ZIM POWER CRISIS TO WORSEN: Page 5 $8

News Worth Knowing Shareholder changes at CBZ?: Page 3

July 18-24 2019 ESTABLISHED 1969 @ FingazLive www.fi ngaz.co.zw Facebook: The Financial Gazette

ZSE Report THE All Share Index lost 0,26 percent on Wednesday to close at 191,83 points. Econet lost $0,025 War vets to close at $1,6950, while Ed- gars dipped by $0,0201 to settle at $0,1600, as Simbisa traded $0,0175 weaker at $1,0800. The Industrial Index was down 0,3 per- cent to close at 640,10 points, while the Top 10 Index lost 0,3 percent to close at 183,2 points. The Minings Index was fl at at 251,30 points.

Currencies (Bloomberg) % change ◀ sow new USD:ZAR 13,9817 0,23 EUR:USD 1,1219 ◀ 0,07 ◀ GBP:USD 1,2431 0,19 USD: JPY 108,1200 0,11 ◀

Stock Markets 191,80 0,30 ZSE (All Share) ◀ ZSE (Minings) 251,30 0,00 13,756,00 1,67 JSE ◀ 7 540,90 0,48 FTSE 100 ◀ 0,34 seeds of Dow 27 243,77 ◀ Commodities ◀ Gold 1 418,35 0,86 ◀ Platinum 845,60 0,67 ◀ Brent Oil 64,48 0,20

Grains (Grain SA) White Maize ZAR 2 393,47 0.0 Soya ZAR 4 556,14 ◀ 0.8 ◀ anarchy Wheat ZAR 2 604,53 1.0 French billionaire Adelaide Moyo are not handled properly, at a time that Zimbabwe Staff writer is battling serious economic challenges and trying to overtakes Gates attract much-needed foreign direct investment. FRENCH billionaire Bernard Ar- ITH Zimbabwe already on its knees due This is more so given that the mining sector ac- nault, the CEO of luxury goods to serious stagfl ation, among other ills counts for between 12 and 16 percent of the coun- maker LVMH, has overtaken Bill — marked by economic decline and hy- try’s gross domestic product — amid government Gates on the Bloomberg Billionaires W Index, which is topped by Amazon per-infl ation — there are fears that fresh demands hopes that the industry will earn the country as much for mines and other war spoils by former freedom as US$12 billion annually by 2023. CEO Jeff Bezos, who holds an esti- mated net worth of US$125 billion. fi ghters could fi nish off the economy. Export earnings from the key industry exceeded It's the fi rst time since the index This comes as the restless war veterans were re- US$3 billion in 2018, contributing more than 70 per- People’s Own Savings Bank (POSB) board chairper- was created seven years ago that cently given a further 15 000 hectares of farmland cent of Zimbabwe’s foreign currency earnings then. son Mathilda Dzumbunu. POSB bank is among sever- Gates has dropped out of the top in eight provinces following complaints that some of This is what has prompted words of caution from al state enterprises earmarked for privatisation under two. them had been excluded from the disastrous land re- experts, particularly given the background that Mug- government's transitional stabilisation programme Arnault has a net worth of forms that took place under ousted former president abe’s reckless appeasement of ex-combatants about following years of perennial losses and as part of the around US$108 billion, having Robert Mugabe. 22 year ago had plunged Zimbabwe into unprece- reform process. The bank recorded a profi t of $16,89 added US$39 billion to his fortune But experts warn that their new demands could dented economic chaos — following his award of million in 2018, up from $11,36 million in 2017. Picture in the past year. Microsoft founder deal a fatal blow to the country’s economy if these To Page 2 by Freedom Mashava Gates is worth $107 billion. - CNN Page 2 | July 18-24 2019 The Financial Gazette National News War vets sow new seeds of anarchy

From Page 1 agement that investors have faced for many years,” US$300 million-plus in unbudgeted for funds or Robertson said. gratuity payments to the war veterans and chaotic He added that in countries that consistently re- land reforms. spected the rule of law, investors were prepared to Piers Pigou, the International Crisis Group “outlay very large sums of money to unleash produc- consultant for southern Africa, told The Financial tive capacities”. Gazette that the latest move not only summed up Vince Musewe, another local economist, said the everything that was wrong with Zimbabwe’s po- former freedom fighters should learn from the expe- litical economy, but “war veterans have neither the riences of other countries “where benefits are set, and resources nor the expertise to venture into mining”. agreed, and not re-negotiated when it suits them”. “These demands reflect an unhealthy sense “Each year, war vets demand new benefits and of entitlement from a select politically connected this reflects that their needs have not been fully con- grouping of war veterans. These demands have no sidered and met, or are being drip-fed to keep them obvious merit and reflect just one aspect of the un- on a leash. That is wrong,” he said. healthy underbelly of Zimbabwe's mutating patron- But the Zimbabwe National Liberation War Vet- age system,” he said. erans Association national spokesperson Douglas “They are indicative of why the Zimbabwean Mahiya said “ungrateful Zimbabweans must not economy will struggle to recover as they reinforce forget that the ex-fighters lost opportunities while the notion that economic prospects are rooted in fighting the country’s 1970s bush war and, therefore, opportunism and political connectivity, rather than are keen on levelling the playing field as well as sup- economic fundamentals of merit, efficiency and ef- plementing their meagre salaries or pensions”. fectiveness,” Pigou said. “War veterans want to do something meaningful “I can’t see war veterans playing a major and Piers Pigou Douglas Mahiya for themselves. They have been receiving their pen- successful role in the sector ... sions from 1997. This time around, they will have to find partners “These demands reflect an the mining sector have a long “Such assets become “...Ungrateful Zimbabwe- we got $204 and we are surviving and also convince investors of unhealthy sense of entitle- gestation period,” he said. less efficient and eventually ans must not forget that the on 0,97 cents a day. It’s unsustain- the benefit of doing business ment from a select politi- “Indeed, some investments fail ... when they are under ex-fighters lost opportunities able,” he said, adding that the move with them,” he said. take at least 15 years to pay the control of people who while fighting the country’s to take over some mines “will not Tinashe Kaduwo, a local cally connected grouping acquired them for nothing. destroy the economy”. back the invested capital and 1970s bush war and, there- economist, also said the latest of war veterans. These as such, well defined property In the interest of the con- “We opted to look for mines to demands by war veterans did demands have no obvious rights and a stable policy en- tinuing development of the fore, are keen on levelling the survive. Every day, we are lobby- not augur well for the country’s vironment are key. Any distur- entire country, government playing field as well as sup- ing and facilitating for the progress quest for being a safe destination merit and reflect just one bances (to these investments) should deal very harsh- plementing their meagre sal- of the matter, but ... those who are for capital. aspect of the unhealthy will have serious negative ly with any person found aries or pensions.” responsible for the documentation “This is something of con- underbelly of Zimbabwe's consequences for the econo- guilty of interfering with and approval continue to drag their cern. Weak institutions and lack mutating patronage sys- my, given that it (mining) is the the civil and property rights Douglas Mahiya feet,” Mahiya said. of regard for property rights has tem.” main driver of growth and our of ... other individuals and Mahiya added that while Pres- been weighing down this econo- capacity to earn foreign curren- companies,” he said. ident Emmerson Mnangagwa’s my for more than two decades. cy,” Kaduwo added. “The charge against such government was keen to “fast-track This could actually destroy Piers Pigou Veteran commentator John culprits should be economic the programme”, some “evil civil the little progress that we have Robertson said any “advantag- sabotage because the repercussions of their activi- servants who do not want to see the ex-combatants been enjoying over the past few es to have been extracted from ties ... quickly affect investment inflows into every prosper have been out to frustrate the process”. months as it could dent confidence and scare away the mining sector will be put at risk by persons un- business sector. Zimbabwe’s dreadful unemploy- [email protected] capital and investment ... more so as investments in dermining laws protecting such investments”. ment figures are a direct result of the severe discour- See also Page 8 Central bank autonomy vital, say experts Paul Nyakazeya bank its autonomy as part of strategies wean off the Reserve Bank of Zimbabwe (RBZ) to ments have been using the RBZ as an extension of Group Digital Editor to jumpstart the country’s ailing econ- ensure that it plays its advisory role. the executive, and sometimes unduly relying on the omy. Economists who spoke at The Financial Gazette’s institution for funding. RESIDENT Emmerson Mnan- This comes after Finance minister Executive Dialogue held under the theme ‘Impact Hawkins said confidence was at its lowest in Zim- gagwa’s government has been Mthuli Ncube last week indicated that and outlook of SI 142’, agreed that it was important babwe and most people do not trust monetary author- Purged to swiftly grant the central government is working on a plan to for an independent central bank to focus on its core ities. business of controlling inflation, exchange and inter- “The motivation needed now is to have a curren- est rates without being side-tracked by the political cy that is trusted by its people and that is viable and agendas of the day. backed by solid reserves,” he said. “If you look at the history of countries that went What we have is a currency that is hedged around through hyperinflation, virtually all of them, one of exchange control regulations. It cannot be accepted the measures they took was to establish an indepen- by its people, when push comes to shove, but they dent central bank so that money will not be printed have no choice but to accept it. I suspect if they had a by politicians and central banks to control inflation,” choice they would prefer another currency.” respected economist Tony Hawkins said. Zimbabwe last month dumped the multiple cur- The latest development comes at a time central rency system it adopted 10 years ago and made the banks around the world are struggling to stay above Zimbabwean dollar the country’s sole currency. politics. However, the reintroduction of the domestic curren- In Zimbabwe, successive Zanu PF-led govern- cy has failed to halt the country’s worst economic crisis in a decade. John Robertson, another renowned economist, said the central bank’s autonomy from fiscal au- thorities was particularly important as a protection against monetisation of debt. “The reserve bank should not be trying to run the economy…An independent central bank is neces- sary to contain inflation,” he said. Economist Brains Muchemwa said an indepen- dent central bank in any environment had more credibility. “If people have more confidence in the central bank, this helps to reduce inflationary expectations. In turn, this makes inflation easier to maintain at low level,” he said. Muchemwa said controlling inflation was the primary objective of any central bank. “In order to do so, they need to control the mon- ey spent by the government. If decisions regarding the economy can be taken by the government, they will take only populist decisions,” he said. He, implored Treasury to guarantee the indepen- dence of the central bank. “For many years, the footprint of the reserve bank has been so huge and distorting in the econo- my,” he said. Critics however say independent central banks are too secretive and put commercial banks’ inter- ests before taxpayers’, hence need for more public control. [email protected] The Financial Gazette July 18-24 2019 | Page 3 National News Local consortium buys into CBZ?

Eric Chiriga 2000s, NSSA itself and Russian-owned Rennaisance Managing Editor Capital. Meanwhile, the banking group has been one of the ZIMBABWEAN best performing stocks on the ZSE this year, registering investment group gains of 222 percent. A ― linked to a local The institution is the biggest in Zimbabwe by asset tycoon ― has allegedly base. swooped on a significant The company says the value of its transactions in- stake in CBZ Holdings creased 52 percent to $16,6 billion in four months to Limited (CBZ) after a April 2019 compared to $11 billion in the same period “flurry of block trades”, last year, largely driven by new products and increased which started in March accounts. and handled by Akribos Its total income for the four months increased by 43,6 Wealth Managers (Akri- percent to $83,4 million, largely driven by increased val- bos). ue of transactions. This comes as the During this period, the group’s underwriting income same investor has report- grew 53 percent to $4,6 million while its funds under edly launched an ambi- management went up 18,3 percent to $448,8 million. tious plan to acquire more Its stock traded at 50 cents yesterday. private and quasi-govern- [email protected] ment assets in the mining, See also page 13 The CBZ stock block trades started in March and increased in June energy and agricultural sectors to complement Blessing Mudavanhu his current activities. Al- ready, he has purchased gold and chrome mines. Even, though, CBZ's share register has not changed to reflect “the real identity of the mystery buyer”, CBZ chief executive Blessing Mudavanhu yesterday told The Financial Gazette that the company had noted “unusual trades” on the bank's stock, but they were also trying to find out who the “particular funder is”. “It is interesting and there are rumours about who may be behind the trades, but it is not an established fact at the moment,” he said by telephone Wednesday. “What I know, so far, is there were transactions that were done through Akribos and I am trying to find out the particular investor behind those trades,” Mudavanhu said. While the Reserve Bank of Zimbabwe and other regulatory authorities were not readily available for comment on the unfolding surprise deal, numerous sources have told this publication that the “acquisitive and deep-pocketed investor” had snapped up 20 per- cent-plus of the Zimbabwe Stock Exchange-listed fi- nancial group. Although the identity of the investor remains un- known and a question of market conjecture, it is be- lieved the same “What I know, so far, is person or insti- there were transactions tution, is behind that were done through the Landela con- Akribos and I am trying sortium, which to find out the particular recently bought ZimAlloys. investor behind those In the mean- trades,.” time, The Finan- cial Gazette's Blessing Mudavanhu, CBZ chief week-long inves- executive tigations have shown that $55 million worth of CBZ shares exchanged hands ― start- ing in March to June ― and with Akribos emerging as the top shareholder of the company. This makes the fledgling financial research and equi- ties firm a top five owner alongside the government of Zimbabwe at 16,01 percent, the Libyan Foreign Bank (LFAB) at 14,06 percent, while the National Social Se- curity Authority (NSSA) and Stanbic Nominees NNR hold 11,98 percent and 1,52 percent, respectively. And the few, but hefty transactions, which made the “local nominee” a key stockholder account for a signif- icant value relative to CBZ’s market capitalisation of about $344 million. Batanai Matsika, the head of research at Morgan & Co and ex-Akribos senior associate, said: “Activity in the counter has of late been characterised by block trades while its turnover has increased quite signifi- cantly over the past two months. Someone seems to be building a strategic position in the (CBZ) stock.” “It is not surprising that someone would do that be- cause the company is a good target because of its po- sition in the market,” he told The Financial Gazette, adding that “CBZ has a very good market share and is probably the biggest bank in the country. It is also quite cheap if you consider all these things”. A local equities analyst, who preferred anonymity, weighed in, saying the identity of investors or entities behind such “eyebrow raising trades” is hard to ascer- tain. “When you see nominees on a share register, it means that the investors would have used wealth man- agers to buy the shares and their identity is very confi- dential,” he said. For a bank that has always retained “significant government interest” ― from both an equity point of view and support for state programmes ― CBZ has al- ways attracted a variety of interesting investors, includ- ing South Africa's Absa Group and LFAB in the early Page 4 | July 18-24 2019 The Financial Gazette National News vehicle.” tutional investors and was designed as an indepen- “Africa50 is on track to launch a private sector dent infrastructure fund that focuses on high-impact third party fund to leverage $1 billion from private national and regional projects, mostly in the energy sector institutional investors. I encourage countries and transport sectors, with a particular emphasis on that have not yet joined Africa50 to do so. Join us increasing the pipeline of investment-ready projects. Zim seeks as we move towards a future of great promise for Some of the opportunities for investment in the Africa. Join us as we lay the foundations for a more energy sector in Zimbabwe include Gokwe North prosperous Africa,” he said. Thermal Power Station (Sengwa), Gwayi Thermal Africa50 is an innovative fund for developing Power Station, Western Area Power Plant, Lupane and financing African infrastructure, funded by the Coal Bed Methane, and mini hydro power stations. infrastructure AfDB, African governments and private and insti- [email protected] development funds Tabitha Mutenga ture services in Zimbabwe is the cornerstone of Features Editor achieving the economic growth objectives of Vi- sion 2030 and beyond. IMBABWE is now in a position to access Given years of infrastructure deterioration funding for infrastructure development af- with minimal maintenance, addressing the infra- Zter the country joined regional infrastruc- structure gap will require complementary funding ture investment firm Africa50. through concessional loan financing, joint ven- Finance secretary George Guvamatanga said tures and development partner financial support. Zimbabwe became the 28th shareholder of Af- Estimates by the African Development Bank rica50 after both parties signing an agreement in (AfDB) indicate the cost of implementing priority WHERE THE MONEY IS: As competition to attract customers heats up, leading supermarket Kigali, Rwanda last week. infrastructure projects at more than US$30 billion. retail group OK Zimbabwe has erected a massive billboard opposite Pick n’ Pay supermarket at “This opens the opportunity for infrastructure Akinwumi Adesina, the AfDB president who the corner of Sam Nujoma street and Jason Moyo Avenue in Harare. The two giant supermarkets funding. We continue on our journey to be part of is also board chair of Africa50, urged more Af- recently reduced prices of basic products as more shops warm up to the removal of the multi-cur- the broader global financial community,” he said. rican countries to join the institution, which he rency regime. Picture by Freedom Mashava The need to improve the quality of infrastruc- described as “the continent’s main investment Ndlovu ups industrialisation ante Cross

Tabitha Mutenga ous measures to revive the 2023), which focuses on Features Editor country’s struggling man- export led industrialisation, network ufacturing industry, which investment led industrial- NDUSTRY minister is hamstrung by lack of ac- isation and innovation led Nqobizitha Ndlovu says cess to cheap capital, high industrialisation. transactions Ithere was need to adopt production costs, pow- The country’s manufac- a value chain approach to- er and water shortages, turing sector was expected wards industrial develop- and obsolete equipment to grow by 2,5 percent this ment to create competitive among other things. year, but the projection has decline economic linkages and Ndlovu told delegates since been revised down- Nelson Gahadza business opportunities for attending a state of the wards to one percent due Business Reporter entrepreneurs. industry business break- to a number of factors such This comes as govern- fast in Harare on Monday as foreign currency short- ment is implementing vari- that adopting a value chain ages, the El-Nino induced IMBABWE’s mobile money cross network trans- approach would help ex- drought, energy challenges, actions have been on a consistent decline as wallet pedite the country’s indus- among others. Zinteroperability within the country’s three mobile trialisation agenda. “Capacity utilisation, network providers remain a challenge, industry regulator “Currently we are fac- the trends over the last five has said. ing challenges mostly be- years have not been very The Postal and Telecommunications Regulatory Au- cause we cannot procure inspiring. As long as our thority of Zimbabwe (POTRAZ), in its first quarter 2019, raw materials timely and capacity is less than 60 per- raised concern over the declining cross network transac- cost effectively and we Nqobizitha Ndlovu cent it shows that there are tions between the country's three mobile companies – have to import most of the a number of inefficiencies Econet, NetOne and Telecel. raw materials. I believe that it’s quite im- es. The private sector has since identified that we have. When we During the quarter, cross network mobile money trans- portant that we begin to backward integrate and mapped 18 value chains across all sec- thought we are on a trajec- actions declined 8,4 percent to $89,8 million compared to or support the primary production of raw tors. The value chain approach will be ad- tory moving towards 50 $98 million during same quarter last year. materials.” opted for selected sectors that have high em- percent, 2019 has come and Ecocash processed 99,4 percent of the total value of In efforts to develop these value chains ployment and export-generating potential. a projection of 34 percent transactions whereas Telecash and OneMoney processed some contact manufacturers especially in The meeting sought to give industry an done by the Confederation 0,1 percent and 0,5 percent respectively. the oil and baking industries are contracting opportunity to discuss the Zimbabwe Na- of Zimbabwe Industries,” “Cross-network transactions have been consistently de- farmers to support their production process- tional Industrial Development Policy (2019- Ndlovu said. clining and this is attributable to the lack of comprehensive However, the industrial wallet to wallet interoperability amongst the three mobile development policy envis- money providers,” Potraz said. ages that the country should Amid continued cash shortages and a push from gov- attain 80 percent capacity ernment for inclusive financial services, government in utilisation by 2030. 2018 gave mobile money platforms in the country to be “As we look ahead to- interoperable with failure to comply, risking government wards the second half of intervention. 2019, numerous economic Government noted that while it is possible to send stabilisation measures have money to an unregistered customer on another network, been put in place and it is the unstructured Supplementary Service Data (USSD) time to move the country platforms for operators are not yet fully integrated" hence on a growth trajectory that wallet-to-wallet funds transfer have not yet been fully in- it deserves and it is also tegrated. time for the manufactur- African telecom companies have been offering mobile ing sector to have a more money services are more inclined to regional interoperabil- focussed dialogue on the ity than national cross network money transfers and other future of this critical sector, transactions as they continue to seek a share of the regional the need to ignite techno- remittance market dominated by banks and money transfer logical transformation, pro- agencies. mote enduring partnerships However, according to the Potraz report, value of cash- and inspire the next gener- out transactions also declined, but there was growth in ation of leaders and inno- cash-in transactions as well as airtime, bill and merchant vators to create a roadmap payments in the quarter under review. towards global prosperity,” Airtime, Bill and Merchant Payments transaction in- he said. creased 3,4 percent to $1,47 billion compared to $1,425 The creation and billion in 2018 same period comparable. strengthening of industrial As at the end of the latest quarter under review, Zimba- value chains is one the key bwe had 6,67 million mobile money subscribers up from pillars of the ZNDP. 6,35 million subscribers in the previous quarter. [email protected] [email protected] The Financial Gazette July 18-24 2019 | Page 5 National News ‘Zim power crisis set to worsen’ Tabitha Mutenga quiet about it. I am here to collect what is owed Hidroelectrica de Cahora Bassa US$83 mil- Features Editor to Zesa. Needless to say, the power situation lion, resulting in the country getting about 50 in the country is dying, and I do not believe megawatts (MW) of power instead of 450MW. IMBABWE’S electricity situation is that I should use words that do not describe a “We no longer have a challenge, we have a deteriorating at an alarming pace and particular set of circumstances,” he said. huge problem and we need to make sure that Znow requires everyone to play their part The trained barrister said the power crisis this entity that is so critical to Zimbabwe re- to save the crisis, Energy minister Fortune has graduated “from being a challenge, to a mains viable. Pay your debts so that I am also Chasi has said. very big problem,” which needs to be con- able to pay our external debts,” Chasi added. The southern African country is current- fronted head on. The power cuts are a result of a number ly facing massive load shedding of up to 18 “All of us regardless of our political affil- of challenges which include foreign currency hours, with the country’s industrial sector tak- iation are subject to load shedding. We must shortages, a breakdown of equipment, debt ing the major fall as production time has been share the pain. But the frustrations, sometimes and a receding water levels at Lake Kariba, cut to between five and six hours a day. the anger, sometimes erroneous, should help which are at 24 percent. Chasi told delegates attending a meeting to galvanise us as a nation to resolve this is- Zimbabwe’s internal generation capaci- organized by the Industry ministry on Mon- sue. There is no time for politicking, when one ty largely stands at below 1 000MW due to day that it was important for business, house- has a debt they simply must pay,” Chasi said. problems at the major power stations, Kariba holds, farming communities and parastatals to This comes as Zesa has been trying to put South and Hwange Thermal Power Station. service their $1,2 billion debt to Zesa Hold- pressure on its defaulting consumers to meet “Without power, no investment will come, ings (Zesa) to ensure that the power situation their obligations to enable the national power so this is an issue that we must address and stabilises. utility to pay its foreign debt. people should pay their debts,” Chasi stressed. “I am not going to waste time or even keep Zesa owes Eskom of South Africa and [email protected] Fortune Chasi Insurers face $10m IFRS bill Shame Makoshori Companies Editor

