as a safe investment destina- “This orchard is the only significant lemon (plantation) tions, and by extension to the economy, which was happen- tion. left in Zimbabwe with export-earning capacity... and destruc- ing at a rapid rate”. The Pellier incident also comes as Mnangagwa’s admin- tion of the orchard is a travesty as significant investment has With the ceaseless disruptions having started some 14 istration has been desperate to shake off the ghost or bad-boy been made, and it will take more than three years for new months ago, a staggering 50 hectares ― of the 752 ha mixed image of Robert Mugabe’s legacy, which was spawned by trees to bear fruit,” Lovejoy Bamala, Pellier’s director, said use farming enterprise and worth US$500 000 ― have been ruinous farm invasions in 2000. in a May 30 letter to Mnangagwa, Mines minister Winston plundered by the rag-tag army of fortune seekers. [email protected] Page 4 | June 13-19 2019 The Financial Gazette National News Powertel reviews funding model ZSE drives Shame Makoshori straints,” he said. Wireless. Companies Editor Vendor financing is the lending of In 2018, Powertel invested in projects money by a vendor to a customer who to increase network capacity, improve net- non-life assets OWERTEL Communications says it then uses it to buy the vendor's inventory work coverage and opening up new mar- has reviewed the funding model for or services. Sometimes called trade cred- kets. Adelaide Moyo its key project in order to deal with it, such financing usually takes the form “The business opened a new market in P Business Reporter the tight foreign currency situation con- of deferred loans from the vendor. It may Chegutu through deployment of metro- fronting the Zimbabwean market. also include a transfer of shares of the bor- politan distribution and access optic fibre OSITIVE performance on the Zimbabwe Stock Patrick Chivaura, the state-owned tele- rowing company to the vendor. network. The planned backbone network Exchange (ZSE) has seen non-life insurance com- communications firm chairman, said Pow- Vendor financing is most common projects were not implemented due to un- panies increasing their asset base by 25 percent ertel invested a total of US$0,7 million in when a vendor sees a higher value in a availability of loan funding. The planned P to $350,64 million in the quarter ended December 31, capital projects mainly in relation to virtu- customer's business and business relation- CDMA to LTE upgrade of the wireless ac- 2018, latest figures show. al private network (VPN) projects. How- ship than a traditional lending institution cess network could not be undertaken due The Insurance and Pensions Commission (IPEC) ever, plans to upgrade its code division does. Such loans carry a higher interest to foreign currency shortages,” he said. said assets of non-life insurers remained fairly distrib- multiple access (CDMA) system to long rate than what a borrower would normally Powertel’s revenue increased by three uted across the investment classes through equities and term evolution (LTE) were being frustrat- find at a bank. percent to $25,8 million in the full year premium debtors, which were the major contributors to ed by the currency crisis. Chivaura said Powertel will be focus- to December 2018, from $25,1 million the non-life insurance total assets “The company managed to award ten- ing on implementing the DWDM and LTE during the same period in 2017. The com- “Largely buoyed by the positive movements on the ders for the dense wavelength division projects to enhance capacity to match pany reported a $263 000 profit during the stock market, total assets for non-life insurers grew multiplexing (DWDM) project and the competition in a sector that is dominat- period, up from a $3 million loss during from $279,72 million as at December 31, 2017 to the LTE project based on the vendor-financing ed by several big players, including the the same period in 2017. current $350,64 million. Insurers are required to abide model in order to alleviate funding con- Zimbabwe Stock Exchange-listed Econet [email protected] by our investment guidelines in order to sustain their capacity to liquidate their contractual obligations on time,” IPEC said. The commission said the increase in total assets was mainly due to a surge in equities and premium debtors that grew by $29,82 million and $19,30 million respec- tively. Premium debtors increased to $56,14 million for the 12 months ended December 31, 2018 compared to $36,84 million re- ported in the previous “Only eight of the 20 non- year. life insurers were com- IPEC said the in- pliant with the minimum crease in premium prescribed assets ratio. debtors mainly arose The commission engaged from perceived in- the non-compliant play- creases in premium ers to submit compliance rates on the backdrop plans.” of temporary challeng- es on the operating and ― IPEC economic environment, especially the multi-tier pricing systems. This usually gives rise to challenges in premium re- mission or payment by the insuring public. Investments in prescribed assets declined by 5,02 percent to $21,09 million as at December 31, 2018 from $22,21 million as at September 30, 2018. “Only eight of the 20 non-life insurers were compli- ant with the minimum prescribed assets ratio. The com- mission engaged the non-compliant players to submit compliance plans,” IPEC said. The regulator noted that 17 out of 20 insurers were compliant with the minimum capital level of $2,5 mil- lion during the review period. It said compliance with minimum capital levels is a critical solvency indicator for players as it provides additional cushion to policyholder funds. Data from IPEC indicates that total gross premi- um written (GPW) by non-life insurers amounted to $277,35 million last year, a 17,29 percent increase from $236,47 million reported in the comparative period. Profit after tax reported for non-life insurers was up 23,32 percent during the review period to $41,47 mil- lion from $33,62 million reported in the comparative period in 2017. IPEC said in terms of business distribution, motor and fire insurance remained the key classes of insurance business, accounting for 65,40 percent of the total gross premium written during the period under review. “The increase in gross premium written is attribut- able to more stringent underwriting mechanisms and associated reviewed risk premium rates in the wake of three-tier pricing systems in the market,” IPEC said. “The commission encourages insurance players to continuously ensure that they implement prudent un- derwriting techniques as opposed to cash underwriting in order to preserve value.” The pensions regulator said it is critical for the play- ers to maximise distribution of products through the use of enhanced ICT platforms as emerging new digitalised distribution channels offer insurance and risk manage- ment players an avenue of tapping into unserved mar- kets. For reinsurance, the industry average retention ra- tio declined to 58,41 percent during the review period, compared to 60,82 percent recorded in previous com- parable period, demonstrating a slight decrease in risk appetite among the non-life insurance industry. In actuarial matters, the non-life insurance indus- try reported a decrease in total technical liabilities to $71,39 million as at December 31, 2018 from $72,81 million in previous comparable period. “The industry was considered to have adequate liq- uid assets to match its total technical liabilities as shown by the industry average liquid assets to total technical reserves of 147,95 percent reported as at December 31, 2018 compared to 127,57 percent reported as at Sep- tember 30, 2018,” IPEC said. [email protected] The Financial Gazette June 13-19 2019 | Page 5 National News UK firm mulls leaving Zim Adelaide Moyo Roach said the resources firm concluded an work on stopes. The original projection was that Business Reporter agreement with the National Indigenisation and within 100 working days of funding we would Economic Empowerment Fund of Zimbabwe at have the plant running and producing first con- REMIER African Minerals (Premier) says it is con- the end of April with the binding legal provision centrate and it still remains a very realistic target.” sidering divesting from Zimbabwe due to the southern to provide the miner with US$6 million. Last month, Premier said it was reopening PAfrican country’s risk profile. He said the funding was adequate to restart discussions with a previous drilling contractor to The risk profile reflects the country’s creditworthiness, or RHA Tungsten and to develop the shafts, explo- recommence drilling at Zulu. the dangers of investing or lending to a country due to possi- ration work and plant upgrades. Premier had announced on February 26, 2019 ble changes in the business environment against a backdrop “I’m pretty comfortable that the government that the Aim-listed miner would recommence of socio-economic and political factors. will stick to its commitment. I don’t see any rea- drilling at Zulu and Tantalum Project and that George Roach, the London Stock Exchange-listed min- son why they shouldn’t. We are continuously en- KME would be the drilling contractor to carry out er’s chief executive, said Premier has value in Zulu lithium gaging with the government. We do expect some- these drilling works. projects and will not allow the Zimbabwean situation to drag thing to happen quite soon,” Roach said, adding It however emerged that KME failed to hon- its tungsten project. that once the funds are received, the tungsten proj- our the long form drilling contract hence the con- George Roach “I think we need to look to perhaps move a little bit away ects would be remobilised immediately. tract was terminated. from Zimbabwe exclusively. There are other areas in the “The underground stopes are partly developed, “Following the announcement dated May 15, Zulu Lithium Project in Zimbabwe,” Premier SADC (Southern African Development Community) region there is a little bit of upgrading and repair work 2019, Premier reports that it has been unable to said. that have some very good opportunities. De-risking a little that we will need to do on the hoist system be- conclude a revised pricing structure for the long The company added that it had cancelled the bit from country risk may be a good idea. So the board is cause it hasn’t been in use for nearly 18 months form drilling contract that was commercially ac- 212 million shares it had issued to KME as a looking actively at that,” he said. now,” Roach said. ceptable to both Premier and KME that fairly re- pre-payment for the mobilisation and drilling and He said the Premier projects ― Zulu, RHA Tungsten and “The underground needs to be dewatered but flected the revised relationship for the next phase expected the shares to be cancelled on AIM by Circum ― which are all waiting for development “have been we will very quickly be back into the development of drilling activities at Premier’s wholly-owned June 4. [email protected] intensely frustrating holding breaths.” “I can’t continue and sit by and see Premier go through another period like it went through last year. We still own the plant, we have a big loan account and we have rights to the deposit itself. We are well protected from that point of view. We have value in Zulu and Circum. We’re not going to allow the Zimbabwean situation to drag RHA.” Construction inflation hits record high Omega Ukama Business Reporter

IMBABWE’S construction industry recorded 110 percent inflation during the first quarter, official figures Zhave shown. This comes as prices of goods and services in the country are skyrocketing following the devaluation of the RTGS dol- lar ― a merger of bond notes and local bank balances into a lower-value transitional currency ― tradable against major currencies on an interbank market. The country’s official inflation for the broader economy, which was reported at 75,86 percent in April, had however only climbed to 66,80 percent by the end of the first quarter. “The year-on-year rate of change (annual percentage change from March 2018 to March 2019) for the first quarter of 2019 stood at 110,46 percent,” Treasury said in its recently published bulletin for the first quarter of 2019. “In basic terms, between the first quarter of 2018 and the first quarter of 2019, prices of construction materials as mea- sured by the Building Material Price Index (BMPI) increased by an average of 110,46 percent,” the bulletin said. While Treasury said the parallel exchange market premi- ums “remain the major source of inflation, driving up prices, particularly of tradable goods”, analysts assert that the con- struction industry is especially affected because of high de- mand for properties in the inflationary environment. “I think the one meaningful investment that sounds se- cure in Zimbabwe at the moment is properties and so that leaves the industry as the only sector that still has quite a bit of demand for goods and services,” an administrator at a lo- cal construction company said. “But bear in mind this is on small projects that have cre- ated informal employment for the majority of Zimbabwe urban dwellers. The bigger and meaningful projects are left bleeding due to their scale and have been put on hold while they still remain the major highlights for the industry at large. The industry has been affected drastically by the high prices of materials,” she told The Financial Gazette. Another player in the industry, who also elected anonym- ity, said pace and number of projects has decreased as a result of the inflation. “It is a result of loss of value of our local currency bond, causing instability and this has resulted in lower production in the market. “The loss of value of the bond has also resulted in re- sources being sold in forex, making many players unable to fit in,” the source said. Treasury added that the main drivers came from metal windows and door frames, which were up by an average of 213,75 percent, prices of roofing materials climbed 141,71 percent while electrical goods and materials were up by 125,35 percent, with bricks recording an equally significant 121,06 percent increase. Month-on-month inflation during the quarter averaged 5,6 percent against 11,5 percent in the last quarter of 2018. Due to the elevated base, annual inflation recorded 57,6 per- cent, 59,6 percent and 67,8 percent, in January, February and March, respectively. [email protected] Page 6 | June 13-19 2019 The Financial Gazette National News Zim demands right to sell $300m ivory

IMBABWE has demanded the right doubled and yet the land is not expanding," to sell its stockpile of ivory to raise Farawo said. Zmoney for conservation, wildlife Zimbabwe has an elephant population of authorities said on Tuesday, joining other around 84 000, which is nearly double what southern African nations in calling for the it can cope with, according to the parks and global ban on the trade in tusks to be relaxed. wildlife authority. Wildlife authorities in the cash-strapped But over the past decade, the popula- nation estimate the country's decades-old tion of elephants across Africa has fallen hoard of ivory is worth around $300 million, by about 111 000 to 415 000, largely due which they say would help plug funding to poaching, according to the International gaps for game reserves. Union for Conservation of Nature (IUCN). The proposal has put it on a collision In May Zimbabwe sold 100 elephants to course with the Convention on Internation- China and Dubai in an effort to raise cash. al Trade in Endangered Species (CITES), The deal was worth $2,7 million over six which prohibits the sale of ivory to curb years, according to wildlife authorities. poaching. Farawo called on critics of the ivory sale Zimbabwe, Botswana, Namibia, Zambia proposal to "give us money to run our opera- have cited the growing number of elephants tions," instead of lambasting it. in some regions in their bid to have the re- Wildlife authorities said if approved, it strictions relaxed. would help them fund operations, buy radios Tinashe Farawo, the Zimbabwe's wild- and vehicles for patrols to curb poaching. life authority spokesman, told AFP that the "CITES was meant to regulate trade in nations had submitted a joint proposal to endangered species but if there is no trade CITES and warned: "If we are not allowed then CITES is not serving its purpose," Fara- to trade we will not take part in CITES dis- wo said. cussions on elephants." Last month Botswana, which has the "Our decision to sell ivory is not an emo- largest elephant population in Africa, tional one. It is a scientific one backed by sparked controversy by lifting its five-year facts. At independence in 1980 we had 40 ban on elephant hunting citing "high levels 000 elephants and the number has more than of human-elephant conflict". – AFP Short term insurers shun prescribed assets

Omega Ukama Business Reporter

HE Insurance and Pensions Com- mission (IPEC) says less than half of Tthe players in the non-life insurance industry complied with the minimum pre- scribed assets ratio in 2018. According to the Insurance Act, “every insurer shall in respect of the insurance busi- ness carried on by him in Zimbabwe, hold the insurance fund in prescribed securities and in such proportions of prescribed secu- rities as may be specified by the minister”. However, the regulator noted that in- vestments in prescribed assets declined by 5,02 percent from $22,21 million at the end of September last year to $21,09 million by December 31, 2018. “Only eight out of the 20 non-life insur- ers were compliant with the minimum pre- Chakanyuka Nziradzemhuka scribed assets ratio,” IPEC said in its recent- ly published short term (non-life) insurance 33 of 2019, which prescribed that certain report for the quarter ended December 31, assets and liabilities would be converted to 2018. RTGS dollars at a rate of 1:1 to the US dollar. “The commission engaged the non-com- And, in an apparent response to the situ- pliant players to submit compliance plans,” ation, FMHL recently announced that it is in the report said. the process of relocating its reinsurance busi- This comes as the investment rules ness, First Mutual Reinsurance Company, to around insurance ― particularly the pre- Botswana to escape the “limitations of the scribed assets requirements, have become local operating environment”, and to expand a villain after insurers have been forced to the horizon of the business. helplessly watch their books’ value become Meanwhile, total assets for non-life in- eroded by rising inflation, as the laws restrict surers grew significantly from $279,72 mil- their ability to save the situation. lion as at September 30, 2018 to $350,64 The country’s inflation increased to a 10- million by the end of last year. year record of 75,86 percent in April 2019, “This considerable growth in total assets after gaining 70,47 percentage points since was mainly due to a surge in equities and the beginning of October 2018. premium debtors that grew by $29,82 mil- “One of the challenges for the local in- lion and $19,30 million respectively,” IPEC surance and pensions sector is the issue of said. regulatory restrictions in investing. In an The commission indicated that assets inflationary environment, funds that are not of the non-life insurers remained fairly dis- adjusted quickly will suffer through the loss tributed across the investment classes “even of value,” said Chakanyuka Nziradzemhu- though equities and premium debtors were ka, the National Social Security Authority the major contributors to the total non-life (NSSA)’s chief strategic officer. insurance total assets”. Integrated insurance firm First Mutual Premium debtors rose significantly from Holdings Limited (FMHL) said it has also $36,84 million reported in the previous year been hurt by the “loss of value on prescribed to $56,14 million for the twelve months end- assets and other monetary assets required for ed 31 December 2018. regulatory compliance” due to rising infla- “The increase in premium debtors were tion. mainly arising from perceived increases in “After the recent monetary changes, the premium rates on the backdrop of temporary prescribed assets remained at 1:1, they have challenges on the operating and economic not been revalued,” Douglas Hoto, the finan- environment especially the multi-tier pricing cial services group’s chief executive, said systems. recently. “This usually gives rise to challenges in Following the announcement of the premium remission or payment by the insur- monetary policy statement on February 20, ing public,” IPEC said. government gazetted Statutory Instrument [email protected] The Financial Gazette June 13-19 2019 | Page 7 National News ‘Zim budget surplus fictitious’

Adelaide Moyo and Omega Ukama is a positive move (the surplus) given Zimbabwe’s Business Reporters high public debt, the implications are somewhat mixed.” CONOMIC experts have shot down Finance “The intermediary money transfer tax has sig- minister Mthuli Ncube’s assertion that the nificantly reduced consumer spending power thus Ecountry recorded a budget surplus in the first crunching up liquidity in the local environment. quarter. Furthermore, the rapidly growing inflation at 75,6 The Cambridge professor last week said the percent has reduced disposable income in real terms, country’s revenues, at RTGS$1,9 billion, outper- leading to low consumer demand,” the firm said. formed targets of RTGS$1,8 billion throughout the The local think-tank noted that while it com- first quarter of 2019 while expenditures have been mends the “austerity” measures put in place by contained at RTGS$1,5 billion against a target of Ncube, there are other factors working against the RTGS$1,7 billion. efforts being made. “This has led to savings of RTGS$218,9 million, “Zimbabwe’s consumption per capita levels ex- and a budget surplus of RTGS$443,1 million. Gov- ceed the global average and the government has a ernment is finally earning more than it is spending. high wage bill that also drives the budget deficit, No deficit. Not even breaking even. But a real bud- which has persisted since 2009.” get surplus for Zimbabwe,” he said. “The recent Cyclone Idai and El Nino played a However, this is despite rising inflation, rebasing significant role in crippling the country’s agriculture of gross domestic product, fuel and drug shortages, Mthuli Ncube Terence Mukupe sector, which accounts for approximately 17 percent high unemployment rate. of gross domestic product. These phenomena have Zimbabwe Coalition on Debt and Development on business and the general populace. The other seeing that expenditure management has also come resulted in shortages of wheat and maize, which will said following the calibration of the country’s nom- thing is that we are in an inflationary environment into the mix, which is a good thing. have to be imported to avoid the starvation of 3,5 inal gross domestic product and liberalisation of the and so the increase in revenues is nominal but not “So people will say but we have not seen the re- million citizens,” Morgan & Co said. local currency, “the country registered a budget defi- real. They are getting more money in nominal terms sults of the surpluses, there is still instability in the The firm said in order to avoid these issues, the cit of RTGS1,3 billion dollars”. but it means very little in real terms because of the economy, but austerity is a euphemism for pain. If government will have to borrow and most likely is- “It is ironic that the country is claimed to be in a inflation,” he said this week. the results do come, it will take time.” sue Treasury Bills. positive macroeconomic trajectory against negative Persistence Gwanyanya, an economist, said the He, however, said “as long as there is a multi-cur- “Going forward, we expect inflation to remain performance indicators including rising inflation budget deficit had caused instability in the economy rency system, the dollar effect will persist.” high while the IMTT continues shrinking dispos- rate reaching 75 percent in April 2019 and falling and the government fund. Former Finance deputy minister Terence Muk- able incomes. We foresee some company closures mineral output. All minerals except for chrome were “The background is that government had been upe said “fiscal surpluses are good if the wages do in the outlook period given reduced demand levels,” subdued compared to the similar quarter in 2018,” overspending and it is these deficits that caused the afford a dignified standard of living.” Morgan & Co said. the pressure group said. current situation. It is a decision that had to be made “Just had a high ranking service official in tears “All in all, we expect Treasury to record another Kipson Gundani, CEO Africa Roundtable chief that the imprudence had to stop,” he told The Finan- showing me his gross salary of $430 netting $380. It double-digit budget deficit in 2019. We maintain our executive, said it is also important to consider the cial Gazette. is criminal! Professor (Ncube) let us take better care call that investors should seek exposure in compa- quality of the budget surplus. “The downside for the ordinary man on the street of those that brought about the second republic,” he nies that are export-oriented and have been success- “One significant factor that has brought the sur- is that the rebalancing has been from increased rev- said. ful in pushing through United States dollar pricing.” plus is the two percent tax, which is a huge burden enues in the form of taxes. However we have been Morgan & Co, an advisory firm, said “while this [email protected] Page 8 | June 13-19 2019 The Financial Gazette Leader Page

News Worth Knowing Zim not yet ripe for new currency N THE aftermath of President Emmerson Mnangagwa's decla- ration that a new Zimbabwean currency was in the offing, many Ishould have received this ghastly news with a loud invective and arrowed reminder of the maxim: cry the beloved country. While it is true that the country needs ― at some point ― its own legal tender, we believe the government is not only off-side, but pur- suing a ruinous path akin to Robert Mugabe’s policies. At the moment, all economic indicators including inflation, trade deficit, external debt and gross domestic product are heading south and there are no meaningful reforms to ensure that these improve before year end. Therefore, any talk of a new Zimbabwean dollar ― which was abandoned in 2009 after being severely battered by hyperinflation ― in the absence of adequate reserves and a stable macroeconomic environment borders on insanity. As it is, what guarantee is there that the so-called new currency will hold its own against major currencies when the country is not producing anything for local consumption, let alone for exports to generate foreign currency? With inflation almost hitting 100 percent, public debt levels of US$18,5 billion, trade and fiscal deficits of US$3 billion, and US$2,3 Construction of Zimbabwe's new Chinese-funded parliament building in Mt Hampden. The $46 billion, respectively, in the past three years, it doesn’t need rocket million building, being constructed by Shanghai Construction Group, is expected to be completed science to know that the mooted currency will collapse within weeks. in 32 months. At the moment, the country’s economic fundamentals are still very weak and cannot sustain a local currency. Additionally, produc- tion and confidence remain very low, which means a sustained trade deficit. Is Zim serious about fighting graft? Zimbabwe’s economic plight has been worsened by the fact that the central bank has no foreign currency reserves, as evidenced by BASED on what is happening in criminal, racketeering and bent on trivial things when there are big- fuel and electricity shortages. At best, the troubled country has al- Zimbabwe ― and elsewhere in profiteering. ger crimes out there. ways had two weeks of import cover, against the six months bench- the world ― noone could have Therefore, such characters Therefore, it not only beg- mark. captured the picture better than MUST BE subjected to a legal gars the question as to whether Before Mnangagwa and his cabinet ministers think of printing French journalist, social critic probe and sanctions because they the Zimbabwean government is money ― we all know how the Zanu PF government behaves with a and writer Jean-Baptiste Alphonse are acting in a manner, which is quite clear about what constitutes money printing machine ― they should first ensure that the country Karr when he came up with the affecting those that the ruling par- a crime, but that there is even a has a budget surplus of not less than five percent of the country’s phrase: the more things change, ty expects them to keep voting it modicum of a balanced applica- gross domestic product, stable foreign currency nostro accounts to the more they stay the same. into power. tion of the law in this country. guarantee currency stability and stable production at 80 percent ca- And when one considers Indus- Just yesterday, independent These are exactly the kind of pacity utilisation levels to guarantee enough export earnings. try minister Mangaliso Ndlovu's journalist Hopewell Chin'ono re- things that British businessman So, instead of pursuing a re-introduction of our own currency, recent pronouncements that Pres- vealed that parliament was buying Richard Heygate and other inter- why not work at encouraging a wider use of the rand ― as was the ident Emmerson Mnangagwa's fuel at up to double the price that national investors are complaining case at the beginning of the multi-currency regime ― and stop all government “was not keen on was obtaining before the Zimba- about that: where there is no trust this madness about claims of difficulties in joining the Rand Mone- pursuing or prosecuting cartels”, bwe Energy Regulatory Author- and respect, no money will come tary Union, and so forth. which are causing untoward suf- ity had announced an adjustment in! In our view, reverting to rand pricing would not only ease capital fering for the masses, they ought late Wednesday and you wouldn't At a time folks are facing death movement between the two countries, but will also result in price to have had a sickening feeling know what the president, and his at public hospitals such as Pari- stability, as the country imports nearly 60 percent of its goods from that: old habits die hard for real. team makes of this? renyatwa due to foreign currency South Africa. This is so when one takes into Whether or not the price mecha- shortages (to fix chemotherapy account the implications of the nism was hammered or put togeth- machines and procure essential Bulima East member of parlia- er to cushion suppliers against a drugs because the same money is ment's words on government and non-paying and perennially-broke being held by roly-poly cartels as Southern Africa’s Leading Business and Financial Newspaper President Emmerson Mnangag- national assembly, this is simply well as their own failure to meet Established 1969 wa's commitment to the fight UNJUSTIFIABLE as it is tax pay- the new charges for treatment), Publisher: Modus Media against corruption, and other ers' money at issue here. and starvation because they can- forms of vices in our country. But alas, this is Zanu PF ― and not buy maize meal, one also EDITORIAL MARKETING a party, which would rather sweep wonders whether there is any big- Editor-In-Chief & Chief Oper Brand Executive - Advertising corruption under the carpet be- ger "saboteur" than a state, which Edwin Vengesa: ev .zw Christopher Goko: gok .zw Open Forum cause “the cartels are operated by hikes producer prices by $1 400. Managing Editor Senior Sales Executives its own people and boys”. And when private sector players Christobel Washaya: cwashay .zw Amid talk and high-sounding seek to do the same ― by way of .zw with threats by government officials, adjusting prices in order to survive Senior Assistant Editor .zw Chris Gumun .zw and their surrogates including the scourge of record inflation and Sales Representatives - Harare Dumisani Mugari Chris Mutsvangwa, that the econ- an ever-plummeting currency ― News Editor .zw omy was suffering due to “sabo- government leaders cry wolf, and John K .zw Frank Nyandoro: fny .zw tage”, one is tempted to ask where start to see all manner of shadows, Companies Editor Edreck: emudzingany .zw And assuming Ndlovu was the biggest form of subversion and conspiracy theories. Shame Makoshori: smak .zw Sales Representative - Bulawayo Clever Pedzisai: [email protected] “quoted correctly” by online pub- would be coming from other than If anything ― and truth be told Group Digital Editor lications, and all, when he declared these known cartels? ― our government is the biggest Paul Nyakazeya: pnyakazey .zw Brand Executive - Events K .zw that the Harare administration was On the other hand, can Mnan- cartel and saboteur through its Features Editor Brand Executive - Subscriptions "aware of economic syndicates, gagwa and his fellow cabinet various acts of commission, and .zw Tatenda Taka: t .zw but had chosen to engage them members speak with a sense of omission such as the “treasonous rather than prosecute them", many superior morality that they are plans” for a new currency when Subscriptions Representatives Production Supervisor should have taken this to mean: serious about fighting endemic the recently-introduced RTGS Kudzai Rushambwa: krushambw .zw Ronald Madiviko: rmadivik .zw Elizabeth Nyamaruze: eny .zw that the Zanu PF government is graft in this country when they sit dollar itself is floundering. General Manager - Marketing Chief Executiv fully aware of the profile and na- around a cabinet room, and unilat- As l conclude and round off, .zw .zw ture of these 'saboteurs' but it has erally decide to let these common we are, therefore, reminded of the elected to turn a blind eye. criminals go scot-free? truth in those two opening lines: Crucially, Mnangagwa's gov- This also comes at a time Mnan- that the more things change under Bulawayo ernment is fully aware of the char- gagwa and his government have this “new dispensation” and the Editorial, Advertising & Circulation 1st Floor, Princess Court, acters behind these illegal groups, launched “an anti-corruption more things remain the same (for 2nd Floor, Green Bridge South, Eastgate Complex, Corner Forth Street/9th Avenue, P. O. Box CY 376, CAUSEWAY, Harare, Zimbabwe Bulawayo. which are engaged in such “eco- blitz” against people like David real because it is a-looter conti- Tel: +263-242-781 572 Tel: (029)75873/75270 nomic crimes” as foreign currency Parirenyatwa, Adam Molai, Gift nua). Website: www Distributed by: ANZ dealing and other collusive com- Machengete and Robin Vela for Crucially, “old habits are look- VOLUNTARY MEDIA COUNCIL OF ZIMBABWE mercial activities. alleged abuse of office, and fraud ing so hard to beat or defeat” for e Financial Gazette newspaper subscribes to a Code of Conduct that promotes truthful, accurate, fair and balanced In our lay or pedestrian interpre- in cases where they had even de- sure because, like Robert Mug- news reporting. If we do not meet these standards, register your complaints with the Voluntary Media Council of tation, those operating in “monop- livered or the state was amply in- abe's successive governments, Zimbabwe at: No 34 Colenbrander Rd, Milton Park, Harare. Telephone: 04-778096 / 778006 24 Hr Complaints line: 0772 125 659 olistic and exploitative industries” sured. Mnangagwa's administration Email: [email protected] or [email protected] Twitter: @vmcz http://www.vmcz.co.zw | Facebook page: vmcz are behaving in no other way than Essentially, people are being seems to be so comfortable with Zimbabwe which can be characterised as pursued ― if not persecuted ― for obfuscating corruption! The Financial Gazette June 13-19 2019 | Page 9 Page 10 | June 13-19 2019 The Financial Gazette National News Hino in aggressive marketing drive

Freedom Mashava Staff Reporter

APAN'S largest truck and bus manufacturer, Hino, says it is aiming to increase brand awareness and Jgrow sales in four Sub-Saharan Africa countries through a 50-day promotional roadshow. Carl Varga, Toyota Zimbabwe's national sales and marketing manager, said the company will drive through Zimbabwe, Zambia, Malawi, and Mozam- bique, and hold customer events to promote national distributors in each country. “Toyota Zimbabwe took over the Hino sub distrib- Hino trucks on the Zimbabwean leg of the roadshow utorship in 2011 and the brand has strengthened its

Toyota Zimbabwe’s managing director Se- bastein Benning

presence and reputation ever since,” he said during an awareness campaign in Harare this week. “Toyota invested in new premises both here in Ha- rare and in Bulawayo with the ability to service Hino trucks aware that the after-service is of paramount im- portance to truck owners. We will take a brief tour of the facility as part of this event,” Varga said The event, running under the theme “Cross Coun- try Tour 2019 ― With Africa for Africa,” started on June 1, in Hino Isando, South Africa, and is being rolled out in four other Sub-Saharan Africa markets before returning to its starting point on July 20. Among the fleet of trucks that are on tour include the Hino 300, 500 and 700 series models, which were later taken for a day of ride-and-drive adventure at Donnybrooke Racetrack in Harare. Varga said Hino was satisfied with customer re- sponses in Zimbabwe and the company was ready to introduce new products into the market. “Initially we were only able to sell Euro 1 gener- ation trucks mainly 300 and 500 series, here in Zim- babwe, but as our capability to offer first class Hino standard service has grown, we moved on to bigger and better models until we are proud to say we sell and service Euro 2&3 generation Hino 300, 500 and even 700 series trucks here in Zimbabwe, all of which are part of the roadshow,” he said. Sebastien Benning, Toyota Zimbabwe’s manag- ing director, said his company was re-energising and re-focusing its business to cater for changing consum- er needs. “Much of the Toyota teams’ drive relates to our ability not just to supply a transport solution for our customers, but a sustainable support network to keep customers on the road. As part of the Toyota Group of companies we have worked tirelessly to grow the Hino brand here in Zimbabwe. Part of our marketing strategy is to give our customers first-hand experience with Hino as a brand, educating our customers as to the quality of our products therein,” he said. Benning noted that the Hino roadshow was the beginning of this personalised strategy to engage its Zimbabwean customers. “This is a consolidated effort between Hino distrib- utors throughout Africa and Africa Mobility Solutions (AMS), a part of the group focused on driving distri- bution of Hino into the African market. The roadshow is an initiative that was born early 2019 in an effort to grow Hino awareness throughout the continent, hav- ing achieved so much success in neighbouring South Africa through trust and reliability,” he said. Hino has grown exponentially since its inception in 1910, from its humble beginnings supporting in- dustry growth in Japan. Hino has stamped its mark from a variety of perspectives in particular as an inno- vator in the area of environmentally friendly vehicles for global markets. The company’s driving force is to continue to sup- port society and people through logistics and trans- portation. The model line up ranging from the smaller 300s, 500s and 700 series vehicles comfortably cov- ers any business or industries transport needs. [email protected] June 13-19 2019 Page 11 Companies&Markets The Financial Gazette DROUGHT HITS SEEDCO SHARES — 12 USD/BWP Sugar (USD/lb) Cotton (USD/lb) Nickel (USD/t) Palladium(USD/oz) SEEDCO Holdings (SeedCo) shares have lost 21 percent this year due to effects of a poor farming season caused by drought. 0,11% 0,84% 0,22% 0,06% 0,16% 10,6840 11,94 66,91 11 729,92 1 337,36 Delta suspends most Larfage seeks self-sustenance Adelaide Moyo Business Reporter

ARFAGE Cement Zimbabwe (Lafarge) says it is capital investments looking for ways to sustain its operations thorough Lforeign currency cash generation. This comes as the cement maker secured external Adelaide Moyo loan facilities amounting to US$38,4 million and utilised Business Reporter US$24,8 million of the amount for working capital while the remainder was used to clear long outstanding foreign ELTA Corporation (Delta) says it has obligations. suspended most of its capital invest- “The LafargeHolcim Group put in a loan last year to ments due to Zimbabwe’s deteriorat- D sustain the business but for this year the challenge for us ing economy. is to be able to sustain our own operations from our own Alex Makamure, Delta’s company secre- cash generation,” said Kaziwe Kaulule, Larfage’s chief ex- tary, told The Financial Gazette that foreign ecutive. currency shortages and a depreciating RTGS He said the cement producer was still struggling to se- dollar, which continues to take a heavy batter- cure foreign currency from local banks. ing against most major currencies, has made it “The interbank market has not been as liquid as we difficult to plan. would like. We have had a few trades that have gone “The macro-economic environment in through but at very minimal ranges not enough to sustain Zimbabwe has changed significantly in the our business,” Kaulule said, adding that the availability of past 12 months. This makes it difficult to make foreign currency will determine Larfage’s plan to double concrete capital investment plans, particularly capacity at the plant. with the shortage of foreign currency and the “We have received national project status for our plant loss of value of the local currency,” he said. to double capacity and that will require US$25 million, “As of now most capital investments have but completion of the project is subject to foreign currency been suspended, except for the Rusape Chi- availability. We are working with relevant authorities to find buku Brewery project, which is expected to a solution so that we can remain the leader and participate in kick-off during 2019, starting with phases that the economy,” he said. use locally sourced materials.” The new Lafarge boss indicated that he was optimistic The development comes as the beverage after the company started this year on a solid note. maker had planned to invest US$50 million in “We started 2019 very strongly and with the measures plant and equipment annually for the next five taken to stabilize the macro-economic environment we be- years to boost production. lieve we will have a much stronger year than 2018. But it all Last month, Delta said it had consolidated goes to quickly resolving issues around foreign currency so its stake in African Distillers Limited (Afdis) that we can get our critical spare parts, uninterrupted supply, after acquiring 50,1 percent share ownership. markets stabilising so that the end users are able to predict The consolidation comes at a time when what is happening in the market,” he said. the listed beverages manufacturer has been Kaulule said the group looks forward to increasing expanding in the region to generate more for- production and sales volumes as well as reinvesting in the eign currency. Inforgraphic by Darius Mutamba business. Delta, late last year, entered into binding “This strategy includes capex investment in various agreements to acquire the 100 percent stake in the Zambian market. Locally, Delta secured land at Tsanzaguru projects, subject to availability of foreign currency, which at United National Breweries of South Africa, It also emerged that Delta — 40 percent Industrial Park for its Chibuku Super plant in should significantly increase production in 2019 and- on with the transaction’s funding still to be final- owned by Anheuser-Busch InBev (AB InBev) Rusape. wards. Furthermore, the business will focus on driving prof- ised. — is eyeing AB InBev’s Zambian and Mala- Delta said it will invest in excess of US$20 itability through robust cost cutting measures, tightened in- If it goes through, the purchase will be Del- wian assets. million to construct a new Chibuku Super plant ternal controls and a performance driven culture to achieve ta’s first acquisition in South Africa and it’s Delta said since the Budweiser maker was in Rusape to cater for increasing demand. set out targets,” he said. second outside Zimbabwe. divesting out of the region, it had resolved Makamure said despite Delta having ac- He said the cement maker’s volumes were seven percent The Zimbabwe Stock Exchange’s most to bid for available assets in the wake of an cessed very limited foreign currency, the higher than prior year. capitalised counter also acquired a 70 percent increasingly tough operating environment in firm remains hopeful to access forex from the Kaulule said during the second half of last year, Larfage stake in Natbrew Zambia, a manufacturer of Zimbabwe characterised by foreign exchange US$500 million facility announced by the cen- experienced supply constraints that affected consistency in sorghum beers with a noteworthy market share shortages. tral bank recently. [email protected] the business. [email protected]

Ofiicial Media Partner Page 12 | June 13-19 2019 The Financial Gazette Companies & Markets Drought hits SeedCo shares Omega Ukama It is estimated that Zimbabwe’s maize year warned that Zimbabwe’s current eco- Nzwere, however, expressed concern that the situation Business Reporter harvest, which started in April, maybe less nomic situation could have an adverse im- could negatively affect the company’s procurement and than one million tonnes compared with 1,7 pact on its trading year. marketing. EEDCO Holdings (SeedCo) shares have lost 21 per- million in 2018 – a far cry from the two “There is going to be an adverse impact Apart from the drought and the harsh economy, FBC cent this year due to effects of a poor farming season million tonnes annual requirements. from the economic turbulence that we are Securities said the separation of the foreign concern under Scaused by drought. “Also, austerity measures may also facing. Our biggest concern is the infla- SeedCo International might also be weighing on the share The latest development comes at a time most stocks on lead to a tightening of government input tionary environment,” Morgan Nzwere, price performance of SeedCo. the Zimbabwe Stock Exchange are appreciating in value, programs, which usually provide a boost the group’s chief executive, said in De- “Given value preservation objective in light of the cur- as investors hedge against rising inflation. in sales for SeedCo,” Nyaungwa told The cember last year. rent macroeconomic conditions a rational investor choos- Year-on-year, Zimbabwe’s largest seed producer’s Financial Gazette. “This is worsened by the fact that our es SeedCo International ahead of SeedCo. This is obvi- stock, which closed trading at 161,81 RTGS cents on Fri- Enock Rukarwa, FBC Securities’ re- product is a public good or a mass product ously based on the foreign currency generation capacity day, has depreciated in value by 40 percent. search and investment analyst, said Seed- and trying to increase the price of a mass between the two companies,” Rukarwa said. “It is likely because of a depressed farming season,” Co’s performance was being affected by product or to sell it in US dollars will at- “On a like-for-like basis, SeedCo International is per- said Fungai Nyaungwa, a senior associate at Akribos Re- weather patterns. tract quite a lot of attention.” forming far much better than SeedCo and historical Seed- search Services. “SeedCo is a fairly good counter in This was after backlash from govern- Co investors have been migrating to the foreign concern “The market also anticipates poor seed sales on ac- terms of relative company fundamentals, ment and the public had forced the compa- where capital gains have been high since separation. count of affordability and the drought.” however, demand for the company’s prod- ny to reverse price adjustments it had ef- “In as much as the separation of SeedCo Internation- The southern African region is currently experiencing ucts is continuously under attack from fac- fected in line with inflation developments. al created a lot of value for shareholders and unlocked harsh weather conditions, which have compromised ag- tors like climate change, low disposable With the company still to publish full potential of underutilized resources this corporate action riculture operations, particularly the harvest of the staple incomes and low producer prices for food year results, it is not yet clear how much might also have has negatively affected the share price maize crop, and deepened Zimbabwe’s economic crisis crops in particular,” he said. the worsening foreign currency shortages performance of SeedCo,” he said. marked by an acute dollar crunch. This also comes as SeedCo had last have affected the company’s procurement. [email protected]

The Financial Gazette @FingazLive Zinwa records $1,8m profit

Tabitha Mutenga Features Editor

HE Zimbabwe National Wa- Develop financially Tter Authority (Zinwa) is back in the black after it reg- istered a $1,8 million literate business leaders profit after tax in 2018, up from a loss of $2,5 million in 2017. Zinwa is one of the 107 State-owned entities struggling to meet their obligations, Perrance Shiri such as the payment of creditors and other statutory requirements that include taxes and levies. Agriculture minister Perrance Shiri last week ap- plauded the organisation for turning around its fortunes from a loss-making parastatal to a productive entity. “Zinwa has now recovered from a largely loss mak- ing entity incapable of meeting its obligations to stake- holders, creditors and employees,” he said in his first interaction with the new water regulator’s board chaired by Bongile Ndiweni who took over from Michael Tum- bare. “The Authority recorded $1,8 million profit and is now firmly placed on a growth trajectory. Therefore I expect the board to build on the current momentum and guide Zinwa on this upward trend and transform it into a highly modernised water utility,” he said. However, despite this commendable set of results, the water utility is owed millions of dollars by its di- verse clients. “The parastatal is currently owed over RTGS $110 million by various debtors with local authorities and farmers owing the bulk of this money,” Shiri said. “You will need to develop innovative ways which al- lows for the collection of the money while at the same time ensuring farming operations and service provision by local authorities do not grind to a halt.” Subscribe for your The retired air marshall indicated that a lot of empha- sis has been placed on the need for state owned enter- prises to provide top notch services to clients. former schools “Gone are the days when parastatals gave below standard services to clients, banking on their statutory existence,” he said. Shiri added that government was working on the Contact our subscriptions team on: transformation of state owned enterprises to become vi- able and more efficient. [email protected] “This second republic now expects parastatals to be run on a sound basis that hinges on proper and timely service delivery without resorting to treasury for financ- ing. I thus expect this new board to steer the Zinwa ship Subscribe Now so that it operates and metamorphose into a highly cus- tomer-centric organisation whose decisions, processes and practices are informed by the need to meet and re- spond to client needs,” he said. The minister also urged the new board to ensure the completion of Gwayi Shangani Dam, Tuli Manyange Dam, Semwa Dam, Bindura Dam which he said are crit- ical for the realisation of the country's socio-economic development in the areas of energy, sanitation, agricul- ture and food security. [email protected] The Financial Gazette June 13-19 2019 | Page 13 Companies & Markets CBZ transactions hit $16,6bn Nelson Gahadza increased to $83,4 million compared to “We don’t have specific areas it’s on a case by Business Reporter $58,1 million as at December 31, 2018,” case basis we don’t think that there is one sector he said. which is more vulnerable than the other sector. I BZ Holdings (CBZ) says the value of its trans- He noted that the environment con- think these are macro-economic wide issues that actions increased 52,1 percent to $16,6 billion in tinues to be characterised by foreign affect all the sectors so there’s nothing peculiar Cfour months to April 2019 compared to $11 bil- currency shortages, constrained business about any sector.” lion in the same period last year, largely driven by new growth and inflationary pressures, despite During the period under review, the bank’s un- products and increased accounts. there been an improvement on foreign derwriting income grew 53 percent to $4,6 million Blessing Mudavanhu, the group’s chief executive, currency availability on the interbank and this was attributed to increased market pres- told shareholders at the company’s annual general meet- trading platform. ence in the insurance sector. ing that CBZ continues to innovate and grow its market Mudavanhu said total expenditure for Mudavanhu said funds under management share, despite the current difficult environment. the period increased by 38,4 percent to went up 18,3 percent to $448,8 million with the “The bank’s deposits grew 1,42 percent and now sit $45,9 million, but the growth in expen- portfolio yielding positive returns despite subdued at $2,11 billion compared to $2,08 billion recorded as at diture was contained to below prevailing performance on the stock market during the quar- December 31, 2018. Additionally, the number of bank inflation levels. ter. accounts increased by 11 percent to 238 000 from 215 The group’s total assets rose 14,9 per- “There has also been an increase in specialised 000 recorded in the same period last year while CBZ cent to $2,81 billion while net advances advisory services and trading income arising from Touch subscribers rose 31 percent to 351 000 from 268 was up 8,1 percent to $526,3 million – balance sheet management activities,” he said. in April 2018,” he said. driven by growth in total deposits and Mudavanhu said the diversified financial in- Mudavanhu said total income for the four months in- profitability, stitution was well capitalized at $360 million and creased by 43,6 percent to $83,4 million, largely driven “Despite the volatility of the environ- aims to be in the top five market capitalisation on by increased value of transactions. ment, we are not prioritising any sectors the Zimbabwe Stock Exchange (ZSE). “Total income for the first four months to April 2019 for loans,” Mudavanhu said. Blessing Mudavanhu [email protected] Powerspeed equity trebles BUBI RURAL to $100m DISTRICT COUNCIL

Nelson Gahadza Business Reporter OWERSPEED Electrical (Powerspeed)’s equity INVITATION TO TENDER value surged to $104,6 million in the six months to PMarch 31, 2019, from $31,5 million in the same peri- od last year, largely due to significant investment in property and inventory. Bubi Rural District Council is inviting registered and reputable companies for the Martin Gurira, the company’s secretary, said the growth supply and delivery of building materials for the construction of two classroom in equity was achieved without increasing foreign creditor exposure. blocks. He said the group’s turnover increased 62 percent to $60,1 million from $37,2 million due to increased sales. “Despite the disruptions which occurred in October SPECIFICATIONS 2018 and January 2019, the group had a reasonable half Interested bidders are required to submit their tenders in sealed envelopes clearly year, benefitting from an increased footprint, product range and increased market share in a difficult market,” he said. labeled “Supply and Delivery of building materials for two classroom blocks – He added that Powerspeed has been relentless on efforts to improve service provision which resulted in growth in BRDC/G001/19” throughput. Gurira said during the interim period, gross margin fell from 28,1 percent to 24, 1 percent, primarily because of a Tenderers must meet the following conditions: shift in product mix. • Provide certified copies of certificate of incorporation and company “This resulted in a 39 percent increase in gross profit to $14,5 million.” registration certificate. He noted that due to a combination of branch expansion • Provide a certified copy of Zimra Tax Clearance certificate. and inflationary pressures, operating expenses grew 50 per- cent to $11 million. • Be registered with the Procurement Regulatory Authority of Zimbabwe and “The result of which was a 14 percent increase in op- proof of the same document certified to be provided. erating profit from $3,32 million to $3,8 million,” Gurira said, adding that the listed firm’s inventories grew to $52,6 • Bids to be in RTGS$ million compared to $16,7 million same period prior year, while property, plant and equipment value increased to $37,9 million compared to $9,6 million last year same peri- Prospective bidders can collect the tender document from Bubi RDC’s reception upon od comparable. payment of non-refundable fee of RTGS$80.00. Tender documents must be deposited The group’s finished goods and goods in transit consti- tuted bulk of the inventory at $51,5 million and $6,5 mil- into the tender box at the Bubi RDC Reception on or before 1200 hours on the 5th of lion respectively. Other items included are work in progress July 2019. The tender opening will be done on the 5th of July 2019 at 1400 hours in valued at $126 786 and allowance for obsolete inventory at $6,1 million. the Council Boardroom and representatives of Bidders are free to attend the tender On property, plant and equipment, the bulk cost at $48 opening. million, relates to cost or valuation. Other additions include additions of $2,8 million, disposals of $660 000 as well as accumulated depreciation and impairment for the period of NB. Bubi RDC does not bind itself to accept the lowest or any bidder and reserves the $12,8 million. During the period under review, group bor- rowings reduced to $10,2 million despite the significant in- right to accept the whole or part of any tender and to cancel the tender. vestment in both property and stock. Powerspeed’s Electrosales unit improved its range of products in the period under review despite the difficulty in The sealed envelopes with completed tenders to be addressed as follows: sourcing stocks, both locally and internationally. Gurira said the company continue to maintain its engi- neering business in hope for growth in investment in indus- The Chief Executive Officer, Attention: try and mining at some point in the future. Mr Washington Lunga, “Simultaneously, we have ensured good value for mon- ey by charging reasonable prices for good quality products, Bubi Rural District Council, hence we are growing our reputation for being a dependable P.O. Box 5, Turkmine. retailer.” He added that the company has made further progress in Telephone: 0782 312 327 identifying and sourcing directly from best manufacturers globally, for a number of products. [email protected] Page 14 | June 13-19 2019 The Financial Gazette

Livestock producers are failing to grow their Zim’s cattle herds due to disease outbreaks and the lack of national medium to long term financing. herd remains stagnant

Tabitha Mutenga Features Editor

OMMERCIAL and A2 livestock producers are failing to grow their cattle herds due to disease Coutbreaks and the lack of medium to long term financing, a study commissioned by The Financial Gazette and the Zimbabwe Agricultural Society has revealed. The report, compiled by the Africa Economic De- velopment Strategies Africa on the state of the agricul- ture sector in Zimbabwe, noted that the main challenge faced by farmers across all livestock species was the high cost of production that adversely effects on farm viability and competitiveness locally and in the region. “Challenges faced in the sector due to the trans- formation were identified as disease outbreak, lack of access to affordable funding, expensive inputs when compared to the region and depressed cereal produc- tion. “Evidence from research shows that cattle produc- tion remained flat at around five million herd since 2001, this could be partly attributed to the outbreaks of foot and mouth disease and other diseases that were identified as a serious threat to the complete recovery of the cattle herd,” the study said. Research shows that 69 percent of the cattle in Zimbabwe are owned by small scale rural farmers, 11 percent by A1 farmers, A2 and large scale commer- cial farmers own a combined 10 percent, old resettled farmers own six percent while small scale commercial farmers own four percent. The study, which also aims to unpack the conditions prevailing in the agriculture sector so as to develop clear, practical responses and proposals for implemen- tation at government and private sector levels, revealed that on one hand, livestock herd sizes nationally de- clined by about 20 percent for beef, over 83 percent for dairy, and 26 and 25 percent for pigs and small rumi- nants, respectively. While the other livestock species did not recover, the dairy sector is noted to have defied the declining trends due to the presence of an integrated value chain. Although the current output of 75,4 million litres is still below the annual national demand of 120 million litres, the country has progressively reduced milk im- ports from South Africa by about 45 percent. “From the study, it was crystal clear that the average slaughter rate was around five percent of total head. The low slaughter rate was largely contributed by the fact that small scale farmers who controlled 69 percent of the total head keeps cattle as a store of wealth and as a sign of wealth and hence sees slaughtering as wast- age,” read part the Agriculture Sector Survey. The report said it was crucial for the country to cre- ate strong value chains linkages between farmers, the Cold Storage Company, meat processors and abattoirs, in order to improve the slaughter rate from the current five percent. [email protected] The Financial Gazette June 13-19 2019 | Page 15 Companies & Markets OK contends with supply challenges Omega Ukama Siyavora said the foreign currency “The environment and attitude of the authorities Business Reporter shortages and product supply challenges when you compare 2008 and the current situation is are threatening to persist, “but we will re- fundamentally different. Back in 2008, there were price IMBABWE Stock Exchange-listed retailer OK main focused on procuring adequate pro- controls and these have the effect of clearing product Zimbabwe (OK) says it has been facing product sup- duction to sustain operations”. off the shelves. Zply challenges due to shortages of foreign currency “We will elevate our engagement with “This time around the authorities’ approach is that and dysfunctions in the local industry. our traditional suppliers and we will contin- the market must find itself. It is difficult for the consum- This comes as the southern African country has been ue to rope in small to medium enterprises, er because of the prices but it is the most logical way to reeling from foreign currency shortages, which have been this will fill some of the gaps,” he added. of rationing product,” he said. caused by a number of factors, including its persistent trade Herbert Nkala, OK’s board chairman, And while Delta Corporation, the country’s largest deficit, waning industry competitiveness, as well as confi- said “strategic linkages with suppliers will beverage manufacturer, has hinted at the “improvement dence issues. be key to ensure the stores are reasonably of foreign currency availability on the Interbank mar- Alex Siyavora, OK’s chief executive, said product sup- stocked”. ket” following the central bank’s announcement of a ply became more and more intermittent towards the end of This also comes only a decade after the $500 million facility, OK, however, maintains that sup- last year because of the lack of foreign currency for imports. country faced acute product supply short- ply of hard cash remains “unsatisfactory”. “Local supply itself continued to be hamstrung by out- ages in 2008 due to foreign currency short- “There is some activity on the interbank market and dated technology, the lack and cost of capital as well as the ages and price controls. yes we have gotten some foreign currency but not all sting in cost of local activity,” he told analysts last week Siyavora, however, said the situation that we require,” Siyavora said. Herbert Nkala said. will not get that bad “this time around”. [email protected]

Turnall eyes profitability

Nelson Gahadza Business Reporter

URNALL Holdings (Turnall) says it is now shift- ing focus to cost containment through upgrading Toperational efficiencies, as well as right-sizing the business. Roselyn Chisveto, the company’s managing director, said the firm was now on a strong position to trade prof- itably. “Focus is now on re-capitalising the plants and im- prove production efficiencies, and reduce costs,” she told shareholders at the company’s annual general meet- ing last week. She said plans were underway to upgrade their non-asbestos plants in Bulawayo in order to improve production efficiency and reduce costs. Turnall, which has been streamlining its business in the past few years, recently consolidated its asbestos cement operations in Bulawayo to accrue economies of scale while the Harare asbestos plant was placed under care and maintenance. The company also realigned its staff requirements with the remodelled business and retrenched excess staff. In addition, it also exited the PVC pipes business in order to streamline the product portfolio. Chisveto said volumes are expected to remain de- pressed during the year, but values will continue to in- crease mainly due to inflationary pressures. She noted that pricing issues have been a major chal- lenge particularly on the export market owing to high production costs and influx of cheaper products from within the region. “The upgrades will help the company achieve com- petitiveness both on the domestic and export market. But what is key is maintaining a strategy that guard against any potential losses,” she said. Chisveto indicated that in the four months to May 2019, Turnall recorded a $8,5 million turnover, which is 21 percent above the previous year’s $7 million. She said sales were negatively affected by liquidity constrains, subdued aggregate demand and uncompeti- tive pricing due to fixed exchange rate of 1:1 which was in place during the first two months of 2019. “Export sales contributed 0, 13 percent compared to prior comparable period contribution of 0,51 percent, attributable to uncompetitive prices within the region,” she said. The Turnall boss further indicated that recent power shortages continue to affect production schedules result- ing in low outputs. [email protected] Page 16 | June 13-19 2019 The Financial Gazette Motoring VW Golf GTI meets VW Golf R Horses for “Golf” courses given the lousy weather conditions and I Volkswagen clearly put an unprec- drive up and park a Golf R alongside ily- adjustable seats are decked out with also have reason to believe that VW UK edented amount of development effort and you’ll surely agree the latter is too grey leather inserts flanked by carbon-fi- has priced the R somewhat closer to its into the Mark 7 Golf as it’s been “right” discrete for its own considerable creden- bre-look bolsters and black surrounds. GTI sibling (than in RSA) as well, but from the off, so the limited extent of the tials, notwithstanding a prominent front The dash is anthracite, the door panel TOP GEAR with that’s another story. 7.5 tweaks is fully understandable. Those valance in gloss black. Where the GTI are anthracite , the carpets are black, the Richard Wiley On home turf, VW has at last un- who read widely on automotive matters has red inlays, the R uses chrome picked roof lining is black. Only white stitching leashed the unrestricted 228kW Golf R cannot fail to have noticed that even in out in black. provides a contrast where the GTI uses N THE world of motoring, emotion motor to replace the mildly- throttled its run-out year, experienced journos still If it weren’t for the newly-introduced red – you get my drift? often overrules good sense such that outgoing 213kW version. In typically regard the Golf as the class benchmark diamond-cut 19-inch wheels, the vesti- Sure, the GTI uses the same excellent people buy cars that are impractical conservative fashion, VW had decid- such that it mostly stands at the top of the gial roof spoiler and in this instance, the seats but they’re uplifted by perforated I ed that the hotter parts of South Africa, pile in comparative tests. super-shiny Lapis Blue paintwork, this centre panels underlaid with a subtle red and fast-depreciating, and perhaps even unreliable. The lure of flash styling along with non-optimum fuel in terms So it was that there was no difficulty could be a 1.4TSI to the average onlook- base which, along with the sexier red means the heart overrules the head, but of octane numbers, could have a dele- in feeling fully at home behind the wheel er. stitching, makes for a warmer, sportier for years, the high-performance Golf terious effect on durability, so presum- of the 2019 GTI in Tungsten Silver that I detest showy attachments, but I do and more eye-catching interior that in formula has provided buyers with a ably changed the ignition mapping and graced my driveway. All the usual VW think VW could have and should have no way looks garish. Victory then for the blend of pace, durability, enduring value peak boost levels to leave a bigger safety attributes were on display. A glossy paint done more to differentiate the R. Why, GTI which, for the record, also has more and practicality that’s proved irresist- margin. Research has obviously shown finish, panel gaps of microscopic accu- for example, add chrome tinsel to a top boot space as the R’s AWD system takes ible. The GTI badge adorns more new that the well-proven motor has lots in re- racy and a nice four-square stance com- performance model? Where the GTI away some depth from the luggage area. Golfs in RSA than any other model in serve, hence the arrival of the full 228kW plemented in this 7.5 iteration by the fa- sports red add-ons, maybe the R should Both cars were equipped with VW’s the range which tells you all you need to derivative of VW’s famous four. mous red grille inlay that now terminates have been dressed- up in VW racing latest digital dash and infotainment sys- know about the cachet of that badge. In mid-2017 the “entry level” GTI in dual, upwards strakes housed within blue. And maybe that roof spoiler and tem which sports crystal-clear graphics, The range-topping and more expen- also received a mild power boost from the LED headlamps. the front valance could have been made rapid responses and a veritable host of sive R model with its greater power and 162 to 169kW along with a subtle range- The more prominent black strakes in just a bit more muscular and the uprated information and playback options, in- more sophisticated underpinnings has wide model upgrade which brought the front valance, along with the discrete brake calipers could usefully be blue in- cluding Apple Car Play and Android appealed to a more select market but its about the introduction of what has been red GTI badges inlaid within the front stead of gloss black? Auto along with a very good (optional genes are pure GTI, so I thought it ap- termed the 7.5 version. These changes fenders, provide just enough differenti- Don’t get me wrong in the sense that Discover Pro) sat nav system. I’m not propriate to compare the latest versions included reprofiled front wings and- in ation for onlookers to know this isn’t a the R still looks smart – it just doesn’t so sure that touch-screen functionality, of each as the model ranges run into their takes, new lamps with sweeping indi- cooking-level Golf, but it’s the gorgeous look adequately aggressive, and the even with gesture control, is necessarily twilight years. cators and a few tweaks down the back (optional) 19-inch Santiago alloys that theme continues inside where, notwith- the best solution in a constantly-moving Interestingly, Golf R sales in the UK along with the introduction of more red really stand out. standing very good material quality and environment but with familiarity comes are much closer to GTI levels than in elements into the GTI interior – not for- There’s nothing shouty, mark you – impeccable fit and finish, the R just looks ease of operation, so let’s say VW’s sys- RSA but I suspect the practical virtues getting the availability of a digital dash just discrete GTI bits that have marked monotone. tem is one of the best out there. of the AWD system have more appeal display - about which more in a moment. out the model since 1976. But now Its wonderfully-comfortable and eas- For full article visit www.fingaz.co.zw

Again, the red bits add to the visual appeal of the GTI’s comfortable interior. Flashes of red uplift the GTI exterior and pay homage to the 1976 original.