IMBABWE’s insurance companies will spend almost $10 million to implement International Financial Re- Zporting Standard (IFRS)17, which comes into effect in 2022, latest projections show. Clive Mukondiwa, a partner at PwC, said he is not only concerned by the huge cost the new regulations will drain from the insurance industry, but also penalties that may arise from delays in implementing it. “The cost of implementation may be between zero and two percent of GWP and this is a huge number,” he said. “The industry’s GWP is $400 million, and this may cost the industry about $8 million. There will be some changes and we need to be ready for these. The key message is that we are already late. We are behind and we need to catch up. The standard is here and it is a game changer. It is not something that we will say overnight you will do as you have done in the past.” Failure to meet the deadline for IFRS 17, which was issued by the International Accounting Standards Board two years ago to replace IFRS 4, may come with dire implications for the domestic insurance sector, including risking losing major underwriting contracts globally due to poor disclosures. The new standard will see insurance contract liabilities being calculated as the present value of future insurance cash- flows with a provision for risk. The discount rate will reflect current interest rates, accord- ing to the standard, which will also impose a shift from the current accounting practice. Reinsurance contract will be revalued and accounted for separately, while there will be a new income statement pre- sentation for insurance contracts, including a revised defini- tion of revenue. Mukondiwa, who was addressing a preparatory meeting held by the Institute of Chartered Accountants of Zimbabwe recently, said implementation will involve serious changes to the systems of insurers, including training sessions and re- viewing information technology systems. It is not clear whether delays in implementation have been a result of financial problems or lack of expertise in Zimba- bwe, but generally, Zimbabwean institutions tend to leave issues until the last minute, and then do a rushed job in the eleventh hour. This laxity could help explain why in the case of insurers; they have failed to attract huge potential for policies in the informal sector, which is estimated to hold about half of the country’s $70 billion gross domestic product. Other African countries are already at an advanced stage of IFRS preparations, with listed firms in South Africa ready to roll out the standard in their financial statements for the half year to June 30, 2021, about six months before implementa- tion date. In South Africa, which has a bigger insurance industry, whole teams have been dedicated to help the industry meet the deadline and comply, while in Zimbabwe the industry appeared to be hoping that there will be a deferral of the dead- line. But Mukondiwa, who have been studying the progress in South Africa, said it was unlikely that the deadline will be extended. He said financial directors will have to involve all key players in their firms during the preparatory phase, including their boards and actuarial teams. “It is going to change the way we do business as insurers,” he noted. “The boards of insurance companies must be aware of IFRS 17. It is prescriptive. January 1, 2022 sounds very far but it is not. You need to have people working exclusively on IFRS 17. It will not work if we want to do it as finance people but we need to collaborate with actuaries,” he said. [email protected] Page 6 | July 18-24 2019 The Financial Gazette National News Inflation haunts Zim Paul Nyakazeya Group Digital Editor

IMBABWE’S annual in- CUSTOMISED flation reached a peak of BOARD INDUCTION Z176 percent in June, despite assurances from government that prices will stabilise in August. WORKSHOPS The latest figures have sparked fears that the country is again entering hyperinflation territory, which last occurred 10 years ago when it hit an estimated one bil- lion with the last official figure

“It is unclear whether the re-introduction of the Zimbabwean dollar Dates: To be discussed with Client will yield the desired John Mangudya Batanai Matsika Henry Ruzvidzo Time: 0830 Hours to 1600 Hours (each day) effect, because the in- currency system will help rein in by more than 200 percent year- “However, we do not believe Venue: Provided by Client flation rate is vastly inflation to around 10 percent by on-year in June. In comparison, this will be the case as there is still Minimum No. of Delegates: 15 year end, economists believe this electricity and water prices rose by considerable distrust in the gov- understated due to the is a pipe dream. only 50 percent. ernment and in official channels,” large informal econo- Regional think-tank NKC Af- Inflation opened the year at NKC said in a research note. Overview my.” rican Economics said considering 56,90 percent, rising to 59,4 per- This comes as both business The sooner new Board members fi nd their current shortages of basic goods cent in February and 66,80 in and analysts continue to moan feet on the Board, the sooner they are able NKC African Economics and lack of foreign exchange, March. The figure then rose to 75, about policy inconsistencies, to meaningfully add value to the Board. It price pressures are unlikely to dis- 86 percent. which characterise government’s sipate, in fact they believe the sit- NKC noted that there is no way key decisions, thereby eroding is ineffi cient and unproductive for a Board to recorded in July 2018 being 231 leave new Board members to fi nd their feet uation will continue to deteriorate. in which authorities can accurately confidence, which is badly needed million percent. to help turn around the country’s through trial and error. This 2 – Day Workshop “It is unclear whether the re-in- measure purchasing power given At the time, the central bank shrinking economy and exchange equips new Board members to meaningfully troduction of the Zimbabwean the turmoil in the monetary sys- authorized a 100-trillion Zimba- dollar will yield the desired effect, tem. rate mismatch. participate in boardroom discussions and bwean dollar banknote that was because the inflation rate is vastly “Provided that all transactions Henry Ruzvidzo, Confeder- decision – making. not even enough to buy bread. understated due to the large infor- are conducted through official ation of Zimbabwe Industries Although Finance minister mal economy,” said NKC African channels and paid for with the (CZI) president, said the prevail- Who Will Benefi t Most? Mthuli Ncube and Reserve Bank Economics. Zimbabwean dollar, in theory, we ing adjustments in exchange rates of Zimbabwe governor John Man- The workshops are best suited for: According to ZIMSTATS, the should see a more accurate reflec- were in response to the increased gudya have expressed confidence prices of food, clothing, furniture, tion of the change in consumer demand for the local currency and • New Board members in Public and Private that recent changes to the nation’s health care, and transport jumped purchasing power. the need to meet statutory pay- Enterprises, including Local Authorities, ments. Churches and NGOs; “Sustainability will de- • New members of Board Committees; and pend on fiscal and mon- • New members of School Governing etary policy discipline. A Bodies. weaker local currency is good for export competi- tiveness and will increase Workshop Objectives foreign currency genera- The workshop objectives are to: tion,” he said. “An efficient market for • Introduce new Board members to the foreign currency, with clear workings of the organization; priorities to encourage pro- • Build a deeper understanding of the roles duction, is also important and responsibilities of: for sustainability. As more - the Board; and more businesses ac- cess forex through formal - Individual Board members; and and predictable channels, - the EXCO. confidence will build.” • Enhance appreciation for sustaining Board He added that with con- performance; fidence and more flows of foreign currency to the for- • Build a deeper understanding of running mal market, some stability effective Board meetings; and in the prices of goods and • Strengthen fi nancial fl uency amongst new services is expected. Board members with special focus on how to Ruzvidzo was also evaluate organizational fi nancial health. hopeful that a focus on production across all sec- tors, coupled with bal- Learning Process ance of payments support, The learning process is deliberately diverse, could see the economy turn including – around. • Facilitated Sessions; Batanai Matsika, head • Individual and Group Exercises; of research at Morgan and Co, said authorities should • Case Studies; and boost the interbank market • Candid sharing of knowledge and in order to stop retailers experiences. from sourcing foreign cur- rency for their imports on the parallel market. Facilitators “If retailers source for- Board Leadership Zimbabwe’s battle – eign currency on the par- hardened professionals will be facilitating the allel market, the end cost workshops. will be on consumers. This will also push up parallel market rates … and there Investment and Payment Terms should be an equilibrium • ZWL$400 per delegate per day, covering to avoid an upward move- tuition and Certifi cate of Attendance. ment of prices,” he said. • 30 days in advance Since the economy was dollarised in February in 2009, this is the first time Enquiries that year on year inflation For enquiries, please phone Tel: +263 8677 has breached 100 percent. 164 501; Mobile: +263 772 353 574. Or email The first time the country's [email protected] inflation recorded a three digit figure was in Novem- ber 2001. [email protected] The Financial Gazette July 18-24 2019 | Page 7 National News Fiscal pressures stalk Mthuli Ncube Adelaide Moyo “Most of the tax paid does nothing more than omy are fiscal incentives like tax breaks for com- Business Reporter provide salaries for public sector employees and panies. We encourage the substitution of imports most of them cannot possibly claim to be doing so that the country can save foreign currency,” he INANCE minister Mthuli Ncube faces a daunting task anything of value to the country.” said. when he presents a supplementary budget this month- Vince Musewe, another economist, said Zim- “Ncube also has to prioritise moving away Fend at a time when a number of negative economic de- babwe still needs to deal with lack of productivity from subsidies. Let’s be real, it’s not real for a velopments are threatening to retard Zimbabwe’s economic and investment in key productive sectors and an country to subsidise, we are talking about electric- growth. aggressive import substitution policy to cut down ity, Zupco, Command Agriculture and mining. It The southern African country’s annual inflation rate leapt on imports, produce locally and create jobs. doesn’t work, government should allow markets up to 175,66 percent in June from 97,85 percent in May, high- “While Ncube is doing well on the monetary to work. lighting the gravity of persistent increases in prices that have economics front it is time to address the issue of “The minister was talking about a surplus but if eroded incomes and worsened poverty. At the same time, incomes and the issue of production. On incomes you bring in fiscal consolidation you might see that the economy is expected to contract by 5,2 percent this year it is clear that the cost of living has reduced dis- in real terms we are recording deficits. At some ― according to the International Monetary Fund ― due to posable incomes and the economy cannot grow point we have to pay for the subsidies. Treasury drought, the effects of Cyclone Idai, a sharp rise in inflation, without demand. Both the business and private has to push for a market oriented economy and falling real incomes and acute foreign exchange shortages. sector need to adjust incomes upwards as a matter push for the operationalisation of the commodity While the majority of Zimbabweans expect a change in of urgency,” he said. exchange and that has to be done now,” Mugano fortunes from the Treasury chief’s supplementary budget an- Economist Gift Mugano said government said. nouncement, as he promised to give tax breaks to workers Mthuli Ncube should prioritise productivity. In a revised budget in May, Ncube said govern- while striking a balance to ensure that there isn’t a big loss one of the most heavily taxed populations in the “We have a new currency in place and we can- ment expenditure is now projected at $12,2 billion in revenue, economists who spoke to The Financial Gazette world, especially when the very small benefits we not do anything about it. We now have to work on in 2019, from US$8,2 billion in the initial budget. warned the country not to expect a miracle. get from the taxes are properly measured,” Rob- production, what mechanisms are put in place to He said revenue is now expected at $9,3 billion Victor Bhoroma, an economic analyst, said Ncube has to ertson said. revamp production?q What is missing in the econ- from US$6,6 billion. [email protected] focus on aligning budgeted figures to the new market prices. “The inflation rate has quickened from 31,01 percent in November 2018 when the budget was presented to the latest 175,66 percent as of June 2019. This means that the budgeted expenditure figures in the $8,16 billion budget are now worth- less and will not see the government pull through the year,” he told The Financial Gazette. He said local markets are expecting a progress report on the austerity measures in terms of what has been done so far and “how much has been saved of key importance, would be progress on rationalisation of foreign service missions, bio- metric register for civil servants, stricter management of the government fleet and state enterprises reforms.” Bhoroma said it was pertinent for Treasury to give a realis- tic economic outlook and give industry direction. “A realistic gross domestic product (GDP) growth rate for full year 2019 considering the economy is now in a recession due to hyperinflation, decline in production caused by foreign currency shortages and power cuts and decline in consumer spending,” he said. In November last year, Treasury presented highly optimis- tic projections of 3,1 percent for the current year although it said growth will be weighed down by the anticipated poor performance of the agricultural sector and the general unsta- ble economic conditions. Bhoroma said despite this pressure, Ncube will be forced to cushion labour. Civil servants are currently agitating for increased salaries, as according to Zimstat, the prices of food, clothing, furni- ture and health care all surged by more than 200 percent last month from a year before. “The two percent intermediated money transfer tax has hit workers hard on every transaction, thereby eating into the low disposable incomes already eroded by hyperinflation. A tax break would help cushion hard hit labour and improve buying power,” he said. Bhoroma noted that this should be supported by civil ser- vice salary adjustments that factor in rising inflation. “There is need for improving the budgeted figures for critical sectors such as health, energy and sanitation. The sit- uation in referral hospitals is now dire and medicines from pharmacies now expensive, rendering health services a luxu- ry for the sick,” he said. He added that water and electricity are also now critical due to unavailability of foreign currency to import chemicals or pay off legacy debts to suppliers. The current 18 hours power cuts by Zesa are likely to worsen Zimbabwean industries’ woes, particularly mines and manufacturers’ capacity utilisation, and the economy’s recov- ery efforts. So dire is the country’s situation that on Monday, Indus- try minister Mangaliso Ndlovu said manufacturing industry growth projection has been revised down from the initial 2,5 percent growth issued in the 2019 budget to one percent due to challenges emanating from foreign currency shortages, Cyclone Idai aftermath, El-Niño induced drought and energy challenges, among others. Economist John Robertson concurred with Bhoroma and said there is need to revise figures to align with what is going on in the economy. “The changed value of the currency calls for new revenue and expenditure calculations, but if the exchange rate does not stabilise soon, all the new figures will have to be revised quite often. Their initial estimates will reveal how stable they think the rate is going to be, but that forecast could become a self-fulfilling prophesy,” he said. Last month, authorities announced that the interim curren- cy, the RTGS dollar, had become the country’s sole legal ten- der, ending a decade-long use of multiple currencies in a bid to stem black market demand for foreign currencies. However, even after the adoption of a mono-currency, par- allel market rates and supermarket prices have been going up. Robertson said currently government is getting a large proportion of every worker’s wage increase as they move into higher tax brackets. “Minister Ncube clearly does not want to be too generous. I hope he does accurate measurements of how much he has already reduced disposable incomes with his two percent tax. I believe that accurate comparisons would show that we have Page 8 | July 18-24 2019 The Financial Gazette Leader Page

News Worth Knowing No end in sight for Zim’s woes HEN President Emmerson Mnangagwa boldly declared that he wants to transform Zimbabwe into “a capital-friendly destination” Win a recent Bloomberg interview, we didn't know whether to laugh or take him seriously, given the chaotic nature of Harare’s political economy. From the manner in which the Zimbabwe dollar was reintroduced on June 24 to the way our war veterans were given 15 000 more hectares of prime land and the group’s demands for a pound of the key mining sector, one can surmise that our government is so much given to politically-expedient policies. While the “convenient truth” by would-be beneficiaries of this state delin- quency, if not outright misconduct or deviance, is that our constitution and even western nations ― including America ― recognise their ex-fighters, the sad thing about our welfare programmes is that they have always been focussed on one group of former combatants, particularly the pre-independence veterans. And therein lies the problem, especially when the “compensation” is sought in a manner that smacks of an unjustified sense of entitlement and risks strik- ing at the goose that lays the golden eggs, if not the core of the entire nation's SAD DEVELOPMENT: Surface Wilmar plant in Chitungwiza. The country’s largest cooking oil manu- survival or future. This is a sector capable of delivering US$12 billion annually facturer resumed operations in May after closing shop in January due to foreign currency shortages. by 2023. The company needs at least US$6 million per week for its operations. With an installed capacity of 16 We have no gripe with our war veterans being looked after, but to give them 000 tonnes per month against demand of between 8 000 and 10 000 tonnes per month, the company mines ― probably wrestled from companies, which would have done explora- is now running below 15 percent of capacity due to power outages. Picture by Freedom Mashava tions and listed a portion of that pegged or demarcated land as assets ― is a See also Page 30 different ball game altogether. On the other hand, history does not favour us with a good experience to con- fidently say the latest policy or course will be an orderly one. From the days of Chenjerai Hunzvi when the freedom fighters were given Zim lacks ideas, novelty to US$300 million-plus worth of unbudgeted for gratuities by Robert Mugabe, for their role in the often-violent land reforms, Magamba Echimurenga and Telecel Zimbabwe, among other business opportunities, why is it that none of these enterprises are on their feet? tackle present challenges Crucially, and in the absence of sufficient evidence that routine beneficiaries of these “empowerment” programmes, include veterans of Mozambique, Ango- IMBABWE is at a crossroads. cabbages among other things. ing at the world with fresh eyes, la and the Democratic Republic of Congo, can anyone in government really say The economy is on its knees, Is this a policy issue, lack of cap- which implies transforming our the latest campaign is not an “economic apartheid” of sorts? both literary and metaphori- ital or outright lack of ideas to pro- minds. And if the failure to open new ventures such as the group's vaunted medical Z cally. And while it is painful to be duce enough food to feed the coun- Given the amount of educated facility in Victoria Falls is part of that evidence to show that our “stockholders” living in a time when history seems try? Zimbabweans both in and outside are not adept at running commercial enterprises, why risk it with such a capital to be repeating itself ― in less than It then doesn’t come as a surprise the country, it is evident that we have and skills-intensive sector as mining? two decades ― as the country fac- when Zimbabwe’s unemployment the necessary resources and knowl- Apart from the potentially damaging 15 000-hectare land redistribution and es more challenges than before, it is rate has over the years skyrocketed edge to address the challenges our renewed upheavals, weren't there more “subtle ways” of managing or handling also a moment of immense oppor- to over 90 percent, with nearly 200 communities are facing. these affirmative action programmes or exercises? tunities for those with a discerning 000 graduates each year pestering But what we are in short supply And so, as lowly mortals, we are not only left wondering as to where the eye. government for employment oppor- of is our thinking caps being applied resources will come from, but whether this “noble idea” will not be hijacked by For the optimist, our time is the tunities. to the right cause. If we have peo- some “comprador bourgeoisie” among the Zanu PF leadership, who by the way best of times while for the pessimist Perhaps it’s time we look at our- ple who have the temerity to defraud also claim to be real war veterans! it is the worst. It is the worst of times selves in the mirror, introspect and parastatals and state-owned enter- And if government was really serious about building confidence in this econ- in that the country is experiencing “Ask not what our country can do prises of millions of dollars through omy, and boosting its re-engagement efforts, would it entrust such a “delicate debilitating power, fuel, drug and for us, but rather ask what we can systematic corruption, surely we can empowerment process” to a bunch of people, who helped shatter Zimbabwe's water shortages while prices of basic do for our country” in the words of harness these “brilliant” minds to economic prospects only 20 years ago ― and this is what makes us think Mnan- goods and services are spiralling out the late United States president John develop sustainable national projects gagwa is not serious about turning this country into an “investor-friendly na- of control. Fitzgerald Kennedy. for the benefit of the nation. tion!” And while we are regarded as one And this brings me to my ear- Someone recently pointed out of the best educated nations in Afri- lier point that despite our present that we have over US$750 million ca, our academia at institutions of challenges, our time also represents sitting in nostro accounts, yet the Southern Africa’s Leading Business and Financial Newspaper higher learning have proved useless the best of times as all forms of cri- whole country is in darkness because Established 1969 Publisher: Modus Media in coming up with “African solu- sis should be seen and embraced as national power utility Zesa Holdings tions to our African problems”. It challenges. is struggling to raise US$14 million MARKETING seems we have Professors and PhD The Chinese word for “crisis” is to import power? EDITORIAL General Manager - Marketing weiji, which consists of two charac- Why don’t our so-called captains Editor-In-Chief & Chief Oper .zw ters ― danger and opportunity. So of industry come up with a proposal Christopher Goko: gok .zw Brand Executive - Advertising Open Forum in the midst of crises, one finds op- to lend hard currency to Zesa, so that Managing Editor Edwin Vengesa: ev .zw portunities. But to find opportunity they can be guaranteed uninterrupt- Senior Sales Executives with in the bosom of crisis, one must be ed power supply and thereby boost Senior Assistant Editor Christobel Washaya: cwashay .zw willing to think outside the box. production and export their products Chris Gumun .zw .zw .zw John Kachembere What the times — difficult as to generate the much needed foreign News Editor they might be ― allow us, then, is currency? John K .zw Sales Representatives - Harare to imagine new ways of confronting What this clearly shows ― at a .zw Companies Editor Frank Nyandoro: fny .zw problems. They help us rethink the macrocosm level ― is that industry Shame Makoshori: smak .zw Edreck: emudzingany .zw holders who are more comfortable past, and envision a better future. is waiting for government to deal Group Digital Editor Sales Representative - Bulawayo dishing out Western-centrism theo- Thus, the rallying cry around which with the power crisis alone when it’s Paul Nyakazeya: pnyakazey .zw Clever Pedzisai: [email protected] ries to students rather than champi- coalesces the slogan “The Zimbabwe a national crisis, which needs every- Brand Executive - Events oning innovation and practical solu- we want” involves nothing less than one to pull in the same direction to Features Editor K .zw tions to their communities. look- have electricity back in our homes .zw Someone recently point- Brand Executive - Subscriptions After nearly 40 years of indepen- and workplaces. Staff Writers Tatenda Taka: t .zw dence, isn’t it shocking that we are ed out that we have over Unless and until we all stop blam- Freedom Mashava: [email protected] still struggling with basic drugs and “US$750 million sitting in ing government for all our problems, Adelaide Moyo: [email protected] Subscriptions Representatives Omega Ukama: [email protected] Ronald Madiviko: rmadivik .zw the country being forced to import nostro accounts, yet the whole most of which are self-inflicted, our Nelson Gahadza: [email protected] Elizabeth Nyamaruze: eny .zw trifling products such as tooth picks country is in darkness because problems will not go away. The cur- Production Supervisor Chief Executiv and tissue paper, which are being national power utility Zesa rent government is, without a doubt, Kudzai Rushambwa: krushambw .zw .zw produced by low-level entrepreneurs Holdings is struggling to raise a destructive and formidable beast in many developing countries? Yet that exists at the expense of the indi- Bulawayo US$14 million to import power? we have full-fledged industries here viduals it claims to serve. Editorial, Advertising & Circulation 1st Floor, Princess Court, Why don’t our so-called cap- 2nd Floor, Green Bridge South, Eastgate Complex, Corner Forth Street/9th Avenue, in Zimbabwe. It can be easy for the suffering P. O. Box CY 376, CAUSEWAY, Harare, Zimbabwe Bulawayo. For a country that has over 300 tains of industry come up with masses to get caught up in anger and Tel: +263-242-781 572 Tel: (029)75873/75270 Website: www Distributed by: ANZ days of uninterrupted sunshine in a a proposal to lend hard cur- resentment for an unstoppable foe. year, isn’t it flabbergasting that we rency to Zesa, so that they can But, if we are not careful, our loath- VOLUNTARY MEDIA COUNCIL OF ZIMBABWE are experiencing 20 hours of load be guaranteed uninterrupted ing will consume us to a point where e Financial Gazette newspaper subscribes to a Code of Conduct that promotes truthful, accurate, fair and balanced shedding? We have one of the best personal responsibility is lost in a news reporting. If we do not meet these standards, register your complaints with the Voluntary Media Council of power supply and thereby boost Zimbabwe at: climatic conditions in the world, but production and export their sea of perpetual blame. And when No 34 Colenbrander Rd, Milton Park, Harare. Telephone: 04-778096 / 778006 24 Hr Complaints line: 0772 125 659 we continue importing wheat, maize, this happens, we become no better Email: [email protected] or [email protected] Twitter: @vmcz http://www.vmcz.co.zw | Facebook page: vmcz products to generate the much Zimbabwe tomatoes, potatoes, milk, carrots and needed foreign currency?” than our opponents. The Financial Gazette July 18-24 2019 | Page 9 Page 10 | July 18-24 2019 The Financial Gazette National News Zim, SA trade gap narrows