Lovely instrument displays and comfy seats for the somewhat bland Golf R interior Smart wheels and glossy paint apart, the Golf R is visually understated. The Financial Gazette June 13-19 2019 | Page S1 Opinion How Robert Mugabe destroyed Zimbabwe

Steve Hanke abandoned full dollarisation and started to issue its own currency in enormous amounts. HAT do Slobodan Milosevic, Robert Mug- The "New Zim dollar" was issued at par to the US abe, and Nicolás Maduro have in common? dollar but traded at a signifi cant discount. The money WOther than being leaders who kept the Com- supply, as a result of the New Zim dollar issuance, ex- munist Manifesto at their bedside, all three ushered in ploded, and so did infl ation. devastating hyperinfl ations. As night follows day, Zimbabwe experienced its Hyperinfl ations are rare. They have only occurred second episode of hyperinfl ation in less than 10 years, when the supply of money has been governed by dis- starting in September of 2017 and peaking at a month- cretionary paper money standards. No hyperinfl ation ly infl ation rate of 185 percent. has ever been recorded when money has been com- Mugabe had been in the saddle just shy of 30 years, modity-based or when paper money has been convert- but this was the straw that broke the camel's back. ible into a commodity. Zimbabwe's second episode of hyperinfl ation opened The fi rst hyperinfl ation occurred during the French the door to Mugabe's ouster in a November 2017 coup Revolution (1789-96) when the mandat collapsed and d'etat by the Zimbabwe Defence Forces. Robert Mugabe the monthly infl ation rate peaked at 143 percent in De- cember of 1795. More than a century elapsed before another episode of hyperinfl ation occurred. Not coincidentally, this period of currency tranquil- ity occurred during the heyday of the gold standard. With the emergence and adoption of fi at currencies, the 20th century ushered in currency instability and in- fl ation. Indeed, since 1900 there have been 57 episodes of hyperinfl ation. And, fi ve of those episodes can be claimed by Yugoslavia, Zimbabwe, and Venezuela. Fast forward to March of 2007, when Robert Mug- abe was in his 19th year as president of Zimbabwe. Congratulations! The African country was experiencing an episode of hyperinfl ation that was destroying the economy, push- ing more of its inhab- itants into poverty, Makorokoto! ast forward to and forcing millions March of 2007, of Zimbabweans to Fwhen Robert emigrate. In the 1997- Mugabe was in his 19th 2007 period, living Amhlophe! year as president of standards (as mea- Zimbabwe. The Afri- sured by real gross do- can country was expe- mestic product – GDP riencing an episode of – per capita) fell by a hyperinfl ation that was stunning 38 percent. You were one of the winners in the category destroying the econo- The episode, which Outstanding CEO of the year at the Megafest my, pushing more of its peaked at an annual inhabitants into pover- infl ation rate of 89,7 Leadership awards. You were the Bronze ty, and forcing millions sextillion percent — that is 89,7 followed winner with the citation: Special Recognition for of Zimbabweans to em- by 20 zeros—in No- a Welcoming approach to doing business. igrate. In the 1997-2007 vember of 2008, had period, living standards robbed people of their (as measured by real savings and fi nancial gross domestic product institutions of their The shareholders, Board and Management of – GDP – per capita) fell capital through real Adela Contracting (Private) Limited would like by a stunning 38 per- (infl ation-adjusted) cent.” interest rates that were to congratulate Mr Samuel Mukubvu the CEO actually negative. of Tanaka Ventures for winning the Megafest This form of theft occurred, in large part, due to laws and regulations governing fi nancial institutions leadership award in the category of outstanding (pensions funds, insurance companies, building soci- eties, and banks) that forced them to either purchase CEO of the year award. government treasury bills that yielded only a small fraction of the current infl ation rate or make deposits at the Reserve Bank of Zimbabwe (RBZ) that paid no interest. So, what was the cause of this economic meltdown? The blame lay at the doorstep of the Zimbabwean gov- ernment, whose policies forced the RBZ to print mon- ey. From January 2005 to May 2007, the RBZ issued currency at a rate that exceeded that of Germany's cen- tral bank from January 1921 to May 1923, the ramp-up phase of the great German hyperinfl ation. During this period, the RBZ more than doubled its staff, from 618 to 1,360 employees. Despite this 120 percent increase in staff, the RBZ staff was incapa- ble of producing accurate and timely data — even the most standard economic and fi nancial statistics arrived months late, if at all. With the help of Alex Kwok and my research as- sistants at the Johns Hopkins-Cato Institute Trouble Currencies Project, I was able to fi ll the gap left by the RBZ and accurately measure Zimbabwe's fi rst hyper- infl ation episode. By my measurement, the monthly infl ation rate peaked at 79,6 billion percent in November of 2008, taking over the rank of second and pushing the Yugo- slavia episode to the third most severe episode of hy- perinfl ation. Despite this astronomical fi gure, Mugabe was able to remain in offi ce for another nine years. This was due, in part, to the fact that, in early 2009, Zimbabwe dumped the Zimbabwe dollar and offi cially dollarised. But, Mugabe never learned the lessons of 2008. When his party, ZANU PF, regained full control of 22 Anthony Drive, Msasa, Harare. Zimbabwe in 2013, government spending and public debt surged. To fi nance its ballooning defi cits, the government S2 | June 13-19 2019 The Financial Gazette The Financial Gazette June 13-19 2019 | Page S3

Zim business leaders honoured at Megafest Leadership Awards Guest speaker Luxon Zembe. EGAFEST Holdings recently celebrated the country’s business leaders at the 2019 Leader- Mship Awards held at a glamorous ceremony at Rainbow Towers in Harare. The awards ceremony followed a selection process in which nominations were drawn from various organisa- tions across the country and subjected to a rigorous adju- dication process. The Leadership Awards are a way of celebrating Zim- babwe’s business heroes. Megafest chief executive, Dr Tafadzwa Matsika, said the Leadership Awards recognise those industry, business leaders who are servant leaders, those that have worked for the betterment of the organisation and the economy. “The economy has not been performing very well, it seems as if it’s got a cold and it’s sneezing, but neverthe- less we are quite excited that at a time like this, we are able to recognise the leaders of our time, those that have done amazingly well in these trying times, those that have gone through the doldrums of the economy, those that are sustaining the economy from the front,” Matsika said. Guest of honour, businessman and former Zimbabwe National Chamber of Commerce president, Luxon Zem- be, said the awards were ideal especially in a country that was full of uncertainty. “In times like these, when everyone is worried and things are challenging, especially when people are wor- ried whether we are going back to 2008, everybody is worried about survival and about tomorrow. Fortunately amidst all these worries and challenges, we can still take time to celebrate our heroes,” Zembe said. Winners included Zimbabwe Parks and Wildlife direc- tor-general Fulton Mangwanya, who walked away with the Outstanding Public Service Leader of the Year award. Mangwanya joined Zimparks in 2017. Procurement Regulatory Authority of Zimbabwe (PRAZ) chief executive Nysha Chizu won the Outstand- ing CEO of the Year Award. Chizu has been PRAZ chief executive since January 2018. He was attached to the Of- fice of the President and Cabinet as the technical person for the Public Procurement Reform that promulgated the Public Procurement and Disposal of Public Assets Act [Chapter 22:23]. The Act established PRAZ, whose man- date among others is to set standards, monitor and eval- uate, professionalise and modernise public procurement. Chizu has over two decades of supply chain manage- ment experience in the private and public sectors, han- dling different portfolios in procurement, stores and logis- tics management. He has done supply chain consultancy and was the World Bank procurement consultant for the Country Integrated Fiduciary Assessment of Zimbabwe that produced the Country Procurement Assessment Re- port that is guiding public procurement reforms. Other winners include Outstanding Advocate and Legal Leader of the Year, Honour Mkushi, of Sawyer & Mkushi Legal Practitioners, Outstanding Leader in Local Government of the Year, Engineer Hosiah Abra- ham Chisango from the City of Harare and Outstanding Banking and Finance leader of the Year winner from CBZ Bank. The awards have become the country’s premier busi- ness awards, rewarding the country’s great business minds. Megafest Business Awards are held annually as a way of recognising, developing and promoting profession- al business acumen at all business levels. These awards were introduced in 2008 as part of Matsika’s doctorate research and have been a common feature ever since and are supported through donations and sponsorship. Since then several well-known business people, managers and corporates in Zimbabwe have been recipients of the Pre- mier and Prestigious Megafest Awards. The awards cere- mony, attended by close to 300 people, was a cocktail of celebrating a milestone and honouring top business per- sons who had distinguished themselves in business and leadership. Page S4 | June 13-19 2019 MEGAFEST LEADERSHIP AWARDS SPECIAL FEATURE The Financial Gazette Qualities required to win Megafest Award

N individual is the sum total of his/her per- mean the absence of turmoil. One has to maintain sonal attributes. You can tell who a person their cool even if in the midst of chaos and threat is by assessing how they behave in given of danger. Peace is a mental state that one must pur- CONGRATULATIONS! Acircumstances or situations. People are bound to be sue. It therefore calls for one to master the art of different hence there should never be an expecta- ensuring that nothing ever disturbs the processes in tion that people will be the same one day. They may the mind. agree on one issue strongly but be at a different tan- 5. Personality that is pleasant ― People who gent on a separate subject. exude pleasant personalities create friends and net- The differences that people have make this world work easily. These are people who know how to re- CELEBRATING a wonderful place to be, it becomes so colourful and late with other people. pleasurable to stay in. Roles that 1. Pro-activity in situations ― To be proactive require human A proactive individual is pre- LEADERSHIP is to be able to discern what needs to be done and interaction ferred for leadership positions then do it without even waiting to consult and fol- such as leader- because sometimes you will not low the red tape. ship, customer always have people to consult EXCELLENCE A proactive individual is preferred for leadership care, sales, over an idea. As a leader you will positions because sometimes you will not always help desk and have situations when you have to have people to consult over an idea. As a leader you so on require create or control a situation rath- will have situations when you have to create or con- someone who er than always having to respond trol a situation rather than always having to respond is friend- Property Wise Real Estate would like to salute ALEXANDER MILLIN to what has happened (reactionary or reactivity). ly. Pleasant to what has happened (reaction- for winning the OUTSTANDING LEADER IN REAL ESTATE AND 2. Persistence to the end ― This is the ability to should never ary or reactivity). PROPERTY MANAGEMENT OF THE YEAR, PLATINUM AWARD at the be able to continue steadfastly at something in the be confused Megafest Annual Awards. midst of adversity and immense difficulty. with weak. People who persist to the end have a winning at- These people are friendly and yet firm in their May you continue to champion the cause for the growth and titude, never giving up because of impending fail- convictions and beliefs. sustainability of the real estate sector in Zimbabwe and beyond. ure. Persistence is the willingness to push until there 6. Positive character at all times ― No one ever are results showing. wants to be close to people who are always negative. Many people have great potential but lack the Positive thinkers look at the brighter side of life, the Makorokoto, Amhlophe! urge to push to the end. side of possibility, the side of hoping against hope. 3. Patience in tribulation ― Patience can be de- These are constructive, optimistic and confident fined as the capacity to tolerate delay, trouble, or people. A positive person can easily attract a job or suffering without becoming angry or upset. favour while a negative person looks on. In life one may experience delays in getting what 7. Professionalism and good work ethic ― Pro- one needs, patience is important. Things may not fessionalism is the competence or skill expected of happen according to your own timing or your own a professional. A professional who is guided by a set thinking but one has to develop tenacity to be solid, of moral principles will always go far and beyond to hold on even when it does not make sense. and ordinary person. 4. Peace in the midst of turmoil ― When one When at work, such an individual will not abuse Property Wise Real Estate ( Pvt)/Ltd is at peace they are free from disturbance, anxiety company resources such as time, finances and so on. No 7 Mitchell Court, Mitchell Road, Greendale, Harare. Contact 0774 221 454 Property Sales │ Property Management │ Property Valuations │ Facilities Management │ Project Management or stress. If you lack in principles then any behaviour is ac- Peace is contentment with what is. It does not ceptable to you. The Financial Gazette MEGAFEST LEADERSHIP AWARDS SPECIAL FEATURE June 13-19 2019 | Page S5 Megafest Leadership Awards

TelOne representatives receiving the Outstanding Public Relations & Corporate Affairs Outstanding Leader in Medical and Health Care of the Year winner Dr Tafadzwa Gutu Leader of the Year on behalf of Melody Mbira-Harry. from Premier Services Medical Investments.

Outstanding Public Service Leader of the Year Gold winner: Bernard Zvamada (Parliament of Zimbabwe) Platinum winner: Fulton U Mangwanya (Zimbabwe Parks and Wildlife) Outstanding Marketing Leader of the Year Bronze winner: Dennis Mambure (First Capital Bank) Silver winner: Stella Nkomo (Zimbabwe International Trade Fair) Silver winner: Michael Chiduku (National Social Security Au- thority) Gold winner: Chengetai Madondo (Dicomm McCann) Platinum winner: Tapuwa Mandimutsira (Zimpapers) Outstanding Educational Leader of the Year Platinum winner: Taurayi Mataka (Trust Academy) Outstanding Accounting, Auditing & Investment Leader of the Year Gold winner: Lisbon Mhonda (Swift) Platinum winner: Farai Matanhire (Zimpapers) Outstanding Legal and Corporate Secretary of the Year Platinum winner: Meryl Mahlangu (Green Fuel) Outstanding Advocate and Legal Leader of the Year Platinum winner: Honour P. Mkushi (Sawyer & Mkushi Legal Practitioners) Outstanding Leader in Media of the Year Silver winner: Mqhele Tshuma (Classic 263) Gold winner: Tonderai Katsande TK (ZiFM Stereo) Platinum winner: Wisdom Mdzungairi (Newsday) Outstanding Leader in Local Government of the Year Gold winner: Maxwell Kaitano (Chinhoyi Municipality) Platinum winner: Hosiah Abraham Chisango (City of Harare) Outstanding Leader in Hotel, Tourism and Hospitality of the Year Silver winner: Douglas Mukucha (Chop Chop Grill House and Coffee Shop) Silver winner: Forbes Zaranyika (Air Namibia) Gold Winner: Crispen Chimumvuri (Cresta Oasis) Platinum winner: Tafadzwa Mushangwe (Cresta Hotels) Outstanding Leader in Engineering of the Year Gold winner: Lloyd Kuda Agere (Cascade Consulting Engineers Zimbabwe) Platinum winner: Misheck Siyakatshana (Zimbabwe Energy Regulatory Authority) Outstanding Banking and Finance leader of the Year Gold winner: Lameck Gweshe (Lion Finance Zimbabwe) Platinum winner: Saul Chin'anga (CBZ Holdings) Outstanding Leader in Medical and Health Care of the Year Gold winner: Dr Stanley Ngwaru (Avenues Women Clinic) Platinum winner: Dr Tafadzwa Gutu (Premier Services Medical Investments) Outstanding Leader in Real Estate and Property Management of the Year Gold winner: Wasara Victor Trevor (Dollar Real Estate) Platinum winner: Millin Alexander (Property Wise Real Estate) Young and Promising Business Personality of the Year Silver winner: Lorraine Chindiya Mufambi (Rent a Car) Gold winner: Clara Dondo (Impala Car Rental) Platinum winner: Lynette Tariro Veremu (Grain Millers Associ- ation of Zimbabwe) Outstanding Public Relations & Corporate Affairs Leader of Year Silver winner: Sugar Chagonda (Zimbabwe Consolidated Dia- mond Company ) Gold winner: Marjorie Fadziso Mutemererwa (Seed Co Group) Platinum winner: Melody Mbira Harry (TelOne) Outstanding Human Capital Development Leader of the Year Silver winner: Cynthia Ncube (Population Services Zimbabwe) Silver winner: Martin Kweza (Zimbabwe National Water Au- thority) Gold winner: Patrick Mutandwa (Seed Co Group) Platinum winner: Isaac Wisikoti (Brands Africa) Outstanding Entrepreneur of the Year Silver winner: Georgina Duri (Zanox Men) Gold winner: Dr Solomon T Chikanda (Vineyard Funeral ) Platinum winner: Cynthia Bizure Sithole (Janjam ) Outstanding Thought Leader of the Year Gold winner: Nyasha Nyambuya (Microhub Financial Services) Platinum winner: Benny Luwisi (Africa Albida Tourism) Outstanding Industrialist of the Year Platinum winner: Baldwin Guchu (Simbisa) Outstanding Business Leader of the Year Gold winner: Michael Monson (Monson Funeral Directors) Platinum winner: Collen Mathaga (Proton Bakers) Outstanding CEO of the Year Bronze winner: Samuel Mukubvu (Tanaka Ventures) Silver winner: Tanya Chigombe (Provenly Safe Wear) Gold winner: Nyasha Matonda (Willdale Limited) Platinum winner: Nyasha Chizu (Procurement Regulatory Au- thority of Zimbabwe) Page S6 | June 13-19 2019 MEGAFEST LEADERSHIP AWARDS SPECIAL FEATURE The Financial Gazette Megafest leadership winners in pictures The Financial Gazette MEGAFEST LEADERSHIP AWARDS SPECIAL FEATURE June 13-19 2019 | Page S7

2019 Megafest Leadership Awards winner.

2019 Megafest Leadership Awards winners. Why are the awards important for business?

WARDS can come in many The Megafest Business Awards are forms, from the pomp and cer- your opportunity to shine and demon- Aemony of award shows and strate you are an outstanding Zimba- trophies to ones where the winner does bwean business. PLATINUM WINNER not receive a prize in the conventional The Megafest Business Awards sense but instead gains from the pres- connect the nations’ business leaders tige that it brings the firm. through its annual ceremony and year- There are so many benefits to enter- round thought leadership programme to ing awards. celebrate enterprise excellence. Not only are they a fantastic way to •The award is a great opportunity gain recognition from industry peers to raise your profile within the - man but they also showcase your compa- agement community, helping to accel- ny, showing customers and clients that erate your management career as well you’re one of the best in the market. as gaining recognition and acknowledg- The benefits don’t just stop there ment for your skills. though. •It’s a great achievement, conferring Alongside the obvious, gaining a tremendous prestige on the individual credible third party endorsement of a nominated as well as their company. product, service or company can help •Taking part also offers a spring- increase sales, enhance reputation and board to career progression. generate growth. •This competition differs from oth- It’s very easy to get bogged down in er industry awards as it is designed and the day-to-day management minutiae judged by the people who matter – the and forget to celebrate your successes. customers. An award win can be an incredible •Creates a unique opportunity to morale boost especially in times of re- challenge existing stereotypes, under- cession. stand emerging trends and add value to Some awards also create a buzz in organisations aiming to commercialise the press industry, and are therefore and apply new and innovative concepts. worth pursuing if you hope to gain •Crucial in unveiling the perception Congratulations to our Town Clerk some attraction in the media. of the market concerning your organi- In general what’s great about the sation. for being awarded the Platinum winner’s way awards work is that you tend not to •Disseminating information about be judged on profit margins or how well your company to various stakeholders award as the outstanding leader in known you are. and is also a very effective promotional Most of the time it’s about that cer- tool. Local Government for 2019 tain ‘je ne sais quoi’ — having that •It is a continuous process that seeks unique quality within the market or to enhance personal and company im- CONGRATULATIONS!MAKOROKOTO!AMHLOPE! making a difference to those around age as it moves into the future. you. •Reassurance and reinforcement to So whatever size your business stakeholders that they are dealing with a is, you can compete with firms of all strong recognised up market company. shapes and sizes and still stand your •Attracts, retains and enhances a pro- ground. ductive workforce. Everybody wants to Awards benefits be associated with the best. June 13-19 2019 | Page S8 The Financial Gazette NEW PRESIDIUM Feature

Ruzvidzo new CZI president

HE Confederation of Zimbabwe Industries General Beltings general manager. (CZI) held its 62nd Annual General Meeting Treasurer: Edson Padya ― managing director, T on May 30, 2019, where a new leadership BOC Gases was thrust into office. Chambers Henry Ruzvidzo, the Richmond Furnishers man- Manicaland aging director, became the CZI president, taking President: Victoria Jakazi (Wattle Company) over from Sifelani Jabangwe. Vice presidents: Thomas Masese (Africa Uni- Ruzvidzo served as the CZI Mashonaland cham- versity) ber vice president before being promoted to CZI Joseph Mavu (Associated vice president. Foods) In his acceptance speech, Ruzvidzo acknowl- Mashonaland edged the need for a collaborative effort in order to President: Gertrude Mashonganyika (ZFC) contribute towards shaping the country’s economic Vice presidents: Roseline Chisveto (Turnall) environment. He went further to urge members to Eustice Mubvurungwa (Blue remain supportive of the orgarnisation. Ribbon Foods) “I accept this honour to lead CZI for the next Matabeleland 12 months. I wish to thank the outgoing president President: Shepherd Chawira (Shepco) for his support. I had subtle encouragement from Vice presidents: Raymond Shonhiwa (BBR) previous presidents. Electra Mafunga “I look forward with trepidation. It will require (NRZ) wide consultation, and work by all of us. I am cer- Midlands tain we cannot be bystanders as our fate is written. President: Agatha Gandidze (Dendairy) CZI president Henry Ruzvidzo. I, therefore, call on all members to play their part Vice presidents: Rorani Zulu (Lesaffre) to shape the environment so that our businesses sur- Allan Manhanga (Sable Chemi- vive,” he said. cals) Ruzvidzo will be deputised by Walter Chigwa- Industrial Associations chairman: Luckson da, Zimplow managing director, and Joseph Gunda, Gwara, Motor Industry Association of Zimbabwe.

CZI immediate past president Sifelani Jabangwe.

CONGRATULATIONS!!

The Wattle Company Ltd wishes to congratulate Mr Henry Ruzvidzo on being elected as. The President of the Confederation of Zimbabwe Industries (CZI).

We wish you all the best in your term.

Pine sawn timber Creosote Treated poles Vesta grill charcoal 4kg bags and 30kg bulk charcoal

Rhomosa brand solid, green special powder and ordinary Roofing trusses powder wattle extract

3 Durban Road. P.O.Box 250 Mutare, Zimbabwe TEL (+263) 20 63821 FAX +(263) 20 65347 Marketing /64564 Main E-MAIL: [email protected] Website: www.wattle.co.zw The Financial Gazette CZI NEW PRESIDIUM CONGRATULATORY SPECIAL FEATURE June 13-19 2019 | Page S9 The CZI new presidium President: Henry Ruz- Vice-president: Walter Vice-president: Joseph vidzo Chigwada Gunda. Ruzvidzo is the Chigwada is the Gunda is the general managing director of Zimplow managing di- manager for General Belt- Richmond Furniture, rector. He is a holder of ings. He was the CZI Mata- which started as a di- a BSc Agric Honours beleland Chapter president. vision of Adam Bede (University of Zimba- He is a holder of a Bache- in 2010, manufactur- bwe), MSc (Universi- lor of Technology Degree ing lounge suites and ty of Aberdeen) and a in applied Chemistry and middle level furniture Diploma in Executive Chemical Technology and under the Richmond Management from the a Masters Degree in Busi- Furniture Brand. Adam University of Zimba- ness Administration. He has Bede discontinued the bwe. over 18 years experience in division’s operations at production and operations the end of 2015. Ruz- management in the chemi- vidzo has over 30 years cals and allied industry. He industry experience as worked for Lobatse Clay an engineer and a man- Works Botswana before ager. joining General Beltings. Retooling Zimbabwe

industries 36 – 38 Birmingham Road, Southerton, Harare. Tel: 08677007182 www.zimplow.com IMBABWE is losing in excess of $2 billion annually through lack of competiveness and use of antiquated machinery. Zimbabwe’s manufacturing sector is sad- Zdled with antiquated equipment, most of which was imported from Britain over 40 decades ago. “It has been estimated that Zimbabwe is losing in excess of $2 billion annually through the loss of com- petitiveness. The use of antiquated machinery in pro- duction processes significantly impacts on the quality of a significant contributor,” Stan Matiza, managing director African Century said at the Buyers-Sellers Forum at the 2019 Zimbabwe International Trade Fair. For Zimbabwe to be competitive there is need to produce products that compete favourably locally and abroad and it requires new equipment and technolo- gies that drive efficiencies and reduce costs. “The biggest question many of these corporates face is whether to upgrade the old machinery they have or to dismantle it and start afresh for them to be competitive. “Due to the downward spiral in capacity utilisa- tion, most of these firms are facing collapse due to viability challenges,” Matiza said. The World Bank estimated in its recent study that Zimbabwe needs above $1,7 billion per year for re- tooling industries and over the next two decades around $33 billion. “The manufacturing sector require about US$1 bil- lion for working capital and equipment upgrades to arrest a downward spiral in capacity utilisation and collapse of firms “It also needs to adopt new business models, invest in new technologies and revamp processes.” Financial requirements for retooling include fi- Zimplow Holdings Limited would like to recognise and nance for infrastructural developments, capital expen- diture for purchase of eth equipment, working capital congratulate Mr Walter Chigwada, the Managing Director purposes and for research and development. for our Mealie Brand Division on his new appointment into the CZI Presidium as the Vice President. We extend our warmest congratulations to him on this great achievement and we wish him success during his tenure of office. Page S10 | June 13-19 2019 CZI NEW PRESIDIUM CONGRATULATORY SPECIAL FEATURE The Financial Gazette

CZI engages power utility as power situation deteriorates HE CZI Energy and Environment ZESA presents a proper plan to service Committee has engaged the power their debt. Tutility, ZESA to discuss the pow- In the past, when ZESA was facing er supply status, which has seen several such shortages, it appealed to its cus- parts of the country experiencing Power tomers and to industry for help. ZESA is cuts in some cases lasting up to 10 hours therefore appealing to CZI membership ZESA highlighted the fall in water for support in mobilising foreign curren- levels in Kariba as the main reason for cy and generating local currency. ZESA reduced power supply. stated that they are unable to disclose the Kariba, the largest electricity produc- exact figures they need at the moment, er in Zimbabwe with a capacity of 1,050 but they will do so in due course. MW, is generating less than a third of that CZI pointed the ZESA should bring a due to low water levels caused by a se- full proposal of the terms and conditions vere drought. for such and arrangement in order to ef- The breakdowns at Hwange thermal fectively engage members. power stations have not helped the situa- CZI also indicated to ZESA that the tion. Coal price has increased by 500 per- tariff in RTGS was not sustainable and cent and diesel price has also increased would support ZESA tariff review de- phenomenally. pending on the magnitude and well and ZESA indicated that the despite all the procedures being followed. Amid all these increases, their tariffs have re- this, ZESA is prioritising industry and mained stable since 2011. mining. Despite indications that ESKOM is For those with dedicated lines they facing its own power supply struggles, will be able to get power with little or no power utility Zesa Holdings stated that interruptions. Those without dedicated they are still able to import from them line may approach ZESA. This is to en- during off peak hours. sure an almost continuous cycle of pro- However, ESKOM and HCB are both duction, at a time when generators, the owed by ZESA large sums of debts and most popular alternative, are expensive they can only be allowed to import if to run with diesel prices having shot up. The Financial Gazette CZI NEW PRESIDIUM CONGRATULATORY SPECIAL FEATURE June 13-19 2019 | Page S11 Unstable RTGS currency affects capacity utilisation ― Ruzvidzo

HR: Pricing of products is to a large de- be for the country to win and not the indi- HE Confederation of Zimbabwe Indus- gree dictated by environment factors such vidual parties within the tripartite. tries (CZI) recently elected Henry Ruz- as inflation expectation and the medium Q: Who is Henry Ruzvidzo? What in- vidzo (HR) as the body’s new president, of trade. Stability in exchange rates and spires and motivates you. taking over from Sifelani Jabangwe. Ruz- inflation will tame the pricing madness HR: Henry Ruzvidzo has worked for Tvidzo is the managing director of Richwood Fur- currently obtaining. many years in a number of Zimbabwe’s niture and he is coming at a time when the coun- Q: Your views on the Tripartite Ne- industrial sectors, rising from engineer try and the manufacturing sector is facing serious gotiating Forum Act enacted recently? through various levels of management competiveness and capacity utilisation challenges. This is a good development which will to director level. Henry is passionate In an interview with The Financial Gazette, Ruz- require parties to exercise good faith in about the manufacturing industry and has vidzo indicated that the industry was beset with a looking at issues and proffering solutions. worked tirelessly during the past decade plethora of challenges emanating from the adverse It is time to get down to the real business to improve the environment for industry. economic conditions. of coming up with binding solutions to He enjoys sport, especially golf. He is in- Below are excerpts of the interview with The Fi- challenges affecting the country in a col- spired by selfless people and is motivated nancial Gazette: lective manner, for the good of all. by challenges which require team work to Hopefully the attitude of all parties will resolve. Q: As the new CZI president what is your vision for the organisation? HR: As I look at my term as CZI president, I am aiming to continue the good work done by my prede- cessors in positioning CZI as a leading BMO whose views are sought and valued by policy makers, a re- sponsive organisation that addresses member issues with efficiency and is always ready to provide infor- mation for decision makers in industry. I see the organ- isation playing its full role in contributing to solutions for the country’s economic challenges. Q: The industry has been facing a number of challenges, how does CZI intend to work with gov- ernment to protect and support industry? HR: Industry is indeed facing a number of challeng- es that include foreign currency availability, low levels of investment, competitiveness issues due to the high cost of doing business, rapid sustained depreciation Henry Ruzvidzo of the local currency which makes trading in the RTG dollar difficult and also affects purchasing capacity of President a large section of the market. Industry will continue to lobby for policies that will address the structural weak- nesses in the economy. Industry will also participate in efforts to improve the doing business environment. Q: What can be done to assist those industries that are facing collapse especially the manufactur- ing sector? HR: The manufacturing sector is a key pillar of the economy with strong backward and forward links with all the sectors of the economy. Industries that are facing collapse have weathered many storms over Walter Chigwada Joseph Gunda a number of years and deserve support. The biggest V. President V. President challenges for manufacturing has been the lack of long term reasonably priced financing for modernisation. Patient capital, which includes foreign currency, is also important and has been unavailable due to a number of factors which include country risk factors as well as the high cost of doing business. Q: Industry’s capacity utilisation is said to have declined since the beginning of the year, what are some of the reasons behind this decline? HR: The decline has been as a result of adverse market conditions caused by the unstable RTGS cur- Edson Padya rency. The unequal pace of adjustment of pricing in the Treasurer economy leads to problems in the long run the local market purchasing capacity has been impacted for in- stance. The preference for USD payments by suppliers has pushed up RTGS prices further making products BOC Directors, Management and Staff would like to congratulate unaffordable. Q: Is the interbank exchange market working you on your new appointments to the CZI PRESIDIUM. for industry? HR: The interbank market has not worked as was expected. There is insufficient foreign currency at the We wish you success in your new tenure. interbank market, the unrequited demand from this market has probably pushed up rates on the parallel market. Q: The CZI was very influential in pushing for an environment that allows for low ranking under the Ease of Doing Business in Zimbabwe. What are your views and comments on the Zimbabwe Invest- ment Development Board (ZIDA) Bill? HR: The setting up of ZIDA is an important devel- opment which will lead to efficient processing of in- vestment projects. The debottlenecking of administra- tive processes in government is welcome and must be extended to other areas such as for instance, one stop import permit processing for raw materials. Q: What could be the major stumbling blocks to the country’s economic reform agenda (Transition- al Stabilisation Programme)? HR: The context for any change programme is im- portant, stakeholder buy in and stakeholder impact mitigation are also important considerations. An im- plementation plan that considers possible unintended outcomes allows for building in of contingencies. Q: Consumers are on the receiving end of price hikes. Do you foresee changes in the pricing regime? Page S12 | June 13-19 2019 CZI NEW PRESIDIUM CONGRATULATORY SPECIAL FEATURE The Financial Gazette

RBZ deputy governor Kupukile Mlambo RBZ hopes for stability HE Reserve Bank of Zimbabwe was back on track. Mlambo highlighted (RBZ) deputy governor Kupukile that while year on year inflation was still TMlambo says monetary policy in- high, the best indicator of stability was troduced this year with the aim of remov- the month on month inflation and this has ing various distortions in the economy, gone down significantly. reduce inflation and preserve the value of He said that the US$500 million be- the RTGS (ZWL). ing injected into the economy through the However, the slow start of the inter- interbank will go a long way in bringing bank market caused by various factors stability. has led to the runway exchange rate. The deputy governor referred to what Addressing the CZI AGM recently, is known as the “the impossible trinity” Mlambo said that there were many fac- or Trilemma economics, to explain why tors affecting the foreign currency trading the MPS is struggling to work. leading to unsustainable exchange rates. This is a concept in international eco- Once such factor he highlighted was the nomics which states that it is impossible role of cartels and speculators. to have all three of the following at the While the management of economic same time; a fixed foreign exchange rate, situation through the monetary and fis- free capital movement (absence of capital cal policies have not gone according to controls) and an independent monetary plan, he still believes that the situation policy. To Page S14

The Management and Staff of Prime Sole congratulates the new presidium. Excellent work Abbiamo Trading (Pvt) Ltd would like to hereby congratulate; never goes unrecognized. We wish you success during your tenure in office.  We look forward to working with you. The Quality Assurance and Research Manager of Dendairy Limited

For her election into the Presidium of the Confederation of Zimbabwean Industry (CZI) as the Midlands Chamber President.

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The Shepco group of companies, namely Shepco BMA Fasteners (Pvt) Limited and Shepco Industrial Supplies (Pvt) Limited and its entire subsidiaries would like to congratulate the newly elected leadership of the Confederation of Zimbabwe Industries (CZI) which was elected following the 62nd Annual General Meeting (AGM) held on 30 May 2019 to the following executive portfolios . The new leadership consists of:- NATIONAL LEVEL: President: Henry Ruzvidzo – Managing Director, Richmond Furniture. Vice Presidents: Walter Chigwada – Managing Director, Zimplow, Joseph Gunda – General Manager, General Beltings, Treasurer: Edson Padya – Managing Director, BOC Gases.

CHAMBERS: Matebeleland- President: Shepherd Chawira, Group Chief Executive Officer (Shepco Group of companies). Vice Presidents: Raymond Shonhiwa (BBR), Electra Mafunga (NRZ).Manicaland – President: Victoria Jakazi (Wattle Company). Vice Presidents: Thomas Masese (Africa University), Joseph Mavu (Associated Foods). Mashonaland- President: Gertrude Mashonganyika (ZFC). Vice Presidents: Roseline Chisveto (Turnall), Eustine Mubvurungwa (Blue Ribbon Foods). Midlands- President: Agatha Gandidze (Dendairy), Vice Presidents: Rorani Zulu (Lesaffre), Allan Manhanga (Sable Chemicals).

We wish you great success in driving the CZI agenda of promoting viability and competitiveness of business in Zimbabwe. Amhlope, Makorokoto, Congratulations

9 Dunlop Road, Belmont. P. O. Box 8249, Bulawayo. +263 (292) 460781-2/+263 (292) 460784. [email protected] 478 Pomona, Borrowdale Along Harare Drive, Harare. +263 (242) 853255-7/+263 (242) 853254. www.shepcobma.co.zw

SpecialistSpecialist manufacturers Manufacturers of Quality of Bolts Fasteners and Nuts We’re nuts about bolts

For more information, get in touch with our sales reps: I.C. - 0714009356, M.S. - 0785035819, E.M. - 0775195049 Page S14 | June 13-19 2019 CZI NEW PRESIDIUM CONGRATULATORY SPECIAL FEATURE The Financial Gazette RBZ hopes for stability From Page S12 This is a finding from empirical stud- ies where governments that have tried to simultaneously pursue all three goals have failed. He also explained that in any basic economy, exchange rates must be for- malized and transparent, those responsi- ble for the hikes and unpredictable rates which are horrendous must be acquitted. It was also stated that having goods and services being priced in bond, RTGS and USD is inefficient, confusing and is not a long-term solution to our conundrum. The deputy governor explained that this situation is unsustainable; we have a duty to the people of Zimbabwe, to commit price stability and fighting to keep infla- Kupukile Mlambo tion under control. The deputy governor also stated that The rate is not sustainable currently the Monetory Policy Statement aimed at rated at 1:8 which is not doable. The need setting a robust market-based framework to deal with the exchange rate is critical for determination of the exchange rate, because no business will survive. that way facilitating financial sector sta- He said that the US$285 billion defi- bility, containing of inflationary pressures cit is far less than the previous period re- and building of confidence is paramount garding the export-imports comparison. as objectives of the MPS. The issue of dynamic inconsistence He explicitly stated that as we move problem is bad for Zimbabwe, he elu- forward the RBZ will continue to focus cidated that institutions that guarantee on money supply growth, which also sup- confidence are required and RBZ to be ports the fiscal measures contained in the a standalone institution and a statement 2019 budget on macro-fiscal stabilization from the Ministry of Finance that it will including inflation containment. not borrow from RBZ brings in the posi- He stated that RBZ negotiated to draw tive side enhancing progress. down US$500 million Plus letters of The deputy governor advised that that credit to stabilize the Inter-Bank Market. the road to recovery is not a straight path, He urged banks to be creative to help sta- there are sharp turns, bridges and obsta- bilise the rates. cles on the way but it is these big deci- There is a mismatch between the US$ sions which will help put Zimbabwe’s and the RTGS. economy firmly back on its feet. The Financial Gazette CZI NEW PRESIDIUM CONGRATULATORY SPECIAL FEATURE June 13-19 2019 | Page S15 Investment opportunities in manufacturing

HE manufacturing sector used to and 2016 was 11,9 percent. contribute immensely to the Gross lCurrent export markets include Zam- Domestic Product, employment and bia, Angola, Mozambique and DRC T l exports. Growth of primary industries in these However, due to challenges experienced countries points to potential for further at the turn of the new millennium, the im- growth. portance of the sector diminished with the lEquipment exported from this sec- government instituting policies to revamp tor include, tobacco curing and handling the sector. equipment, land preparation implements, Factors affecting competitiveness in the planters, irrigation equipment and mining manufacturing sector: consumables. Currency issues are affecting the doing lEconomy diversification policies in business environment through: regional markets have shifted attention to l Shortage of foreign currency to im- agricultural growth (a key consumer of en- port raw materials and intermediate inputs gineering products). l Illiquid conditions ― economic lIn Angola efforts to diversify from oil agents need to access cash to be able to based economy has seen investment in ag- transact. riculture. l There have been improvements due lZambia has adopted a similar ap- use of plastic money proach to alleviate the risk of depending on l High cost of capital on the local finan- copper. cial market. Food processing sector Investment opportunities in lProcessed foods sector is the biggest manufacturing sector export earner among the select manufactur- Pharmaceutical sector ing sub-sectors. lZimbabwe has eight pharmaceutical lZimbabwe manufactures a wide range manufacturers. of products that are exported mainly into lThe industrial policy of Zimbabwe the region, these ranges from dairy prod- identified the pharmaceutical sector as one ucts, confectionaries, biscuits, peanut but- of four priority sectors for development. ter, fish and tea among others. lZimbabwe, together with South Af- lThe sector has potential since most of rica, have been identified as fulcrums for the producers are producing below capacity the pharmaceutical value chain within the due to lack of affordable finance to retool SADC Industrialisation Strategy. and increase their competitiveness. lLocal manufacturers can take advan- lAvailability of affordable finance will tage of the similarities in disease patterns increase the regional competitiveness of within the SADC region. Zimbabwe products. lThe sector has potential to produce lZimbabwe has a non-GMO policy large volume parenteral and injectable which makes most of the products more ap- penicillin which are in demand within the pealing compared to regional competitors. region. lSome of the products had become lThough production has ceased, there household brands in the regional market is presently unused capacity to produce par- (e.g. Tanganda Tea in Zambia, Lyons). enterals in two plants. lZimbabwe’s agro-value chain is on a Engineering Sector recovery path implying that raw-materials lThe sector strategy targets 15 percent are becoming easily accessible. annual growth in exports. lThree new edible oil processors with lSectoral export growth between 2015 To Page S17 Page S16 | June 13-19 2019 CZI NEW PRESIDIUM CONGRATULATORY SPECIAL FEATURE The Financial Gazette Zimnat, THI bring agricultural

PRINTING & PACKAGING innovation to ADMA Agrishow “Perfection In Printing & Packaging” IMNAT and THI Insurance, DT) Mobile Laboratorium at the ers in agriculture. which earlier this year entered show. “THI, Zimnat and Santam Agri-

into an underwriting manage- The laboratorium, a 20 metre culture together have the resources Z ment agency agreement with Zimnat 30 tonne Scania truck with a cus- to respond effectively to the chang- General Insurance, are jointly par- tom-built agriculture laboratory ing insurance needs of Zimbabwe- Congratulates ticipating in this year’s Agricultural that includes training facilities and an farmers and their upstream and Dealers’ and Managers’ Association high-tech electronic equipment, is downstream service suppliers,” Ma-

Agrishow, which runs from today, designed to provide agricultural lab- zorodze said. Thursday ( June 13 to June 15) until oratory services in rural areas. There are many risks that farm- Saturday at Borrowdale Racecourse Zimnat General Insurance chief ers face, including variations in the in Harare. executive Stanley Mazorodze says weather and pest infestations that The agreement between THI and the laboratory would enable emerg- require good agricultural insurance ConfederationCZI of Zimnat General Insurance, which ing farming businesses to do soil and policies, he pointed out. Zimbabwe Industries came into effect on January 1 this water analysis and is also intended to There are also many other types year, resulted in THI being under- introduce technology to rural school- of insurance policies offered by Zim- written by Zimnat in conjunction children. nat, such as vehicle insurance and with Santam Agriculture, through “Two high-definition television life assurance, that farmers could Zimnat’s shareholder partnership screens on the outside of the truck benefit from. with Sanlam, the largest non-bank- relay what is going on inside. All Zimnat Life, Zimnat Financial ing financial institution in Africa. laboratory equipment, apart from air Services and the Funeral Services THI’s agricultural insurance ex- conditioners, is run with solar pow- Group are participating in the Agri- perience and Zimnat’s wide general er,” he said. show alongside Zimnat General In- MRS. GETRUDE MASHONGANYIKA insurance experience and partnership “The mobile laboratory’s training surance and THI Insurance, enabling The Supplies & Logistics Manager of Zimbabwe Fertilser Company (ZFC) with Santam Agriculture, as well room can be used to train emerging farmers to learn about not only the on the appointment into the Presidium of the as the brand reputation of all three farmer groups and can also be used agricultural insurance products that Confederation of Zimbabwe Industry (CZI) of these entities, have enhanced the to introduce agriculture science to THI and Zimnat offer them but about as the Mashonaland Chamber President insurance products and service they youths in remote rural areas. the full range of services Zimnat of- are able to offer farmers. “Training in light engineering fers. Contact Our Sales Team For Efficient & Reliable Service, Farmers participating in the and maintenance can also be con- This includes vehicle insurance World Class Quality, On Time, Every Time! ADMA Agrishow will be able to dis- ducted by the truck driver, who has and other short-term insurance pol- cover some of the insurance benefits years of experience as a mechanic,” icies, as well as trade credit insur- • A1 FULL COLOUR PRINTING & COATING • CONTINUOUS BRANDED BUSINESS FORMS that the combined expertise and re- he said. ance, offered by Zimnat General In- • DESIGN • SECURITY PRINTING • DIGITAL PRINTING • MAGAZINES sources of Zimnat, Sanlam Agricul- The MASD facility, which, Ma- surance, life assurance policies and • POS BRANDED ROLLS • BRANDED PACKAGING • LABELS • BUSINESS CARDS • VARIABLE DATA PRINTING ture and THI offer them. zorodze said, can bring appropri- retirement plans, funeral policies 17035 Cedora Road, Graniteside +263 (242) 773021-27,+263 8677006177 THI and Zimnat, in partnership ate technology to the field where it and services, and financial services, with Santam Agriculture, are also is needed most, is likely to attract including loans and asset manage- [email protected] www.paragon.co.zw showcasing the Mobile Agri Skills the attention of participants in the ment, offered by Zimnat Financial Development and Training (MAS- ADMA Agrishow, particularly deal- Services. The Financial Gazette CZI NEW PRESIDIUM CONGRATULATORY SPECIAL FEATURE June 13-19 2019 | Page S17 Investment opportunities in manufacturing sector

From Page S15 working on migrating its logistics from capacity for exports have set up plants in primarily air to ocean freight, a move Zimbabwe over the past few years. These which is set to reduce cost while at the include Willowton, Surface Willmar and same time reducing the carbon footprint CONGRATULATIONS Pure Oil Industries. of the industry. Cotton sector lThis increases the competitiveness lZimbabwe grows organic cotton of Zimbabwean produce since the market with long staple fibres which requires is become increasingly discriminatory less processing and therefore lowers cost based on prices, health and environmen- of production. tal issues. lAfter tobacco, cotton is the second Leather largest contributor to export earnings Leather and leather products are in the agricultural sector (59 million in among the most widely traded and uni- 2015). versally used commodities in the world. lThe Government of Zimbabwe has Already, the total value of annual trade is introduced a $25,8 million input facility estimated at: for cotton farmers. l1,5 times the value of the meat trade; lBy-products for cotton can be used lMore than five times that of coffee; for oil and stock feed production. and Getrude Mashonganyika lLint exports have generally done lMore than eight times that of rice. well compared to textiles and clothing. lFormal trade is calculated at over We Congratulate Mrs Getrude Mashonganyika the Supplies & Logistics Manager This is due to the availability of foreign US$50 billion a year and according to of Zimbabwe Fertiliser Company (ZFC) for being elected into the Presidium as funding specific for lint production. analysts, the market is far from saturated. the Mashonaland Chamber President of the l Similar funding for other levels of In the next decade, the demand for raw Confederation of Zimbabwean Industry (CZI), the value chain will also help boost ex- materials and finished products may ex- ports. ceed supply. lAccording to ZITMA, 1kg of cotton lAbout 80 to 90 percent of furniture with an average market value of $1,85 leather is imported, this shows a gap that Congratulations- Makorokoto- Amhlophe can be value added to produce three cot- can be addressed by tanners and a thriv- ton shirts valued at $12. ing leather furniture business. Horticulture lMore than 700 schools enrol more lHigh potential for exports to Europe than 1 000 students in the country. “It’s including The Netherlands, United King- a fact that students should wearChemplex shoes.” Corporation Limited congratulates dom and Germany. lThe Special Economic Zones pres- lMajor export produce include, flow- ent opportunities for potential partner- 100 Kelvin Rd, North ers, peas, citrus, berries and other vege- ships with investors. Graniteside tables. Automobile industry Harare, Zimbabwe lTo promote exports, the RBZ is re- Opportunities in the automobile value Tel: 263 242 758 766/7/8/9 vamping the horticulture finance facility chain include: +263 242 755 595/9 to the tune of US$20 million. lThe downstream of the assemblers, Fax: +263 242 758 770 lThe availability of a local certifying garages and workshops www.freightworld.co.zw body for Global Gap is set to increase the lConsumable manufactures [email protected] number of horticultural exporters from lBattery manufacturesThe Procurement and Regulatory Authority of Zimbabwe (PRAZ) on successful rebranding Zimbabwe. lGlass manufacturesand launch of the new PRAZ identity. We wish you the best on you new mandate to lThe horticultural sector is also lRadiatorsupervise manufactures. public procurement proceedings to ensure transparency, fairness, honesty, cost- effectiveness and competition as required by Section 315 of the Zimbabwean Constitution. Congratulations, Makorokoto, Amhlophe!!!

We congratulate Mrs Getrude Mashonganyika on being elected Confederation of Zimbabwe Industries (CZI) Mashonaland Chamber President. For All Your: *Industrial Chemicals *Mining Chemicals *Water Treament Chemicals For All Your:*Animal Health Products *Agricultural Fertilizers *Industrial ChemicalsFor All *Mining Your: Chemicals *Water Treament Chemicals *Industrial Chemicals *Mining Chemicals *Water Treament Chemicals HM PROOF *Animal*Animal Health Products Health *Agricultural Products Fertilizers *Agricultural Fertilizers

Customer Services Harare Sales Bulawayo Sales Webmaster Orders: Harare Zimphos, 93 Parklane, Harare, Zimbabwe 10 Biston Street 35 Coventry Rd Msasa Mining and Metallurgical Sales: +263 712 231 396 P.O. Box 8394 Bulawayo, Zimbabwe ZFC Head Office Cell: +263 772 276 335 Industrial Chemicals and Tel: +263 9 470719/23 470326-9 Harare, Zimbabwe Tel: +263 8677007187 Plastic Raw Materials: +263 712 217 014 Cell: +263www.chemplex.co.zw 712 217 641, Tel: +263 (242) 751 001 / 751 007 Email: Water Treatment: +263 712 217 015 0712 413 115 Email: [email protected] [email protected] Email: [email protected] Email: [email protected] www.chemplex.co.zwwww.chemplex.co.zw

Chemplexwww.chemplex.co.zw Corporation Limited congratulates

The Procurement and Regulatory Authority of Zimbabwe (PRAZ) on successful rebranding and launch of the new PRAZ identity. We wish you the best on you new mandate to supervise public procurement proceedings to ensure transparency, fairness, honesty, cost- effectiveness and competition as required by Section 315 of the Zimbabwean Constitution. Congratulations, Makorokoto, Amhlophe!!! HM PROOF Page S18 | June 13-19 2019 CZI NEW PRESIDIUM CONGRATULATORY SPECIAL FEATURE The Financial Gazette Why there's no forex?

Fay Chung currency, all of us have to work together will not get foreign currency. You will have Foreign currency is needed for new machinery, to solve the problem. It cannot be solved to go to the informal street market. maintenance, essential industrial raw materials, etc. E ARE told by the Finance min- by government alone. It cannot be solved On fuel, is it wise, is it important, to It is also needed as a safer form of saving than the ister that we officially received by the Reserve Bank of Zimbabwe (RBZ) spend 50 percent of RBZ foreign currency local currency, which has been characterised by rapid WUS$3 billion of foreign currency alone. It cannot be solved by the private sec- on one commodity, fuel? Fuel is essential devaluation for two decades. (51,7 percent of the total), but that another tor alone. It cannot be solved by the diaspo- for the economy. It is also something which It would be better if the RBZ, on behalf of gov- US$2,8 billion ends up in the informal mon- ra alone. It cannot be solved by the commu- the hundreds of thousands of car owners ernment, were only to take one third of the foreign ey market (48,3 percent of the total). nities alone. And it cannot be solved by an love, as it is so convenient to have your own currency it now controls, about US$1 billion’s worth, Yet Zimbabwe clearly has insufficient individual alone. car rather than catching the kombis. Let us and allow market forces to control the rest. Govern- foreign currency. We can’t buy medicines, First of all government. Is it doing the assume that only a third of the fuel we pres- ment should only appropriate what it needs for itself, and those who have foreign currency have right thing vis-à-vis our precious foreign ently buy is essential for the economy, and such as for health, infrastructure, new investments to get their medication from outside. Com- currency? We know that the RBZ dishes out that two thirds go to wealthier members of into industrialisation, etc. It should certainly not take panies that require imported inputs or sell its US$3 billion of foreign currency to what society who own multiple and fuel-devour- everything. foreign goods cannot get adequate foreign it sees as priority sectors. We know that half ing cars. If government’s appropriation of foreign currency currency to make their businesses viable. of this goes to fuel. RBZ also favours cer- It is very important for government to was much more limited, it is likely that much of the However, why is this? Is it the fault of tain companies. People believe that compa- stop taking all the foreign currency it can US$2,8 million that is going into the informal market government, of private enterprise, of the di- nies owned by ZANU PF and powerful high get to the RBZ, and setting up an expensive will then come through the formal banking system, aspora, or of all of us? level politicians get this foreign currency. and time consuming system, fraught with resulting in an immediate doubling of the foreign cur- Actually all of us are to blame. In order People also believe that if you oppose the favouritism and corruption, for anyone to rency available to the country. to redress the serious shortage of foreign government or even if you are neutral you get hold of foreign currency. Is private enterprise responsible for the shortage of foreign currency? Yes and no. In the past, and it is still the case, the private sector would invest their savings outside the country, leaving little or nothing for investment within Zimbabwe. This is one reason why the RBZ believes it has the sacred duty of deciding who gets foreign currency: it is a control system which denies the private sector as well as all other sectors the right to decide how it spends foreign currency that it may have earned or generated. Companies and individuals who transgress RBZ regulations face draconian punishment. Never- theless many industrial and commercial companies, and even government departments themselves, utilise the informal money market to obtain foreign currency. Rumours abound that the RBZ itself is the main culprit in charge of fuelling the informal money mar- ket. The practise is so widespread that it would lit- erally be impossible to control it only through tough punitive measures: you would have to arrest tens of thousands of companies and individuals. This would certainly bring the economy to a halt, and cause horrendous political disturbances. Instead we should give back to the banks their traditional role of deciding who of their clients should benefit from the foreign currency they have earned or brought into the country. To date, despite the recent introduction of nostro accounts, those who are unwise enough to bring in foreign currency will not be able to get hold of it easily. It is well known that the diaspora is responsible for bringing in a significant amount of foreign currency, but usually they do not use the conventional bank- ing system in Zimbabwe. Mainly their relatives open accounts in neighbouring countries, especially Bo- tswana, and make monthly trips to collect their mon- ey. There is also a well-known system through which trusted kombi drivers will bring in foreign currency for individuals. Thus a lot of the diaspora money ends up in the informal money market. Why does the diaspora not utilise Zimbabwean banks? Zimbabwean banks usu- ally do not have foreign currency to give to anyone, even if you yourself bring in foreign currency. More- over, there is serious distrust of the system by which RBZ takes charge of all foreign currency, and dishes it out secretly. Most people are rightly suspicious of secrecy. The man in the street is also responsible for the shortage of foreign currency. If someone, say an unemployed person receives US$10, he could get RTGS$10 before the recent changes in the exchange rate. Now he is likely to get RTGS$31 from the bank (but this is not usually available) or RTGS$60-70 in the informal market (readily available). RTGS$ 60- 70 is enough for him and his family to just survive for a month, whereas RTGS$10-31 is definitely not enough for mere survival. It is clear that the street money market is essential for survival of both indi- gent individuals as well as struggling companies. The RBZ system of exchange control is the one in- herited from the authoritarian Ian Smith government. It was suitable for the raging war which took place in the 1970s. The war made survival rather than eco- nomic growth the key to the wise utilisation of foreign currency. Little or no economic growth took place in the 1970s. We have retained the Smith system even though it is obviously archaic and causes serious dys- function of the economy. It is clearly the catalyst for the informal money market. For Zimbabwe to enjoy a greater proportion of the estimated US$5,8 billion of foreign currency it receives, serious adjustment is needed by all concerned, beginning with government and the RBZ itself. A number of steps are needed: The first is for the RBZ to seriously lower the amount of foreign currency it controls by itself, and replace it by a very simple and straightforward way To Page S19 The Financial Gazette CZI NEW PRESIDIUM CONGRATULATORY SPECIAL FEATURE June 13-19 2019 | Page S19

The man in the street is also responsible for the shortage of foreign currency through parallel market activities. Why there’s no forex

From Page S18 enabling Zimbabwe to obtain a better of accurately gauging how much is control of its estimated US$5,8 billion spent on genuine investment. foreign currency. Zimbabweans are highly skilled at The second is to allow economic fooling the RBZ, and the central bank sectors such as industry, farming, min- itself collects so much data that it is ing, medicine, etc. to have some say unable to process it in a timely and regarding how their foreign currency accurate way. We saw how well they is utilised. The fact is that even if the collected the names of individuals and RBZ was superlatively efficient and companies who were perpetrating for- absolutely full of integrity, it would be eign currency fraud. It filled hundreds impossible for it to manage to provide of newspaper pages. Then nothing hap- for the needs of every company and ev- pened to these miscreants. ery individual in the country. There are Zimbabweans are cheating the RBZ 39 757 registered companies in Zimba- directly and also through the informal bwe, and understanding their foreign money market. The RBZ is cheating currency needs requires a lot of detailed Zimbabweans by utilising foreign cur- know-how and experience. Such deci- rency to benefit political favourites sions should be mainly controlled by rather than to grow the economy. For market forces, but evaluated and super- example if the amount controlled by vised by government. the RBZ was reduced to a third, and Business is well supported by the the other two thirds negotiated through Confederation of Zimbabwe Industries, the private sector, including and espe- which is in a better position than either cially both state and private banks, this government or the RBZ to gauge how would certainly change the balance, To Page S20

Congratulations,Congratulations,makorokoto,amhlope Makorokoto, Amhlope

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From Page S19 placing political and individual en- much foreign currency and at what richment aims above economic aims. price it is needed for industry to flour- Control of foreign currency is a key to ish. The farming sector also has farm- both political power and wealth. But ers’ unions which can estimate how so far it has not been utilised for eco- much fertiliser is needed and what are nomic growth. This allows politicians the affordable prices and technologies to ensure that their companies pros- required. per through a most favoured company In every case, government and the system, which enables them to enjoy private sector should work together as most of the available foreign curren- partners. The requirements of large, cy. This is naturally linked to corrup- medium sized and small companies, tion as the RBZ and other banks are as well as of individuals must be tak- able to favour politicians by gifts of en into account. Allowing the spe- money, cars and property. cialist representative companies and Moreover the state budget can be individuals a say will certainly help used to favour the political outcomes to ensure that Zimbabwe’s foreign of elections, through the free distri- currency is judiciously used. Region- bution of urgent requirements such al distribution linked to the number as land, fertiliser and seeds: without of enterprises in each region will pro- these inputs which are provided free vide better equity. of charge many of the poor would not To attract diaspora to invest in the be able to feed themselves. But many country rather than only support the ruling party members who are not feeding of their relatives, it is essen- poor also get these inputs. They sell tial to provide them with attractive in- it at below the cost price, so under- centives. Why do Zimbabweans love mining the actual companies which to invest their money in neighbouring develop these inputs. countries rather than in Zimbabwe? A Yet the free distribution of seeds good example of an attractive incen- and fertiliser, whilst essential for tive has been successfully launched winning elections, may handicap the by Ethiopia: this is a programme by growth and profitability of companies which people in the diaspora who de- working on agriculture, as they bear cide to invest in a business of their the brunt of the cost of these “free” choice (e.g. a factory, hotel, poly- gifts. They do this by raising the price technic, etc.) would be eligible for of fertiliser for the ordinary market, low cost loans in local currency for a so that fertiliser is only affordable to matching amount. the rich. It is now RTGS$115 for 50 Conclusion kg. The poor have to depend on hand- All economists and also the gener- outs, and handouts depend on whether al public accept that one of the main they vote for the party and politicians causes of the shortage of foreign who provide them with the handouts. currency is the lack of economic de- Politics is important. The econo- velopment, despite the 18 ambitious my is also important. By undermining economic development plans that this economic growth, we are also under- country has developed but generally mining long term political popularity not implemented. and stability. Poor people have be- One of the most prominent reasons come beggars, depending on these so- for this lack of development has been called “free gifts” to survive. The Financial Gazette June 13-19 2019 | Page S21

Annual Mining Conference Feature Nerwande takes over as CoMZ president takes its affairs in line with internationally accept- Mines and Mining Development Minister Win- get of growing the country’s mining sector into ed practices, being always alive however, to our ston Chitando said that Zimbabwe in terms of a US$12 billion industry by 2023, which forms national interests. petroleum exploration, was headed in the right part of broad interventions towards achieving “The ongoing cross-cutting reforms will direction. the government’s vision, espoused by President therefore undoubtedly enhance our country’s With these developments, Zimbabwe may Mnangagwa, of transforming Zimbabwe into an competitiveness as an investment destination. We start producing its own diesel and petrol within upper middle-income economy by 2030. are determined to progressively eliminate bottle- the next 10 years following encouraging explo- “The US$12 billion (target) does not include necks, red tape and all forms of corruption,” he ration fi ndings by Australian company, Invictus the oil. It is a quoted company (doing explora- said. Energy, in the Muzarabani area. tion), so I will not divulge much, suffi ce to say Also addressing delegates at the conference, “This comes as government has set the tar- To Page S23

CONGRATULATIONS

CoMZ president Elizabeth Nerwande-Chibanda.