Omega Ukama that imports from SA, which remains Zimbabwe’s SA has maintained a trade surplus with Zimba- “The growing import pressures consequently Business Reporter major trade partner, were $586 million during the bwe since 2007 with the surplus widening over the pushed the country’s overall trade deficit in 2018 period under review down from $1 billion in the years mainly due to Zimbabwe’s economic woes. higher to $2,5 billion from $1,7 billion in 2017, IMBABWE’S trade deficit with South Af- previous comparable period. The trade gap between the two countries was a trend reversal from a five-year narrowing posi- rica (SA) declined by about 92 percent to This also comes as Zimbabwe’s trade deficit has expected to worsen after SA last year terminated tion,” local advisory firm, Equity Axis said in a Z$32 million in the four months to May 2019 declined by almost 70 percent to $400 million in a trade agreement which had been in place since note recently. compared to $398 million recorded in the same pe- the five months to May 2019 compared to $1,34 1964, opting for the Southern African Develop- In 2018, Zimbabwe’s trade deficit grew by riod last year, latest data show. billion recorded in the same period last year, after ment Community Trade Protocol on trade, and close to a billion dollars from $1,77 billion in 2017 This comes as Zimbabwe’s imports have been a considerable decline in imports during the period after government’s suspension of Statutory In- to $2,68 billion. declining dramatically as the economic situation in from $2,83 billion to $1,96 billion. strument 122 in October last year to increase the The southern African country has persistently the southern African country has continued to de- While Finance minister Mthuli Ncube says the flow of basic goods into the market after panic and run trade deficits since dollarisation in 2009, re- teriorate amid a worsening foreign currency short- decline in imports has come as a result of govern- speculative buying had been had left some shops cording only a single monthly trade surplus over age, while rising inflation has eroded purchasing ment’s efforts towards import substitution, market without stock. the period. power leading to suppressed demand in the econ- experts assert that the majority of imported goods Official data shows that the country’s cumula- omy. are being smuggled into the country to avoid high “Coupled with the waiver was a sharp rise in the tive trade shortfall since 2009 has breached $20 Official data provided by ZIMSTAT shows taxes at the borders. prices of goods on the local market amid shortages. billion. [email protected] Inflation ravages Fire underperforming CEOs: AG savings bond Shame Makoshori inflows and stimulate economic growth. Companies Editor Treasury will be spending about $700 000 for the programme, which will run Nelson Gahadza CCOUNTANT-general Daniel until 2026, while the World Bank has Business Reporter Muchemwa has indicated that chipped in with additional $300 000. management and boards at under- The programme will see accountants NVESTORS who snapped up the Reserve Bank of A performing state-owned enterprises and receiving training in International Public Zimbabwe (RBZ) savings bond are likely to write off government departments should be fired Sector Accounting Standards (IPSAS) to Ithe investment due to high inflation, economist Antho- for incompetence. equip them with skills to efficiently drive ny Hawkins has said. This was after auditor-general Mildred government business. The savings bond, which was issued by the central Chiri had released another damning report “The move to move towards IPSAS ac- bank in 2016 to encourage institutions and individuals to that illustrated a serious counting is to ensure that we nurture a culture of saving and building national wealth, “Basic accounting prin- rot in public sector fi- ciples were being ig- improve and produce better has a seven percent interest rate, while the country’s in- nancial management. results by professionalising flation topped 176 percent last month ― thus negatively Muchemwa said ba- nored and financial the accountant in govern- impacting on pension funds with negative real returns on sic accounting princi- statements were not pro- ment,” Muchemwa said. fixed income and money market instruments. ples were being ignored duced in time, even after “Only three local author- “Subscribers to the RBZ savings bond have literally and financial statements government introduced ities submitted accounts for lost everything, as their return have been eroded by rising were not produced in the Public Finance Man- auditing in 2018. In 2017 in inflation,” he said. time, even after gov- agement Act, which was only Goromonzi. It you Special features of the savings bond, which was issued ernment introduced the compels state enterpris- are a civil servant and peo- when the country was still in deflation, include liquid as- Public Finance Manage- es and local authorities ple come to you for a ser- set status, rolling maturities of one year, two years, three ment Act, which com- vice and you say no, it is not years and five years, simple interest fixed rate of seven to work under clearly pels state enterprises laid out procedures to professional. They want a percent per annum calculated on a 365-day basis, tax free and local authorities to birth certificate and you say interest, acceptable as collateral and bearer instrument. work under clearly laid deliver their mandates..” no…Being a professional Other features of the seven percent savings bond were out procedures to deliver means having the right atti- a bearer instrument and a discount window at the RBZ 30 their mandates. Daniel Muchemwa tude,” he said. days after issuance for individual and 180 days for other “Boards must en- The accountant-gener- investors. sure that quarterly financial statements al's announcement comes after 39 state According to the central bank, over $2,7 billion has are produced in time. They meet every enterprises failed to submit their financial been invested in the savings bond since their inception three months but they cannot produce ac- statements to the auditor general in 2018, in 2017. counts in time for audit. How do you end while another 29 submitted their accounts Zimbabweans abandoned the savings culture mainly up without documents for your financial but had adverse opinions, indicating that in 2009 when they lost their savings and pensions during statements? That is a basic principle of ac- the statements were misrepresented, the transition to the United States dollar economy from counting,” he said. mis-stated and not accurately reflecting the Zimbabwean dollars. Muchemwa, who spoke during the the institutions’ financial performance and As a result, demand deposits constitute bulk of bal- government signing of a deal between health. ances sitting in financial institutions for fear of a similar government and the Institute of Chartered Ten state enterprises produced ac- situation where their bank deposits were wiped out. Accountants of Zimbabwe to train 10 000 counts which were difficult for the audi- The Zimbabwe Stock Exchange is also proposing the accounting officers into chartered accoun- tor-general to shape an opinion on because issuance of inflation indexed bonds and the establishment tants, said the culture of secrecy in gov- they did not meet the basic standards ex- of a US dollar trading platform on listed securities in or- ernment will work against Zimbabwe’s vi- pected of such public financial statements. der to hedge against rising inflation. sion to scale up foreign direct investment [email protected]. Daniel Muchemwa [email protected]. ‘Zim needs strong institutions to achieve 2030 vision Shame Makoshori “If we don’t achieve this Vision 2030 will just icies not translating to desirable development omy is reached. The country is also facing para- Companies Editor be another talk. That vision will be a pie in the sky outcomes, including sustained economic growth, lysing power cuts, fuel shortages and erratic fuel if we have weak institutions. We need to make structural transformation, employment, reduction supplies which all can negatively affect economic IMBABWE needs strong institutions to our institutions strong and transparent. If we are in inequality and eradication of poverty. growth in the short to medium term,” the local achieve an upper middle-income economy ready to have our institutions scrutinised it means The deal, which runs until 2026, is expected to think tank said. Zstatus by 2030, a senior government offi- we have confidence in what we are doing. So, our professionalise the public sector and bring trans- Low gold output in Zimbabwe, where miners cial has said. mindset must change. We must mean what we say parency in the operations of State institutions. have been thrown into a crisis by the power cuts This comes as the southern African country’s and we must do what we promise.” Churu said public sector accountants have a and a sharp slid in the availability of foreign cur- development efforts are being hobbled by severe A World Bank report two weeks ago placed big role to play in drumming up foreign direct rency, will also have serious implications on the capacity deficits often in the form of shortage of GDP per capita at $1 400 and ranked Zimbabwe investment by establishing seamless systems that direction of the economy going forward. critical skills, deficits in leadership, inhibiting in the lower middle-income economy category, improve service delivery in line with Vision 2030. The numbers have not been looking good in mindsets and weak institutions. This has severely but with country’s economy projected to grow by “The President (Emmerson Mnangagwa said the first half of the year, with first quarter gold de- hampered the ability to implement existing poli- 3,2 percent this year, which is way below the sev- we must leapfrog into a middle-income economy liveries coming in at 6,5 tonnes, from 7,3 tonnes cies and development strategies across the coun- en percent benchmark being projected, econom- and we must leap in an organised manner. We during the prior comparable period, according to try. ic analysts assert that the country needs to work must not move slowly,” he said. the Chamber of Mines of Zimbabwe. Zvinechimwe Churu, a chief director for hard to achieve its 2030 vision. Last week, Econometer Capital said Vision This has been compounded by volatile global budgets in the Finance ministry, said strong and Churu told delegates at an event where govern- 2030 will be fraught with challenges if the coun- commodity prices in the past seven years, which transparent institutions help the country push ment and the Institute of Chartered Accountants try does not address a high debt profile, power places Zimbabwe in an extremely precarious po- double digits annual growth rates. of Zimbabwe inked a pact to train 10 000 public cuts and a slowdown in gold output. sition, as the $3 billion mining industry by reve- “We must generate growth rates of…nine per- accounting officers into Chartered Accountants “Painful decisions should be taken by govern- nue generates about half of the country’s export cent, or even shock ourselves with growth rates of (CAs) that persistent implementation gaps have ment in the short to medium term to ensure that earnings. up to 10 percent,” he said. resulted in good development strategies and pol- the journey to achieving a middle-income econ- [email protected],zw The Financial Gazette July 18-24 2019 | Page 11

‘We are demystifying the market’

INANCIAL Securities Exchange (FINSEC) is licensed and raise capital today, he is concerned with, which and they have to go back and plan again. We have icant opportuni- by the Securities and Exchange Commission of Zimba- currency am I raising, and by the time capital the rais- had the currency reforms, so it means the numbers ties that are yet to bwe as an equities alternative trading platform (ATP). ing is complete, what have to change because it be tapped that can F will be the value. So, involves several transac- create value for FINSEC harnesses and facilitates electronic trading of a wide Currently, you are able variety of securities, thereby formalising marginalised mar- we are fine tuning the tions. It is those economic investors as well as ket segments and bringing all alternative trading activities on product so that it ad- to buy shares on the fundamentals that contin- the country. to a central and organised market place. The company pro- dresses challenges that C-Trade; so equally, you can ue to shift. They are very issuers are facing. enterprising people in- vides an electronic platform for the issuance, holding, trading buy and dispose the unit trusts and settlement of financial securities. The ATP is completely NG: Are there any tending to raise capital. automated and integrates all market participants in real time. prospecting listing on through your mobile and NG: Overall, is Our business reporter Nelson Gahadza, (NG) spoke to Fin- Finsec’s ATP? online platforms... Zimbabwe’s capi- sec’s general manager Garikai Munema (GM) to understand GM: We have a pipe- tal markets ready how the ATP works. Below are the excerpts of the interview line which continues for investments? to grow. Some of them move to almost ready, then GM: We are ready for investments both by NG: As an alternative trad- GM: We have not engaged all something happens, either a policy announcement, local and foreign investors. There are signif- ing platform, have you man- of them, but appetite is there aged to bridge the gap of because what this platform financial inclusion? does is that it brings more traf- GM: Our thrust is to be an fic without them really engag- alternative securities market ing the market themselves. offering alternative investment NG: Are there any mini- opportunities to more diverse mum and maximum lim- investors. Traditionally, capital its to investment one can markets have been associated make? with huge transactions with GM: We have not set up min- institutional investors, but one imum figures, but that will of our thrust is to de-mystify now depend and set by the that and prove that securities fund managers. But we want markets are also for the ordi- to keep it as low as possible as nary person. We have devel- you are aware that on C-Trade, oped products that are already the minimum is $10, so we trading and have proved their will try to keep it as minimum worthy in terms of financial as possible but at the same time inclusion. At the moment, as make economic sense. In this part of continued product de- current environment, an in- velopment, we have brought vestment of $10 will not yield into the market a product that good returns. So, the concept may not be new in a way, of unit trust helps in that it is a but what we are bringing collective investment scheme, as a channel through which so if you put $100 and the that product can be accessed fund is $300, means you are in the capital markets. Unit now dealing with a $300 fund trusts have always existed in which can be placed into the this market as an investment market for a good return. option for people who want NG: Are these products em- to invest. But access to those anating from the C-Trade units meant that one had to platform? engage a fund manager and GM: Yes, these are products buy for you. Now, with the developed from the platform advent of technology, what and you might have heard of we are bringing is the ability the savings club, that we are for investors to access the unit trying to put on the C-Trade trusts through mobile and on- platform. We are trying to pool line platforms. So basically, together small savings and we are riding on the C-Trade investments into a fund and platform to also introduce unit invest collectively to get better trusts as a product. Currently, returns. you are able to buy shares on NG: What has been the the C-Trade; so equally, you performance of C-Trade in can buy and dispose the unit terms of volume and value? trusts through your mobile GM: We have seen an in- and online platforms. The ad- creased number of transac- vantage with unit trusts, unlike tions since we launched, in shares, where you actually terms of amounts and transac- buying the actual shares your- tions. When we first launched, self, with unit trusts you are there was fear and hesitation, buying into a fund which will but now there is improved invest on your behalf. These confidence. What we have are funds managed by fund also done is introduce C-Trade managers who understand corporate. Prior to that it was market dynamics, so that risk mainly for retail customers, of whether the counter will but it is now looking at corpo- perform or not, will not rest rate investors. That will also with the investor. All you need definitely push the numbers. to do as an investor is choose NG: You are also targeting which fund manager you want to introduce a growth enter- to work with. prise portal for capital rais- One of the other things we ing. Would you explain? have realised is that because GM; It is a platform to extend of the centralisation of fund capital markets to more peo- managers and stock brokers ple and raise capital. With the in the city centre, in the small growth enterprise portal, it is towns there is no such service some platform to raise capital providers. So not only are we by small to medium enter- trying to promote a culture of prises and the subscribers will saving, but also financial inclu- then be retail investors. This is sion, so that financial products one thing we will be officially are accessible to everyone, communicating. But like we anywhere. said before, the economic en- NG: Are fund managers vironment continues shifting, showing interest? so if someone is to come in Page 12 | July 18-24 2019 The Financial Gazette National News Zim needs US$218m to import maize

Tabitha Mutenga ty in Southern Africa, compiled by the SADC in Zambia (144 percent), Zimbabwe (128 per- three months, compared to the average three Features Editor secretariat’s Regional Vulnerability Assessment cent), Eswatini (90 percent), Mozambique (85 to five months, resulting in large food con- and Analysis Unit indicated that Zimbabwe, percent) and Democratic Republic of Congo sumption gaps. IMBABWE will need US$217,7 million like the bulk of southern African countries, was (80 percent),” SADC said. From the region, Zimbabwe will have to to import at least 800 million tonnes of facing a deficit and will have to supplement According to SADC, the volatile macroeco- import from either South Africa or Tanzania as Zmaize after harvesting an estimated out- with grain imports. nomic situation in Zimbabwe continues to dete- they are the only two countries with surpluses. put of 776 635 tonnes against a national re- “Assistance required amounts to 818 323 riorate with increasing fuel prices, staple food Zambia, which recorded the second biggest quirement of 2,2 million tonnes, the Southern tonnes of maize, at US$217,66 million,” the prices, and foreign exchange shortages further surplus of 1,8 million tonnes last year after African Development Community (SADC) sec- report said. weakening household access to food and oth- South Africa, now has a cereal deficit of 0,9 retariat has said. When comparing the 11 member states, food er basic needs, while government has institut- million tonnes. This comes as government this week indicat- insecurity increased by 28 percent, and is also ed Statutory Instrument 145 of 2019 to control As a result, maize grain and maize meal ed that at least 5,5 million people are in need of 7,4 percent higher than it was during the severe maize trade, exports, and movement. prices in Zimbabwe are anticipated to contin- food aid until the next harvest in March 2020. El Nino-induced drought of 2016/17. Due to widespread poor harvests this year, ue to be significantly above average due to low The 2019 Synthesis Report on the State of “Significant increases in the number of most subsistent farming households are ex- supply of maize, high demand, and the volatile Food and Nutrition Security and Vulnerabili- food insecure people have been recorded pected to exhaust their crops within zero to economy. [email protected],zw Old Mutual plans to build Ngezi industrial park