HE Chamber of Mines of Zimbabwe (CoMZ) recent- ly elected Mimosa Mining Company corporate affairs Texecutive Elizabeth Nerwande-Chibanda as its new president, taking over from Bindura Nickel Corporation’s Batirai Manhando, who has been president since 2017. Nerwande-Chibanda will be deputised by Colin Chiba- fa, the chief fi nance offi cer at Unkie Mine, who will be the fi rst vice president. Demand Gwatinetsa, the managing director of How Mine, a unit of Metallon Corporation, takes over as second vice president. Nerwande-Chibanda is the second female president of CoMZ, after Ellah Muchemwa, a former executive at Ri- oZim, who was once president. Nerwande-Chibanda has previously served as the cham- ber’s vice-president. She was the executive director of the Consumer Council of Zimbabwe (CCZ) from 1999 to 2003, and chief executive of Zimbabwe’s trade promotion body, ZimTrade, from 2004 to 2006. Outgoing president Batirai Manhando said although the environment has not been rosy for the mining sector, the fu- ture was bright. “The mining industry welcomed the review by the gov- Ms Elizabeth Nerwande ernment of the indigenisation law, which has brought some clarity to investors, but general operations have been affect- President CoMZ ed by the power supply and foreign currency unavailability for smooth operations. “Of the revenue realised by the mining industry in 2018, $1 billion was spend on suppliers. We hope through con- Mr Colin Chibafa Mr Demand Gwatinetsa tinuous interactions with the government, some of the con- 1st Vice President CoMZ 2nd Vice President CoMZ cerns will be addressed,” noted Manhando. Offi cially opening the Zimbabwe Annual Mining Con- ference organised by the Chamber of Mines of Zimbabwe, President Emmerson Mnangagwa said investments into the mining sector and mining value chain industries are wel- come and safe, adding that government remains ready to support the implementation of sustainable growth strategies Mimosa Mining Company congratulates the newly in the critical industry for the attainment of Vision 2030. “Investments into the mining sector and mining value appointed presidium of the Chamber of Mines of Zimbabwe chain industries are welcome and safe in Zimbabwe,” said the President. led by Ms Elizabeth Nerwande (President), Mr Colin Chibafa “We continue to prioritise the processing and issuance of exploration licences in order to revamp mineral exploration (1st Vice President) and Mr Demand Gwatinetsa (2nd Vice across the country. “The facilitation for the opening of new and closed mines, capacity utilisation as well as projects expansions President). and local benefi ciation are ongoing, with increased momen- tum.” He explained that his administration remains determined to pursue ongoing reforms to ensure the country is thrust on We wish the team success in their new journey. the path to prosperity and development. Critically, Mnan- gagwa said the current situation where investors are moved from offi ce to offi ce “should stop”, as a number of potential investors have been left frustrated. “Let me once again reassure you that my administration is committed to pursuing the ongoing reforms so that our country is fi rmly back on course towards prosperity and de- velopment,” said Mnangagwa. Fostering a mutually benefical relationship with our valued communities “In line with our engagement and re-engagement policy, we shall play our part to guarantee that our country under- Page S22 | June 13-19 2019 CoMZ NEW PRESIDIUM & CONFERENCE SPECIAL FEATURE The Financial Gazette

Congratulations

The Board, Management and Staff of Cell Insurance, Cellmed Health Medical Fund and Nectacare (Pvt) Ltd would like to congratulate the incoming Chamber of Mines Presidium on being elected into office.

We wish you the best as you execute the duties of your office.

ISO 9001:2015

HARARE | The Honeycomb, Fifth Floor Finsure House 84-86 Kwame Nkrumah Avenue | P.O Box A1727, Avondale | BUZZLINES | +263 24 2793405, 2793301 BULAWAYO | The Beehive Centre, 102A Parirenyatwa Street, P.O. Box 2082 | BUZZLINES | +263 29 2887375-78 MUTARE | 1ST Floor, ZB Life Centre, Cnr 1st Ave/ H. Chitepo Street | BUZZLINES | +263 20 2061320, 2202020701 ZVISHAVANE | Nectacare Clinic, Stand Number 101 6A Highlands| BUZZLINES | +263 39 2352765/ 66, 2354177 HWANGE | Office Number 21, Health Services Section, Hwange Colliery Hospital | BUZZLINES | +263 81 2820344, +263713099924 WEBSITE: www.cellinsurance.co.zw

CONGRATULATIONS TO

MRS ELZABETH NERWANDE-CHIBANDA, MR COLEEN CHIBAFA & MR DEMAND GWATINETSA

FOR BEING ELECTED THE PRESIDENT & VICE PRESIDENTS RESPECTIVELY, OF THE CHAMBER OF MINES.

• Building Construction • Property Development • Renovations • Project Management • Civil Works

21 Colenbrander Road, Milton Park, Harare. Tel: +263-242-778317-8 • Email: [email protected] www.gatewayconstruction.co.zw The Financial Gazette CoMZ NEW PRESIDIUM & CONFERENCE SPECIAL FEATURE June 13-19 2019 | Page S23 Nerwande takes over as CoMZ president Congratulations

From Page S21 Zimbabwe is headed in the correct path in terms of hav- ing an oil industry. “Zimbabwe is headed in the correct path in ensuring that by 2030, we have our own diesel, oil being pro- duced from the resources we have,” he said. Chitando said through the “Zimbabwe is Open for Business” mantra, part of government focus entailed attracting global capital into mining, including petroleum. To this end, Australia Stock Exchange-listed fi rm, Invic- tus Energy, had made huge strides towards giving Zimba- bwe its own diesel and petrol. Data released by Invictus Energy in April this year, pro- vided management with in- creased confi dence regarding a sizeable increase in the pro- spective resource estimate of the Muzarabani oil prospect that currently stands at 3,9 Tcf CoMZ outgoing president Batirai Manhando. (trillion cubic feet) and 181 Brantam Mine Supplies would like to congratulate Mrs million barrels of condensate. and chemicals, service providers includ- Chitando said the government’s target ing banks, insurance companies, consult- Elizabeth Nerwande Chibanda on being elected as the of a US$12 billion industry by 2023 was ing engineers, and various mining related President of Chamber of Mines, we wish you success in not far-fetched, but realistic given the se- professional bodies and individuals. The ries of planned interventions in gold, plati- mining company members of the CoMZ your tenure. num, diamonds, chrome and coal. produce about 90 percent of Zimbabwe’s “So, the US$12 billion industry which total mineral output. we are talking about is not a dream, but The activities of CoMZ are guided by a reality, which we are in the process of its constitution and strategic plan. The achieving,” he said, adding the target will primary objectives are to advocate and Congratulations! Makorokoto! Amhlophe! be underpinned by mineral specifi c poli- lobby in order to promote, encourage and cies. protect the interests of the mining indus- Government, the minister said, was try in Zimbabwe. In so doing, activities working on interventions to grow gold of CoMZ are concentrated in the fi elds of production from 34 to 100 tonnes by 2023, economic policy, mining sector policy, in- platinum from 14 to 50 tonnes, growing vestment promotion, labour and industrial coal to export product and liquid fuels and relations management, research on legal value adding chrome to stainless steel and matters related to mining, representation carbons. of the views of the industry to government The CoMZ is a private sector voluntary and other stakeholders, and the provision organisation established in 1939 by an Act of a variety of services aimed at promot- of Parliament, although its origins go back ing health and safety, manpower training, to 1880. Members include mining compa- environmental protection, and the support nies, suppliers of machinery, spare parts, of mining associations. Customs Clearance, Warehousing and Freight Forwading

Project Freight Logistics Management Warehousing Port Clearing and Handling Congratulations

Veer-Freight Directors, Management and Staff would like to

congratulate Mrs Elizabeth Nerwande Chibanda on being elected President of the Chamber of Mines, we wish you success in your new tenure.

Batirai Manhando Immediate Past President

Veer-Freight (Private) Limited 48 Northampton Crescent,Eastlea, Harare, ZIMBABWE. Tel: +263 4 776991/776905/776284 Email: [email protected] / [email protected]: www.veerfreight.co.zw

Our other branches are at Forbes border post in Mutare, Chirundu Border Post, Nyamapanda Border Post, Plumtree Border Post, Beitbridge Border Post and Kazungula Border Post Page S24 | June 13-19 2019 CoMZ NEW PRESIDIUM & CONFERENCE SPECIAL FEATURE The Financial Gazette Meet the CoMZ presidium

CoMZ president Elizabeth Nerwande-Chibanda

NERWANDE-CHIBANDA is the head dustrial Psychology and a BSc degree of Corporate Affairs for Mimosa Min- in social work. She sits on a few boards, ing Company responsible for high lev- where she is involved in providing lead- el, corporate communication strategies ership direction .She is an entrepreneur for the company. She served as the fi rst with a 15-year old business in personal vice–president of the Chamber of Mines /corporate image branding, inclusive of of Zimbabwe. a health centre and conference facilities. Through her consulting work on lead- Her passion is in creating an environment ership skills training, she entered the min- where people with potential can partic- ing industry in 2009 where she worked ipate in self exploration with an aim of with three mining houses on strategic re branding self for success and growth. forward planning issues. Prior to joining Elizabeth loves reading, value adding mining industry, she worked in the cor- through training and giving back to those porate industry for almost a decade, as in need. She currently sits on the com- Executive Director for Consumer Coun- passion board for her church, and always cil Zimbabwe from 1999 -2003 and also puts God fi rst in all her work. as CEO for Zimtrade from 2004-2006, Her down time is punctuated by trav- where she was subsequently appointed el, family getaways and personal care Commissioner General for Aichi Japan at health centre. She has mentored and Expo. She has sat on two International coached men and women from all walks boards in the past, and has been instru- of life at her own time and personal ex- mental in providing innovative solutions pense. in all her various roles. She is a focused, Her guiding principle is: Opportunity driven individual who thrives in service favours the prepared mind – plan and pay delivery excellence and completion of attention to detail. every task she undertakes. Nerwande-Chibanda is married and Congratulations She holds an Honours degree in In- has one child.

The Board, Management and Staff of Cell Insurance, Cellmed Health Medical Fund and Nectacare (Pvt) Ltd would like to congratulate the incoming Chamber of Mines Presidium on being elected into office.

We wish you the best as you execute the duties of your office.

ISO 9001:2015 CoMZ fi rst vice-president Colin Chibafa

CHIBAFA is a chartered accountant, ness development and corporate fi nance. HARARE | The Honeycomb, Fifth Floor Finsure House 84-86 Kwame Nkrumah Avenue | P.O Box A1727, Avondale | BUZZLINES | +263 24 2793405, 2793301 BULAWAYO | The Beehive Centre, 102A Parirenyatwa Street, P.O. Box 2082 | BUZZLINES | +263 29 2887375-78 having trained with PwC in Bulawayo. In addition to being Unki Mines (Private) MUTARE | 1ST Floor, ZB Life Centre, Cnr 1st Ave/ H. Chitepo Street | BUZZLINES | +263 20 2061320, 2202020701 He has been with Anglo American since Limited’s CFO, he is also responsible for ZVISHAVANE | Nectacare Clinic, Stand Number 101 6A Highlands| BUZZLINES | +263 39 2352765/ 66, 2354177 HWANGE | Office Number 21, Health Services Section, Hwange Colliery Hospital | BUZZLINES | +263 81 2820344, +263713099924 2001 and has held various roles in Zim- the management of the company’s key WEBSITE: www.cellinsurance.co.zw babwe and South Africa in fi nance, busi- external relations. The Financial Gazette CoMZ NEW PRESIDIUM & CONFERENCE SPECIAL FEATURE June 13-19 2019 | Page S25 Meet the CoMZ presidium

CoMZ second vice-president Demand Gwatinetsa GWATINETSA is the general manager of How Mine, a subsidiary of Metallon Corporation.

Congratulations to the New Chambers of Mines Presidium, we wish you success in your new tenure.

Demand Gwatinetsa - Second Vice President Elizabeth Nerwande Chibanda - President Coleen Chibafa - First Vice President

Proud member of 10A Spurrier Rd the Mining industry of Zimbabwe New Ardbennie, Harare Zimbabwe. Tel: Fax: +263 242 660326

Page S26 | June 13-19 2019 CoMZ NEW PRESIDIUM & CONFERENCE SPECIAL FEATURE The Financial Gazette Speech by Elizabeth Nerwande-Chibanda

WOULD like to take this opportuni- ty to thank the Chamber of Mines of I Zimbabwe for the chance to present my candidature for the presidency of the esteemed mining body. Let me start by recounting the jour- ney I have travelled at the Chamber in the last four years. It has been a journey that exposed me to the inner workings of the Chamber ― the challenges and threats on one hand, and the opportu- nities for improvement, growth and taking the organisation forward on the other hand. While I have been privileged to hold prime leadership positions before as chief executive officer of ZimTade and the Consumer Council Of Zimba- bwe, my position as vice president at the Chamber has brought incredible lessons for me. It has immersed me into the mining ecosystem and prepared me for the position of president. I am also very clear that this role is Elizabeth Nerwande-Chibanda not an individual, but collective role. The collective expertise and experi- value that has never been challenged. ence within Chamber is of paramount Deviation from such norms, which have importance in achieving our goals as an served us so well, can have far reaching organisation. implications beyond merely not vot- I have learnt and seen from my pre- ing for an individual. I urge members decessor that the role of presidency is to observe this value as it has worked to provide guidance, energise the team seamlessly for Chamber over the years. and inspire belief and confidence by Whilst I recognise that if you vote government and other stakeholders. I for me as your president, I will be the have no desire to deviate from this. first woman to hold such a post. I also Chamber is solidly built around its firmly believe that gender without com- values, traditions and norms. One of petence is a meaningless accolade. My these is to fully represent the views of experience and the confidence you have members and Chamber will continue to had in me for the past four years has pursue this during my presidency. An- sharpened my ability to engage, speak other value has been the predictability out and lobby for and defend the posi- of our succession arrangement. This ar- tion of the mining body. I commit to not rangement has served the Chamber well betray your trust. My voice will repre- over the years and it is a time-honoured sent without fear or favour. The Financial Gazette CoMZ NEW PRESIDIUM & CONFERENCE SPECIAL FEATURE June 13-19 2019 | Page S27 Zimbabwe gold mines target $4 billion revenue IMBABWE’s large-scale gold mines have the capacity to generate $4 billion worth of revenue to the economy in the next five years, a senior industry exec- Zutive said. Thomas Gono, chairman of the Chamber of Mines of Zimbabwe’s Gold Producers Association, however noted that at least $1 billion in fresh capital would be required by the sector to achieve this target. “It is not an illusion that we can achieve 100 tonnes of gold output by 2023,” said Gono, who spoke during a gold mining symposium attended by more than 300 dele- gates at the opening of the 2019 mining industry annual conference. “We can actually contribute $4 billion by 2023 and make significant contribution to foreign direct investment. But the gold sector requires in excess of $1 billion in the next five years to sustain the growth and development of the sector to achieve the 2023 target,” Gono noted. Zimbabwe’s share of gold production in Africa remains low. He said a number of factors were militating against growth, including power cuts of up to seven days a week, and the foreign currency shortages that have lately seen a number of mines con- templating “suspending operations”. “Notwithstanding the supportive measures, the gold mining industry continues to face viability challenges in- cluding: inadequate foreign exchange allocations; cap- ital shortages; fuel shortages; and high cost structure.” Gold producers retain 55 percent of gold proceeds with the remainder liquidated at the interbank market at the prevailing rate. According to Gono, the 55 percent falls short of for- eign exchange requirements for the gold industry which range from 70 percent to 90 percent of proceeds. Gold producers also face difficulties in accessing for- eign exchange on the interbank market to supplement the gap in their foreign exchange requirements, resulting in input shortages and production disruptions. “Local gold producers also face a high cost structure characterised by high input costs, high cost of funding, high labour costs, and suboptimal royalty. The coun- try’s average all-in cost of producing an ounce of gold at US$1 080 in 2018, remains the highest in the region. “To note, a number of mines incur costs well above this average, with narrow seam mines averaging around $1 350 and heap leachable deposits averaging around $1 300 as of 2018. These mines are struggling to break even, and some, have already been placed under care and maintenance, while others are contemplating on suspending operations completely,” he said. The gold industry requires in excess of US$1 billion in the next five years to sustain growth and development of the sector and achieve the output targets. “Local financial market has limited capacity tofi- nance such huge capital requirements on the back of li- quidity challenges. When facilities are locally available, they will be expensive. Offshore facilities are also ex- pensive due to country risk premium. As a result, mining companies have struggled to fund explorationactivities as well as facing difficulties in retooling.” The gold industry has grown phenomenally over the past decade, with gold output having increased from 3,6 tonnes in 2008, to peak at 35 tonnes in 2018. He said gold revenues had increased to $1,35 billion in 2018, from $110 million in 2008, due to improved policies, but government had to make sure the operating environment remained perfect in order to encourage in- vestment into the sector, noted Gono. The industry has huge scope for further growth as it still has excess capacity (with average capacity utilisa- tion estimated at 72 percent in 2018). “We have a support in our society of 1,5 million peo- ple under the small-scale mining sector alone. So, gov- ernment cannot afford to ignore our requirements. Gold mines employ 12 000 jobs directly, which is 25 percent of the total jobs in the mining industry. And there are 33 000 jobs indirectly,” he said. “Further, the artisanal and small scale sector is esti- mated to absorb in excess of 500 000 people.” The small scale miners have taken over from the large producers as figures show that of the 27 tonnes produced in 1999, 21 tonnes were produced by large scale produc- ers. On the contrary, of the 35 tonnes produced in 2018, 21 tonnes came from small scale producers while large scale produced 14 tonnes. Large scale producers have lost seven tonnes for the comparable periods. He described the period 2005 to 2012 as the lost de- cade for Zimbabwe’s gold sector. “Notwithstanding the lost decade, the industry re- mains important in the socio-economic development of the country through its contribution to export earnings, government revenue and employment, among other con- tributions. We have not done well enough,” he said. “Our production declined to 3,5 tonnes in 2008 but at the time gold prices rose to $1 800 per ounce. We re- gard this as the lost decade. But from 1999, if we had increased production annually by five percent, we would have reached 50 tonnes of gold in 2018, instead of the 35 tonnes that we produced,” said Gono. Page S28 | June 13-19 2019 CoMZ NEW PRESIDIUM & CONFERENCE SPECIAL FEATURE The Financial Gazette Gold mines target $4bn revenue Zim mines target 50 In terms of gold productivity per square kilometer, Zimbabwe is ranked above traditional big tonnes of producers including USA, Canada, Australia and Brazil. The country has, however, remained largely underexplored, platinum impacting negatively on grades due to limited new discoveries. (The last major gold discovery was Freda in 10 years Rebecca in 1984 and started producing in 1988). HE Chamber of Mines of Zimbabwe (CoMZ) says it is working out strategies to increase platinum Toutput to 50 tonnes by 2030, in line with President Emmerson Mnangagwa’s vision to transform the ailing southern African country into an upper middle-class economy in a decade. The industry produced 14,6 tonnes of platinum in 2018. But both government and the private sector hope that by increasing output of the key resource, efforts to- wards achieving this ambitious national target would be easier to achieve. These numbers were announced by outgoing CoMZ president, Batirai Manhando at the opening of the indus- try’s annual general meeting. He said along with plans to increase platinum output, the industry was targeting a sharp rise in gold output to 100 tonnes in five years. “The session on the gold industry will discuss strat- egies for achieving the government gold output target of 100 tonnes by 2023 while the platinum session will explore strategies to achieve 50 tonnes of platinum by 2030 and maximise the contribution of platinum re- sources to the economy,” said Manhando. “The gold sector is by far the largest in terms of con- tribution to the economy, contributing 40 percent of the country’s exports and contributing 18 percent of its reve- nue to government. There are more than 500 000 players in the small-scale mining sector. But the sector is con- tinuously weighed down by foreign currency shortages and delays in the allocation of foreign currency. There are power shortages and high cost structures. Address- ing these factors will be key to achieving the 100-tonne target by 2030,” Manhando told over 300 delegates who attended the annual conference. So huge has the interest been in the development of the two key minerals to help Zimbabwe ride out of its current struggles that the CoMZ has dedicated two sym- posiums on gold and platinum to discuss how best to exploit them. “We are having intensive discussions on gold and platinum industries growth strategies in line with the need to unlock the potential in the two minerals,” Man- hando said. Zimbabwe Miners Federation president, Henriet- ta Rushwaya said among the biggest drawbacks to the growth of gold output was the centralisation of the min- eral’s marketing to Fidelity Printers and Refineries, a Reserve Bank of Zimbabwe unit that has the sole au- thority to buy the mineral. She said government must immediately do away with the monopoly in order to improve miners’ options.

The highest level of beneficiation of chrome ore in Zimbabwe is production of ferrochrome. The Financial Gazette CoMZ NEW PRESIDIUM & CONFERENCE SPECIAL FEATURE June 13-19 2019 | Page S29 Zimbabwe’s largest ferrochrome producer forecasts output to reach one million tonnes IMBABWE’s ferrochrome output will rise by almost half to one million metric tonnes by 2022, from a projected 419 000 metric tonnes this year, according to Zstatistics released by Zimasco recently. Zimasco is the country’s largest producer of the metal. Zimasco chief executive officer, John Musekiwa said much of the growth will come out of expansion projects in the country, underpinned by another Chinese firm, SinoTsingshan-the world’s largest producer of stainless steel. Source: ICDA 2015 Musekiwa said with adequate power supply, in- creased ferrochrome output will see a 40 percent rise in chromite ore production in 2019. “Future years will see chromite ore production in- crease in line with the growth of ferrochrome produc- tion. Chromite ore exports in 2018 totalled 800 000 metric tonnes. Government’s thrust is towards value addition and beneficiation therefore future years will likely see a decrease in chromite ore exports as fo- cus shifts to increasing ferrochrome production,” he noted. President Emmerson Mnangagwa’s Vision 2030 has ignited significant interest in investment and expansion programmes across mineral sectors, with platinum producers projecting output to rise to 50 tonnes by 2030. “With new capacity already commissioned, out- put is forecast to increase by 15 percent in 2019 year on year 419 000 metric tonnes, “Musekiwa said, ad- dressing delegates at the 2019 Chamber of Mines of Zimbabwe annual conference. “Resumption of operations at Zimbabwe Alloys on the back of refurbishments currently underway, coupled with expansion of production from Zimas- co will see output ramping up in the coming years. As part of the roadmap to Tsingshan’s stainless steel production in Zimbabwe by 2026, Afrochine, which is a subsidiary of Tsingshan will also expand its fer- rochrome production going forward. The expansions will see Zimbabwe’s ferrochrome production capacity rise to almost one million metric tonnes by 2022, he said. Musekiwa said with adequate power supply, in- creased ferrochrome output will see a 40 percent rise in chromite ore production in 2019. “Future years will see chromite ore production in- crease in line with the growth of ferrochrome produc- tion. Chromite ore exports in 2018 totalled 800 000 metric tonnes. Government’s thrust is towards value addition and beneficiation therefore future years will likely see a decrease in chromite ore exports as fo- cus shifts to increasing ferrochrome production,” he noted. The crisis is, due to uncertain global economic conditions arising from the trade wars between the United States of America and China, the global mar- ket is expected to be bearish in 2019. The supply side of both chrome ore and ferro- chrome is expected to significantly outstrip demand this year as the key global economies slow output due to the prevailing uncertainties. Stainless steel growth which, in previous years, has been typically around five percent, is expected to slow to between two and three percent for 2019, according Musekiwa. “The consumption of stainless-steel scrap has in- creased especially in the developed markets like USA and Europe and is also growing in China due to in- creased availability. “This results in reduced consumption of virgin ferrochrome. There is expectation that there will be some cut backs in production from the key ferro- chrome producing nations of China and RSA in Q3 2019 and into Q4 2019, which should assist to rebal- ance the supply demand equation in 2020. Stainless steel growth forecast at between two and three per- cent per annum for next the five years,” he said. Zimbabwe currently has 14 ferrochrome opera- tions mainly concentrated in the Midlands Province with the larger players (Zimasco, Afrochine) utilising medium sized furnaces and the smaller operations us- ing small furnaces. Production in 2018 totalled 365 kmt, which is around 2,5 percent of global output. Zimbabwe holds the world’s second largest chrome ore reserves, second only to South Africa. Global Resources estimated in excess of 12 billion metric tonnes Page S30 | June 13-19 2019 CoMZ NEW PRESIDIUM & CONFERENCE SPECIAL FEATURE The Financial Gazette Kamandama victims remembered

UNE 6, 1972 saw the disaster at Wankie Colliery 424 bodies where they were. Three bodies had been re- where 427 miners lost their lives when a series of covered after the initial explosions. A mass memorial Junderground explosions occurred at the Wankie service took place on June 11 at a nearby football stadi- No.2 colliery in Rhodesia (now known as Zimbabwe). um, where a crowd of about 5 000 people paid tribute. With 427 fatalities, it remains the deadliest mine ac- “This has cast a gloom over the whole country,” Rhode- cident to date in the country’s history. sian Prime Minister Ian Smith said during the service. Historical records established that the accident was Hwange Colliery Company Limited annually gathers caused by an underground methane dust explosion and to commemorate the lives of the 427 dedicated and hard- despite the several attempts by the then PROTO teams to working miners who lost their lives in the Kamandama rescue mine workers, the fatality of the disaster was such No 2 Underground shaft in 1972. that the mine shaft had to be sealed off. The miners perished while moving the economic The disaster took place at the Wankie No.2 Colliery wheels of the nation and region at large. in Wankie, (now known as Hwange) in the Rhodesian The aftermath of the Kamandama mine shaft disaster province of Matabeleland North, when several gas ex- saw Hwange Colliery Company play a critical role in plosions ripped through the mine. It was initially be- the implementation and monitoring of safety and health lieved that more than 470 miners were trapped, but the polices in the mining sector for the benefit of the mining number was lowered after the owners found a number of industry in Zimbabwe. people had shown up for work. Safety, Health and Environmental sustainability have Eight men were pulled alive from the mine after the since become a topical issue at national, regional and initial explosions. Two new explosions on 7 June poured international level following this disaster. clouds of poisonous gas into the 3 miles (4,8 kilometres) The 2019 memorial commemorations were held un- of tunnels, making further rescue attempts impossible. der the theme: “Embrace and Practice Safety Always to On June 9, the general manager of the Wankie col- Prevent another Disaster — Commemorating the Ka- liery, Gordon Livingstone-Blevins, decided to leave the mandama Victims.” DRA Global successfully hosts CoMZ golf tourney

RA Global successfully hosted the 2019 Chamber of Mines of Zimbabwe (CoMZ) an- Dnual golf tournament in Victoria Falls. This is the third consecutive tournament that DRA Global has hosted, and the quality of the tournaments has improved year on year. DRA Global is a diversified global engineering, project delivery and operations management group, with an impressive track record spanning over three decades. Known for its collaborative approach and extensive experience in project origination and de- livery, as well as turnkey operations and maintenance services, the organisation delivers optimal solutions that are tailored to meet clients’ needs. “With expertise in the areas of project develop- ment, mining, mineral processing, plant optimisa- tion, operations and maintenance and related water, energy, and infrastructure requirements, DRA Glob- al delivers truly comprehensive solutions to the re- sources sector,” DRA Global country manager, Ten- dai Kakono said. The organisation employs over 4000 people and offers flexible engineering and operations manage- ment services worldwide through 16 offices. Beginning in 1984, DRA Global has grown to one of the largest project management enterprises in Af- rica and, through organic and acquisitive growth; the organisation continues to advance its global footprint to reach this same expanse. “The DRA Global success story started from a ca- sual conversation between Brian Dowding and Tony Reynard, who both had a vision to create something new and extraordinary and had the courage to make the change. Over 30 years later, DRA Global remains an innovator in the industry and has earned a solid reputation of exceptional delivery. “DRA Global opened its doors in Zimbabwe in 1994 after securing the first FS project with Mimosa Mining Company and the organisation continues to grow from strength to strength across Africa,” Ka- kono said. DRA Global has carried out various major multi-disciplinary projects in Zimbabwe for: 1.Mimosa Mining Company 2.Ngezi Zimplats 3.Bilboes/Pan Arican Mining 4.Golden Reef Mining 5.Zimasco Ferrochrome Project for Minemash 6.Freda Rebecca Mine 7.Murowa Diamonds (Rio Zim) “Africa remains a key focus for DRA Global, of which Zimbabwe is a key location and through events such as these we bring together colleagues across our sector to have important discussions about our indus- try and future opportunities,” he said. The Financial Gazette CoMZ NEW PRESIDIUM & CONFERENCE SPECIAL FEATURE June 13-21 2019 | Page S31 Zim needs new mineral resource policies

Selina Zhuwarara

OLICIES are important; they are roadmaps that articulate how governments intend to exe- P cute their mandate. The content of policies is followed closely be- cause it constitutes an expression of intent and in- evitably provokes strong reactions to key econom- ic indicators. Good policies stimulate progress and growth and bad or weak policies on the other hand stifle national development and stunt economic growth. With this in mind, mineral rich countries need to pay particular attention about how each thread of policy provision fits into the overall fabric that makes up the mining policy structure. Zimbabwe has gone through significant policy changes over the last decades and we expect more such changes as the industry continues to dominate people’s hopes for economic revival. The overall impression any mining policy should have is to be a clear deliberated blue print that out- lines how a nation intends to invest, discover, ex- tract, sell and utilize its mineral resources including what it intends to do with the revenues generated from these activities. While there are a lot of fac- tors that are taken into account during the crafting of mineral policies, there are six critical pillars that need to be catered for in every national mineral re- source strategy blue print. These six strategic pillars are exploration, com- mercialization, industrialization, revenue manage- ment, technology and sustainability and social and environmental issues. A strong policy structure in- corporates all these key pillars and facilitates the maximization of economic potential from mineral endowment. Each pillar should be structured such that pro- visions will not clash with attainment of objectives set of the other pillars. This ensures that the overall policy framework in harmony and consequently at- tainable. The first pillar of a wholesome mineral resource strategy is a clear and robust plan on exploration. Exploration is the motor that keeps the mining in- dustry running. It is important for a country to know what it has, what is required to develop the reserves and to continue to invest in discovering viable po- tential reserves. A mineral policy should articulate how to finance exploration, the key national institutions leading the task and the steps necessary in preparing the assets for commercialization. In many instances govern- ments in developing countries leave this task to ju- nior miners or private entities however, in the inter- ests of harnessing first hand benefits of possessing geological data, governments should seriously con- sider taking a prominent role in driving exploration as this has strategic benefits. In many instances some governments do not have the full picture of the min- eral reserves the country has because they are held or traded by private companies. This is a poor meth- od of managing resources, knowledge is power and leaning heavily on private equity to handle explora- tion is a costly mistake.

The second pillar is determining the commercial strategy for developing mineral assets. This pillar includes deciding on investment and financing op- tions, the role of government and the contractual and commercial systems that will support the sector. It also includes multiple sub components which make up the overall business environment which includes but is not limited to setting up appropriate and com- petitive rights issue rules, fiscal rules, tax structures, marketing and sales rules. The overall commercial environment that is created should allow all stake- holders to realize profitable and sustainable enter- prises. A vibrant policy structure should create an op- timal business environment that reduces risks and costs and promotes viability, stability and profitabil- ity. Some of the issues that promote those outcomes include ensuring security of rights and tenure, avail- ability of effective and independent judicial mecha- nisms, robust fiscal and monetary rules, competitive and predictable tax and regulatory fees structures and ease of import and export movements. The poli- cy framework should also make room for the partic- ipation of different players in the industry, it should allow inclusiveness. In Zimbabwe the formalisation of the artisanal sector is now critical, the increase of illegal miners continues to soar and shows signs entrenching itself forcefully as a part of the mining industry. It also continues to deliver detrimental socio-economic ef- fects such as constant loss of life, violent crimes and has created a potent environment for illicit trade of minerals. The only solution is to embrace the sector and bring systems that allow its participants and the To Page S32 Page S32 | June 13-19 2019 CoMZ NEW PRESIDIUM & CONFERENCE SPECIAL FEATURE The Financial Gazette Zim needs new mineral resource policies From Page S31 government to benefit constructively. The third pillar is the Industrialisation strategy. This pillar looks at how a country intends to ben- efit from its mining industry outside the receipt of taxes and rents. Mineral rich developing countries should be able to fully industrialise on the back- drop of their access and supply of critical primary minerals. It is prudent for developing countries to court investors that can also establish much needed beneficiation and manufacturing industries in min- eral rich countries in order to expand the scope of industry and services to host countries. Many developing countries have made various pronouncements regarding beneficiation, however, the success of such strategies is in some instances hampered by lack of industrial and manufacturing demand of processed materials within the domes- tic market, lack of required skills and technological capacity within the country, inadequacy of infra- structure and energy requirements and undesirable fiscal and tax structures that threaten the viability of beneficiation. As a result their beneficiated minerals still end up heading for the export market thus their indus- trial capacity remains stunted. The correct approach to establishing beneficiation is to also create cor- responding local demand for processed mineral commodities. The vision for beneficiation should not be to merely gain the extra dollar on exporting processed minerals but should be to grow local in- dustrial capacity and to ignite other critical drivers for economic growth. Good revenue management is the blood of the mining industry; the monetary return from mining feeds the entire industry engine. This includes good management of the return on investment received by project shareholders and the rents, dividends and taxes collected by Government. While the mining system seems like it only depends heavily on out- side financing it is actually a system that reinvests in itself. The growth of the mining sector is reliant on mining projects being profitable and the reve- nues generated from these projects being ploughed back into the research, development, exploration and expansion. Efficient mining policies firstly make sure that all the systems and mechanisms that oversee the collection, accountability, distribution and use of mining revenues are clear, functional, resourced and effective in their mandate. If the mining sec- tor is to make an indelible mark to economies, then governments need to be deliberate about the checks and balances they create to ensure efficient collec- tion of taxes and rents and effectual use of the rev- enues collected. What mining revenues are used for is very import- ant. The government of Norway has perfected the art of saving the proceeds from oil projects and subsequently the Norwegian Government Pension Fund is currently worth billions which has been ac- crued from saved oil revenues. The quality of life of the people of Norway is significantly better be- cause of the way their government decided to uti- lize revenues generated by oil resources and this is evidenced in the stability of their national fiscus, progressive infrastructure development, food secu- rity and advanced social services structures. While such saving statistics are not readily attainable in developing counties due to various constraints, the principle of creating mechanisms that are intention- al, that account and plan for the sustainable and re- sponsible utilization of mining revenues should be embraced. The fore most questions on policy makers’ minds should be how to get every citizen to encounter the benefits of mining. These benefits should be attest- ed for by present and future generations. For de- veloping countries mining revenues are normally pooled into the general treasury and utilized for various projects and day to day expenses but such an approach does not work especially in countries experiencing economic failure, poverty and the col- lapse of health and social infrastructure services. In such cases governments should be able to separate- ly account for mining revenues and pursue public and social service projects’ specifically headlined by mining revenues. For instance the government may refurbish or install new cancer or dialysis equipment for each provincial hospital in Zimbabwe from a portion of the mining taxes they receive annually. The rate of clashes, conflict and anti-mining sentiment be- tween communities, citizens and mining entities in developing countries is increasing and this is partly because people cannot relate to the benefits of min- eral wealth and remain disconnected to the returns of the sector. The use of revenues brings to bear another im- portant pillar which is technology and sustainabil- To Page S34 The Financial Gazette CoMZ NEW PRESIDIUM & CONFERENCE SPECIAL FEATURE June 13-19 2019 | Page S33 Mines lose billions to blackouts

ROLONGED blackouts are wiping out billions of almost US$20 billion yearly. commands in an economy in which it generates over 50 dollars in potential revenue and economic losses These estimates are contained in the percent of export revenues and about 40 percent to GDP. Pfrom Zimbabwe’s key mining industry annually, CoMZ’s reports. To avert an industrial and social crisis, President adding misery to a country already battling extensive Patrick Chivaura, acting chief exec- Emmerson Mnangagwa has resumed his reengagement write-downs sparked by the return of fuel shortages, an utive officer at ZESA Holdings, told the offensive with flights into eastern Europe, possibly to analysis of several mining records has revealed. mining conference two weeks ago that canvas for bail outs. Following a decade of dollarisation that briefly the problem that ZESA faced should not But while he is on the global diplomatic offensive calmed its economy and propelled jittery markets back be taken as its own, but a national crisis to help him offset debts of over $16 billion, Harare is to stability, Zimbabwe’s industries including mines are that must be addressed by all stakehold- on fire. on the edge again. ers. The raging infernos are not only stemming out of But in the midst of the crisis, many in the mining He warned that the targets project- the huge interests demanded by banks on long running industry remain optimistic, with large-scale gold mines ed by the mining industries may not be loans. projecting to generate $4 billion worth of revenue to the achieved unless combined private sector They are stemming out of the return to foreign cur- economy in the next five years, from about $1 billion and government efforts were implement- rency pricing of goods and services by frustrated busi- currently. ed to pay up the $68 million required at nesses. During the Chamber of Mines of Zimbabwe (CoMZ) Mozambique’s HCB and South Africa’s This is happening in a market where the last remain- annual conference two weeks ago, platinum producers Eskom. ing workers earn salaries through an electronic platform forecast output to increase to 50 tonnes a year by 2030, Some mines are relying on expensive called the Real Time Gross Transfer System, which is from 14,6 tonnes last year. diesel-powered generators to run opera- just the electronic transfer of values without a backing There have been fears of a relapse into turbulences tions during power cuts. currency. experienced in 2008, when gold mines produced their This could ignite fresh waves of Petrol service stations have started pricing in for- worst output at 3,5 tonnes as a result of blackouts, for- de-industrialisation across sectors, con- eign currency, sending shocks among consumers in this President Emmerson Mnangagwa eign currency shortages and challenges in accessing raw sidering the clout that the mining sector southern African country of 16 million people. materials. The gold sector recovered to 35 tonnes last year. But still, some mines are indicating that they have been hit by blackouts of up to four days a week in the past month after regional power exporters to Zimba- bwe cut supplies to about 100 megawatts (MW), from 900MW before October 2018, due to non-payment by State-run power producer, ZESA Holdings. Several industry statistics produced during the con- ference revealed that power blackouts could be afflicting the economy at the same measure as fuel and foreign currency shortages. And unless government immediately springs into ac- tion, the industry, which projects to generate $4 billion this year, could be headed for a meltdown. Gloom prospects have been bolstered by a wave of fuel shortages, and escalations in load shedding after ZESA delayed paying about $35 million for power im- ported from Mozambique, and $33 million for electricity imports from South Africa. While the CoMZ does not provide overall figures, calculations based on previous and current data revealed that potential economic losses of up to $4 billion have been suffered annually. In its State of the Mining Industry 2018 Report re- leased in December 2018, the CoMZ said 60 percent of mines were reporting up to $1 million in yearly losses to power, which adds to $480 million in economic losses, based on the estimated 800 mines. The report reveals graphic details of how electricity shortages are affecting operations. In its report, the CoMZ said; “All respondents indi- cated that power outages were negatively impacting on their operations resulting in output losses,” the CoMZ said. “In times of power outages, respondents indicated that they would use diesel powered generators which are expensive,” notes the CoMZ. This adds to about 30 percent of survey respondents who said they were losing between $1 million and $3 million per annum to power shortages, which translates to about $720 million. Eighty percent of respondents said power cuts were costing their companies $3 million annually, which adds up to $240 million. Cumulatively, the mining industry could be directly losing a combined $1,4 billion to electricity shortages. A further $3 billion could be lost in downstream in- dustries. Calculations indicate that total annual losses suffered by the mining sector, together with downstream indus- tries could reach at least $4 billion after factoring in loss- es in a range of sectors that survive around it. This figure is based on reports that every $1 generat- ed by Zimbabwe’s mines creates $3 in a range of feeder industries such as explosives traders. Each dollar lost by the industry leads to a correspond- ing loss of $3 downstream. ZESA Holdings has had to resort to power imports to bridge a deficit of at least half of the 2,2 million Mega Watts per hour (MWh) required to fire Zimbabwe. Institute of Mining Research (IMR) chairman, Ly- man Mlambo, said headwinds remained endemic. IMR is a specialist institute based at the University of Zimbabwe. “There were significant losses due to power black- outs,” Mlambo said at the presentation of the survey in December. “It is a serious issue, the cost of power needs to be addressed,” warned Mlambo. All mining executives who responded to the CoMZ survey warned against the prolonged power problems to Zimbabwe’s economy. Troubles rocking the mining industry are compound- ed by high taxes, old infrastructure, which have all un- dermined its potential to reach full potential to generate Page S34 | June 13-19 2019 CoMZ NEW PRESIDIUM & CONFERENCE SPECIAL FEATURE The Financial Gazette Zim needs new mineral resource policies

From Page S32 move towards circular economies. ity. Technology has taken a lead role The industry has to be resilient in an in improving business efficiency, ever-changing world, address critical introducing better mining methods, socio-economic issues and preserve reduction of waste, improvement in the integrity of the environment. health and safety and also limited This aspect is closely tied to the environmental damage. Remotely last pillar which consists of social controlled machinery and plants are and environmental outcomes. Gov- increasingly becoming part and par- ernments need to know what they in- cel of today’s mine set-ups. Research tend the mining sector to contribute and development is undoubtedly the in respect of social and environmen- spine of a sustainable mining indus- tal impacts. The common mistake is try. to apply varying standards within Mineral rich countries need pol- the industry. Firstly, all companies icies that promote innovation and and mining participants need to give drive directed technological change back to the community in accordance in the industry. It is important to with their capacity and also strive to utilize and create synergies between incorporate solutions to social ills business, tertiary institutions, private such as discrimination, inequality, businesses, research institutions and violence and child labor in the indus- original equipment manufacturers to try. Most developing countries em- keep the industry resilient. For ex- phasize social returns mostly from ample policies supporting artisanal foreign owned entities, this approach and small scale miners in developing is not correct. All mining companies countries can tap into the accessibil- need to exercise social responsibil- ity of mobile money platforms as al- ity under the same lens albeit their ternative financial and transactional contribution executed in different platforms. proportions. In a country like Zimbabwe, all the Secondly social returns usually telecoms operators have strong mo- lie in the grey area between statuto- bile money applications such as Eco- ry compliance and voluntary corpo- cash, Onemoney and Telecash which rate social responsibility or company are operated by Econet, NetOne and policy hence most companies define Telecel respectively. These platforms for themselves what positive social have become central in Zimbabwe’s impact means or what is requires. It transactional space and are readily is helpful for governments to craft accessible to anyone with a mobile. credit point system tied to various Management and Staff of Whaleside Shaft Sinkers (Pvt) Ltd, particularly Such platforms can be enhanced and incentives that guide companies on the Mine Manager and staff at Ngezi Chrome Mine, wish to congratulate adapted to allow for artisanal miners how they can positively contribute in Zimasco (Pvt) Ltd. for winning 2 Exporter of the Year Awards. to be able to receive and pay loans communities and societies that they and also to receive payment for the operate in. Governments should also off take of their produce. Innovation lead the drive to improve social re- We are proud of your achievement. is required to navigate today’s prob- turns and promote balanced policies lems and solutions are within reach as an employer and within their busi- if stakeholders are willing to think ness projects. Where governments outside the box. hold mining title and run operations Providing a full range of Information technology has also they should set the example by im- improved marketing. Producers proving livelihoods and undertaking Underground Mining should be able to exercise the option sustainable and responsible habits. to tap into global markets through Government cannot disregard its avenues like online mineral trading own responsibility towards its em- Contracting Services, platforms. Over the years several ployees, communities and environ- such platforms have emerged such ment and then efficiently oversee including: as the Continental Commodity Ex- other entities. change (CCEX) or Open Mineral The pillars discussed above are by which can be carefully integrated to no means exhaustive of the many is- help break internal commodity price sues that are central to the industry, monopolies and extend market reach. they only comprise key guidelines Embracing technology and innova- that can be used to assess wheth- tive business solutions can produce er mining policies are coherent and greater returns for mineral rich coun- progressive in line with the creation tries and also foster responsible min- of sustainable value for stakehold- ing. ers. The guidelines also ensure that Sustainability should also be a the mining industry is resilient and key component of the fabric of min- relevant to addressing the issues of eral policies. Minerals are non re- the day. newable and therefore the extraction It is important to realize that pol- and consumption of minerals should icies are only as good as there is be closely managed. Policies there- clarity behind the objectives of gov- fore should include provisions that ernment. Therefore, the first inquiry promote the purposeful use of min- for any mineral rich government is, eral revenues, engrain the use of al- what do we intend to achieve with ternative renewable energy sources, our resources? Once the answer to promote resource efficiency, partic- this question is clear then policies ipate in low carbon emissions drive, can be structured efficiently towards establish vibrant re-purposing of that common purpose. processed mineral commodities and The Financial Gazette CoMZ NEW PRESIDIUM & CONFERENCE SPECIAL FEATURE June 13-19 2019 | Page S35 CoMZ 2019 Conference and AGM in pictures Page S36 | June 13-19 2019 CoMZ NEW PRESIDIUM & CONFERENCE SPECIAL FEATURE The Financial Gazette Stanbic Bank, Power utility demands US$ payments Zimplats merge HE Zimbabwe Electricity Supply Authority currency, yet we pay for our spare parts in foreign (ZESA) will ask mining companies and oth- exchange,” he said. Ter exporters to pay part of their power bills Chivaura declined to say what proportion of pay- in foreign currency to help the utility cover import ments would be in domestic and foreign currency. costs. The payment requirement will place further CSR efforts ZESA introduced daily outages for the first time strain on mining companies grappling with a short- in three years this month after a drought crimped age of hard currency that has forced some of them to hydropower output, exacerbating breakdowns at its suspend operations this year. aging power plants. ZESA only has the capacity to “Mining companies have begun discussions with meet about two-thirds of the demand for electricity ZESA about the proposal,” said Batirai Manhando, Binga District administrator, in Zimbabwe and is considering increasing imports the outgoing president of the Chamber of Mines, an Ndeti-Banda, handing over spec- from neighbouring South Africa and Mozambique industry lobby group. tacles and sunscreen lotions to one to supplement output. “If this is adopted without proper consultations, a of the beneficiaries while Chiedza The authorities are drafting legislation on the number of them will close,” he said. “Already, some Mupfumira (Zimplats corporate payments, ZESA acting chief executive officer Pat- in the sector are paying for power in US dollars and communications manager) and rick Chivaura said. this is not sustainable at all.” Justice Mataruse (Stanbic Bank The utility currently receives all payments in ZESA owes regional suppliers more than $80 Hwange branch manager) look on. RTGS dollars, the country’s de facto currency. million, including $33 million to South Africa’s Es- “We are supplying mining companies and ex- kom Holdings SOC Ltd and $35 million to Mozam- porters with power, but they are paying in local bique’s Hidroelectrica de Cahora Bassa.

TANBIC Bank Zimbabwe and Zimplats have combined forces to support people with albinism. SThe two organizstions have been actively support- ing people with albinism in their individual capacities and have embarked on a partnership to benefit Binga, Hwange and Lupane districts. At events recently held in Binga and Hwange, Stan- bic Bank and Zimplats handed over spectacles and sun- screen lotions to 27 beneficiaries who were in need of the goods. People with albinism have a reduced amount of melanin, and this can affect their eyesight, hence, the spectacles will definitely go a long way in improving the eyesight of the beneficiaries. The three districts of Bin- ga, Lupane and Hwange have the highest population of people with albinism in Matabeleland North Province. People with albinism in this region regularly need access to sun protection materials due to the extreme heat in the region. Speaking on the side-lines of the events, Palmer Mugavha who is the Head of Marketing and Commu- nications for Stanbic Bank articulated that the Standard Bank subsidiary has been involved in the support of peo- ple with albinism for four years now. “The bank has been working with the Albino Chari- ty Organisation of Zimbabwe (ALCOZ) to reach out to people in different parts of Zimbabwe by distributing sunscreen lotions, lip balms, sunhats, and antibacterial soaps, and our relationship with ALCOZ was estab- lished four years ago,” said Mugavha. Zimplats launched a massive awareness campaign dubbed “Beyond the Skin” in October 2017. Through the campaign over 1000 people with albinism accessed sun protection materials. Challenges faced by people with albinism require a multi-stakeholder approach, therefore, through the campaign, Zimplats joined forces with Friends with Albinism in a bid to understand issues affecting people with albinism and developing effective programs to assist them. Chiedza Mupfumira, Zimplats’ corporate communi- cations manager, expressed gratitude to all the govern- ment and private stakeholders who partnered the Friends with Albinism campaign, highlighting the great impact the campaign has had in different provinces particularly Mashonaland West and Matabeleland North provinces. “We are greatly overwhelmed by the support we have been receiving from the Ministry of Health and partners such as Stanbic Bank among many others,” she said. “We appreciate Stanbic bank’s support in purchasing the spectacles for the Hwange, Binga and Lupane ben- eficiaries and we hope this partnership goes a long way into the future.” Zimplats in conjunction with Optinova Eyecare Zimbabwe and supported by the Minister of Health and Child Care along with the Ministry of Public Service, Labour and Social Welfare, conducted free eye tests for the beneficiaries. Speaking at the event held at Binga District Hospital, the Binga District administrator, Lydia Ndethi-Banda, extended her gratitude to Stanbic Bank and Zimplats cit- ing the great need in their district given the number of people with albinism in Binga and surrounding districts. “We continue to look for solutions to support mem- bers of our communities with albinism and are greatly humbled by Stanbic and Zimplats’ support,” said Nde- thi-Banda. The Financial Gazette June 13-19 2019 | Page 17 Column Remuneration outlook for 2019 HE economy has experienced significant changes payments would be more feasible. Some employers still provide offering a fuel allowance were also forced to since July 2018. The introduction of the Transitional However, before making any employer-assisted school fees adjust this allowance for employees given the TStabilisation Programme by Finance and Economic such payment, the employer must for employees’ children. These huge jump in fuel costs. Development minister Mthuli Ncube, followed by the communicate to employees that it have significantly increased, with Medical aid Reserve Bank of Zimbabwe’s monetary policy, has brought is a once-only payment to manage the majority of schools requiring Medical aid related costs have also gone up about new challenges for businesses. These policy changes expectations. a portion of the fees to be paid significantly. Some medical aid societies have have resulted in new challenges related to how people are The economy is increasingly in foreign currency. This has gone to the extent of pricing their services in remunerated. re-dollarising on its own. We left most employees who are on United States dollars. This has put significant Historical issues anticipate that this trend will employer-assisted child school fees pressure on employers, especially how to fund Remuneration systems in Zimbabwe have been increase as businesses seek to programmes exposed, reducing the the USD component when they do not generate anchored on guaranteed packages from lower-level safeguard themselves against the HR Perspective purchasing power of their salaries. US dollars. Even in RTGS dollars, the cost has employees to senior executives. Over 90 percent to 100 erosion of value through inflation with Fully expensed company vehicles significantly gone up. percent of all remuneration in Zimbabwe is guaranteed (be and exchange driven losses. If this Memory Nguwi The cost of purchasing and The right direction for Zimbabwe it basic salary, cash allowances, and annual bonuses). Very trend continues as anticipated, we servicing vehicles has significantly The most sustainable way to remunerate few organisations operate “true performance-based” pay are also likely to see more employers starting increased. This trend affects companies that are employees is to tie a portion of the remuneration systems. to pay either in hard currency or the RTGS on fully expensed company vehicle schemes and to productivity. Paying people based on Over 70 percent of employees fall under the National equivalent. What is not yet clear is if employers also those that had converted to total cost. We have productivity is the surest way to sustain higher Employment Councils (NEC) collective bargaining will maintain the face value of previously noticed adjustments on average ranging from 30 wages. There is a need to reverse the current framework. This means their remuneration is negotiated denominated USD salaries or they will make percent to 60 percent. This is meant to cushion trend where over 90 percent of the remuneration at the NEC level and once agreed, the employer has changes. employees against the high cost of servicing the is fixed and guaranteed across all levels. This will to comply or apply for an exemption. Very few NECs School fees vehicle and fuel costs. Those companies that are To Page 19 approve exemption applications. The employer needs to prove financial incapacity by providing documented financial evidence. None of the NECs in Zimbabwe include performance-related pay in their collective bargaining frameworks. It is all fixed and guaranteed. Remuneration leverage The remuneration structures above present a huge risk to businesses as they put them in a high leverage situation. The remuneration leverage looks at the ratio of the fixed and guaranteed remuneration component versus the variable pay component. Ninety to 100 percent of all remuneration in Zimbabwe is guaranteed, with a small portion coming from variable pay. Thirty to 80 cents of every dollar generated goes towards remuneration although there are variations by industry. This means Zimbabwean companies are not able to lower their remuneration costs in line with fluctuations in business performance. This is a huge risk for any business unless the money is donor-funded. Trends in remuneration Less than 40 percent of local companies have migrated to total costs to employer. Those that have migrated to total cost to company have cited the need for an equitable and more predictable staff costs structure. What is worrying though is that half of this 40 percent only partially migrated to total cost to company. Those that have fully migrated keep referring to individual items found in the traditional model. This means they have not migrated to total cost but converted certain benefits to cash and called that total cost to company. Total cost to company is a change of the whole remuneration mindset. It should be anchored on making the employee understand that all remuneration paid to him/her constitutes staff costs from the perspective of the employer. Therefore, the employer is better off paying them one figure, which they can use according to their discretion. When making salary adjustments, they must be based on a total figure of the total cost, not certain individual elements in the original conversion calculations. The traditional model, with a litany of benefits, makes it extremely difficult to predict with certainty and factor staff costs into the overall business costs. Under this model, you can never predict your staff costs in advance, thereby bringing an element of risk in the administration of staff costs. Over and above the risk highlighted above, there is generally abuse of remuneration elements by senior executives in the traditional model. Whether a company goes total cost to company or remains on the traditional model, that decision must be based on what strategy would give your business a competitive advantage. Salary adjustments and cost of living The cost of living in Zimbabwe has significantly increased compared to last year. Inflation is on an upward trend. The monetary policy brought in another dimension ― open forex trading on the interbank market. This led to a serious devaluation of the local currency, the RTGS dollar. This means that employee remuneration has been eroded by a factor 5.5, which is the average exchange rate now although the black market rate is much higher. It is safe to say at this stage most employees are struggling to make ends meet, given the devaluation of their salaries and rising inflation. Put differently, anyone who depends on a fixed income is worse off than they were this period last year. Paying employees in forex Only 37 percent of organisations that participated in our survey are paying their employees in forex and most of them are non-government organisations (27 percent) and in the mining sector (20 percent). The general trend is that organisations that export their products or receive international donor funds/grants are paying employees either partly or fully in forex. Companies need to earn foreign currency to pay salaries in forex. The call by some trade unions and employee representatives for employers to pay in forex will simply be impossible to meet if the employers do not earn foreign currency. We advise that if an employer wishes to pay salaries in forex but realises that they cannot commit to regular monthly payments, making discretionary once-off forex June 13-19 2019 | Page 18 The Financial Gazette Column Records for capital gains tax purposes AX law requires records to be kept against the spirit of the law, specified asset was acquired deductible for income tax purposes such as repairs. for six years. This is for income tax which provides that capital prior to February 1, 2009. Inflation allowance is 2,5 percent of acquisition Tpurposes because income tax returns gains tax should be levied on Marketable securities listed or construction cost and cost of improvements, have to be filed each year. Besides this, the the net wealth i.e. proceeds on the Zimbabwe Stock alterations or additions. It is granted per year or part records are dealt with within a business set less costs. Exchange are exempt of the year thereof from the date of incurring the up. In Zimbabwe, capital from capital gains tax, but expenditure until the date of selling the specified Under the Capital Gains Tax Act, record gains tax is levied on are subject one percent asset. Other expenditure that is deductible is that keeping is more problematic due to the specified assets, namely withholding tax. which is directly incurred or in connection with the fact that disposals are infrequent and also immovable properties Deductible expenditure sale of the asset. because there could be a significant delay which include homes, includes the cost of Only provable expenditure is deducted, implying between the date the expenditure was marketable securities and acquiring or constructing records should be kept of specified asset’s purchase incurred and the date of sale of the property. certain intangible assets. Tax Matters the specified asset. If you price or construction cost, cost of improvements, Another problem is that proprieties may The tax is levied on capital with acquired the asset by way of additions, and other items that affect the basis of also be held by individuals who hardly gain, which is the amount Marvellous Tapera inheritance your expenditure your specified asset. The records are required to maintain records of their expenditure. It by which a specified asset’s is amount declared for estate prove or justify costs to ZIMRA. is rare for individuals to keep records of selling price exceeds its base cost (cost of duty purposes of the deceased and in the The exact information required depends on the costs on labour, materials, amounts paid acquisition/construction, improvement, case of a donation your acquisition cost type of asset sold, when it was acquired, how it to contractors, architect’s fees, building inflation allowance, selling costs etc). is the amount used for capital gains tax or was acquired, whether a valuation was used and permit charges and legal fees directly Capital gains tax is then charged at the income tax purposes of the donor. how it was sold. On acquisition, documents to connected with building their homes. rate of 20 percent of the capital gain for a Expenditure on improvements, additions retain will include acquisition details, legal costs, The downside is that capital gains tax specified asset acquired after February 1, or alterations to the specified asset is also stamp duty, valuation fees etc. An estate valuation will be levied on gross capital amount, 2009 and at five percent of proceeds if the deductible, but does not include expenses report is required for an asset acquired by The Deductible way of an inheritance. expenditure in- If expenditure was “cludes the cost of incurred in improving acquiring or construct- the property and this is ing the specified asset. reflected in the value of If you acquired the the asset on sale, then asset by way of inheri- these costs are usually tance your expenditure allowed and the invoices is amount declared for should be retained. estate duty purposes A formal valuation of the deceased and in from reputable valuation the case of a donation firms (three quotations) is required whenever a your acquisition cost specified asset is sold. is the amount used for The Commissioner- capital gains tax or in- General can set aside come tax purposes of the selling price if it the donor. Expenditure has not been established on improvements, ad- at fair market price. ditions or alterations to The valuation report the specified asset is also is required to justify deductible, but does selling price and should not include expenses be retained. Any sale deductible for income agreement giving details tax purposes such as re- of the sale proceeds pairs.” will be required as well. Where an asset is gifted, the sale proceeds may be the market value and evidence of this is a valuation report and this should be kept. Where the asset is destroyed, correspondence relating to an insurance claim including details of any compensation received for a damaged asset should be retained. Without paper work it is difficult to justify costs and you may be assessed on proceeds or a higher gain. The paper work should be written in the name of the owner of the property. The invoices or receipts should specify details of materials acquired (quantity and prices must be contained). Your file must also contain delivery notes. Quotations are not acceptable to ZIMRA. Where the materials have been bought, unfortunately, in the name of the contractor or third parties you may need an affidavit to confirm this. Also keep a contract between yourself and the builder or contractor to justify labour costs. The contract must be signed by both parties. Cash purchases tend to be the major area where an audit trail often lacks. It is encouraged to transact through a bank account, especially for large transactions. Where this is not possible, insist on receiving receipts with full details of your purchases. When you are forced to buy from informal traders still insist on receipts and invoices. If these documents are not available consider making one yourself which the person must sign. Include his name, address and ID number in addition to the general contents of an invoice. If records of costs of acquiring/constructing or improving a specified asset are not kept you also stand to lose inflation allowance. For safekeeping of title deeds, receipts/invoices of expenditure and other related correspondences you may consider lodging copy files with your banker or lawyer. This way you may also be able to salvage these files if your original file is lost or is destroyed for instance, in a house fire.