Shame Makoshori Companies Editor

LD Mutual Zimbabwe (Old Mutual) says it has plans to construct a multi-purpose in- O dustrial park and private hospital in Ngezi. The financial services giant yesterday said con- struction of the project will be carried out by its subsidiary, Old Mutual Life Assurance Zimbabwe Limited. “The industrial park will be established on a 15-hectare piece of land directly opposite Wan- ganui High School,” Old Mutual said in a joint statement with Waterkings, a consultancy firm that will carry out an environmental and social impact assessment for the project. The project scope includes establishment of seven stand-alone state-of-the-art industrial shells to accommodate diverse industrial activities. According to Old Mutual, one of the industrial shells will be occupied by Ball Technology Found- ry that will be manufacturing high chrome balls used in the processing of platinum, and other re- lated customers. “The factory will employ 200 people and sub- stitutes importation of raw materials,” the compa- ny said. MILITARY GUARD: A soldier stands guards over a consignment of medical equipment sourced from India to capacitate central hospitals Old Mutual noted that a second factory to be around the country before the handover ceremony at NatPharm headquarters in Harare. President Emmerson Mnangagwa officiated at established on the facility will manufacture indus- the handover of the equipment that includes infant incubators and resuscitators, multi-parameter monitors for adults and operating the- trial bolts that are used in the support of rock and atre tables ―electric and hydraulic ― mobile X-ray machines and anaesthetic machines . Picture by Freedom Mashava underground mining safety operations, again re- ducing the importation of such raw materials and unlocking employment opportunities. “The private hospital will be on 12 hectares and directly opposite the Turf Village…The hos- Govt orders Zesa to work on Premier pital is being designed to cater for standard hospi- tal operations…The development project is in the planning phase during which the technical designs Adelaide Moyo funds provided by government to support seriously adversely affected by the funding and ESIA processes are running concurrently,” the Business Reporter the project has still been generally misun- in RTGS dollars, particularly in regard to company said. derstood. transactions involving state-owned entities.” REMIER African Minerals (Premier) “For example, Zesa has now quoted to Roach said RHA will seek to delay a de- Market experts said the latest move shows that says national power utility Zesa Hold- electrify the mine at a price which is only cision to construct the planned decline shaft, Old Mutual is moving to industrialise one of the ings (Zesa) has been ordered to electri- approximately 30 percent greater in RTGS any shortfall of funds is expected to be fur- country’s fastest growing economic zones, the re- P cipient of a flood of investment since the Austra- fy its tungsten mine in Matabeleland North. dollars than the original quotation that was ther limited. The Aim-listed miner said government, denominated in US dollars. And, approx- He said NIEEF have reaffirmed their lian listed platinum mining outfit accelerated its which owns a 51 percent stake in the mine, imately RTGS dollars one million has the commitment to provide additional RTGS activities in the area a decade ago. ordered Zesa to commence essential works ability to discharge debts of RHA previous- dollars based funding to the extent this is This has turned a near forest only a decade ago, immediately. ly incurred in Zimbabwe of approximately reasonably necessary to bring RHA back to into a huge settlement of over 3 000 people, which Premier said the decisions were taken US$1 million,” Roach said. production. revolves around the mining operation. following a meeting held on Tuesday with The funding by government is expected Last month Premier said it was consid- Old Mutual, which commissioned a modern the National Indigenisation and Economic to see RHA back in production later this ering divesting from Zimbabwe due to the shopping facility at Ngezi in 2010, owns some of Empowerment Fund (NIEEF). year and allow for required upgrades that southern African country’s risk profile. the biggest upmarket buildings and shopping malls George Roach, Premier’s chief execu- are expected to result in major operating This was before the miner received fund- in Zimbabwe, among them the top end real estate tive, said RHA is now considered a priority cost reductions including electricity grid ing was adequate to restart RHA and to de- gem, Westgate shopping complex in Harare. project for government. connection. velop the shafts, exploration work and plant The group also owns Chitungwiza shopping Last month, the junior miner received “Whilst it is not certain that the funds upgrades. complex, High Glen shopping centre and Eastgate payment from the Zimbabwe government provided to date will be sufficient to bring Roach had anticipated the funding to be shopping centre in Harare, and the Nkulumane to restart production at the RHA tungsten RHA back into production as planned, it is in US dollars but the country adopted the Shopping Mall, the largest shopping complex in mine, but in local currency not US dollars. certain that the payment by RHA of local op- RTGS dollar as the sole legal tender. Bulawayo. Roach said the value of the in-country erating costs within Zimbabwe has not been [email protected],zw [email protected],zw July 18-24 2019 Page 13 Companies&Markets The Financial Gazette PAYNET SAGA DRAGS DOWN CAMBRIA SHARES — C2 USD/BWP Sugar (USD/lb) Cotton (USD/lb) Nickel (USD/t) Palladium(USD/oz) CAMBRIA Africa’s share price fell to a three-year low in June after its subsidiary Payserv Zimbabwe had an im- passe with local banks over fees. 0,40% 0,08% 0,40% 0,05% 0,71% 10,6897 12,47 65,95 12 134,90 1 527,50 ...as ZSE breaches Zim dollar return $1 billion mark Omega Ukama Business Reporter

HE Zimbabwe Stock Exchange (ZSE)’s turnover reached $1 billion in June, surpassing the previous haunts listed firms Tannual turnover record of $926 million, which was set last year. This comes as the demand for stocks has spiked lately as Omega Ukama investors seek refuge from rising inflation. Business Reporter The southern African country’s official inflation was re- ported for May this year at 97,85 percent after gaining 95 IMBABWE Stock Exchange (ZSE)-list- percent points since May last year. ed firms have suffered a string of losses “We believe that activity on the ZSE has been spurred Zin the past three weeks, triggered by the by two things,” said Fungai Nyaungwa, a senior associate at return of the local currency, a new report has Akribos Research Services. revealed. “Firstly, the need by foreigners to sell out of their posi- The southern African country reintroduced tions and exit through dual listed counters, as well as local its domestic currency, the Zimbabwe dollar, institutional fund managers moving a large chunk of their last month and banned the use of foreign cur- portfolio from monetary assets – which are currently yield- rencies on local transactions, in a move that ing negative real returns – on to the stock market in search shocked markets. for value preserving assets. Equities research firm Morgan & Co said af- “In addition, given that turnover is also a function of the ter a strong rally stretching over 12 weeks, the price, the period under review saw some record high prices ZSE had lost about $4,5 billion by Friday as it for some of the companies on the ZSE,” she said. succumbed to a string of loses, which began on The local bourse’s turnover during the six-month period June 24 — the day the multicurrency system was boosted by Econet Zimbabwe Wireless (Econet) and was scrapped. Cassava Smartech’s (Cassava) $222,26 million trades in “While the new currency reforms have February, which were described by entrepreneur Strive Ma- brought about some volatility on the markets siyiwa as housekeeping. as well as a liquidity crunch on the ZSE, one Still, this leaves the market’s organic turnover by June fundamental observation that we have made is this year at around $800 million, which is still way ahead of that stock prices have declined significantly in last’ year’s turnover during the same period of only $312,1 real terms and the market is looking ‘cheap’,” million. the company said in a research note. The market’s momentum has, however, been arrested by “We have done a comprehensive analysis the reintroduction of the Zimbabwe dollar and the scrapping by comparing ZSE United States (US) dollar of the multi-currency regime, which took effect on June 24. prices as at June 2018 with US dollar prices After a strong rally stretching over 12 weeks, the stock ZSE-listed firms have suffered a string of losses triggered by the return of the Zimbabwe dollar. as at June 2019 and 42 out of the 52 counters market has succumbed to a string of losses. studied have declined in real terms. There had This also comes as measures put in place by the central been no fundamental changes in company busi- The stock market capitalisation-to-GDP valued and there is scope of a re-rating,” the bank to support the currency changes, seem to have pacified ness models. The only variable has been the ratio is a ratio used to determine whether an equities firm said. market activity in the economy in general. exchange rate which has moved significantly.” overall market is undervalued or overvalued Meanwhile, Morgan & Co maintains that As part of the measures, the central bank placed a three- Since June 24, the official exchange rate compared to a historical average. The index is investors on the Zimbabwe capital markets month vesting period on dually-listed counters. for the local unit against major currencies has known as the Buffett Indicator—after Ameri- should continue to seek value preservation op- Fungible stocks can be bought or sold on one market soared from levels of around 1:6 to about 1:9. can investor Warren Buffett, who popularised portunities. or exchange, and then sold or bought on another market or This came after the central bank, as part of its use. “Whilst real assets such as property and exchange. According to the Zimbabwe Stock Exchange, measures to support the currency changes, re- “We have also compared the ZSE with other commodities provide a hedge against inflation- shares of firms affected by this move include those for Old moved administrative limits on the operation of regional stock exchanges, using market cap as ary pressures and the ZSE remains a feasible Mutual, PPC, Seedco International, ART Corporation, Caf- bureau de change and on the cap on margins a percentage of GDP. Our findings are that the avenue. Well managed net exporters or compa- ca, Meikles and NMBZ Holdings. for banks for interbank foreign exchange trans- ZSE market cap expressed as a percentage of nies with significant export potential continue Analysts say this promises to reduce “speculative trading actions. GDP is amongst the lowest at 9,6 percent. The to provide value preservation opportunities to of fungible stocks”, which is said to have been one of the Morgan & Co further said it went on to ap- regional average is 16,3 percent. This analysis investors with a long-term perspective,” the eq- major driving forces behind the unprecedented activity on ply the Buffet Indicator to verify the position. confirms our view that ZSE stocks are under- uity firm said. [email protected] the local bourse lately. [email protected] Page 14 | July 18-24 2019 The Financial Gazette Companies & Markets Foreign investors dominate CSD market

Nelson Gahadza Musiwa noted that turnover on the opened in June 2019. Business reporter equities market increased to $235,594 “Local investors still account for 94 percent of CSD million from $119,524 million that was accounts while foreign accounts account for six percent,” HENGETEDZAI Depository Company (CDC) recorded in May 2019. he said. says market value of securities on its trading plat- He said CSD received and processed However, Musiwa said the obligation to implement Cform increased by 8,19 percent to $12,4 billion in 3,708 ZSE trades in the month of June the Reserve Bank of Zimbabwe (RBZ) directive on trad- June from $11,4 billion in the previous month. 2019, bringing the total number of trades ing of dually listed shares is placed on authorized dealers. Campbell Musiwa, the company’s chief executive, processed in 2019 to 11,877. On June 24 2019, government gazetted Statutory In- said foreign investors account for 25 percent of the total “CDC also processed 583 securities strument 142 of 2019, which effectively abolished the market value on the Central Securities Depository (CSD) deposits during the month under review multi-currency regime which was established in 2009 at $3,1 billion, followed by corporate investors at $3 bil- and the cumulative number of securities and reintroduced the Zimbabwe Dollar as the sole legal lion, accounting for 24,68 percent. deposits processed since going live is now tender in the country. “Insurance and Pensions funds also account for a at 82,773,” he said. This was immediately followed up with a directive significant share of total securities placed on the CSD at Musiwa noted that the number of se- from the central bank on the trading of dually listed $2,773 billion and $2,382 billion respectively. Deceased curities on-boarded on the CSD remained shares which introduced a vesting period of 90 days be- Estates, Unclaimed shares and trusts accounts for $688 unchanged as there were no new listings fore buyers of dually listed securities are allowed to sell 000, individuals and unit trusts at $293 000 and $51 000 on the ZSE, but efforts to introduce new the shares they would have purchased in these dually list- respectively,” he said. products and engage potential new issu- ed companies. During the month under review, ZSE market capital- ers regarding on-boarding their securities Affected companies include ART Holdings, CAFCA isation recorded a gain of 11,9 percent to $27,885 billion continue. Limited, Hwange Colliery Company Limited, Meikles up from $24,920 billion in May, while dematerialised He said the total number of accounts Limited, NMBZ Holdings Limited, PPC Limited, Old securities accounted for 45,3 percent of the market cap- opened on the CSD increased to 27,607 Campbell Musiwa Mutual Limited and SeedCo International Limited. italisation. after a total of 180 new accounts were [email protected] Paynet saga drags down Cambria shares Omega Ukama Business Reporter

AMBRIA Africa’s (Cambria) share price fell to a three-year low in June after its subsidiary Pay- Cserv Zimbabwe (Payserv) had an impasse with local banks over fees. The Zimbabwe-focused investment company’s share came off 46 percent on the London Stock Exchange be- tween May 10 and June 13, 2019, to settle at a price of £0,0065 (US$0,0082). And of these loses, the major portion was incurred on 11 and 12 June. Samir Shasha, Cambria’s chief executive, said the company took the decision “to protect its contractual position with those clients to receive its payments for its Paynet software platform in United States dollars as it is concerned about the devaluation of the local Zim- babwean dollar”. The investment group’s stock price has not recov- ered much since mid-June, with signs pointing away from a restoration of banks’ partnership with Paynet. Payserv’s achieved revenues of $7,57 million in 2018 after Paynet processed nearly 30 million transac- tions and over $70 billion in value. On the other hand, the group’s only other notable business, chemicals company Millchem Zimbabwe, re- corded revenues of $1,87 million during the same peri- od as it achieved its first profit in over four years. Meanwhile, the central bank says a new bulk pay- ment platform being developed by Zimbabwean banks will go live at the end of this month. “Banks are working on a fully pledged bulk pay- ments system which will go live by the end of July,” William Kavila, the Reserve Bank of Zimbabwe’s di- rector of economic research said recently. “Banks are currently using other forms of payments like ZIPIT and the Real Time Gross Settlement Sys- tem,” he said. In the meantime, Cambria has been riling banks’ temporary solution to the situation as it has — on more than one occasion — questioned the security of bank’s payment processes since it switched off its services. “Cambria believes this has exposed the banking sec- tor to significant security and privacy risks. It- under stands banks are currently managing payments using manual spreadsheets sent by email and flash drives - much of this information is unencrypted or insufficient- ly encrypted,” the company said recently. Following Payserv’s discontinuation of service to lo- cal banks, some salary payments for the month of June were delayed, while the National Social Security Au- thority delayed June payments to some pensioners due to the service disruptions. And although the group says it has continued to en- gage individually with suspended banks as well as the central bank to find a solution to the standoff, which has resulted in the suspension of services, it has instructed its legal practitioners in Zimbabwe, to commence legal action against the Bankers Association of Zimbabwe and related parties for anti-competitive practices seek- ing damages of US$100 million. [email protected] The Financial Gazette July 18-24 2019 | Page 15 Companies & Markets ‘Power cuts a boon for Econet’ Adelaide Moyo leading to reduced energy costs. Business Reporter Econet’s Distributed Power Africa (DPA) gained momentum in full year 2019 with projects totalling CONET Wireless Zimbabwe (Econet)’s revenue 3MW out of 7MW already being commissioned, de- is expected to be spurred by an increase in mo- spite the business requiring foreign currency to import Ebile data consumption due to crippling power solar panels and associated infrastructure. cuts and high Wi-Fi costs, an equities firm has said. The firm has also commissioned a total of 116 solar Zimbabwe is currently facing debilitating power powered sites including a 466KW solar power plant at shortages of up to 20 hours a day emanating from low the Willowvale industrial complex. investment in the energy sector. IH said it projects revenue for full year 2019 to IH Securities (IH) said Econet’s growth in the short- be up 41,4 percent year-on-year to $1,14 billion and term will be spurred by increased consumption in mo- EBITDA to surge 28,5 percent year on year to $571,66 bile phone usage as people are less inclined to use other million. media platforms such as TVs, PCs and radio given fuel The Postal and Telecommunications Regulatory shortages and exorbitant prices of solar gadgets. Authority of Zimbabwe (Potraz) latest report howev- “We anticipate revenue growth to remain hinged on Zimbabwe is currently facing debilitating power shortages of up to 20 hours a day. er shows that the country’s mobile network operators mobile data consumption, which is anticipated to re- (MNOs) recorded a 12 percent decrease in revenue to main fairly robust, given elevated Wi-Fi costs and cur- the year ended February 28, 2019 from Although the recent power cuts have $249,88 million during the first quarter of 2019, down rent headwinds in ZESA’s power supply and distribu- $573,845 million achieved in the previ- led to some disruption in connectivity, from $287,03 million recorded in prior comparable pe- tion,” the equities advisory firm said in a research note. ous comparable period. Econet’s operations have not been se- riod. The country’s largest mobile network operator re- Voice contributed 54 percent to rev- verely impacted due to the availability Potraz said all MNOs recorded a decline in reve- coded a 41 percent increase in revenue — excluding enue while data contributed 27 percent of uninterrupted renewable energy at nues, with Econet recording the biggest decline of 15 demerged operations — to $808,741 million during and SMS contributed eight percent. base stations and other operating sites, percent. [email protected] Caledonia offers to pay for electricity in forex Adelaide Moyo Business Reporter

ALEDONIA Min- ing Corporation CPlc (Caledonia) says it will engage au- thorities to pay for elec- tricity in foreign currency as part of efforts to get stable power supplies. Zimbabwe needs about 2 200 megawatts (MW) of electricity at peak consumption but Fortune Chasi is generating just below 1 000 megawatts, while relying on imports to fill the gap. Due to ageing equip- ment, power generation is often disrupted following breakdowns. In most cases, the generators operate below capacity. In recent months, Zimbabwe has been failing to import power from nearby countries after major electricity sup- pliers in the region turned off the switches over non-pay- ment of dues Mark Learmonth, Caledonia’s chief financial officer, said the resources group cannot afford to leave the elec- tricity situation unaddressed. This comes as Caledonia’s Zimbabwean unit, Blanket Mine (Blanket) gold production was 3,4 percent down for the first half of 2019 at 24 660 ounces compared to the 25 582 ounces produced in prior comparable period. “The solution is to engage with the electricity provider in Zimbabwe to see what we can do to help them to reme- diate the old equipment so they can improve the quality of the power that we get. We also want to engage with them as we are happy to pay in foreign currency, we see no reason why we shouldn’t be willing to do that. It might help them,” he said. “We are spending a half a million dollars on more gen- erators to make sure that we have capacity for production and continue working on the central shaft uninterrupted. We continue to evaluate solar. It is another alternative so we need to finish our evaluations.” This comes as Energy minister Fortune Chasi said exporting mining firms can enter into foreign curren- cy payments arrangements with Zimbabwe Electricity Transmission and Distribution Company (ZETDC) on a back-to-back arrangement with regional utilities to enable the utility to secure more imports. The country is currently reeling from crippling power cuts of up to 20 hours a day, affecting productive sectors. Meanwhile, Caledonia said Blanket mine remains on track with progress towards its target of 80 000 ounces of gold by 2022. Steve Curtis, chief executive officer, said gold produc- tion at Blanket increased 6,4 percent to 12 712 ounces during the quarter ended June 30, 2019 compared to 11 948 ounces produced in previous comparable period. “Production in the second quarter of 2019 was slightly below our target but ahead of the comparable quarter in 2018, and still at a level at which we remain comfortable with our 2019 production guidance of 53,000 to 56,000 ounces for the full year,” he said. [email protected] Page 16 | July 18-24 2019 The Financial Gazette

Poor infrastructure hampering agriculture

Tabitha Mutenga Agricultural Society revealed that poor anchoring the country’s production and percent of the productive land have not been able to in- Features Editor infrastructure inflate cost of production, productivity. vest in infrastructure and farm equipment thus confirm- which leads to increased prices of agri- “Discussions with key stakeholders ing observations made by the Ministry of Agriculture OOR infrastructure has been identified as one of cultural products. reveal that the country’s agricultural in- that agricultural investment sharply declined over the the top snags affecting competitiveness of agricul- The study, funded by CBZ Bank and frastructure is in a poor state, poor road past 18 years,” read part of the report. Ptural business in Zimbabwe, a new study reveals. conducted by the Africa Economic De- networks and abundant unutilised water In terms of irrigation infrastructure, the country has The Agriculture Sector Survey commissioned by The velopment Strategies, noted that a ro- bodies for irrigation. It was also evident an estimated 70 000 boreholes including non-function- Financial Gazette in partnership with the Zimbabwe bust agriculture infrastructure is key in that smallholder farmers who own 73 al boreholes and has 7 500 registered and unregistered dams. Overall, the survey noted that the country’s irrigation infrastructure is in a poor state manifested through the use of antiquated irrigation equipment and lack of main- tenance by farmers. “Some of the key informants pointed out that in- vestment in agricultural infrastructure has been on the decline because of the nature of the new agrarian stake- holders who do not prioritise in reinvestment of proceeds to develop farms, farming areas and the community at large,” the study said. Investment in irrigation infrastructure has not been realised over the past 18 years and some of the infra- structure availed through government programmes lies idle at farms. Poor schedules for repairs and mainte- nance have left the sector with little functional irrigation equipment. Besides the irrigation infrastructure, Zimbabwe has 87 Grain Marketing Board (GMB) depots with com- mercial storage capacity of 4 782 500 tonnes (bulk and bags). However, the study noted that the GMB silos are in bad state and require refurbishment. For the livestock industry, the country has 3 851 dip- tanks and the highest number of dip tanks was in Masv- ingo with 701 dip-tanks. “The study noted that whilst dip tanks are key infra- structure which is aimed at controlling ticks and tick- borne diseases, it was noted that farmers have lost a significant number of their cattle due to tick related dis- eases in Mashonaland East, Mashonaland West, Mash- onaland Central and other parts of the country. This has been mainly due to lack of implementation of policies that ensure that cattle are dipped often as outlined in the regulations.” With respect to abattoirs, the study discovered that there were 165 abattoirs in the country and of these 145 had renewed their registration to operate in 2018. Also, information gathered during the survey also indicated that for the agriculture sector to prosper there should be an established road network to easy the trans- portation of inputs and produce. In that regard, respondents suggested that a road fund be established for rehabilitation and maintenance of farm strip roads, communal roads and construction of new roads in newly resettled areas. The survey suggested that the country’s infrastructure gaps, which ranges from deficits of irrigation equipment, combined harvesters, tractors, roads, silos, rehabilitation of dams can be financed through government own initia- tives and public private partnerships. [email protected]

GMB silos are in bad state and require refurbishment. The Financial Gazette July 18-24 2019 | Page 17 Companies & Markets Edgars moves to increase interest rates Adelaide Moyo due to inflation and the increased cost of percent below the levels recorded in previous compara- Business Reporter borrowing.” ble period while retail sales as at end May trading were The clothing retailer’s year to date 90 percent above last year against inflation of 97 percent. DGARS Stores Limited (Edgars) says it is increas- profit after tax increased to$8,7 million to The retail business posted an operating profit of $14 ing interest rates charged on customer accounts May 2019 from $1,3 million recorded in million up from $3,8million in previous comparable pe- Edue to inflation and the increased cost of borrow- previous comparable period. riod and a 365 percent growth in EBITDA, mainly due to ing. Earnings before interest, tax, depre- continued focus on cost control by the management team This comes as the Reserve Bank of Zimbabwe (RBZ) ciation and amortization (EBITDA) in- and cost inflation trailing behind top line inflation. has hiked interest rates to 50 percent per annum from 15 creased by 524 percent to $16,3 million. Masterson said retail stock grew by 95 percent over percent to discourage speculative borrowing. Masterson said turnover was up 90 last year to $24,5 million. The listed clothes retailer last week said trade debtors percent on last year but unit sales de- “The factory has made a year to date trading profit of increased by 59 percent to $33,2 million during the five creased by 16 percent with recent im- $1,5 million, 41 percent above last year. Unit growth was months to May 2019. provement for the Jet chain with positive a 12 percent increase from last year. Six percent of the Linda Masterson, Edgars’ group managing director, unit growth for April of six percent and sales were exports. The team continues to focus on export said the number of accounts at the end May were 285 016 May at 10 percent. growth,” she said. compared to 269 190 reported in previous comparable Edgars posted a six percent unit The Edgars boss said for Club Plus, the loan book has period with 52 percent being active. growth in May. grown to $5,5 million from $2,2 million last year and “Our debtors’ book is at its cleanest since dollarisa- The group’s June turnover was trend- has posted a year to date trading profit of $0,5 million up tion, credit goes to our credit teams and our customers for ing above 200 percent over the prior year from a loss of $29 000 last year. their timely payments,” she said. until the announcement Statutory Instru- Masterson said the book is clean with non-performing “We continue to reap the benefits of enhanced con- ment 142 after which growth slowed loans of 31 days plus at 6,1 percent at the end of May trols from our ERP solution. We are in the process of down to around 100 percent. Linda Masterson 2019, adding that total borrowings increased to $9,8 mil- increasing interest rates charged on customer accounts Masterson said unit sales dropped 16 lion from $3,5 million last year. [email protected]

The Nairobi Securities Exchange has one of the most advanced infrastructure and vibrant markets in Africa. Kenya prioritises domestic savings

ENYA plans to prioritise use of domestic savings to fund development projects, a government of- Kficial has said. Nelson Gaichuhie, chief administrative officer at the National Treasury and Planning, told journalists in Nai- robi that use of local resources is a cheaper source of finance as compared to local and foreign loans. “The government will enhance fiscal incentives to encourage the expansion of the national savings rate,” Gaichuhie said during the launch of NEXT Derivatives trading at the Nairobi Securities Exchange (NSE). He said that a high investment rate will be depen- dent on the ability of the country to mobilise domestic savings. According to government data, the country’s saving rate stands at approximately 12 percent against a target of 30 percent. Gaichuhie added that the government is exploring a number of reforms that will accelerate the savings rate in the country. In 2017, the east African nation launched a mobile based government bond to raise local funds to finance infrastructure projects. Gaichuhie observed that the capital markets offers a viable alternative to raise both short and long term funds. “The capital markets also provide an avenue to pro- mote domestic savings by offering high returns on in- vestments,” he added. The Kenyan official revealed that the NSE has one of the most advanced infrastructure and vibrant markets in Africa. “If well utilised the capital markets can be a key driv- er economic growth and development,” he said. Gaichuhie said that Kenya’s capital market faces a number of challenges that affect other emerging market such as limited listing and a narrow investor base. — Xinhua Page 18 July 18-24 2019 The Financial Gazette Motoring Opel Corsa 120Y Special Edition Lots of equipment for a last hurrah!