Meanwhile Matrix Tax School will be hosting its Cross Border Taxes Seminar on July 17, 2019. l Tapera is the founder of Tax Matrix (Pvt) Ltd and CEO of Matrix Tax School (Pvt) Ltd. He writes in his personal capacity. The Financial Gazette June 13-19 2019 | Page 19 Column Public enterprises’ success begins with board

HE country’s socio-economic history has burdened us executive team in its implementation. The board equally vital component of the trio that makes with a disproportionate number of public enterprises. should understand the industry, the strategic up a successful public enterprise. It is arguably TThey dominate the hub of the national economy, challenges and the environmental success factors. the most critical of the three because it is the which makes them central to its revival, survival or collapse. Board members must never play to the gallery catalyst that makes things happen or not happen. Common features of public enterprises are: and second-guess or oppose their CEO publicly Strong-willed executive management is required l One dominant shareholder, the government, which because that destroys the integrity of the entire to run a public enterprise, which can withstand is represented by ever-changing proxies, which prevents business governance structure. and fend off the onslaught by many, who claim handover of institutional memory; Shareholder/s: Government must understand to have authority over the public utility. Under l Boards of directors that are appointed more for that it is engaged in a public-private partnership the leadership of the CEO, it must display its political reasons than competence; through the public enterprise as a business. authority as the steward of the organisational l Top down communication from the shareholder to the Sixty percent of the problems parastatals face brand, its integrity and financial viability, not board and management; Executives Only Corner are within the control of the shareholder, board the shareholder or the board. Most of our public l Unclear business strategy that is not owned by the with and management, leaving only 40 percent as enterprises today are in intensive care, badly in board or management; Shepherd Shonhiwa external, pertaining to market and environmental need of turnaround. This demands an unusual l Political interference in governance, administration headwinds. The shareholder must understand breed of management, which forges alignment and operations; principal role is to appoint the right CEO for the what it doesn’t know ― “how to run a business” with the shareholder and the board to cultivate l Most executive positions have acting incumbents business without external influence, delegate the and leave it to management who are the hired support to enable it to implement unpopular perpetually; running of the business to the CEO and support experts. The principal role of a shareholder is turnaround strategies. It must always be guided l Perceived and treated as an extension of government him/her, particularly to protect them from to capitalise the business at establishment, give by the ethical principle that “Courage is what it to which the ruling party can deploy its cadres for various political interference. A supported CEO generally the strategic vision then recede to the distance to takes to stand up and speak for the right”. reasons; delivers above average results. The board must allow the board to oversee the captaincy of the l Shonhiwa is a chartered director (SA) l Grey areas of accountability and transparency; understand and own the business strategy for ship. and has authored books on leadership. He l Lack of rigorous fiduciary responsibility on the part of it to competently supervise the CEO and the Management: Executive management is an writes in his personal capacity. the board and executive management. Against this backdrop, public enterprises are a drain on the national fiscus and hurdles to the economic growth they are meant to drive. It is a national imperative that they are turned around to deliver. These simple principled actions must be taken to achieve success: Board of directors: Board appointments should be based on merit, which includes skills, experience and appropriate qualifications for the industry. Board composition should reflect a balanced skills set, diversity of age, ethnicity, gender and business acumen. Boards are not a dumping ground for unwanted garbage. The board’s BINDURA NICKEL CORPORATION LIMITED Trojan Mine Road, Bindura, Zimbabwe P.O. Box 35, Bindura Telephone: +263 (0)271 6231–6; 7951–66; 7821–27 Remuneration Fax: +263 (0)271 7572; 7189; 7184; 7577; 6004 outlook for 2019 Company Registration number: 552/1966

From Page C7 be extremely difficult to change for NEC level employees NOTICE TO SHAREHOLDERS: PUBLICATION OF THE ABRIDGED AUDITED as the current bargaining model is extremely rigid. This should, however, be easy for non-NEC employees where FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019 management has more freedom to structure the remuneration so that it’s sustainable. The biggest hurdle in trying to restructure remuneration In compliance with the Continuing Obligations of the Zimbabwe Stock Exchange’s Listing Rules, for managerial employees is that senior executives tend to Bindura Nickel Corporation Limited (“BNC” or “the Company”) hereby issues the following put their interests first before those of the business, leading to unsustainable wage bills and remuneration-related scandals. announcement: Business performance Most businesses reported growth in both revenue and profit for 2018. The trend seems to be continuing. A The Company will not be able to publish its abridged audited financial statements for the year worrying concern though is that most of the growth is price- driven rather than volume-driven. While this is good in the ended 31 March 2019 within the stipulated time frame which ends on 30 June 2019 for reasons short term, it is risky to pursue such a strategy in the long highlighted below. term. Most companies are surviving under a price umbrella that is difficult to maintain going forward. It is very likely that most companies relying on the price umbrella will On 20 February 2019, the Governor of the Reserve Bank of Zimbabwe introduced new measures experience reduced demand for their products and services, affecting cash flow and eventually profitability. It is a delicate through a Monetary Policy Statement. In a Government Gazette Extraordinary that was published balancing act for every business i.e. need to maintain demand on 22 February 2019, Statutory Instrument 33 of 2019 was gazetted and thus marked the and need to recover costs through price. If businesses fail to maintain this balance, the most likely introduction of an electronic currency called the Real Time Gross Settlement Electronic Dollar consequence is that they will have to retrench to reduce staff (“RTGS Dollar”). costs. Euphoria of salary adjustment We are noticing “euphoria” around salary adjustments. We are noticing that several organisations are rushing to adjust Consequently, the Board of Directors of BNC had to review and adjust the manner in which the salaries upward without being sure how their businesses will Company recorded and reported its financial statements, commencing from the reporting period perform in the medium to long term. We project that most businesses will find themselves in a fix as they will not be ended on 31 March 2019. This resulted in a protracted process of preparing and finalising the able to reduce salaries when business performance goes financial statements. Inevitably, the audit review process for that period by the Company’s southwards, given the structure of remuneration models in Zimbabwe. External Auditors had to be extended. There is a need for extreme caution. Organisations that have rushed to adjust salaries without sufficient understanding of how they are going to fund this in the Shareholders are advised that the abridged audited financial results of the Company for the year current business environment may be forced to cut staff ended 31 March 2019 will be published on or before 31 July 2019. to remain viable. Consumers are constrained in terms of their spending and naturally, that will affect business. With low demand as a result of low consumer liquidity, most businesses will struggle to remain viable. By order of the Board Zimbabwean companies, to a large extent, have now Bindura Nickel Corporation Limited realised that increasing fixed remuneration like basic salaries and allowances is a risky affair. The majority of companies are on the brink of collapse as a result of poor judgment when it comes to managing remuneration. Others have adjusted CF Mukanganga salaries haphazardly, resulting in unsustainable wage bills. Company Secretary Others have not necessarily increased salaries but have increased headcount, resulting in the same net effect ― an 13 June 2019 unsustainable wage bill. Despite the significance of optimal staff costs in running a successful business, most organisations have no coherent Directors:M A Masunda (Chairman), B Manhando (Managing Director), J H L Lampen (Finance Director), strategy to harness the value from what they pay in staff costs. O A Barbeau, O M Chidawu, A P Danso, T R Muganyi. l Nguwi is an occupational psychologist and managing consultant with Industrial Psychology Consultants. He writes in his personal capacity. Page 20 | June 13-19 2019 The Financial Gazette Column Company law the heart, soul of capitalist economy

T HAS been stated by some legal authorities There is also a common has its own advantages and known as “uncalled up shares.” As a result, if a member has that company law is the heart and soul of any law corporation called a disadvantages over the other, and one share in the company and its nominal value is say, one Icapitalistic economy. This is because for any universitas, which is formed people who intend to form them dollar, once he has paid that dollar, as fully paid up share, such economy to operate effectively and for the through drawing up a need to be properly advised to then his liability to the company generally comes to an end. capitalist to earn his profit, the operations of the constitution, contrary to other avoid inconvenience and falling This advantage is derived from the rule that a company is a corporate entity must be well regulated, not just organisations that are formed foul of the law. Maybe before the separate legal person and distinguishable from the people for the benefit of the capitalist, but also for the through registration by state distinctions between these varying who own it. As such, its debts and obligations are generally state as well as the public. authorities. corporate entities are discussed, supposed to be met by it, and not by the shareholders. Zimbabwe, being a developing state with a A company is defined readers need to be educated about Shareholders can only be called upon to meet the company’s relatively advanced capitalist set-up, has adequate in legal terms to mean an the concept of “limited liability”. debts where such a company was formed for purposes of legal instruments to cater for the operations of association of people who It can be stated without doubt committing fraud, or where the company was formed solely companies and other related organisations. undertake to carry out that many people have little to be an agent of the person who incorporates it, as well as Our company law regime is predominantly business, with each having knowledge of why companies are where such a company is a fiction, a myth or a sham. regulated by the Companies Act [Chapter the right to assign his shares Legal Matters suffixed with the phrases “Private The Act also repeats the above exceptions to the common 24:03], which is supported by other statutes, all to any other person, subject, with Limited” or “Limited”. Readers law principle of separate legal personality, such that where facilitating harmonisation of our commercial of course, to the articles or VOTE MUZA must know that the concept the business of a company is carried out recklessly, or sector. Various forms of organisations exist that constitution of the company. of limited liability is the best with gross negligence, or with an intent to defraud, then are formed for purposes of transacting business. In Zimbabwe, the benefit that is derived from the shareholders may be treated as one with the company. Among these genres of corporate entities ― as commonest form of company that people form is practice of incorporating companies. In simple Going back to the common distinctions between the defined by law ― are cooperative societies, the private company. Other less popular forms terms, it means that once the company is called various forms of companies, readers will note that a private statutory corporations such as parastatals, of companies are public companies, companies upon to pay its debts, the shareholders will only company is relatively easy to form and the myriad rules partnerships, or a lesser known entity called the limited by guarantee and corporative companies. contribute to the company the unpaid balance governing public companies do not apply to it. “private business corporation”. Each and everyone of these organisations due on their shares. In common lingo, these are A private company can be formed by two to 50 people, whereas a public company has no membership limit. The major difference between a public company and a private one is that the latter restricts the transfer of its shares by shareholders, and also cannot invite the public to subscribe for any shares or debentures of the company. This is the sole reason why private companies cannot be listed on the stock exchange. As stated earlier, company law rules are cumbersome, numerous and often demand strict compliance by the responsible people. Sometime in the early 1990s, and following on the South African system, the government launched a commission of inquiry to investigate and make recommendations on the entire field of company law. It 8. Small Ruminants Sector Best Reporter Award: was suggested that a less sophisticated form of company About the Awards Journalists honoured in this category have excelled The Inaugural Agriculture Media Awards are organised by the be introduced for the benefit of the public. As a result, the in the promotion and articulation of pertinent issues Zimbabwe Agricultural Society. The awards honour media government introduced a law permitting the formation in the sector, which is often overlooked in journalism. practitioners who have substantially contributed towards of an entity called a private business corporation. This objective, impartial and impactful coverage of the agriculture 9. Poultry Sector Best Reporter Award: This award sector in 13 selected categories. organisation is not required to have complex articles and recognises and honours the objective articulation of challenges, opportunities and prospects for growth memoranda of association, but must merely have what is The Agriculture Media Awards aim to encourage coverage of in the sector. known as an incorporation statement. the agriculture sector in the local media in a manner that has a favourable in uence on decision makers, farmers, the public Further, it is not encumbered by the demand to appoint 10. Agricultural Finance and Development Best and the sector in general. Reporter Award. This award will be given to a directors, or hold formal meetings. There is no requirement journalist who excels in the coverage and The Awards will reward media practitioners who have for holding shares, but members only have an interest, understanding of agricultural nance and meaningfully contributed towards creating awareness on the which is recorded as a percentage. development, and related challenges and activities of the agriculture sector, have articulated issues opportunities within the context of the land reform Overall, this form of business organisation is very aecting it as well as illuminating its role and relevance in programme. national economic and sustainable development. simple in its operations. Surprisingly, most people appear to be unaware of its existence. The tendency by the public 11. Sustainable Agriculture, Climate Change and The awards will recognize technical reporting, and Environment (Smart Agriculture) Sector Best has been to rush to form the private company ― perhaps socio-economic aspects of the agricultural sector including Reporter Award: The award recognises the value-chain and ecosystems relevant to agricultural growth. for the purposes of prestige, and also maybe because it is a impactful coverage of the sustainability issues, climate change and responsible use, management fashionable form of a corporate entity. Entries are now open for the Agriculture Media Awards (AMA) and protection of the environment in agriculture at a l Muza, a Harare-based legal practitioner, writes in 2018, which will be held on Friday 28 June 2019. time when weather patterns are erratic. his personal capacity. [email protected] Award Categories 12. Agricultural Equipment, Mechanisation, Irrigation, Storage and Innovation Best Reporter The awards are in 13 categories: Award: This award honours excellence in reportage on equipment used in agriculture, mechanisation, Clarity everything 1. Tobacco Sector Best Reporter Award: This award irrigation, storage and innovative solutions in recognises journalists for their outstanding agriculture. endeavour to promote the growth of tobacco production in Zimbabwe through objectively 13. Overall Agricultural Sector Best Reporter Award – when it comes articulating the concerns and achievements of the The winner is selected from the winners of the sector. awards above. This is the premier award for excellence. 2. Cotton Sector Best Reporter Award: This award to annual reports recognises objective and accurate reporting on the issues aecting the cotton sector in Zimbabwe, its General Conditions of Entry challenges, opportunities and growth potential. Vanessa Richards 1. Journalists can only enter a maximum of two stories 3. Wheat Sector Best Reporter Award: This award across all categories. Please send your entries in one honours excellence in reporting on issues aecting envelope. NNUAL reporting can be a strange business the wheat sector in Zimbabwe, the challenges faced 2. A separate entry form (or photocopy thereof) must for a communications adviser. There cannot be by farmers and other stakeholders and opportunities be completed and submitted with each entry. and growth prospects. 3. Send two copies of each entry many other situations where the author finds 4. Print journalists should send the original article and A it as difficult, even painful, to write something as the 4. Oilseeds Sector Best Reporter Award: Oilseeds are a clean, legible photocopy of the entry. reader does to read it. Communicating in a compli- critical for providing edible oils and reporters will be 5. For TV and Radio, please send two discs (DVD/CD). honoured for incisive and excellent reporting on the Audio and video clips should not be longer than 5 ance-driven vehicle can be challenging, but there are sector, for increased local production, import minutes. steps you can take to make it less so. substitution and employment creation. 6. Entries should have been broadcast or published in English, or any other ocial language. It may sound more than a little self-serving to say so, 5. Cereals Sector Best Reporter Award: This award 7. Winners will be announced at the 2019 Agriculture but I believe it really is in companies’ interest to make recognises outstanding objective and accurate Media Awards ceremony on 28 June, Robbie sure communi- reporting on the issues aecting the Cereals sector in Mupawose Hall, at the Business Hub, Harare. cations profes- Zimbabwe, its challenges, opportunities and growth 8. The judges' decision is nal and no correspondence trends. will be entered into. sionals are front and centre on 6. Small Grains Sector Best Reporter Award: In the For more information, please contact: context of climate change, small grains have become Peter Phiri Cell: +263 774 010 297 Tel: +263 242 780963-6 their reporting prominent and hence journalists should report on Email: [email protected] team. They have the sector, and its challenges and opportunities. Patience Tsikira Cell: +263 776 039 312 Tel: +263 8644250477 knowledge of publication production and can act as the Email: [email protected] 7. Beef and Dairy Sector Best Reporter Award: This Kudzai Muranda Cell: +263 777541965 Tel: +263 8644250477 ‘voice of the reader’ in the reporting process. award recognises journalists for their outstanding Email: [email protected] Getting clarity on what senior management and work in reporting on the sector in Zimbabwe through Paidamoyo Makoni Cell: 0771 329 937 Tel: +263 8644250477 the board want the annual report to say can be a real objectively articulating the concerns and Email: [email protected] achievements of the sector. Website: www.zas.co.zw headache. What often happens is that the subject mat- ter experts who prepare the data take a (more or less wild) guess at what explanation should be given for the results. These experts often only have visibility over their particular part of the enterprise. The result is a patchwork of disconnected disclosures. The solution is to invest time at the start of your reporting project to map out the main points and the key messages for each. Different perspectives across

KM DI600769-CY26 the board and management team should be discussed and resolved. Senior management can be reluctant to spend time To Page C11 The Financial Gazette June 13-19 2019 | Page 21 Column Going beyond compliance in board leadership

HE primary role of boards is to provide direction and sustained employee boards should ensure that their organisations at- support to executive teams, balancing the interests of engagement, etc., do tract, retain and develop motivated cadres who Torganisations’ many stakeholders ― senior manage- make a huge differ- deliver high performance on a sustainable basis ment, customers, suppliers, financiers, government and the ence in achieving or- and are quality succession for the future at both community at large. ganisational success. board and at senior management levels. In most cases, the focus tends to be on compliance with, c). Enterprise lSustainable development review and re- for example, provisions of the Sarbanes-Oxley Act (USA), shaping: Enterprise positioning: Take note of the devastating effects King IV, the Zimbabwe National Code of Corporate Gov- shaping is another of Cyclone Idai! Organisations have, or should ernance and the recently promulgated Public Entities Cor- key responsibility for have, a purpose beyond simply making profits. porate Governance Act (PECGA). boards. This encom- The growing trend is that boards run their organ- Is such a focus adequate in this ruthlessly competitive passes the following: isations in a manner that balances three pillars, global village? This article will proffer some perspective to lMarket and namely: Profits(ie the economic pillar), People this strategic question. Johnson Manyakara competitive land- (ie the social pillar in terms of benefits to staff Compliance requirements in PECGA scape review and re- in the business and benefits to communities) The PECGA provides that public entities in Zimbabwe failed to introduce needed change fast enough positioning: Organisations and Planet (ie the environmental pillar). This is comply with the following provisions: and, where they have done so, they failed to do not operate in a vacuum. Market and com- embracing sustainable development ― “devel- l Board members appointment process; manage the change well. It is one of the key petitor landscape review helps an organisation opment which meets the needs of the present l Board composition; responsibilities of boards to provide transforma- discover its market strengths and weaknesses without compromising the ability of future gen- l Committees of the board; tional leadership to their organisations. as well as identify its opportunities and threats. erations to meet their own needs”. l Meetings of boards; b). Organisational culture transformation: This, in turn, feeds into the process of shaping “Beyond Compliance”, for some, a paradigm l Board performance monitoring; Embedding the organisation’s core values into the organisation’s strategy. shift coming too late! l Board members and senior management remunera- the fabric of the organisation’s culture is im- lTalent quality review and repositioning: lManyakara is a board governance ad- tion and allowances; perative for organisational success. Sustained Strategic talent management is yet another key visor with Board Leadership Zimbabwe. He l Board members training and development; high performance, sustained service excellence, responsibility for forward-looking boards. Such writes in his personal capacity. l Board governance documents; l Conflicts of interest; l Risk management; l Financial reporting; l Annual general meetings; and l Annual reports. An impressive list indeed! Areas beyond compliance The world is changing fast, whether it is in terms of meeting shareholders’ financial expectations or in terms of the provision of services to the public. Below are some key areas of focus for boards, beyond compliance. a). Change management: “When the rate of change out- side exceeds the rate of change inside, the end is in sight” ― Jack Welch. Many entities have gone into extinction not only glob- ally but also in Zimbabwe precisely because they have Clarity is everything in writing annual reports

From Page C10 on the report this early in the process. But too many re- ports are finalised right on the deadline in a high-pres- sure atmosphere with nobody happy about the end re- sult. The annual report can and should echo the broad- er communications programme. Content that has been developed for press releases, employee newsletters or other channels can often be repurposed, with a suitable level of review from legal and compli- ance advisors. Repurpos- ing content saves work and makes your report consistent with other messages to your stake- holders, adding to your credibility. It’s surprising how infrequently this is done. Sometimes the rationale seems to be that report- ing requires more formal and constrained lan- guage and scope (I dis- agree), and sometimes it Vanessa Richards just seems to be a practi- cal issue. Too often there is an unacknowledged barrier between the communi- cations function and whichever function (legal, gover- nance or finance) might own the annual report. Finally, much time is wasted and frustration caused by failure to stick to review responsibilities. This is particularly the case towards the end of the project where low-value changes can require significant re-re- views by all those who have developed the content to date. Be clear about who is reviewing for what and the value these contributions add. Subject matter experts should review for accuracy and completeness of content. Communications profes- sionals can advise on design, clarity, simplicity of lan- guage and overall coherence. Legal must consider the compliance and liability risks. And senior management should assure themselves that the content is in line with the messages they want their stakeholders to hear. l Richards is a corporate communications and governance consultant in Australia. Reproduced with permission from ACCA’s Accounting and Business magazine accaglobal.com/ab. Page 22 | June 13-19 2019 The Financial Gazette Column Creating ideal climate in the organisation

T IS not about the state-of-the-art machinery mode of currency to use. So far there is the black solutions. The answer to the above lies in frank and honest that you have which matters most. It is not market; interbank; semblance of forex payments, conversation provided through the Tripartite Negotiation Iabout how good you are at paying your swipe, ecocash just to mention a few. Activities Forum (TNF) Bill, which was launched last week. Parties to employees. It is not about the type of vehicle you on the market seem to show that the horse might the dialogue need one another and should find one another. have which matters most for employees. It is not have bolted and employees and businesses are in The talk about a new currency requires a frank conversation about the hefty loans you give to employees. It is a bind. Just like in 2006-2008, if nothing happens including putting in place the right optics. Despite the above not about the holidays you take your employees to ring fence pensions, the damage will be huge challenges, organisations can still set the tone and create that bonds the employee to your organisation. Phil Chitagu for the second time now. Those who retire will an ideal climate to prepare for the possible upturn likely to When you look at it closely, even in Zimbabwe not have a pension to talk about given the current be brought into place through frank conversations at the today, salary is no longer a source of motivation, employer does not generate enough forex to pay economic situation. It might be a good approach TNF. The structure, skewed as it is, requires the HR voice, particularly if it is not USD or interbank linked salaries or part salaries in USD. to also consult human resources practitioners given that most decisions will end up impacting employees rate. We have read in the press that a number of when decisions that impact employees are made. in organisations and human resources will be called upon Just to give some live examples: Some unions are demanding salaries in USD. Such Critical questions need to be asked. What to give advice on how to handle issues affecting employee landlords now prefer USD rentals and this is a fact. calls might indicate that the idea to introduce the next even if the USD is back? Does this motivate morale. Even those who are in the property industry peg RTGS$, though noble, was a rushed decision employees? Does this create a bonding culture in To achieve long-term success, organisations need to selling prices in USD, giving hard hit employees since this is not backed by anything. A two-piecer organisations? What needs to be done to create create and maintain the ideal climate as part of developing no room to own such property. It has been reported chicken and chips meal at local food outlets goes sustainability in productivity and continued a bonding culture across the entire business. This cannot in the media that in Victoria Falls, rents and for US$2,50 OR RTGS $17 based on the black employment? Does this require leadership happen overnight and a lot of ground work needs to be services have been pegged in USD. The question market rate (it’s a waste of time talking about transformation to create a bonding culture in the done. Management plays a critical role in cementing a that comes to mind is how then a person who got the interbank rate as this is not what food outlets organisation? bonding culture in the organisation. Companies understand the US$ three years ago will be able to meet the apply). This is the price as at June 9, 2019. The developments highlighted above and that it takes a collaborative effort to compete in their market US$ obligation. This is a serious headache for Zimbabwe seems to be in a situation that can be questions posed have serious implications on segment and produce sustainable profits. Recognising and both employee and employer, particularly if the termed a “correction” phase but also unsure of the HRs practitioners who are required to provide understanding the characteristics of organisation culture can assist you detect problems in your company if it is unprofitable and take corrective steps to operate a successful business. Let me make an attempt to explain how a bonding culture can be created in an organisation. The factors listed below are not exhaustive but can assist organisations to create an ideal climate, which is important for enhance productivity, an engaged workforce and a profitable organisation: Sharing of superordinate goals ― An organisation with an ideal climate shares its business goals with employees at every level. Leaders share goals with employees and get them on board with the mission and vision of the organisation. Employees and managers understand what is required to reach these shared goals and make every effort to achieve them. Mission and vision statements that are not shared are irrelevant to the cause of the business. Teamwork ― One cannot create an ideal organisation climate without looking at teamwork. Companies with the ideal climate know how to develop teams that collaborate to achieve common goals. Employees and managers readily offer their assistance to each other to meet corporate objectives. The reverse is also true of organisations that do not put bonding culture at heart. A feeling of belonging to a team raises employee morale. It is not a disputable fact that employees spend three quarters of their time at work. In that process, work relations are created, which solidifies team spirit. Employee morale ― Companies with an ideal climate possess high employee morale. Employees value their positions and desire to work there for a long time. Productivity is sustainable and organisational events are enjoyable and very successful through creation of a bonding culture. The workplace situation is currently polarised in Zimbabwe because of the economic situation. However, there is light at the end of the tunnel even if this does not happen now. Training opportunities ― Creation of a bonding culture in companies gives rise to policies meant to train and develop employees. Companies provide on-the-job training and opportunities for employees to enhance their work- related skills. Organisations bring in other individuals to provide necessary departmental and corporate-wide training. Companies also offer opportunities to pursue certification and continual education, which is key for continuous development and relevance. Strong leadership ― Good leadership is one of the main characteristics of an organisation with an ideal bonding culture. Employees have good relationships with management that are based on trust. Managers know how to get employees to function together. When correction is needed, employees readily accept the constructive criticism offered by leaders because there is trust within the system. Dealing with poor performance ― Companies confront poor performance instead of ignoring it. They take corrective actions to improve performance. Upper-level management values the input of employees who make suggestions on how to improve productivity and achieve high performance rates. Companies may even bring in specialists to detect problems and offer solutions. Understands risks ― Organisations with a bonding culture understand the risks they are open to and take the necessary steps to protect themselves. When an event happens due to organisational risks, an organisation with a bonding culture learns from the event. Companies take precautions but understand that risks are necessary to facilitate growth, which guarantees continued employment. Opportunities and changes ― Companies with a bonding culture know how to recognise and seize good opportunities. They always look for opportunities to grow. They also know how to adapt to technological or operational changes. They try to stay ahead or in line with changes in the industry and business environment. The mentioned factors create an enabling environment than the perks organisations give to employees. They add more value to both the business and employees. They bring long term benefits even in a difficult environment as the culture will enable such an organisation to respond quickly to the demands of the environment. In conclusion, companies can take full advantage of prevailing opportunities to remain competitive in the face of a debilitating economic environment. l Chitagu is the current IPMZ vice president for PR, research and customer care. He writes in his personal capacity. The Financial Gazette June 13-19 2019 | Page 23

Lafarge bullish on Q2 . . . bemoans crippling power cuts

AM: Any major new projects this year? measures taken to stabilise the macro-economic envi- AFARGE Cement (Lafarge) has not been spared from KK: We have received project status for our plant ronment, if it all bears fruit, we believe we will have a the vagaries — severe load shedding, acute foreign cur- to double capacity, which will require US$25 million much stronger year than 2018. Lrency and fuel shortages, and the influx of affordable subject to the availability of foreign currency. We have But it all goes to quickly resolving issues around for- imports — of Zimbabwe’s deteriorating economy. Although national status for that project. eign currency so that we can get our critical spare parts, the locally-listed cement maker says its parent, Swiss-based La- AM: Lastly, what can we expect during the last uninterrupted supply, markets stabilising so that the end fargeHolcim Group, has agreed to a US$25 million investment half of the year? users are able to predict what is happening in the market. to increase capacity utilisation, it is, on the other hand, struggling KK: We started 2019 very strongly and with the [email protected] Kaziwe Siame Kaulule to access foreign currency on the interbank market. The company has the capacity to produce 450 000 tonnes of cement per year. To understand the company’s state of affairs and strategy going forward, The Financial Gazette’s business reporter, Adelaide Moyo (AM), interviewed chief executive, Kaziwe Siame Kaulule (KK). Below are excerpts of the interview.

AM: How has Lafarge performed in the first half of this year? KK: Volumes have been quite solid, we have seen a growth in the first six months and that is largely because individual homebuilders are using construction as a store of value in this environment with fluctuating exchange rates. So, we have had a strong first half and we hope that the momentum will continue in the next half of the year. Generally, it has been a good start to the year for the business, as we saw huge demand for our products. AM: Can you provide the numbers? KK: To date, we are seven percent higher than we were last year at the same time. AM: The group has devised strategies like developing new business avenues through product development and growing franchises, how are those paying off? KK: Since January this year, management has actively im- plemented tactics to support our strategic agenda, which has giv- en the company a strong start to the financial year. Outside of this strategy, Lafarge is actively engaging in mitigatory measures to prevent critical challenges being faced. Among those challenges we are facing is power cuts, foreign currency shortages and in- flux of imports. When all these issues are resolved, the company strongly anticipates to close the year on a positive note. AM: You mentioned that the recent power cuts have af- fected operations, how dire is the situation? KK: Our kiln runs on electricity. Before the clinker, which is a basic material required for production of all cements is pro- duced, we send the material to the kiln. We use very little fuel. We use the kiln and normally, it needs to work within a specific range of voltage. If that dips, the plant shuts down. Electricity is our main source of energy. AM: What’s your plan B? KK: We are investing in generators to try and make sure that we can sustain our plant for the short period of time when there is a power outage. We are also working very closely with ZESA (Zimbabwe Electricity Supply Authority) to find a solution. AM: You haven’t been spared from the acute foreign currency shortages in Zimbabwe. How has that crisis af- fected your operations? KK: Forex shortages have significantly affected our opera- tions because the interbank market is not yet fully liquid. We have had no real allocations since October last year. So, we have had a few trades that have gone through but at very minimal ranges, not enough to sustain our business needs. AM: How much foreign currency do you need? KK: It depends, month-on-month its from 25 percent to 40 percent, and its mainly for spares. Last year, the business had a huge growth opportunity which was not fully realised as the plant experienced unplanned shut downs due to lack of critical spares. It all goes back to the availability of foreign currency. Look, lack of critical spare parts affects consistency of supply. AM: Have you secured any foreign currency loans from the LafargeHolcim Group? KK: The group put in a loan last year to sustain the business for that time, but for this year, the challenge for us is to be able to sustain our own operations from our own cash generation. From the funds we got last year, we utilised part of the amount on working capital, while the other was used to clear long-stand- ing foreign obligations. AM: Last year your foreign payments backlog stood at $2 million and you said you had been struggling to honour international payments for over a year. Any progress on that? KK: We still have a significant backlog for foreign- pay ments. I don’t have the exact number off hand but it is significant and we are working on a daily basis to try and make sure that is settled. But it is not easy. Page 24 | June 13-19 2019 The Financial Gazette National News Property sector remains lucrative Nelson Gahadza current operating environment, if gov- Business Reporter ernment fully implements the Transition- al and Stabilisation Policy (TSP), this IMBABWE’S property market re- will lead to green shoots of recovery and mains with pockets of high yield- sustained growth in the sector. Zing opportunities despite macro- “The TSP by the government, aimed economic challenges being experienced chiefly at reducing fiscal deficit tore- in the country, a top realtor has said. store macroeconomic stability, while With the southern African country’s maintaining investment infrastructure macroeconomic fundamentals deterio- and priority social spending, among oth- rating at an alarming pace, characterised er necessary interventions, seems to be by rising inflationary pressures, most in- taking the economy in the right direction vestors are opting for the real estate sec- and fruits are expected to show in the tor to hedge their investments. medium to long term.” “Despite Zimbabwe’s macroeco- Mapfidza said although the develop- nomic challenges, which remain well ment submarket remains subdued due to documented, we are optimistic on the lethargic economic growth, Zimbabwe’s opportunities for investors especially real estate sector shall have to redevelop within the sector with bulk infrastructure regardless, as current building stock is services and the development of what are outdated and too expensive to upgrade. referred to as ‘emerging asset classes’ by “In addition, new and appealing de- Africa’s expanding class of property in- velopment corridors have emerged as vestors,” said Gibson Mapfidza, Masho- corporate occupiers continue to exit the naland Holdings’ managing director. central business district for various rea- He said in a market where freehold sons,” he said, adding that there is more sales remain depressed, landlords have realisation by local corporate occupi- adopted aggressive rent review strate- ers and operators alike that they need gies in order to preserve assets value and to deploy more resources to their core hedge income streams against currency businesses and allow property investors inflation. to provide real estate infrastructure for “Investment property owners have them through leaseholds. sought to preserve value through rent Mapfidza’s comments come ahead reviews from January 2019. On average of the second annual ZimReal Property the industry achieved reviews ranging Forum which will be held in Harare next from 30 to 80 percent depending with month, which is expected to be attended location, size of leased premises, grade by local and regional investors and de- of building and quality of tenants,” Map- velopers eyeing current and future op- fidza said. portunity in the property sector. He further indicated that despite the [email protected]

Sales in South Africa of heavy commercial vehicles have dropped due to the sluggish performance of the economy. Heavy vehicle sales hit by sluggish SA economy

RUCK sales in South Africa, es- critical for our industry.” pecially the heavy and extra-heavy The sector said another factor that is Tcommercial vehicle segments, having a negative impact on the industry have been affected by the sluggish econ- is the ongoing violence and attacks on omy with sales slipping 2,3 percent in trucks, especially along the N3 highway. the month of May to 10 252 units in a “It is of vital importance that the gov- year-to-date comparison, according to the ernment and police address and prevent latest combined year-to-date results re- these attacks on trucks and its drivers. leased by the National Association of Au- Trucks form a crucial part of the econo- tomobile Manufacturers of South Africa my and driver safety is of utmost impor- (Naamsa), Associated Motor Holdings tance,” emphasised Swanepoel. (AMH) and Amalgamated Automobile On Tuesday, at least three trucks were Distributors (AAD). torched at a depot in Balgowan in the New vehicle sales declined from April KwaZulu-Natal Midlands, while another to May 2019 by 6,3 percent and 15,9 per- caught alight after its brakes failed at the cent respectively. Tugela Toll Plaza on Monday night. “The drop in South Africa’s GDP by N3 Toll Concession commercial man- 3,2 percent during the first quarter of the ager Con Roux confirmed the incidents year has now eroded some of the positive but said they were unrelated to ongoing growth seen in the transport industry so protests over the hiring of foreign nation- far this year,” said Gert Swanepoel, man- als. aging director of UD Trucks Southern A looming national strike by truck Africa. drivers on July 18 could spell further di- “The performance of the local econo- saster for the already ailing trucking in- my during the next two quarters will be dustry. — Business Report The Financial Gazette June 13-19 2019 | Page 25 National News Angolan president reforms oil industry NGOLAN President Joao Lourenco is changing weren’t properly accounted for during former President the face of the nation’s all-important oil indus- Jose Eduardo dos Santos’s 38-year rule and that billions of Atry, implementing reforms directed at rousing the dollars were looted from government coffers. economy from a production slump, while at the same time Increased transparency and investment are also key to boosting his political standing. reviving an industry that accounts for almost three-quar- Since taking office 18 months ago, Lourenco has an- ters of government revenue and more than 90 percent of nounced the breakup of state oil company Sonangol EP exports. Production is at its lowest level in more than a and set up a new agency to allocate exploration and drill- decade, a hangover from three years of low prices and un- ing permits — moves he says are aimed at luring new in- der-investment, and government data shows a further 50 vestment. He’s also fired Isabel Dos Santos, Africa’s rich- percent drop by 2025 unless new projects come on stream. est woman and his predecessor’s daughter, as Sonangol’s The changes should benefit Lourenco — his appointees chairwoman. are now in control of key levers of the economy, while his Sonangol has been given two years to sell off stakes in moves to sideline members of the Dos Santos family will more than 72 non-core ventures and to transform itself into help cement his control over the ruling party and are likely more of an operator than a passive partner. to go down well among an electorate that blames them for The government also intends auctioning off dozens of decades of misrule and nepotism. new oil blocks and building as many as three refineries to Lourenco’s administration also desperately needs to reduce dependence on fuel imports. bolster revenue. Business risk consultancy EXX Africa While it’s unclear if the targets will be met, a shakeup notes that the nation’s Treasury derives no income from is both necessary and overdue. The International Monetary more than half of Sonangol’s oil exports because they go Fund and civil-rights groups have alleged that oil revenues President Joao Lourenco to China to service existing loans. — Bloomberg Airlines battling drunk, violent passengers TREND of unruly passenger incidents becoming more frequent and more severe is of great con- Acern to the International Air Transport Associa- tion (Iata). According to Paul Steele, Iata’s senior vice president of member external relations, the organisation is very concerned about the significant increase in life-threat- ening incidents due to unruly passengers during flights. The three most prevalent unruly behaviours involve passengers who are violent, intoxicated or smoking. This creates a safety issue on board, says Steele. “The issue of unruly passengers is a safety issue, es- pecially if they are violent, despite it only being a small minority of passengers behaving in this way. “Disruptions by unruly passengers happen daily and can be significant. We cannot allow flight safety to be jeopardised,” Steele said during a briefing at the 75th annual general meeting of Iata in Seoul, South Korea recently. Based on the latest data, Iata estimates that there is about one such incident involving an unruly passenger for every 1 053 flights. According to Steele, Iata has been working on a strat- egy to address the challenge of unruly passengers. It is based on enhancing international air law to make it clear that unruly passenger behaviour will not be tolerated and that there will be consequences for those who endanger safety and good order. Steele said research shows that one of the biggest is- sues airlines face is that in the majority of cases they deliver an unruly passenger to the local law enforcement with the required information, only to find the local po- lice have released the unruly passenger without charging them. “This lack of a response from authorities after an in- cident impairs deterrence,” said Steele. In his view, this can be addressed by empowering aviation security officers to issue “on the spot” fines for misconduct — as in the case of road traffic offences. When such a fine is issued, the unruly passenger can then either pay the fine or contest it. Countries like Australia, Finland, New Zealand and Singapore already have such a civil penalty system in place. “Iata is asking governments to consider such a spot fine option as one tool for police to have when respond- ing to disruptive behaviour when a plane lands. Criminal prosecutions can be sought in more serious cases,” sug- gested Steele. He said the aviation industry is also working hard to try and prevent such unruly incidents by encouraging the responsible consumption of alcohol, for instance. — Fin24 Page 26 | June 13-19 2019 The Financial Gazette

TOP COMPANIES 2019 IN PICTURES

EXECUTIVE RESIDENCE FOR SALE Mount Pleasant Heights On behalf of the Mrs. Theresa Grimmel in her capapcity as the Liquidator of Insolvent Deceased Estate Edward Mutambanadzo.

Offers invited for the purchase of a double storey residence on 2120 square metres comprising: Large master bedroom (en suite with dressing area); 2 additional en suite bedrooms; 3 smaller bedrooms; seperate toilet facilites; utility room; 4 lounges (one with fireplace); seperate dining room; large fitted kitchen; scullery and pantry. Thatched Gazebo, swimming pool, borehole and domestic quarters. Walled and gated.

Written offers over USD230,000 (or equivelant RTGS at a suitable rate), plus transfer fees and all costs will be submitted to the Liquidator for consideration. Preference will be given to cash buyers or to those with financial arrangements in place.

Offers close, on Wednesday 19th June at 3pm. The successful buyer will be required to lodge a commitment fee of 10% of the offer upon acceptance. Full payment required upon signing the Agreement of Sale. Show days: Thursday 13th & Friday 14th June 2019 from 9am to 4pm

NB. Other than the show day, all viewing will be done strictly by appontment with the seller’s.

Directions: From City take Golden Stairs road, over Harare Drive. Immediately before Marlborough Police station turn right into Bannockburn road, proceed 1,7km (beware speed humps). Turn into 2nd right, proceed 900m and take the 4th road on the right. The house is 150m on the right. There are no street signs so the route will be signposted. Representative: Edward Nguruve 0777 633 862

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* Unique African taste & flame grilled restaurant guaranteed to satisfy taste buds with original authentic African recipes. * Sites available nationwide, affordable setup costs. Franchising Enquiries: Cell: +263 78 224 4400 | +263 71 988 6166 [email protected] | www.africanhotplate.co.za The Financial Gazette June 13-19 2019 | Page 27 Page 28 | June 13-19 2019 The Financial Gazette National News Zim banks’ profits top $466m Paul Nyakazeya The significant growth in money supply published during the period show that this tions and small value mobile financial services, cheque, auto- Group Digital Editor resulted in significant inflationary pressures was supported by non-funded income, which mated teller machines, point of sale and internet. and the crowding out of private sector bor- increased for almost all banks. Net interest income during the period under review was IMBABWE’S banking sector recorded $466 million rowings due to significant treasury instru- NMBZ Bank’s profit for the for the year up 37 percent to $581 million underpinned by yields earned in profits last year due to sustained growth in money ment issuances. ended December 31, 2018 was up by 114 on treasury instruments, whilst non-funded fee income was Zsupply for the first nine months of 2018, an equity ad- Resultantly, the nominal growth in the percent to $21,2 million after its income from higher by 31,5 percent to $281,9 million buoyed by increased visory firm has said. banking sector’s total assets and profitability fees and commissions increased by 52 per- electronic transactions as cash shortages persisted. Money supply in 2017 was $5,6 billion but closed 2018 at was significant. cent to $28,5 million. There are thirteen commercial banks in the country, five just under RTGS$10 billion. But in real terms, depending on the infla- ZB Bank also recorded a 30 percent in- building societies and one savings bank currently operating Old Mutual Securities (OMSEC) said financial institu- tion rate and exchange rate used, the numbers crease in after tax profit for the same period to in Zimbabwe. In the analysis OMSEC added Getbucks given tions’ net interest income was up 37 percent to $581 million may have actually been negative. $13,3 million on the back of a 10 percent in- that it was granted a deposit taking licence and IDBZ as the underpinned by yields earned on treasury instruments whilst Non-funded income has continued to spur crease in income from fees and commissions, only development bank. non-funded fee income was higher by 31,5 percent to $281,9 the performance of Zimbabwean banks, with from $33 million to $36,4 million. “The aggregate core capital position for the banking sec- million buoyed by increased electronic transactions as cash electronic payments emerging as the domi- CBZ Bank reported a 148 percent in- tor grew by 15,8 percent to RTGS$1,58 billion. The average shortages persisted. nant channel in the local payment stream. crease in profit after its net non-interest in- non-performing loan ratio increased slightly to 8,25 percent “The aggregate core capital position for the banking sector All banking institutions, with the excep- come increased from $73,2 million to $85,7 as at December 31, 2018 compared to 7,08 percent as at De- grew by 15,8 percent to $1,58 billion. The average non-per- tion of one, reported profits for 2018, with a million.The scenerio was the same across the cember 31, 2017,” said OMSEC. forming loan ratio increased slightly to 8,25 percent as at De- 61,06 percent increase in aggregate profits sector. Despite increased liquidity with regards to capital posi- cember 31, 2018 compared to 7,08 percent as at December from $241,94 million in 2017 to $389,85 This comes as the national payment tions and RTGS balances, the sector continued to experience 31, 2017,” the research firm said in an analysis of the banking million in . stream has been characterised by large value severe cash and nostro funds shortages. sector. And the financials of banks that were Real Time Gross Settlement (RTGS) transac- [email protected]

Tito Mboweni SA rand on the mend HE rand has recovered by almost 3 percent since it plunged lower last week due to a public spat Taround the mandate of the SA Reserve Bank and renewed US-China tariff threats, reaching a high of R15,10 to the greenback. The local currency’s turnaround is as a result of sev- eral factors including the surprise uptick in manufactur- ing data on Tuesday, say analysts. The rand was trading at R14,62 to the greenback at 10:10 on Wednesday morning after opening at R14,82 on Tuesday and closing the day at R14,66. Public arguments over the mandate of the Reserve Bank spooked the rand last week after ANC secre- tary-general Ace Magashule said the central bank’s role should be expanded. Finance minister Tito Mboweni and the ANC’s head of economic transformation, Enoch Godongwana, responded by saying the party had made no such resolution at a lekgotla last weekend. President Cyril Ramaphosa later said the bank’s mandate had not changed, describing the debate as “not helpful”. “The rand is finally starting to play catch-up with oth- er emerging markets as the likelihood of a rate cut by the Fed continues to render support. A surprise uptick in manufacturing data and a cool-off in trade wars assist- ed the rand’s performance on Tuesday,” said Peregrine Treasury Solutions's Bianca Botes in a note to clients on Wednesday morning. Botes said she expected the rand’s rebound to con- tinue, saying it could target R14,50 should global condi- tions remain intact. “The next resistance level on the way there is expect- ed at R14,62.” TreasuryONE also echoed these sentiments in a note, highlighting that the rand was supported by the weaker dollar as well as the good economic data yesterday in terms of SA’s manufacturing production. “Local manufacturing production grew at 4,6 percent year on year against an expected 1,35 percent market consensus. This is the largest expansion in two years and gives hope that the poor Q1 GDP number out last week was an anomaly due to load shedding,” said Treasury- ONE. — Fin24 The Financial Gazette June 13-19 2019 | Page 29 National News RTG revenues up 131pc

Nelson Gahadza ment of all the 181 bathrooms. Business Reporter “The second phase of this exer- cise will see the two guest elevators AINBOW Tourism Group replaced with brand new, state of (RTG) says its revenue grew the art elevators by the end of July R131 percent to $25,6 million 2019,” he said. in the five months to May 2019 from He added that the company aims $11,1 million during the same peri- to finish the refurbishment of the re- od last year, spurred by an increase maining 54 guest rooms at Kadoma in foreign business across the com- Hotel & Conference Centre by the pany’s hotels. end of this year. Tendai Madziwanyika, the com- “The focus is also on the product pany’s chief executive, attributed improvement of the flagship Rain- revenue growth to a deliberate and bow Towers Hotel & Conference persistent investment strategy. Centre with a target to complete 180 “Foreign currency revenues grew guest rooms by 2020.” by 15 percent from US$3,7 million The RTG boss further indicated in 2018 to US$4,2 million,” he told that New Ambassador Hotel will shareholders at the company’s annu- temporarily close for two months al general meeting in Harare yester- from December this year to make day. Tendai Madziwanyika way for the refurbishment of all 72 He added that occupancies for bedrooms, replacement of the guest the period declined to 46 percent hospitality group is leveraging its lift and the upgrade of all public ar- compared to 55 percent recorded foreign currency earnings to drive eas. over the same period in 2018 due to down costs through the importation Madziwanyika indicated that the the closure of Bulawayo Rainbow of service stocks and product refur- company now has a solid balance Hotel for two and half months for bishment materials. sheet and a healthy working capital refurbishments. “Negotiations with suppliers on position, which he said will support “But on a like-for-like basis United States dollar pricing have the hotel group’s growth phase. which takes account of the closure yielded positive results that have “The operating environment re- for two and a half months of the further reduced costs,” he said. mains under stress due to continued Bulawayo Rainbow Hotel, the oc- Madziwanyika noted that the foreign currency shortages, rising cupancy for the period closed at 54 scope of works covered the over- inflation, fuel shortages and errat- percent,” he said. haul of the hotel’s entire plumbing ic electricity supply. However, we During the period under review, system, replacement of all critical remain optimistic that the business RTG invested US$1,8 million in the in-room fixtures, the installation of will continue to perform well driven Bulawayo Rainbow Hotel refurbish- aluminium single and double-glazed by the company’s foreign currency ment. glare and sound reduction windows earning capacity,” he said. Madziwanyika said the listed as well as the complete refurbish- [email protected]

ForFor the the week week ending ending 13 12 March June 20192019

For the week ending 13 March 2019 Page 30 | June 13-19 2019 The Financial Gazette National News World Bank revises Zim growth target Adelaide Moyo percent and only to fall off to 4,8 percent gion was hit by two devastating tropical “However, this expected recovery is significantly Business Reporter in 2021. Government has maintained cyclones—Idai and Kenneth—in March slower than previously projected, reflecting persistent a positive projection of 3,1 percent al- and April 2019 that took a heavy human headwinds in major economies, and it is largely insuffi- IMBABWE’S economic growth will contract by though it said growth will be weighed toll and caused severe damage to social cient to make progress in poverty reduction.” 3,2 percent this year against a projected growth down by the anticipated poor perfor- and economic infrastructure in the Co- The bank said “downside risks to the outlook in- Zof 3,7 percent, owing to a sharp rise in inflation, mance of the agricultural sector and the moros, Malawi, Zimbabwe and, in par- clude weaker-than-expected external demand, lower falling real incomes and acute foreign exchange short- general unstable economic conditions. ticular, Mozambique,” World Bank said. commodity prices, renewed stress in global financial ages, the World Bank has said. The African Development Bank The World Bank said recovery in markets, fiscal slippages, political uncertainty, armed This comes as the International Monetary Fund has (AfDB) has also maintained its projec- Sub-Saharan Africa has disappointed, conflicts, and adverse weather conditions.” said Zimbabwe’s growth will fall by 5,2 percent this tion, saying Zimbabwe’s economy is ex- with weakening external demand, sup- The World Bank said global growth in 2019 has year. pected to grow despite headwinds. ply disruptions, and elevated policy un- been downgraded to 2,6 percent, 0,3 percentage point The World Bank, in its Global Economic Prospects The lender said the southern African certainty weighing on activity in major below previous forecasts, reflecting weaker-than ex- released this week, said: “Growth is also expected to country’s economy will grow by 4,2 per- economies. pected international trade and investment at the start contract in Zimbabwe in 2019, as sharply higher infla- cent this year and 4,4 percent in 2020. “Growth in the region is projected of the year. tion curtails real income and private consumption.” Meanwhile, the World Bank report to pick up from 2,5 percent in 2018 to “Growth is projected to gradually rise to 2,8 per- It said the removal of subsidies and foreign-curren- said several economies in the Southern 2,9 percent this year and an average of cent by 2021, predicated on continued benign global cy shortages have led to comparable double-digit infla- and East African region are facing se- 3,4 percent in 2020 to 21, as domestic financing conditions, as well as a modest recovery in tion rates in Zimbabwe. vere strains following the effects of cy- demand gathers pace and oil production emerging market and developing economies previously IMF has also projected Zimbabwe’s inflation to re- clones. recovers in large exporting economies,” affected by financial market pressure,” the bank said. main in double digits at the close of the year at 40,1 “The Southern and East African re- World Bank said. [email protected]

Coca-Cola is designing its packaging to be 100 percent recyclable. Coca-Cola in recycling drive

HE Coca-Cola Company (TCCC) says it is de- signing its packaging to be 100 percent recyclable Tacross its expanding portfolio by 2025, in a move that is aimed at reducing waste. The international beverages manufacturer said by 2030, all its packaging will contain 50 percent recycled materials within it. The development comes as TCCC recently said as part of efforts to conserve the environment and commem- orate global recycling, it invested in a $38 million fund to accelerate collection and recycling of PET plastic bottles across Southern and East Africa. “Currently in South Africa, all Coca-Cola PET pack- aging is made with at least 15 percent recycled PET. Across southern and eastern Africa, we are partnering with local communities, NGOs, industry and consumers to collect packaging, helping to ensure that it doesn’t end up where it doesn’t belong,” TCCC said. The firm said as a global business, which operates in countries which don’t have regulations or taxes in place regarding plastic packaging, it has taken it upon itself, with its bottling partners, to collect and recycle a can or bottle for everyone they sell by 2030. “We recognise that PET Plastic is a big driver for the circular economy and is used in many other products be- sides bottles, including cars, textiles and carpets. To es- tablish the basis for a sustainable circular economy, we’re designing, collecting and partnering to enable recycling to turn our bottles into valuable resources, which will cre- ate more jobs and drive a greener economy,” TCCC said. The firm said in Namibia, Mozambique, Zambia and Botswana it has contracted with local collectors and recy- clers to accelerate collection and recycling. “Of course, such voluntary systems such as these re- quire ongoing financial support from all industry play- ers to remain sustainable. TCCC provides support in the form of a voluntary recycling fee and an annual grant paid to PETCO, but we also purchase between 9 000 -10 000 tonnes per year of recycled material for use in new bottles, worth an estimated R160 million per annum,” TCCC said. TCCC said it is clear that the world has a packaging problem with plastic pollution being one of the most vis- ible challenges. “TCCC recognises that our packaging has contributed to this global challenge. Because our business relies on bottles and cans, we share a responsibility to help ensure that the world has a more sustainable packaging system in place,” the firm said. In Zimbabwe, PET plastic recycling is primarily driv- en through the PET Recycling Company, which was es- tablished in 2011 with the help of industry players and TCCC. – Staff Reporter [email protected] Life & ArtsNews Worth Knowing June 13-19 2019 Page 31 Mustafa’s Doner Kebab arrives in Bute Street URKISH born Mahmut Aygun invented the doner olive oil. In all there are seven staff mem- become a favourite in Zimbabwe. A follow kebab fast food sandwich when he moved to Germa- bers, all kept busy by a constant flow of pa- up visit to Mustafa’s Doner Kebab House in ny at the age of 16. trons. Bute Street T Irene Zuze prepares doner kebab at Mustafa’s in Made from thinly sliced lamb or beef cooked on a verti- This tasty Turkish snack, so popular in is planned, but as the cost of diesel con- cal rotisserie, the snack is served inside a wrap or pitta bread, Germany and throughout the EU, is likely to tinues to rise, it will not be any time soon. Jute Street. stuffed with shredded cabbage, onion, tomatoes and option- al chilli and yoghurt sauce. Since 1971 when Mahmut, known as the ‘kebab king’, served his first doner kebab in Berlin, the snack has become popular all over Europe. At a dinner party in Harare recently, I met a young wom- an who had grown up in Germany. Missing the favourite late night snack she enjoyed when living in Karlsruhe, she and her husband decided to open a doner kebab restaurant in Harare, giving Zimbos a taste of something new, and an op- tion to lunching off sadza and stew. At the beginning of March, Mustafa’s Doner Kebab House opened its doors at the corner of Bute and Chinhoyi Streets. It was time to visit. We set off for Mustafa’s with some fellow foodies on a Sunday, hoping to avoid heavy weekday traffic and aggres- sive kombi drivers. As luck would have it, the Warriors were playing the Af- rican Cup of nations qualifier against Congo Brazzaville at the National Sports Stadium, and the roads were chaotic, with motorists and pedestrians all wild with excitement as they headed for the stadium. Finally at our destination, we entered a modern and spot- less interior, with comfortable tables and chairs and attrac- tive graphics decorating the walls. In March, a large plate of doner (thinly sliced beef) and generous portions of chips and salad cost $8, a yufka (wrap) with doner, chips and sauce, $9.

A Matter of Taste with Charlotte Malakoff

A bottle of mineral water was $1, and Pfuko Maheu $2. The meat was well seasoned and finely sliced, the salad fresh and the chips crunchy. Irene Zuze, the cook in charge at Mustafa's, trained for two years at Sandringham College in Norton, learning all aspects of cooking. She uses chicken breast for the chicken doner, thinly sliced and marinated for two hours. Flavour- some hind quarter is chosen to prepare beef doner. For the flat bread or wraps she mixes plain flour, yeast, milk and

Attractive interior at Mustafa’s Doner Kebab House in Bute Street. FIFTEEN-TIME major champion Tiger Woods yesterday said he hopes he has another “10 years” to News Worth Knowing win majors ahead of the US Open in California. The 43-year-old ended an 11-year wait to claim a 15th ma- Sport jor at the Masters in Augusta in April. Page 32 June 13-19 2019 SPORT SHORTS Biggest World Cup win ever THE United States recorded the biggest ever victory in the Fifa Women’s World Cup as they crushed Thailand 13-0. The 2015 winners were 3-0 up at half-time, scored four times in 10 minutes in the second half and then added six more goals in the last 16 minutes. Alex Morgan scored five times for the United States with two goals apiece for Rose Lavelle and Samantha Mewis. Lindsey Horan, Megan Rapinoe, Mallory Pugh and Carli Lloyd also scored to beat Germany's 11-0 win over Argentina. The United States’ previous biggest win in the tourna- ment was a 7-0 success over Chinese Taipei in 1991, while Germany’s thrashing of Argentina came in 2007. The de- fending champions have lost just one international game since July 2017 and have won their past seven in a row, scoring 36 goals in the process, and have not conceded in any of their past five matches. They have featured in all eight World Cups, while Thai- land have qualified for the finals for only the second time, having been eliminated in the group stage in 2015. Earlier on Tuesday, Sweden eventually beat a resilient Chile side 2-0 in the other match in Group F, which the USA fully expect to top. — bbc.com Cricket matches washed out A RECORD third World Cup match was abandoned on Tuesday because of rain as Bangladesh’s game against Sri Lanka was called off without a ball being bowled. With persistent rain falling in Bristol, the match — due to start at 10:30 BST — was called off shortly before 14:00. Sri Lanka’s game against Pakistan at Bristol on June 7 was also washed out. Infographic by Darius Mutamba “We put men on the moon so why can’t we have a re- serve day?” said Bangladesh coach Steve Rhodes. “I know that it would have been difficult, but we have got quite a lot of time in between games, and if we have got to travel a day later, then so be it.” The previous highest number of abandoned games in a World Cup was two, in 1992 and 2003. Just 7,3 overs were possible in the match between West Indies and South Africa at Southampton on Monday. Lionel Messi Only the semi-finals and final have scheduled reserve days. The ICC's head of events Chris Tetley told BBC 5 Live that scheduling reserve days for each stage of the tourna- ment would “inevitably extend the length of the event, which isn't necessarily something that people want”. “The event would have a much greater impact on the domestic summer for cricket in the UK because we would tops Forbes list be blocking out venues for a longer period of time,” he add- IONEL Messi has topped Forbes’ list lion he made in 2018 saw him finish second Outside of the top 50, Manchester United’s ed.— sky.com of the world’s highest-paid athletes as to Floyd Mayweather ($285million). Ronaldo Alexis Sanchez can be found at 53, with earn- Lsoccer players dominated the podium in ($108 million) was third with Neymar ($90 ings of $30,8 million for the past 12 months, 2019. million) in fifth. Conor McGregor ($99 million) ahead of French superstar Kylian Mbappe in Dominic Thiems ‘wants’ Serena Basketball and football dominated Forbes’s had finished fourth. 55th ($30,6 million) and Arsenal’s Mesut Ozil top 100 list of the highest-paying sports, Boxer Saul “Canelo” Alvarez was the high- in 57th ($30,2 million). AUSTRIAN world number four Dominic Thiem has offered and there was a wide variety of nationalities est-earning non-footballer on the 2019 list, with After his move to Chinese Super League to play doubles with Serena Williams at Wimbledon to put amongst the top athletes. $94 million in total — just $2m of which came outfit Shanghai SIPG in 2017, Brazilian mid- their French Open dispute behind them. Forbes calculates the athletes’ earnings by through endorsements, meaning he had the fielder Oscar comes in at number 66, with his Thiem had accused Williams of showing “bad personality” adding up their prize money, salaries and en- same salary as Messi. figure standing at exactly $29 million. after he was asked to relocate a media conference to make way dorsements between June 2018 and June 2019. Tennis player Roger Federer was the fifth La Liga stars Antoine Griezmann (Atletico for the 23-time Grand Slam champion. The Barcelona forward earned $127 million highest-earner, at $93.4 million. He was num- Madrid) and Gareth Bale (Real Madrid) come “Probably it was not Serena’s mistake. I find her achieve- this past year in a combination of his salary and ber one in terms of endorsements, though, with in at 75 and 79 respectively, with Griezmann on ments unbelievable, sensational.” he said on Tuesday. endorsements — $18 million more than sec- $86 million. $27,7 million and Bale with $27,1 million “I would like to make amends with her in Wimbledon or ond-place Cristiano Ronaldo, who pocketed a Football stars Russell Wilson ($89,5 mil- The only other footballer inside the top 100 US Open mixed doubles.” total of $109 million. lion) and Aaron Rodgers ($89,3 million) were is Liverpool’s Mohamed Salah, with the Cham- Thiem, beaten in the men’s French Open final by Rafael Neymar was the third-highest on the list, sixth and seventh, respectively, on the list, as pions League winner notching 98th place with a Nadal, now believes tournament organisers were to blame for having earned $105 million this past year. three NBA players came in next to complete the total of $25,1 million. the incident that saw him shunted out of the interview room The Brazil international took in $75 million top ten. Formula 1 star Lewis Hamilton and former where he had begun answering questions following his fourth- in salary, which was $10 million more than LeBron James earned $89 million in total heavyweight world champion Anthony Joshua round win over Uruguay’s Pablo Cuevas. Ronaldo, while Messi's income of $92 million with Stephen Curry having made $79,8 million are the highest earning British athletes, while “In retrospect, it was funny that such an organisational mis- dwarfed both. and Kevin Durant $65,4 million. number one Messi is one of 38 non-American take happened at a Grand Slam tournament,” he added. However, the Juventus forward made $44 The next footballer on the list is Manchester athletes on the list, with 62 Americans in the “What I do not understand is that it blew up so much.” million in endorsements, which was higher than United’s Paul Pogba in 44th place, who is the top 100. Williams won the mixed doubles title at Wimbledon in Messi’s $35 million and Neymar’s $30 million. highest earning Premier League player with There are 25 countries represented in the top 1998 as a 16-year-old playing alongside Belarus' Max Mirnyi, Last year’s highest earner, boxer Floyd $33 million. 100. and teamed up with fellow American Francis Tiafoe in the Mayweather, has dropped off the list, while Former Barcelona midfielder Andres Inies- The NBA accounted for the most athletes Hopman Cup in January. Serena Williams is the only woman in the top ta (46th), who now plays his football in Japan with 35 players (down from 40 last year). Thiem lost to Nadal in the French Open final for a second 100, earning $29,2 million. with Vissel Kobe, is the only other player to be Serena Williams ($29,2 million) is the only successive year last weekend and says he is confident on im- Messi saw his earnings increase by $16 found inside the top 50, with earnings of $32,5 women to make the top 100, as she was in 2017. proving on previous displays at Wimbledon where he has only million over the past 12 months. The $111 mil- million No woman qualified last year. — forbes.com got beyond the second round once in five visits.. — bbc.com