(55-profi le) tyres that also contribute to a ride that still feels well-controlled and which fi lters out disturbances with TOP GEAR with aplomb, by the standards of the class. Richard Wiley In truth, the Corsa actually feels like a bigger car, so assured is its disposition on most surfaces. GUESS not too many people have Indeed, refi nement levels are most ever reached the ripe old age of 120 pleasing but coastal dwellers should years and not too many car manu- I note that the relatively lightweight facturers are still on the go after all that structure gets blown around a fair bit in time, so Opel’s SA importers decided coastal winds. Steering effort is well- to commemorate this signifi cant pas- judged in urban manoeuvres but in sage of time by dressing up its estab- common with many assisted systems, lished Corsa model. there’s a leaden feel around the cen- But before we get into the nitty-grit- tre position at motorway speeds when ty of the 120-year commemorative so little free play is present that extra model, let’s take a quick look at what’s concentration is needed to keep the car potting in the world of Opel, or more absolutely straight. especially, PSA. Industry-watchers The brakes, despite relying on drums will know that the PSA Group bought at the rear, work faultlessly, being pow- fl oundering Opel from GM a couple erful and progressive and their faultless of years back. The General frankly did performance is more than matched by not pay enough attention to its German the simply magical shift quality of the division, albeit that many of the models six-speed manual gearbox. There is no in the range were very worthy pieces better in my experience. of equipment, but most signifi cantly, it Relatively long rear door improves access to the rear If the Corsa 120 more than passes complicated production fl ows by mak- muster as far as driving characteristics ing too many variations that garnered are concerned, how does the rest of the too little market share. The result was package do? Well, the paintwork, bor- a swathe of red ink on the annual ac- ing old white on the test unit, sported counts. a good gloss and only limited orange Now red ink normally reduces the peel while panel gaps, with the ex- selling price which attracted the at- ception of a slight displacement of the tention of PSA and the rest is history. driver’s door, were all tight and even What is not history though, is the fact and the interior was not sullied by any that by pruning the model range, in- creaks or rattles. troducing shared platform architecture In my usual pedantic manner, I was and concentrating on bottom-line re- attracted by the unusually sturdy door turns, PSA has turned a profi t out of its latches which look far superior to the Opel division which is not something “bent wire” devices employed by al- I’d ever have predicted given that there most every competitor, but at the same appeared, initially at least, to be a fair time, I bemoaned the total lack of trim few model clashes in the pipeline. around the edges of the (inner) tailgate Just for the record, I heard that the and the fact that the back of the one- diminutive Adam is to be axed within a piece folding rear seat was devoid of year and the Zafi ra will not be replaced, any covering. The gloss black paint but as part of PSA’s PACE model plan, will soon be sullied with scratches and expect a slew of new models headed by so will the plastic-lined sides of the oth- the 6th generation Corsa which will be erwise carpeted boot area which offers built on shared CMP architecture that 265/1120l. was developed by PSA’s joint venture For all the nice extra equipment fea- partner in China, Dongfeng. Could this tured in this special edition model – and and the fact that the next gen Corsa will Rear knee room is good for the class. all of it works well notwithstanding an be built in Spain have triggered Frau infotainment screen that’s set too low Merkel’s shakes? – please note that electric windows fea- I make this tongue-in-cheek remark ture in the front only and that the only given that not long ago, the Opel brand soft-touch surfacing is to be found on was promoted as a pure-bred German the upper dash. The door cards tele- contender, but those days are history as graph their (hard) plastic origins rather the quest to maximise production syn- obviously but at least they are endowed ergies gathers momentum with little with useful receptacles. regard for geographic boundaries. The cloth-covered front seats fea- So, having got that history lesson ture infi nite recline courtesy of precise off my chest, let’s head back into Corsa “wheel control” rather than coarse “le- 120 territory and take a peek at a car ver control” and are well-padded but that unashamedly trades on its orig- too short in the under-thigh area which inator’s history. A rather cheap 120 tends to transfer too much strain onto badge adorns the fl anks of this model the lower lumbar region. These short and tells onlookers, if they get close cushions doubtless exist to liberate rea- enough to see the badge, that a host of sonably generous rear knee room for extra equipment has been lavished on two adult occupants or three kids at a the small hatchback which started life push. as an Enjoy-spec model. Other niceties include electric door Take a deep breath and see what mirrors, air con, power point and USB you are being offered for your money: socket and lights that are thankfully front/rear park assist plus rear camera, operated by a rotary switch. The instru- ABS/ESP/HAS, side and curtain front ment cluster, a mix of analogue (with airbags in addition to the usual front poorly executed graphics) and digital, fi tments, ISOFIX rear mountings, re- provides plenty of information to keep mote central locking, alarm/immobil- the driver happy. iser, Intelli-link infotainment unit with Preponderance of black is relieved by shiny detailing. Overall, the Opel Corsa 120Y edi- Apple Car Play and Android Auto driv- tion provides a host of extra equipment ing six speakers, 16-inch alloys with to the latter, actually do a remarkably peppy and it’s no problem to maintain of urban running, is much more realis- within a package that remains very 195/55R16 rubber, Allure cloth trim, effective job of keeping the Corsa on 120-plus out on the motorway when tic and telegraphs to an extent that the good to drive, even in its twilight years. chrome window line mouldings, spe- the boil. any mechanical commotion fades into motor has to work harder than its rel- The fact that all the goodies come at cial door sill plates and branded fl oor As with all very small displacement, obscurity. atively subdued aural output suggests. a discounted price makes this specifi c mats. forced-induction engines, not much As for fuel consumption, unless you That lack of mechanical distur- model even more attractive but wheth- With all that equipment to lug happens below 2000 rpm, but once spend your entire existence out on the bances is complemented by good er all those trinkets will be enough to around, you might expect the Ger- that obstacle is breached, the motor open road at under 100 clicks, you’ll suppression of wind-generated noises lure conservative South Africans away man-designed 3-cylinder 1.0 turbo mo- takes on a pleasant and not especially not achieve the published combined while road roar is acceptably well-con- from their historically favoured brands tor to struggle but the 66kW/179Nm obtrusive off-beat thrum. In a lightly fi gure of 4.6l/100km. My overall fi g- tained, doubtless partly as a result of is a moot point. outputs, with most of the credit going laden state, the acceleration feels quite ure of 7.1l/100 which contains a fair bit the fi tment of relatively deep-walled The Financial Gazette July 18-24 2019 | Page S1 2018 ZIM northern region winners HE Zimbabwe Institute of Management (ZIM) Leadership Excellence Awards are Ta prime event where recognition is given to business leaders for exceptional performance in the previous year. Present at the event are decision makers from both the private and public sectors, that is com- pany directors, business executives, senior man- agers, chief executives, members of the institute, policy makers, legislators, government execu- tives, strategists and experts from various fields. The accolade was introduced in 1978 through a donation and sponsorship by Kurt Kuhn, an expatriate managing director at Ziscosteel. The first recipient of the award was. J. Fraser, the 10th general manager of Bata Shoe company. Since then several well-known managers in Zimbabwe have been recipients of special awards. The awards are available for presen- tation each year to personalities who, in the Businesswoman of Year winner: Mandas Marikanda, Marianhill CA founder and managing partner, Manyara Chigunduru also opinion of the institute, have made outstanding Zimbabwe Women’s Microfinance Bank CEO. walked away as Businesswoman of the Year runner-up. contributions to management and leadership in Zimbabwe. An independent adjudication panel set up by the Council of the Institute adjudicates on nom- inees’ submissions and declares the award win- ners in various categories namely: l Private Sector Leader of the Year Award l Public Services Leader of the Year Award l Small to Medium Enterprises Leadership Excellence Awards l Young Leader Leadership Excellence Awards Award l Business Woman of the Year Award l Business Man of the Year Award l Regional Contribution Award l Customer Service Excellence Award l Most Influential Leader Award The Zimbabwe Institute of Management is a non-profit making organisation with over 60 years of offering management and leadership de- velopment. The awards identify business leaders in the country that have exceeded targets within their organisation and within the sector they op- erate in. The Leadership Excellence Awards are con- ducted at regional and national level. That is a participants contest for awards in the northern region and southern region. To Page S2 Page S2 | July 18-24 2019 ZIM NORTHERN REGION AWARDS CONGRATULATORY SPECIAL FEATURE The Financial Gazette 2018 ZIM northern region winners

From Page S1 Winners will then compete for the 2018 National Leadership Excellence Awards to be held on July 26, 2019 at the Rainbow Towers in Harare. On behalf of the ZIM Council, manage- ment and staff, I wish to thank all the nomi- nees for their submis- sions as well as to con- gratulate all winners for their outstanding achievement in the year 2018. Small to Medium Winner: Simon Tak (Snow White) Runner-up: Rams Security Regional Contribution Winner: Econet Businesswoman of the Year Businesswoman of the Year runner-up Winner: Mandas Dr Eve Gadzikwa. Marikanda (Zimbabwe Women’s Microfinance Bank) First runner-up: Mercy Manyara Chi- gunduru (Marian Hill Chartered Accountants) Runner-up: Dr Eve Gadzikwa (SAZ) Young Leader of the Year Winner: Rinos Mautsa (CiCM) Runner-up: Aux- illia Dzenga (Moon- light) Second runner-up: Arthur Marara (Clair- wood Chambers) Private Sector Winner: Cell Insur- ance Runner-up: Rams Security Customer Service Excellence Winner: Peace Secu- rity Zimbabwe Institute of Management Runner-up: TiB In- CEO Godfrey Sunguro surance Brokers

Young Leader of the Year winner, Rinos Mautsa. The Financial Gazette ZIM NORTHEN REGION AWARDS CONGRATULATORY SPECIAL FEATURE July 18-24 2019 | Page S3 Page S4 | July 18-24 2019 The Financial Gazette

Mine Entra kicks off in Bulawayo HE 24th edition of Zimbabwe’s premier, mining, theme, “Resourcing the Future: Exploring and Leverag- engineering and transport showcase, Mine Entra, ing Mining Potential.” Tkicked off yesterday and ends tomorrow under the The focus of the show will be on facilitating discus- sions on harnessing the country’s mining potential, iden- tifying and kick-starting the catalytic actions necessary for progress on sustainable exploration, mining, process- ing, marketing and management of mineral resources for the benefit of all Zimbabweans. The Zimbabwe International Trade Fair Company, the organisers of the annual event, expects the three days of the show to be characterised by high-level engagement, profitable networking and on-site deal-flow. To this end, the Mine Entra event diary will feature different knowledge-sharing platforms that seek to add further impetus to the national drive to make mining a catalyst for inclusive economic growth, now and into the future. Key highlights of this year’s event Women in Mining Conference and Young Profession- als Forum held yesterday: The two conferences high- lighted the available opportunities for women and youth throughout the mining value chain, enabling each group to achieve its full potential and contribute positively to Zimbabwe’s sustainable economic development. The main Mine Entra Conference, taking place today will spotlight government’s policy initiatives for crafting an enabling environment for mining sector growth. Mines and Mining Development Minister Winston Chitando will deliver the keynote address. The minister will also be presenting awards to the winning displays during the official opening cocktail. Other ministries that will be taking part through the Mine Entra Inter-ministerial Roundtable are Transport and Infrastructure Development, Industry and Com- merce, Energy and Power Development as well as Fi- nance and Economic Development. Other networking platforms that will take place during the show are as follows: Friday July 19: Zimbabwe Miners’ Federation Con- ference ― a targeted platform for small-scale miners to engage with their policy makers, suppliers and service providers to discuss specific challenges and opportunities within their sector. This year’s conference will focus on enhancing the ease of doing business for the sector. Friday July 19: Charity Golf Challenge ― hosted by Bulawayo Golf Club, the tourney offers participants an opportunity to make valuable contacts in a relaxed set- ting. Over 200 exhibitors confirmed their participation in this year’s show, occupying over 5 600 square metres of exhibition space. This represents approximately 80 per- cent of the space made available for sale. Of these direct exhibitors, five are foreign, coming from the People’s Republic of China, Kenya, South Af- rica, South Korea and Zambia. In terms of local participation, 64 percent of the con- firmed exhibitors are from Harare while 29 percent will come from Bulawayo and the remainder from other cities. This year’s exhibition will feature an interesting and varied product mix appealing to both large and small- scale mining operations. Some of the other products on display include detec- tion and lifting equipment, chemicals and explosives, compressors, protective clothing and equipment, seals, bearings and gears, drones, as well as medical aid, insur- ance and security services. The exhibition will take place in Halls 3 and 4 as well as the surrounding external sites. Participants are encouraged to download the Mine Entra 2019 mobile application to access information on event programmes and updates. This tool will help partic- ipants plan their days more efficiently. The ZITF Company board and management would like to thank the following sponsors and partners for their part in putting this show together: Catering Solutions, Consha Enterprises, Directory Publishers, FC Platinum, Fidelity Printers and Refiners, Mimosa Mining Compa- ny, Mining Industry Pension Fund, Minerals Marketing Corporation of Zimbabwe, Young Miners Foundation and Tsebo . The Financial Gazette July 18-24 2019 | Page 19 Column Right way to design organisational structures

RGANISATIONAL structures speak to the way subordinate. Another scenario that may emerge for a higher level of work complexity when they the ratio between core business staff and people are organised to get the work done. It from the above analysis is where the gaps do not have such capacity. In some instances, support function staff. As you clean up your Ocovers reporting relationships, individual authority, between manager and subordinate in terms of you may find that a person placed at Level 3, structures make sure there are no one on one and responsibilities. In practice, we notice that most work complexity is huge. In such a case the for example, has the capacity for Level 5 roles. reporting structures or managers with only one organisations are not structured to get work done. Instead, manager will fail to give context and direction Such individuals, if they are not recognised and subordinate. Such practices are normally an hierarchies are created to pay people and show who has to the subordinate’s work, resulting in poor given a clear career path, may end up leaving indication of fault organisational structures. more power. Because of this anomaly, most organisations performance. the organisation due to frustration. The key While organisational structures are important are not structured optimally to support the organisation’s Another crucial step in the design of question here for executives is: How many in enabling work to be done efficiently, they mission and vision. structures is to then match the individual people in your organisation are placed in roles are not enough to drive sustainable business The first step in designing organisational structures capacity to the level of work complexity in for which they have no capacity? performance. As part of this process, you is to assess the complexity each role. This is where the major challenges Once the issues raised above are addressed, would need to pay attention to individual of the value chain. Over and are encountered. it matters very little whether your structures employee workload, pay, systems and more above the complexity of In the majority of cases people are placed are based on function, product or geographical importantly the culture of the organisation. the value chain, you need a into roles beyond their capacity (cognitive location or a mixture of these. No matter how much you play around with deeper understanding of the capacity). Once that happens, for example, Traditionally structures have been done the structures, you won’t achieve much if the organisation's vision, mission, you will find a person assigned to a Level 4 based on function without due attention being additional components highlighted above are and strategy both in the short role when their maximum capacity is at Level paid to the issues raised above to the detriment not addressed. to long term. Check how the 2. This individual will pull the role down to of the organisation. l Nguwi is an occupational psychologist value chain and strategy aid Level 2 where they feel comfortable operating. The other important areas to look at once and managing consultant with Industrial in the delivery of value to Besides the confusion such individuals bring to the above issues have been addressed are Psychology Consultants. He writes in his the customer. The structure your business you lose money by paying them the average span of control per manager and personal capacity. HR Perspective must predominantly follow with your value chain and be Memory Nguwi underpinned by the need to serve your customers. Once this understanding is established you need to place the organisation into Levels of Work, which ranges from Level 1 (low complexity) to level 8 (very complex value chain). This will help you determine the number of management levels required in the organisation. Most structures start in Level 4 to Level 8. When I assess most organisations in Zimbabwe, they do not exceed Level 5 in value chain complexity. This means very few organisations in this country should have more than five management levels (from the lowest employee to the chief executive). If your organisation has more than five levels it is very likely, you are not optimally structured. The classification of your organisation into the appropriate level ensures that you place your chief executive into the right level of work complexity. The next step is then to place each job into the right level of work complexity. This should be based on a thorough understanding of what each role entails. Once this has been done properly, you may notice that in some instances the manager and subordinate fall into the same level of job complexity. That is a recipe for disaster. In such a case it’s very likely that the manager and subordinates will be fighting for control of certain tasks or the manager will end up macro managing the Nigeria orders banks to lend more money N AN effort to boost economic growth in Africa’s most-populous country, Nigeria is giving its banks a Ichoice: lend more money, or hand it over to the central bank and earn nothing on it. Banks should use at least 60 percent of their deposits for loans by the end of September, the central bank said last week, according to a circular seen by Bloomberg. Those that don’t will have their cash-reserve requirements increased, meaning they’ll be forced to park more money at the central bank. Nigeria’s banks are some of the most reluctant lenders in major emerging markets, with an average loan-to- deposit ratio below 60 percent. That compares with 78 percent across Africa, according to data compiled by Bloomberg. It’s above 90 percent in South Africa and about 76 percent in Kenya. The decision was taken “to ramp up growth of the Nigerian economy through investment in the real sector,” Ahmad Abdullahi, director of banking supervision, said in the letter to banks. “To encourage lending to small businesses and consumers and more mortgages, these sectors shall be assigned a weight of 150 percent” when computing the loan-to-deposits ratio. The Nigerian economy is struggling to recover from a full-year contraction in 2016 and will expand 2,1 percent this year, according to the International Monetary Fund. The central bank cut its key lending rate in March to help boost growth. There was previously no rule on minimum loan-to- deposit ratios, and many Nigerian lenders have ratios of about 40 percent, Abdullahi said by phone from Abuja, the capital. The order came after Central Bank governor Godwin Emefiele urged banks to boost lending or have access to risk-free assets restricted. Speaking at the most recent Monetary Policy Committee meeting in May, he said he would create “a mechanism” to limit banks’ purchases of government securities. Risk-averse Nigerian banks have resisted lending to businesses and consumers and instead piled their cash into naira bonds, which yield 14,3 percent on average, one of the highest rates globally. Lenders worry that with inflation at more than 11 percent, extending more credit could endanger the financial system through an increase in non-performing loans, or NPLs. - Bloomberg Page 20 | July 18-24 2019 The Financial Gazette Column Voluntary disclosure for pre-SI142 tax issues N THE period October 15, 2018 to June redundant because the country the Zimbabwe dollar through of up to 200 percent of the principal tax is charged. 24, 2019 government made a number of was already in a multi-currency Statutory Instrument 142 of Furthermore the commissioner-general is empowered Ichanges to the monetary policy with a regime. Synchronising the laws 2019 gazetted on June 24, to make an estimate of tax liability where none has been huge bearing on fi scal policy, particularly the for payment of taxes in foreign 2019 simplifi es and creates paid accompanied by associated penalties as aforesaid. payment of taxes. currency and the changes certainty in tax laws and their Interest is also charged at the rate of 10 percent per annum On October 15, 2018 it commanded the brought about by the monetary application. However, the whenever there is a delay in settlement of the principal opening of nostro FCAs, thereby separating instruments as aforesaid has not legacy issues caused by the tax. Late return submission civil penalties also exist. RGTS$ and foreign currency bank balances. been that easy. aforesaid distortion will remain Criminal penalties such as fi nes and/or prosecution are On February 22, 2019 through statutory The result has been diverse the sticking points going also imposed for disobeying the law. instrument (SI) 33 of 2019 the parity rate of interpretation of the law forward and it is not surprising Maximum penalties are ordinarily imposed by ZIMRA exchange between the United States dollar between the taxpayers and the the tax authority has gathered on any breaches of tax law that they would have unearthed (USD) and the RTGS dollar was removed. The Zimbabwe Revenue Authority Tax Matters much interest to audit this through their audits or investigations. Tax audits and SI further provided for the RTGS dollar to fl oat (ZIMRA), as well as amongst with period. A voluntary disclosure investigations are some of the key tax compliance and against the USD and other foreign currencies taxpayers. For instance, Marvellous Tapera much talked about within the enforcement tools employed by ZIMRA. Taxpayers who on the interbank market and for the conversion there is no consensus as yet ZIMRA corridors creates a wish to avoid the ZIMRA tax audit and investigation may of every enactment in which an amount is regarding the currency of PAYE tax tables i.e. perfect opportunity for a tax clean-up. opt for the voluntary disclosure programme. expressed in United States dollars into RTGS whether they are in RTGS$ or USD. ZIMRA Meanwhile, Zimbabwe remains one of ZIMRA has made voluntary disclosure an ongoing dollar at 1:1 basis on or after February 22, issued public notices to give guidance on the the high penalty jurisdictions regarding non- programme in order to promote tax compliance. 2019. These changes resurrected the tax laws application of the law for payment of taxes in compliance with tax laws. Failure to pay taxes Voluntary disclosure entails a confession by taxpayers for the payment of tax in foreign currency foreign currency but this still does not guarantee on time attracts up to 100 percent penalties on of their transgressions to a tax authority where they may where the underlying transaction is wholly or correct application of the law. Nevertheless, the principal amount and where the delay is as be granted full remission of penalties and fi nes in return. partly in foreign currency, which had become the move to mono-currency in the form of a result of an attempt to evade the tax, a penalty Besides avoiding penalties and fi nes, voluntary disclosure may help a taxpayer to be absolved from prosecution that could arise from the tax breaches committed. It also comes with more favourable terms to settle the principal amount. This leaves taxpayers with peace of mind to be able to focus on their core businesses. The programme applies across the board uniformly to individuals, trusts, not-for profi t organisations, partnerships, SMEs and large corporates are eligible for voluntary disclosure. The key factor in any voluntary “Voluntary disclosure disclosure is honest entails a confession and accurate by taxpayers of their ascertainment of the transgressions to a tax tax liabilities to be authority where they disclosed. Accurate may be granted full ascertainment of tax remission of penalties and liabilities requires fines in return. Besides the services of tax avoiding penalties experts to carry out and fines, voluntary compliance checks such as tax audits disclosure may help a and health checks taxpayer to be absolved and also assist in from prosecution that fi ling the voluntary could arise from the tax disclosure return breaches committed” with the authority. A health check involves a thorough examination of a taxpayer’s business transactions to determine if they have been afforded correct tax treatment. As mentioned above, the period October 15, 2018 to June 24, 2019 experienced a number of monetary policy instruments, some of them with a direct impact on the payment of taxes, thereby creating an opportunity for diverse interpretation of the law which in some cases would be at tangent with the ZIMRA interpretation or the tax law. There is no doubt that only a few taxpayers will come out of this period unscathed and there is great need among a number of taxpayers to institute corrective measures for a smooth transition into the post multi-currency period. The urgency for correcting the mistakes arises from more than one front. The transactions are still fresh and the records are still accessible. Secondly, we are reliably informed banks have given a window period for effecting transfers of foreign currency for purposes of settling tax payments regarding transactions that occurred prior to June 24, 2019 on which ZIMRA continues to insist payment of taxes in foreign currency where the transaction was wholly or partly in foreign currency. Further, the same period has already been tagged by ZIMRA as the tax risk period and the authority will be in full force doing comprehensive tax audits and investigations of the period for purposes of unearthing any tax anomalies whist the transactions are still fresh. In conclusion,the introduction of the Zimbabwe dollar will bring sanity to the laws on paying of taxes as these will be required in a mono currency except for some exceptions. It will be unfortunate for those that will be found wanting because they will still be required to remit tax and associated penalties in foreign currency in respect of transactions in foreign currency occurring within the aforesaid period when at that time the foreign currency will not be easily accessible. Heeding to the call to carry out tax reviews or health check to enable truthfully voluntary disclosure spares taxpayers from the wrath of the commissioner-general and gives an opportunity for a clean slate entering into the mono-currency regime. Declaration is important now when the tax authority has no knowledge of the undeclared assets. As soon as it starts asking questions, it is no longer possible to benefi t from the unpunished voluntary disclosure rules. Meanwhile, Matrix Tax School will be hosting its 2019 Tax and Business Interface Week in Nyanga from October 9 to 12, 2019. This issue among others will be discussed at the conference.  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 July 18-24 2019 | Page 21 Column Power of rehabilitative leadership AM an ardent church-goer in my old neighbourhood l Identify derailers and manage them ― l Equality perception: Eric Berne in his where the congregants are a close community 30 choir members out of a prison population Psychology of Win-Win coined the theory of I because 12 years ago they were mobilised to raise of possibly thousands would face many “I am Ok and you are OK” which endorses a significant funds to build the church, which opened nine discouragements to pursue their hobby. They feeling of equality among people irrespective years ago. It is a notably affluent neighbourhood with side-stepped them to focus on gospel music. of class, race, ethnicity or culture. a prison within a kilometre of the church. The prison is l Enhanced self-awareness: Through l Goal-orientation: These choir members categorised as a medium security correctional service systematic training, potential leaders individually set their higher order goals for incarceration institution, meaning that the inmates are strengthen their self-insights, which serve as self-building, transformation and change. not such serious offenders warranting heavy sentences propellers for further learning discipline. They trained hard and long to achieve the nearing capital punishment. l Interpersonal skills upliftment: There competitive standard required. Our church developed fellowship with the prison Executives Only Corner cannot be a more potent force for human This experience goes a long way to prove through its chaplain and our members regularly take interaction than one being a member of a the ingenuity of human mind for self-renewal with the Christian ministry there. Recently, the two parties distinguished choir of such a large and varied provided there is leadership support for the Shepherd Shonhiwa arranged an occasion which dawned on me as the institution. rehabilitative process. As observed by Roger epitome of the power of rehabilitative leadership in collectively they have and are undergoing the l Morale and self-motivation: This group Mowen, Snr VP of Eastman Chemical, “What practice. following societal leadership qualities: had the freedom to attend a church service I have come to learn is that . . . people are far Our church leadership invited the prison gospel l Identify competency and excel in it. outside prison, interact with a largely varied more capable than we think. If you just give choir comprising 30 men under the leadership of Their individual competence is singing, society for the limited period and enjoy them the ball and help them as they run with their chaplain and wardens. They were immaculately which they perfected to gospel, perhaps as a semblance of free life. The real morale it, you’ll be surprised almost every time.” dressed in off-white colour shirts and black trousers. repentance for self-healing or carving out booster should be the fact that their guardian l Shonhiwa is a chartered director (SA) The front row of 15 had beige neck ties and the back a post-incarceration occupation. Both are warders were very obscure so as to project and has authored books on leadership. He row wore red ties, which formed a positive contrast. positive initiatives. the choir members. writes in his personal capacity. They all exuded dignity and humility which can disarm the worst critic of human character. Among the five songs they sang in the limited time both in their vernacular and English, two stuck in my mind. One was the rendition of the Lord’s prayer in song and the other was about the omnipotence of the Lord as ― father of the orphans, healer of the sick, feeder of the hungry, husband to the widows … etc. The voices were powerful, backed by a swaying African dance that gave a sense of rock to the prayer, totalling to an unbelievable show. Power of acceleration pools: Theory points to the fact that leadership is solidified by the catalytic support of surrounding groups like the immediate society, authoritative officials and colleagues of the aspiring leaders. The critical mass of these hands-on deck ensures sustainable change and progress in the leadership trainees. These are the leadership multipliers which I witnessed that Sunday morning, bearing testimony to the self-leadership journey that the 30 prisoners had traversed during their incarceration. Individually and AB InBev’s IPO turns sour HE share price of Anheuser-Busch InBev (AB InBev) fell almost two percent on the JSE after the Tbrewer announced that it was not proceeding with the initial public offering (IPO) of a minority stake in its Asia-Pacific subsidiary, Budweiser Brewing Company Apac on the Hong Kong Stock Exchange. The world’s largest brewer said it shelved the IPO on Friday due to several factors, which included the prevailing market conditions. A successful IPO would have given Budweiser Apac a market capitalisation of roughly $54 billion to $64 billion, according to market analysts. The group expected to raise as much as $9,8 billion by selling the stake in its subsidiary and help to reduce its debt. The debt escalated when AB InBev acquired South African brewer, SABMiller, for $100 billion in 2016. The group cut its dividend by half in October last year in an effort to save $4 billion to pay down its loans. However, the group, which owns brands such as Corona, Budweiser and Stella Artois, said yesterday that it might evaluate its options in the near future. The group has more than 500 brands across the globe. “The company will closely monitor market conditions as it continuously evaluates its options to enhance shareholder value, optimise the business and drive long- term growth subject to strict financial discipline,” the group said. Jordan Weir, a trader at Citadel, said first and foremost the cancellation of the Asian IPO will impact the duration of the expected settlement period of the company’s debt burden which was largely brought about by the purchase of SABMiller in 2016. “Although the IPO was not necessarily pivotal in paying off AB InBev’s debt, it certainly would have helped. “The negative movement in the company’s share price means that the company has lost some short- term investor confidence as well as the opportunity to potentially increase its level of liquidity,” Weir said. He added that the fall in the share price yesterday morning was the kind of a reaction seen when investor confidence takes a knock. “The IPO cancellation influenced a negative move in the share price amid concerns over the company’s debt levels and credit rating,” he said. – IOL Page 22 | July 11-17 2019 The Financial Gazette Column Law of defamation and its application

HE law of defamation is primarily and the transformations contain traces of arscenic. speech and access to information. concerned with the protection of an that shape society time Defamation will not It must however, be acknowledged that for Tindividual's good name, reputation and again. suffice where the injurious democracy to thrive and, more importantly, to curtail and status in society. Such protection Examples abound remark has not been corruption, which is itself a threat to democracy, a against unfair, unwarranted, demeaning but a few illustrations published to a person other free speech must flourish and be allowed to expose or damaging verbal or written remarks here would suffice. For than the complainant. graft and malpractices. When public officials are also extends to corporate entities such as example, it would be Where the remark is aware that investigative journalists can expose companies and voluntary organisations defamation to say of a directed to a complainant their vices, graft, embezzlement and abuse of like churches, clubs and societies, while church pastor that he is alone and does not reach power, such vices may be curtailed. Thus, the key it does not apply to the government. In a liar, a thief or adulterer the ears of third parties, it to unearthing corruption is a media that reports this contribution, the words individual and who is in the habit of being is only known as injuria. responsibly, honestly and robustly without bias person shall be used in the wider context intimate with members of The topic of defamation is in order for people to be kept informed about the and to include both natural and artificial his or her flock. It would broad and encompasses the public eye face. As noted above, the subject of legal entities. also be defamatory to Legal Matters controversial issues of media media and defamation is extensive and cannot be This law recognises the important need say of the politician that with freedom and the public's exhaustively discussed in this article. to compel people to “tame their tongues” he is corrupt and that he VOTE MUZA right to be informed about In the law of defamation, the complainant whose because of the inherent potential to cause misuses public funds. As vices within public bodies. character has been assassinated may get remedies irreparable damage to an individual's regards corporate entities, it would be It attempts to balance these two interests either in civil or criminal law. Under criminal law, good name or business goodwill. What damaging to allege and publish verbal or through recognising the right of an a prosecution may be instituted for intentionally is defamation or defamatory material written information that its products are individual to protection from harm to his defending someone or, is against journalists, depends on the circumstances of each case substandard, or that its beverage products good status and the public's right to free under the Access to Information and Protection of Privacy Act. A civil suit will seek to compensate an individual with monetary damages, while under criminal law, retribution will be sought to punish a culprit either through imprisonment or payment of a fine. The nature of gravity of defamation will be judged through examining a number of factors, such as the status of the defamed person in society, the extent of the publication “It would be defamation to of the say of a church pastor that he derogatory is a liar, a thief or adulterer remark, and who is in the habit of being whether an intimate with members of apology his or her flock. It would also followed. Further, be defamatory to say of the and judging politician that he is corrupt whether one and that he misuses public was defamed, funds. As regards corporate the court will entities, it would be damaging apply what to allege and publish verbal is commonly or written information that known as the its products are substandard, reasonable or that its beverage products man’s test. contain traces of arscenic. This is an Defamation will not suffice objective where the injurious remark test to judge has not been published to whether any other a person other than the reasonable complainant. Where the person of remark is directed to a average complainant alone and does intelligence not reach the ears of third would regard parties, it is only known as the remarks injuria.” is untoward. Overall, the effect of the defamation must injure the person to whom it is directed through lowering him in the estimation of reasonable ordinary persons, it must reduce his esteem in the mind of the general public and, finally, it must cause the defendant to be shunned, hated, ridiculed or treated with contempt by the general public. There are instances when a patently defamatory remark can be directed at a class or group of people. An example is when an utterance may allege that all short people are fools. While generally this disparaging remark might be spiteful and injurious, an affected party in the group or class will only be successful if reasonable people would have understood the statement as targeted at the complainant individually, and they would have resultantly thought less of the complainant. When the court awards damages to an injured party, it will not be attempting to repair the damage, for that process is impracticable. This is so because once a defamatory statement has been made, it is difficult to restore a damaged reputation even if it is proved in court that the statement was a falsehood and an apology ensued. Damages are therefore given as solace for the injured feelings. The fear or threat of payment of large sums of money will also restrain individuals from making humiliating, degrading, demeaning remarks about others. The character and status of the individual and the nature of the words uttered as well as the extent of the publication will determine the amount of damages due to the complainant. In one English case, a chairman of a leading car firm cars successfully sued for defamation after a newspaper had inaccurately reported about him. A headline has erroneously stated: “Car thief to pay wife $2 000” instead of stating “Car chief...” l Muza, a Harare-based legal practitioner, writes in his personal capacity. The Financial Gazette July 18-24 2019 | Page 23 Column Developing digitalised small and medium practice

IGITALISATION represents the greatest oppor- heart of the digitalised practice. In 2019 the tunity accountants have had to transform their potential range of options is greater than ever Dbusinesses since the invention of the spread- before. Capability development focuses on the sheet. Such innovations aren’t only transforming ways transition to the digital practice, or the creation of work, but they are also changing the role of the ac- of a new one. A key component of this phase countant itself. Practices that fail to adapt to those new is the emphasis on resources and skills. Once ways of working run the risk of being left behind. Accountants played a vital role in the earlier develop- ment and adoption of business information technology: finance was one of the first functions to be automated. They became the natural business partners and consul- tants within large enterprises as they computerised and re-engineered all their business processes. established, the successful practice needs to Fast forward to the present and there is a sense that take advantage of the changing software envi- small business accountants may be lagging behind, with ronment; to maintain its advantages and grow, many still working in a desktop or even paper-based en- seeing new opportunities as its clients develop vironment, in an increasingly cloud-based, digital world. with it. The incorporation of these technolo- But the tools now exist for accountants to take that dig- gies therefore represents a strong opportuni- ital turn in their practices and transform the way they ty for the growth of small and medium-sized work with clients. Those working with the Small and practices. Medium Enterprise sector now have an unprecedented Reproduced with permission from ACCA’s Ac- opportunity to act as true business advisers. counting and Business magazine accaglobal. Benefits of digitalising the practice com/ab. Digitalisation changes the structure and purpose of the practice itself. It impacts aspects such as the revenue base whereby digital practices move away from a time based model to a value based model, built on enduring relationships with their clients. The client base can also be differentiated in different ways. No longer are prac- tices geographically bound but rather the range of appli- cations available enables them to specialise by industry segment without boundaries. The service portfolio expands and hence the range of skills that the accountancy firm needs beyond technical competencies. Moving to digital will restate one of the fundamentals of the accountant – the client relationship. The message from practices that contributed to the re- search is that they enjoy this work. They have a passion for their business and their cli- ents’ businesses. And for many small business leaders, of all the professionals that they work with in connection with their business, the accountant is the one they trust, the one who ‘has got their back’. The implementation plan The implementation can be split into three phases. Each of these has components of people, process and technology. It is important to balance each of three ele- ments throughout. In developing the strategy and plan, it is important to identify the market segment on which the practice will focus. The accountant needs to develop a roadmap to ac- commodate the range of software applications that will be supported; accepting that supporting all is not a fea- sible option. This defines the ‘app stack’ that is at the Uganda plans $263m vehicle assembly plant

GANDA will invest $40 million in the first phase of a $263 million vehicle assembly Uplant with the view of starting production by mid-2021 to tap rising demand in the East African Community (EAC) region. Construction of the facility started in February, Isaac Paul Musasizi, the chief executive officer of state-owned Kiira Motors Corp said in an interview in the capital, Kampala. Annual output is initially envisaged at 5 000 vehi- cles and will reach 150 000 units with the assembly of buses, trucks, pick-ups and sports utility vehicles, he said. Kiira Motors has so far produced two car proto- types and a solar-powered bus. “We shall start making our vehicles, but also have room for others to assemble,” Musasizi said. The regional EAC offers a lucrative opportuni- ty because at least 85 percent of its vehicle imports are used models, he said. The combined market for passenger and commercial vehicles in its five mem- ber nations ― Uganda, Kenya, Tanzania, Rwanda and Burundi ― could double in the next 13 years to al- most 630 000 annually, according to a study by Ugan- da’s Ministry of Science, Technology and Innovation, which holds a 96 percent stake in Kiira Motors. Kenya and Rwanda are already investing in vehi- cle-assembly industries to exploit opportunities in the region that has some of the continent’s fastest grow- ing economies. Kiira Motors plans to produce sedans on a small scale and is in talks with prospective partners for pro- vision of technology, to take an equity stake or under- take joint ventures, the CEO said. “We are talking to the big fish in the automotive industry,” he said. “We have reached out to players across the globe.” - Bloomberg Page 24 July 18-24 2019 The Financial Gazette Column HR perspective on leadership

HE debate on leadership has been articulating the vision, and the subordinate angles, a wise leader must be able to see beyond what is topical in all organisations including inspiring enough to is amicable, the in front and listen beyond what is being articulated. This Tgovernment. In simple terms, leadership sustain long-term organisation will enjoy is a key ingredient for success. is about impact and influence. I will not bother commitment and plan peace, stability and Accept advice to delve into detailed definitions as there has ahead to capitalise on prosperity. A clever leader is open and receptive to advice never been a universally agreed definitions future opportunities An eagle’s eye view from subordinates and likewise, the subordinates must given that there are many authors on the and aspirations. and attention advise the leader properly. The common saying, “The subject. I just want to touch on key issues Building Phil Chitagu A leader possessing customer is always right and the customer is king” may I have noted as posing serious challenges relationships wisdom is able to not be a good logic to follow. Nobody is right at all in business and in most organisations in The head of diagnose a challenge times and in all circumstances, including the king. If the Zimbabwe. an organisation is obliged to treat his comprehensively before seeking a permanent leader is open, the subordinates will be in a position to Governing an organisation subordinates benevolently and in return the solution. Emotional intelligence plays a advise him/her including giving constructive criticism Governing an organisation is like subordinates will be obliged to serve the head critical role in this regard. This brings the and vice versa. A leader needs to have subordinates managing a household. The foundation of of the organisation faithfully. If the head treats aspect of being insightful, a competency who dare to prevent him from adopting a bad policy. the family lies with the head of the family, his subordinates with care and concern, they which is important in human resources even If a leader is not receptive or unable to accept negative while an organisation’s lies with the leader will reciprocate by serving the leader loyally. when we look at unfolding HR trends in the feedback and criticisms from subordinates, he would in the form of the chief executive, managing This brings in the principle of reciprocity in country. then be surrounded by people who work against his director or general manager. A wise head organisations, which is key for sustainable Listening is an art and when listening to interests, leading to the downfall of the organisation of the organisation not only provides the productivity. someone, it is important to pay particular and the leader. It is important to note that good advice is direction for leaders to follow, but is capable of When the relationship between the leader attention. In order to study things from all piercing to the ear just as medicine is bitter at times but it is beneficial to the ailing body. Being perceptive A leader has to exercise extreme care and vigilance in judging what and who is right or wrong. Being perceptive implies being able to distinguish between white and black. In order to distinguish the two, saying and knowing are two different things. Differentiating colours depends from which angle one is viewing the same object. Thus to be perceptive, a leader needs the ability to know and value those who serve the “The head of an organisation organisation is obliged or him to treat his subordinates wholeheartedly and distinguish benevolently and in return those who the subordinates will harbour ill- be obliged to serve the intentions. If head of the organisation the organisation faithfully. If the head treats is unable to distinguish his subordinates with care between and concern, they will good and bad reciprocate by serving employees, and the leader loyally. This goes ahead to brings in the principle of promote the wrong person reciprocity in organisations, for a higher which is key for sustainable position, it productivity. suffers in the When the relationship long term. HR between the leader and the practitioners play a critical subordinate is amicable, role in the organisation will determining enjoy peace, stability and such issues ― prosperity.” organisations have to listen to such practitioners. Managing people In managing people, a clever leader always makes his intention clear from the beginning, continuously communicating with and developing the people on the rationale and benefits of his plan. It is only through understanding of the plan that the people will support the leader’s vision and action. Beside, a wise leader needs to formulate good policies and develop a comprehensive set of laws to regulate the people’s conduct and behaviour. Selection of people A clever leader is capable of attracting the right person to do the job. Getting the right person to serve the organisation is just like having strong foundational pillars in a house. It is not a secret that without strong pillars, the house will collapse. Similarly, a company without capable people will not be able to enjoy long- term prosperity. People are the most valuable resource of any company or organisation and what organisations do around people determines the success of such organisations. The design that is put in place around people determines the strength of the organisation. Evaluating performance If a leader wants his organisation to be free from corruption, and the company to be strong and prosperous, it is important to regularly evaluate the performance of his subordinates and to reward them in line with evolving trends but also taking into account affordability issues. Reward and recognition of good performers is a good ingredient of sustainable performance of any organisation. On the other hand, there is no need to keep under-performers in the business when rehabilitation strategies have failed. An evaluation system which takes into account personal feelings and preferences is a receipt for corrupt tendencies which can weigh down organisations. l Chitagu is the IPMZ president and writes in his personal capacity. The Financial Gazette July 18-24 2019 | Page 25 THE DAILY NEWS BUSINESS BREAKFAST FORUM IN PICTURES

Delegates at the Daily News breakfast forum follow proceedings held in Harare last week - Pictures by Annie Mpalume Page 26 | July 18-24 2019 The Financial Gazette Foreign News Rand weaker as the JSE gains strength HE rand edged weaker in subdued tomorrow. Twenty-four of 30 economists trade yesterday with market par- in a survey by Reuters said the SARB Tticipants awaiting a local lending would cut rates by 25 basis points to 6,5 rates decision and one by the US central percent tomorrow. bank next week before making any big Two expected a cut of 50 basis points. calls. The other four said rates would be left At 5pm, the rand bid at R13,90 to the unchanged. dollar, 1 cent softer than at the same time Bonds were slightly firmer, with the on Monday, and hardly budging from the yield on the benchmark 2026 paper down overnight close of R13,90. 1,5 basis points to 8,025 percent. Early trade saw the rand touch a ses- On the bourse, stocks rose with other sion best of R13,83 before strong growth emerging market assets. in US retail sales re-energised the green- The benchmark JSE Top40 index was back and dampened expectations of a up 0.99 percent to 51958 points while the deep rate cut by the US Federal Reserve broader all share index closed 0,9 percent next week. higher at 58052,72 points. Locally, retail sales data due today will Paper and pulp producer Sappi and likely be overshadowed by the policy de- energy and chemicals company Sasol In South Africa, only 3,31 percent of chief executives of Johannesburg Stock Exchange-listed companies are women. cision by the SA Reserve Bank (SARB) were the day’s biggest winners. – Reuters Global markets waver as Few SA women Chinese economy slows ORLD stock markets wavered growing 9,8 percent on-year in June, up this week on news that China’s from 8,6 percent in May. Weconomy grew at its weakest “The Chinese data, while confirming run listed firms pace in nearly three decades, hit by the US slowdown fears, seems to be lifting basic trade war. resource stocks,” Erlam said. NLY 3,31 percent of chief The PwC report said that the pay year ended December 31, 2018, up London’s benchmark FTSE 100 index “A decent rebound in industrial produc- executives of Johannesburg disparities between men and women from R40,6 million in 2017. added 0,2 percent and Frankfurt’s DAX tion is naturally driving this, easily exceed- Stock Exchange (JSE)-listed chief executives was problematic, Pick n Pay chief executive Rich- 30 rose 0,3 percent but the Paris CAC 40 ing expectations, and along with retail sales O dipped 0,1 percent. and investment figures, arguably indicates companies are women in the year to citing the largest pay gaps were in ard Brasher took home a total pay April 2019, a report by Pricewater- the healthcare sector, (28,1 percent), package of R32 million for the year Asian equities initially stumbled but that worst fears are not being realised.” houseCoopers (PwC) has shown. followed by consumer discretionary to March 2019. then staged a recovery, as traders digested The GDP number nevertheless high- “If one looks at the composition (25,1 percent), technology (22,9 per- “Remuneration should also not Chinese second-quarter gross domestic lights the negative impact the US tariffs of the top leadership at JSE-listed cent) and financials (21,8 percent). be so egregious that it erodes stake- product (GDP) numbers, while also debat- stand-off is having on China as leaders also companies, the statistics paint a dim “The overall view of this JSE holder confidence or threatens the ing the depth of an expected US interest rate try to recalibrate its growth model from ex- picture, the report titled Executive analysis paints a stark picture of long-term sustainability of the or- cut. ports and state investment to one driven by directors: Practices and remunera- the inequality in representation in ganisation,” the report said. China’s economy expanded 6,2 percent consumer spending. tion released yesterday, said. companies listed on this stock ex- In terms of racial representation, in the second quarter, the slowest reading Observers also pointed out that the “Following Maria Ramos’s re- change,” the report said. 10,2 percent of all chief executives since the early 1990s, official data showed. weakness raised the chances of further tirement in February 2019, there In terms of pay packages the me- in companies listed on the JSE are The outcome was in line with forecasts and monetary easing measures from the central were no female chief executives in dian pay for all executive directors black Africans, 1,7 percent of chief within the government’s target range. People’s Bank of China, with investors also the JSE top 40; however, it is en- including chief executives, chief executives in listed companies were “There’s no doubt in anyone’s mind that tracking the progress of the latest trade talks couraging to see that Phuti Maha- financial officers and managing di- coloured, 2,2 percent were Indian or the trade war is a major contributing factor between Washington and Beijing. nyele-Dabengwa has recently been rectors on JSE-listed companies Asian and 84,9 percent were white. here,” noted Oanda analyst Craig Erlam. Wall Street turned in another vintage per- appointed as the chief executive of increased by 4,9 percent in 2018, The PwC said that at the end of Yet, despite the slowing GDP, the month formance on Friday, with a record-breaking Naspers,” it said. slightly above inflation which stands April, the cut-off date for the survey, of June held some bright spots for the Chi- close for all three main indices in New York. Ramos stepped down in February at 4,6 percent. there were 1198 executive directors nese economy, dealers said. There are bets the US Federal Reserve as Absa chief executive after being Chief financial officers earned an appointed to active JSE listed com- That handed a partial boost to the mining will cut borrowing costs at the end of the at the helm of the group since 2009. average of R3,8 million from R3,6 panies from 1144 in 2018. sector because China is a leading consumer month, though there is speculation about Last week she was appointed as a million in 2017. There were 335 chief executives of many raw materials. how far it will go. director of the Public Investment The report said that the aver- from 342 in 2018, 310 chief finan- Chinese industrial output rose 6,3 per- While bank boss Jerome Powell’s con- Corporation board, marking her first age pay of chief executives had in- cial officers from 325 in 2018 and cent, from 5,0 percent in May, which was gressional testimony last week flagged a high-profile appointment since she creased by 4 percent to R5,4 million 435 executive directors compared to the slowest increase since 2002. reduction, data indicating inflation remains left the bank. in the year under review from R5,2 477 in 2018. Fixed-asset investment also picked up, reasonably healthy has kept investors guess- Mahanyele-Dabengwa was pre- million in 2017. The study was conducted by ana- rising 5,8 percent on-year in January-June, ing. viously the chief executive of Shan- Earlier this year, MTN said that lysing the top 40 JSE-listed compa- from 5,6 percent in January-May. “The Fed is under pressure to cut the duka Group until 2015, when it was it had paid its chief executive Rob nies based on the integrated reports China’s 1,3 billion consumers also con- interest rate this year,” noted ThinkMarkets sold to the Pembani Group. Shuter R42,9 million in the financial available until April 30, 2019. – IOL tinued to open their wallets, with retail sales analyst Naeem Aslam. — AFP The Financial Gazette July 18-24 2019 | Page 27 Foreign News Huawei invests US$3,1bn in Italy HINESE telecoms equipment maker Huawei ers”, and not applied to extra-European providers only. Technologies will invest US$3,1 billion over the “The 5G technology is very important,” RAI cited Miao Cnext three years in Italy. as saying. Addressing the press on the sidelines of an exhibition The CEO added the new 5G golden power rules in Milan, Huawei's Italian unit chief executive Thomas should be neutral and “apply to all, in order to be sure Miao said the investment plan would allow 1,000 new that – from the first day – we have a safe and reliable direct jobs in the period 2019-2021, according to Ansa infrastructure, since the country needs to be ready before news agency. the roll-out”. More specifically, the plan would consist of some Operating in the country since 2004, Huawei now $1,2 billion invested in operations and marketing, and employs some 850 people in Italy, and has inaugurated $1,9 billion in direct supplies, while $52 million would its new headquarters in Milan earlier this year. be added for research and development activities, Ansa In its 15-year activity, it has opened four innovations also said. centers in cooperation with Italian ICT operators and a Speaking to reporters, Miao stressed the solidity of On Friday, in fact, the Italian gov- Under the new decree — which needs Joint Innovation Center for Smart & Safe City in coop- Sino-Italian commercial ties. “They are two well-paired ernment passed a decree boosting the approval by parliament within 60 days — eration with the regional government of Sardinia and its countries: Italy needs China, and vice versa, and I am so-called “golden power” legislation, Italian public and private companies must Center for Advanced Studies, Research, and Develop- very optimistic from a business point of view,” state and increasing the power of the state to now inform the government of any pur- ment (CRS4). broadcaster RAI News24 cited him as saying. intervene in the private sector of ICT chase of 5G technologies from non-Euro- Huawei is the largest of five global companies cur- The country chief executive also urged Italy to make infrastructure networks – including 5G – pean suppliers. rently selling 5G equipment and systems, the others be- a “transparent, efficient, and fair” use of its golden pow- due to “urgent need to strengthen national Huawei-Italy’s chief exceutive called ing Chinese ZTE, Finnish Nokia, Swedish Ericsson, and er on the development of 5G networks. security in strategic sectors”. for the new rules to be fair “for all suppli- South Korean's Samsung. — Xinhua

Nestlé will start selling KitKat bars with 70 per- cent dark chocolate under the new recipe. Nestlé sweetens chocolate without sugar

ESTLE SA has found a way to create chocolate without adding any sugar, relying on leftover Nmaterial from cocoa plants for sweetening as consumers look for natural and healthier fare. The food company is using a patented technique to turn the white pulp that covers cocoa beans into a pow- der that naturally contains sugar. This fall in Japan, Nestlé will start selling KitKat bars with 70 percent dark chocolate under the new rec- ipe, which doesn’t include any added sugar, the Vevey, Switzerland-based firm said. Until now, the pulp has never been used as a sweet- ener for chocolate, and usually it’s mostly thrown out. Nestlé could use the same process to make milk or white chocolate in the future, Alexander von Maillot, head of Nestlé’s confectionery business, said in a phone interview. The food and beverage industry is under pressure from consumers and governments alike to make health- ier products amid rising obesity and diabetes rates. Nestlé’s move may bolster its position as a leader in the industry, and it comes three years after finding a way to alter the structure of sugar to boost its sweetening power. The world’s largest food company plans to use the pulp technique for other confectionery brands in addi- tional countries next year. “Using pulp makes it a more premium chocolate,” Von Maillot said. “Sugar is a cheap ingredient.” Nestlé’s new 70 percent dark chocolate will have as much as 40 percent less sugar than most equivalent bars with added sugar. Nestlé’s existing dark chocolate Kit- Kats have 12,3 grams of sugar per serving. “The sugar reduction is incidental, not a focus,” Von Maillot said. “It’s more about a novel way to produce chocolate and use the best of the cocoa pod.” — Bloomberg Page 28 | July 18-24 2019 The Financial Gazette National News InDriver targets Zimbabwe

USSIAN ride-hail start up inDriver says it has begun recruiting drivers in Harare for the Rservice, which it intends to launch in the cap- ital towards the end of this month. The online taxi company which already operates in four African countries ― Kenya, Uganda, South Africa and Tanzania ― will add Zimbabwe as the Zimbabwe has so far sold 228 million kilogrammes of tobacco this year. fifth country. Yegor Fedorov, inDriver’s marketing director, said the bargain for a fair price taxi app, used by 26 million people across more than 200 cities, an- nounced their launch with the addition of a new safety button for both riders and drivers. Emergency numbers are also incorporated into the app. “The coming to Harare of inDriver should ben- efit those in need of transport for a specific journey and the drivers. The passenger proposes a fare on 228 million kgs the app. Nearby drivers can decide whether to take up the request at the passenger’s proposed fare or make a counter proposal,” Fedorov said. “We want the passengers and drivers to deter- mine independently and directly a fair and favour- able price for each route. In InDriver it is up to each driver to take a ride request, skip it or send a counter of tobacco sold offer. We want to give the power of setting prices back into the hands of passengers and drivers. As Tabitha Mutenga US$4,50 per kg, US$0,40 lower than the price kg has been maintained on the floor there has a result, drivers will be able to get higher income Features Editor of the first bale the previous season. been very little tobacco that has attained this while enjoying more transparency and flexibility.” However, statistics from the Tobacco In- pricing as compared to previous years. Fedorov said unlike other ride-hailing services, IMBABWE has so far sold 228 million dustry and Marketing Board (TIMB) show “In recent days, there has been an improve- inDriver drivers can see the starting and ending kilogrammes of tobacco, way ahead of that sales have since improved with grower ment in prices, though daily volumes are de- points of a journey that are put by the passenger in the targeted 200 million kg, new figures earnings reaching US$445,2 million at an av- clining. On contract floors, after a significant the app. Z show. erage daily price of US$1,92. weakening of prices to well under US$2 per inDriver will be competing with Cassava’s Vaya The current golden leaf was produced un- Although the average price is lower that the kg there has been a welcome improvement, Ride service which now has over 10 000 drivers der unfavourable weather conditions charac- US$2,92 in 2018, farmers who adopted a wait with daily averages above US$2 per kg, as spread across Zimbabwe’s major urban centres. terised by late rains and prolonged dry spells, and see approach at the beginning of the sea- higher quality leaf grades of commercial to- The firm said for the first six months, drivers particularly when the crop was almost ready son have improved on deliveries as the season bacco come onto the market and firmer prices are not charged any commission as they retain the for harvesting, and as a result the industry an- draws to an end. are being paid for some lower leaf styles,” the whole fare without any payment to inDriver. ticipated a reduction in output as well as qual- Grower earnings in 2018 reached US$892 farmer organisation said. Afterwards, inDriver will charge them a modest ity. million from a record level 252 million kg. According to the TIMB, auction sales have commission of no more than 10 percent, which is The marketing season opened on March, The Zimbabwe Tobacco Association said reached 30 million kg raking in US$52,8 mil- much lower than other ride-hailing services. – Staff 20 with subdued activity and prices as there prices on the auction floors have remained lion, while contract sales have reached 197,4 Reporter [email protected] was confusion surrounding exchange rates and fairly static, throughout the season at US$1,65 million kg worth US$392,4 million. currency retention. The first bale was sold for per kg, although a price ceiling of US$4,99 per [email protected] Govt debt chokes banks Omega Ukama risks to macro-economic stability as a result of Business Reporter money supply growth. And while government has resolved to curb Amplats disposes IMBABWE’S liquidity crisis is signifi- the reliance on domestic borrowing through the cantly hampering the central bank’s deci- securities, it says it is exploring options to restruc- Bafokeng Zsion to minimize the country’s credit risk ture the securities “to manage maturities”, with by alleviating non-performing loans (NPLs), an an additional $180 million worth of treasury bills international think-tank has said. having been issued recently for such purposes. Rasimone mine The Reserve Bank of Zimbabwe in 2015 es- On the other hand, the gains of the ZAMCO tablished an asset management corporation to exercise have also been diminished by recent ad- clean up non-performing loans in the market. ministrative issues with bank’s NPLs increasing NGLO American Platinum Since then, the Zimbabwe Asset Management by about $85 million in 2018 after the industry (Amplats) said on Wednesday Company has assumed over US$1 billion NPLs. implemented the International Financial Report- Ait had completed the disposal of Fitch Solutions (Fitch) said while the ratio of ing Standard (IFRS). its 33 percent holding in the Bafokeng NPLs fell to 7,1 percent by December 2017 from IFRS 9, which replaced IAS 39, requires the Rasimone Platinum Mine (BRPM) a peak of 20,5 percent in June 2014, which was recording of expected losses on financial assets, joint-venture after the department of largely due to the publicly funded ZAMCO ab- such as loans, regardless of whether there has mineral resources granted approval. sorbing much of the sector's bad debt over recent been any actual loss. Previously, these ‘impair- The disposal is the culmination of years rather than improving risk management, the ment losses’ would only be recorded after they a deal entered into in December by ratio is not fully reflective of the low quality of as- had been incurred. Amplats' wholly-owned subsidiary, sets on banks' balance sheets, as they do not cover Meanwhile, Fitch says banks will continue Rustenburg Platinum Mines (RPM) Treasury Bills (TBs) that are looking increasingly to see fairly strong profits from transaction fees and Royal Bafokeng Platinum's Royal illiquid. in the months ahead. In recent quarters, income Bafokeng Resources. “The Zimbabwean government's constrained from fees and commissions on card and inter- The agreement stipulated that Royal fiscal position leaves virtually no room for sup- net transfers have become the largest source of Bafokeng Resources would, in a two- port to the banking sector,” the research arm of revenue for banks as the population has had to phased transaction, acquire the balance New York-based ratings agency Fitch Ratings increasingly rely on electronic money in the dol- of the 33 percent interest in the BRPM said in a report recently lar-starved economy. joint venture from RPM, including full “While the creation of ZAMCO has helped “However, the strong bank profits belly the title in respect of all assets owned by alleviate banks of NPLs, any beneficial effect has economic challenges facing Zimbabwe. Indeed, RPM. been offset by the lack of cash repayments of out- rather than an indication of the good health of the On Tuesday, Amplats said basic standing TBs, which now form a substantial part banking sector, the headline numbers are a result earnings for the six months to June 30 of banks' asset sheets.” of a dearth of hard currency in circulation, which were impacted by an impairment of This also comes as issuances – in recent years is preventing banks from fulfilling their tradition- R0.6 billion post-tax relating to the dis- – of government securities, which stood at $6,2 al role of allocating capital to productive activi- posal of its holding in the BRPM joint billion at the end of August 2018, have posed ties,” Fitch said. [email protected] venture. — ANA The Financial Gazette July 18-24 2019 | Page 29 National News Time to overhaul Zimbabwe’s disaster management plan Simon Bere cedures for dealing with the threats at all its stages. This also includes the direct and continued involvement of the HEN Cyclone Idai hit Manicaland, decimated vulnerable communities starting with raising the level of lives and destroyed infrastructure, bringing un- awareness of the communities of the threats and hazards Wtold suffering to Zimbabweans, I was in Kariba they face so that they can play a part, first in preventing the with a friend who runs a company in Zimbabwe. disasters associated with those hazards and second, in mini- We were talking somewhat casually about the cyclone mising the impact of the environmental hazards in the event the three days before it struck and my friend was very cau- the communities are exposed. tious of our movements then. But on the Saturday night Zimbabwe cannot afford another environmental disaster when pictures and videos of the horror started appearing for which they are ill prepared. The time to take drastic ac- on social media, my friend was so moved by that he made tion to improve and maybe even completely overhaul its di- some frantic calls to his team in Harare, instructing them to saster management approach is now while the wounds from respond to the cyclone by sending teams into the disaster Cyclone Idai are still fresh. [email protected] Cyclone Idai destroyed infrastructure and brought untold suffering to many people. zone to set up camps for the victims. What was then a somewhat casual talk suddenly became serious talk and the cyclone dominated our discussions until we came back to Harare. My friend responded the way he is — a typical leader par excellence. Leaders do not ask for permission to respond to a situation. This was also the case with many other leaders who responded spontaneously to the situsation and poured in their own resources to help the situation. When I returned to Harare, I realised that the scale of devastation was far larger than what we were getting from social media. In addition, it became glaringly clear that the cyclone caught Zimbabwe ill prepared for it. While the Civil Protection Unit (CPU) was aware that a cyclone was brewing and the country’s weather experts knew at least fourteen days before both the strength and probable trajectory of Cyclone Idai, something did not go on well in the response. I remember being called for an radio interview on the cyclone and my co-panelist was Zimba- bwe’s top weather expert working for the Meteorological Services Department. The weather expert acknowledged that the department knew fourteen days before that a deadly cyclone was brew- ing and would hit Manicaland. He even admitted that the department knew that the cyclone was in category four, only one step below the severest of cyclones. From the look of things, something seriously went wrong disaster management wise in responding to the cy- clone. Given the severity of the cyclone, it most probably was not enough to issue warnings to the Manicaland popula- tion about the impending disaster. A more massive response ought to have been activated including forced evacuations of the most vulnerable targets and the movement of people from the most vulnerable locations based on their local ge- ology and local geography. In addition, instead of warnings being issued through social media, text messages and radio and television in a news like fashion, the president of the country must have been advised to take leadership command of the situation and have him make the announcements through all the pos- sible media including marshalling resources for evacuations ahead of the cyclone. The impending cyclone must have been declared a na- tional emergency and even resources mobilised and moved to the safest areas close enough to the most affected areas. Instead the country, even with all the intelligence on the cy- clone on its finger tips, was caught flat footed. Many lives could have been saved had the nation been better prepared for the cyclone. Cyclone Idai is now gone, living the nation counting its loses and fighting to restore normalcy to those affected. However, it is very easy to forget paying attention to the na- tion’s poor disaster management strategy so that what hap- pened with Cyclone Ida may never happen again. Weather experts have done researches and they warn that the sea sur- face temperatures in the Indian ocean have risen to a level that triggers cyclones, meaning the Indian Ocean is now a more frequent and more efficient breeder of cyclones. This means we are more likely to experience cyclones more often than in the past. If we do not take serious action by drasti- cally improving our disaster management strategy and ap- proach at all levels from the strategic, operational and to the tactical, another cyclone the magnitude of Idai will decimate Zimbabwe. There are many factors that must addressed. First, the technical composition of the CPU needs a review. Cyclones are part of environmental hazards and their impact is not just dependent on their weather characteristics, but on the interplay of many factors that also include the geology, the culture, the geography and the economic and infrastructur- al factors. This means a robust CPU must have the right composition of different expertise so that a holistic disaster management framework has the relevant strategic, technical and operational dimensions required for both proactive and reactive management of such environmental hazards. Second, effective disaster management especially for environmental hazards requires the right protocols and pro- Page 30 | July 18-24 2019 The Financial Gazette National News ZESA to receive payments in forex

Omega Ukama Business Reporter

NFORMATION minister Moni- ca Mutsvangwa says government Ihas approved an arrangement between Zesa Holdings (Zesa) and some hotels in Zimbabwe, which will see the state-owned power utili- ty receiving payment in foreign cur- rency. This comes as the southern Afri- can country has been suffering pro- longed load shedding caused partly by depressed electricity generation at Lake Kariba, as well as frequent breakdowns at the Hwange Thermal Power Station. Zimbabwe requires at least 2 200 megawatts (MW) of electricity to meet its daily needs but the coun- try is currently producing less than 1 000 MW. At the same time Zesa has not been able to able to import to cover the deficit from the region ow- Zimbabwe requires 2 200 megawatts of electricity to meet its daily needs but the country is currently producing less than 1 000 megawatts. ing to its indebtedness and its lack of access to foreign currency. “To alleviate the situation on States dollars to guarantee power reserve bank, you must look for your forex. mandatory for all new construction proj- the power supply front, Cabinet re- supplies. own forex,” Patrick Chivaura ZE- “We are now pushing through our ects to be solar-powered. solved to endorse an arrangement On June 24, through Statutory In- SA’s chief executive said at a busi- ministry that we get an exemption,” he Mutsvangwa further stated that gov- whereby large hotels in the Victoria strument 142 of 2019 (SI 142), made ness conference hosted by the Daily said. ernment has “embraced the commitment Falls resort town can pay their Zesa the Zimbabwean dollar the country’s News last week. Meanwhile, Mutsvangwa said Cabi- by mining companies under the banner of bills in foreign currency so as to sole legal tender on Monday, ending “So we embarked on that exer- net also resolved that a large scale pro- the Zimbabwe Chamber of Mines to pay boost capacity to import power sup- a decade of dollarisation and also cise and we sourced support from gramme be implemented to promote the a cost recovery electricity tariff to ZESA, plies,” Mutsvangwa told journalists made it difficult for Zesa to receive miners or exporters to provide us importation, local production of solar and to directly procure extra power sup- on Tuesday. payment in foreign currency. with forex, the exercise was work- equipment and the use of solar power as plies from the Southern Africa Power This also comes as the parastatal “I have a clash, to say the least, ing pretty well, we were getting an alternative energy source. pool as well as to mobilise a lumpsum has been seeking a government ex- with SI 142. We were told at a strat- commitments of forex coming our “In this regard, special incentives shall towards the settlement of the existing emption to charge mining compa- egy workshop by our perm sec that way so that we import. But when SI be provided through duty waivers on im- power imports debt arrears”. nies and other exporters in United ‘there is no forex for you guys at the 142 came we could not access the ported solar equipment while it shall be [email protected] Power cuts cripple Surface Wilmar

Nelson Gahadza stalled capacity of 16 000 tonnes per month Business Reporter against country requirement of between 8 000 and 10 000 tonnes per month, but was URFACE Wilmar, one of Zimbabwe’s operating at 15 percent capacity due to chal- largest cooking oil manufacturers, lenges related to the operating environment. Ssays its operations have been crippled Surface Wilmar started operations start- by current power outages. ed in 2006. Government through the Indus- The southern African country is cur- trial Development Corporation holds 10 rently enduring 18 hours of load shedding percent stake and the company is also into as the generation capacity has plummeted Olivine Industries, producing cooking oil way below the country’s peak demand of for Olivine. The company in January this 1 800MW, resulting in business losing pro- year temporarily stopped operations citing duction time. challenges related to accessing foreign cur- “Our plant takes a lot of time to set up, rency to meet their foreign supplier obliga- therefore we can only run if there is suffi- tions. According to Mangani, the situation cient power for at least five continuous has not really improved as the interbank days,” Sylvester Mangani, the company’s market system is trading on thin volumes. chief executive, said after a tour of the op- “Foreign currency is supposed to be erations. available on the interbank market but it is He said Surface Wilmar has engaged not there. There is no trading happening, power utility Zesa Holdings (Zesa) over the and if any, there are very thin volumes,” he issue, but the situation is yet to improve. said. Raji Modi, the deputy Industry minister, He added that the company has a month- who toured the cooking oil producer’s plant, ly foreign currency requirement of $6 mil- highlighted that government is currently re- lion per week and is importing crude from viewing power tariffs, which will enable the Agentina and Brazil. power utility to import more power, as a “If government commits to support at short term plan. least 100 000 hectares of soyabeans, wheat “Government is working on a new tariff and seed cotton, we will be able to secure which will improve the power supply situ- the inputs locally and save on the foreign ation in the short term. But for long term, currency,” he said. there are various projects at different stages “In the absence of proper land tenure, of completion to bring in additional power,” the company has not been able to support he said. local farmers through contract farming. We However, according to Mangani, the cannot support farmers who does not have load shedding has also impacted winter proper land tenure, and it is a system that wheat farming, depleting the already inad- government has to do,” he said. equate local supply. Mangani noted that local farms need to He said the company’s raw material be equipped and mechanised and that calls supply is currently at 95 percent imports, in for a lot of investment. form of crude oil, with local supply being “There is need for expertise which will five percent. enhance yields which are currently too low “The amount of soyabeans and cotton to sustain our requirement,” he said. seed that is produced locally will only last Surface Wilmar is a joint venture be- us one month, so the other 11 months, we tween the Singapore head-quartered agri- have to import,” he said. business group, Wilmar and Midex Global Mangani said Surface Wilmar has an in- of India. [email protected] The Financial Gazette July 18-24 2019 | Page 31 National News Is Zimbabwe on the right track? Eddie Cross being revived and a program of reform that has deliberately created a night- struggle that led to independence in adopted and signed. mare of a process and queues that will 1980 and who formed our fi rst inde- E ALL agree with the basic This has resulted in a period of take you hours to clear before you can pendence government, have at long last facts about Zimbabwe, it has self-imposed austerity to get our macro get onto the open road to your destina- been retired. In their place we have a Wabundant natural resources, a fundamentals back into line and some tion. younger and more professional cabinet literate people who are enterprising and volatility in local markets. Progress seems impossible unless of just 20 ministers. hard-working, a strategic location in the Secondly, we need to acknowledge you pay. The new minister of Finance, Mthuli southern African region. that a process of political reform is un- If this is not enough, you then have Ncube, has set out a clear road map to All good, but, we have a serious and derway which, if fully implemented, to take into account a thing that the a more open and market driven econo- long term energy defi cit, an agricultural will meet the demands made in ZIDE- bankers call ‘country risk’ and pay my with stability in both prices and ex- system that is simply not working, an RA, the US sanctions legislation, and again. Punitive interest rates and a jun- change rates. infrastructure defi cit that does not al- the often repeated shortcomings high- gle of regulations involving tax and ex- This road map is being systematical- low for the cost effective movement of lighted by western diplomats over the change control. ly implemented despite opposition from goods for consumption or export and a years. I was asked by a potential investor many of the old guard who think that whole raft of weak or non-functioning This is a slow process but is under- from a major international company — their ‘command economy’ was better. state institutions that are a drain on the way and the progress made should be what is exchange control and why is it So we have seen in the past 12 months fi scus and an impediment to growth. highlighted when appropriate. necessary? I never thought about this the following changes. I think we could all add other prob- Thirdly, there is progress in the fi eld issue — it seems to have always been a The elimination of the fi scal defi cit lems — collectively we could fi ll a of the rule of law, violations are being feature of our everyday lives. which has been the main source of our book. prosecuted and the prosecuting author- When we abolished exchange con- macro-economic woes and the rapid But we have a new government and ity and the attorney general both seem trols and controls on prices in 2009, growth in the national debt; in many ways this is a very big change to be operating more independently. I think the Reserve Bank must have Recognition of our own currency from the past. Property right violations are being rec- thought it was the end of the world, let and its separation from the international We are a functioning democra- ognised and some action taken, nothing alone the leeches in the ministry of In- currencies we have been using for ex- cy, many will argue that the president like enough but in sharp contrast to the dustry and Commerce who seemed to change purposes in the local market; fudged the last election and that the fl agrant abuse of property rights in the Mthuli Ncube control everything — import licenses, Granting individuals and companies playing fi eld was not level. past. The worst example was the ‘fast export licenses and permits to go to the full control over any hard currency bal- But no one is challenging the mem- track land reform programme’ but loo. ances they might hold in local banks. bership of the House of Assembly, no at last the obligations of the state to “The one-stop-shop approach looks A good friend of mine who is a The creation of an open interbank one is challenging the election of 2 000 provide compensation and recourse lack lustre and ineffi cient, even coun- major foreign investor here tells me market system with a monetary policy local government councillors and the is being recognized and negotiated. terproductive. Investors looking for he needs nine signatures on doc- committee of real professionals to help new president has had his election con- BUT, and it is a big BUT, we uments to export a free sample of manage the system; and fi rmed by our supreme court. must argue that the ‘ease of doing opportunities are swamped by good his products to a client who wants The reintegration of a local currency For that, we have a well-qualifi ed business’ and ‘opening up the econ- projects that look great on paper but to buy by the stuff from him. Why? denominated as the Zimbabwe dollar for and experienced chief justice and the omy to investment’ — both local when looked at closely are fraught Why does he need a permit to do use for exchange purposes in the domes- two new judges, just appointed have and foreign, seems to have simply with problems — land claims, polit- something that is absolutely rou- tic economy and abolishing the multi- both been recognised as good profes- run out of steam. ically connected people with rights tine in the business world? When currency system introduced ten years sionals. The one-stop-shop approach we opened up the economy in 2009 ago at the height of the crisis. We have come a long way since 1997 looks lack lustre and ineffi cient, over resources that they can never and for four years became the most Sometimes it has seemed like a roller when we were in all respects a ‘one par- even counterproductive. Inves- exploit and a bureaucracy that lacks open economy in Africa, did the coaster experience or white water raft- ty state’ with a dictator in charge. tors looking for opportunities are any motivation to do the right thing ceiling fall down? No we did not ing, but the direction seems set in politi- It’s been a rough ride these past 20 swamped by good projects that look and seems to do everything to stop even feel the transition but the im- cal and economic terms. years but we are now a multiparty de- great on paper but when looked at progress. It’s like a gigantic version pact was huge — no queues in ten Zimbabwe is going through prob- mocracy with a decent constitution. closely are fraught with problems days, for anything, after a decade of ably the most profound and extensive That is something that all need to accept — land claims, politically connect- of the Beitbridge border post where mayhem in all local markets for ev- overhaul of its governance in over a 100 and recognise. What other changes can ed people with rights over resources visitors are greeted with a swarm of erything, except poverty. years. we recognise? that they can never exploit and a bu- hustlers who offer their services to get The last major change that I see We all have a stake in this process Firstly, I think we should acknowl- reaucracy that lacks any motivation you through the bureaucracy that has in our situation is those, what the and we simply have to make it work. edge that a start has been made in the to do the right thing and seems to do deliberately created a nightmare of a Chinese call ‘the veterans of the If we do, we will look back on this pe- effort to reengage with the global fam- everything to stop progress. long march’, being the men and riod of change as a time when we put ily of nations after nearly 60 years of It’s like a gigantic version of process and queues that will take you women who accompanied Mau on our country, Zimbabwe, onto a new path sanctions and isolation. the Beitbridge border post where hours to clear before you can get onto the march that brought the Com- into the future which will eventually lift Our membership of the multilateral visitors are greeted with a swarm the open road to your destination. munist Party to power, have been the majority of our people out of poverty group of global fi nancial institutions led of hustlers who offer their services Progress seems impossible unless you largely mothballed. and give our children and grandchildren by the International Monetary Fund is to get you through the bureaucracy pay.” The veterans of the liberation a real future. newsdesk@fi ngaz.co.zw Page 32 | July 18-24 2019 The Financial Gazette The Financial Gazette July 18-24 2019 | Page 33 National News Zim investor optimism wanes: US

Tabitha Mutenga wide berth. ency, streamlining business regula- by reducing the regulatory costs mea- Features Editor “The government announced its tions, and removing corruption, in sured in the World Bank’s Ease of commitment to improving transpar- the last two years, has brought only Doing Business index, but the pace Ford SA to IMBABWE’S failure to im- ency, streamlining business regula- modest progress. of such reforms according to the US prove the ease of doing busi- tions, and removing corruption, but “The Transitional Stabilisation State Department has been slow, and Zness and a protracted currency the last two years have brought only Programme, announced in 2018, in- policy inconsistency remains a major crisis has resulted in depressed inves- modest progress. Investors remain cludes structural and fiscal reforms challenge to foreign investors. create tor sentiments, the United States has cautious,” the US State Department that, if fully implemented, would re- In addition, corruption remains said. said in a report. solve many of the economy’s funda- rife and there is little protection of There was renewed investor confi- The study titled “2019 Investment mental weaknesses,” the department property rights, particularly with re- 1 200 jobs dence in the southern African country Climate Statements: Zimbabwe” ac- added. spect to agricultural land. after former president Robert Mug- knowledged the efforts being made Zimbabwe has attracted low in- On corruption the report noted HE South African unit of Ford abe was ousted in November 2017 by government to resuscitate the vestment inflows of less than US$500 that accusations of corruption seldom Motor Co said on Wednesday it through a military coup that paved country’s ailing economy, but prog- million annually over the past decade. result in formal charges and convic- would hire an additional 1 200 way for Emmerson Mnangagwa to ress in these reforms has been very Between 2014 and 2017, foreign di- tions. Many corruption charges stem T staff at one of its local assembly plants, become Zimbabwe’s second elected slow, affecting investor confidence. rect investment inflows fell from from opaque procurement processes. an increase of over 25 percent, to add an president. The US also indicated that gov- US$545 million to US$289 million, “While the laws to combat corrup- extra shift and raise production. However, the United States said ernment’s Transitional Stabilisation but rose to approximately US$ 470 tion exist, enforcement of the laws is The additional shift, which will in- government has failed to capitalise Programme (TSP) could work if fully million in 2018. weak as law enforcement agencies crease production to 720 vehicles per on international goodwill resulting in implemented but since government’s The government has been working lack political will and resources.” day, is the result of a R3 billion (US$215 foreign investors giving Zimbabwe a commitment to improving transpar- to improve the business environment [email protected] million) investment in South Africa that was announced in 2017, aimed at in- creasing annual production to 168 000 units. The United States-owned company currently employs around 4 300 people Data drives NetOne revenues in South Africa, at the plant in the Sil- verton suburb of South Africa’s admin- ETONE, Zimbabwe’s second for most Zimbabweans, offering a istrative capital Pretoria, which will add largest telecommunications combo/cocktail of on-net and off-net the extra shift, and at another site in the company, says it reported posi- voice calls, international calls, data, coastal city of Port Elizabeth. N “The third shift will allow us to ramp tive revenue results last year were driv- Whatsapp, Facebook and twitter. en by growth in mobile data. Latest figures released at the AGM up our production from the current 506 This was after the state-owned indicated that NetOne internet and vehicles assembled per day to a peak of firm’s revenue increased by 13 percent data usage increased by 60 percentage 720 units to satisfy the strong demand to $119,2 million in the 12 months to points to close off the year 41 percent. from customers in South Africa, as well December 2018. According to the Postal and Tele- as for our crucial exports to 148 markets Lazarus Muchenje, NetOne’s chief communications Regulatory Authority around the world,” Ockert Berry, vice executive, said despite tough trading of Zimbabwe, a total of 7.395TB of president of operations for Ford Middle conditions, competition, policy and po- mobile internet and data was consumed East and Africa said in a statement. litical uncertainty experienced last year in the 2018 third quarter. Social media Ford joins a number of other global the company made a profit of over $8 bundles continued to drive mobile data carmakers in ramping up production million recovering from a $77 million usage with Whatsapp constituting 32 on the continent, which promises rapid loss in 2017. percent of mobile data. growth at the same time as trade tensions “The growth in mobile data usage The mobile industry is playing an and upsets like the United Kingdom’s was buoyed by our increased footprint increasingly important role in the so- departure from the European Union optimisation of network across Zimba- cial and economic development of the threaten their operations elsewhere. bwe. Strong customer focus played a nation as mobile connectivity has be- The South African arm of Japanese pivotal role in the growth of data as the come the main platform for innovation carmaker Nissan also announced a sim- telecoms giant optimized its network and the driving force for greater inclu- ilarly sized investment earlier this year, monitoring and addressing issues of sion, while the mobile ecosystem, in- increasing production at its local plant internet speeds and incidences of data cluding mobile network operators are by 30 000 units, while BMW produc- packet losses,” he said at NetOne’s an- contributing significantly to economic tion chief Oliver Zipse said earlier this nual general meeting (AGM) in Harare growth and job creation. month that it had moved some produc- last week. For many consumers in Zimbabwe, tion from the UK as a result of Brexit, Muchenje also attributed growth the mobile phone is not just a commu- and that British plants no longer built in revenues to cost containment initia- nication device but also the primary South African components. tives, comprising of enhanced efficien- channel to get online, as well as a vital Around a third of Ford’s local pro- cy and cost discipline. tool to access various life-enhancing duction is sold in South Africa and other “This was evidenced by the 21 per- services. sub-Saharan African countries, with the cent decrease in the overheads margin, Access to mobile connectivity has rest exported elsewhere. to end the year at 48 percent against 69 enhanced access to many essential ser- The additional shift will start in Au- percent for prior year,” he said. vices, including education, health and gust and will be focused on the New The NetOne boss further indicat- utilities, while also enabling business Ranger, Ranger Raptor and Everest ed that the parastatal leveraged on its to deliver efficient and sustainable ser- models. The locally-built Ranger is seamless product offering, with the vices through mobile-based platforms ranked as the top-selling pick-up in Eu- One-Fusion bundle taking the market such as mobile money. – Staff Reporter rope and leads light commercial vehicle by storm as it proved to be affordable [email protected] Lazarus Muchenje exports. —Reuters WB approves US$72m support for Zim

Tabitha Mutenga country director said the already acute ments the on-going cyclone response by its board, the World Bank will also mo- Features Editor economic and humanitarian situation in providing timely and flexible financing bilise additional trust fund resources to Zimbabwe was further worsened due to that enhances the coping capacity of the provide technical assistance to the Gov- HE World Bank has approved a the damage inflicted by Cyclone Idai. affected communities while humanitari- ernment of Zimbabwe in setting up an US$72 million financing support “This warrants an extraordinary and an operations continue in tandem through overall programmatic disaster recovery Tto help mitigate the impact of Cy- urgent response from the World Bank, other partners. and resilience framework to help it coor- clone Idai on the most affected commu- and we are engaging partners to mount an “ZIRP addresses critical issues at the dinate the efforts of all agencies support- nities of Zimbabwe and lay a foundation effective response that addresses the most humanitarian-development nexus, com- ing disaster recovery in the country. for regional recovery and longer-term critical needs for immediate and sustain- bining best practice from both fields. The unprecedented scale of the impact resilience. able disaster recovery,” he said. This multi-sectoral approach provides a of cyclone Idai on Zimbabwe represents The project will target the most affect- The project will target the most affect- more integrated, holistic, and sustainable the country’s most devastating recorded ed districts with a focus on immediate ed districts, with a focus on immediate solution and truly illustrates the power of natural disaster, compounding the coun- interventions to support livelihoods re- interventions to support livelihoods re- partnerships,” said Rosemary Mukami try’s already fragile humanitarian situa- generation and restoration. generation and restoration of productive Kariuki, country manager for Zimbabwe. tion. Given Zimbabwe’s non-accrual sta- agricultural and livestock capacities and The project will engage the govern- The cyclone and its aftermath directly tus with the World Bank, the Zimbabwe healthcare services, as well as medi- ment’s national, provincial and local impacted 270 000 people; displaced close Idai Recovery Project (ZIRP) will be um-term recovery and resilience-build- structures at the various stages to ensure to 60 000 people; caused estimated direct processed and financed on an exceptional ing to rehabilitate critical community in- close coordination and collaboration with damages of $622 million; and signifi- basis, reflecting international recognition frastructure, such as water and sanitation the programs of humanitarian and devel- cantly damaged infrastructure, proper- of the unprecedented humanitarian crisis systems, community schools, roads, and opmental agencies involved in support- ties, crops, and livestock, with estimated caused by Cyclone Idai in the country. disaster risk mitigation and preparedness. ing cyclone recovery in Zimbabwe. building-back-better needs of up to $1,1 Paul Noumba Um, the World Bank The World Bank’s support comple- Beyond the project just approved by billion. [email protected] Page 34 | July 18-24 2019 The Financial Gazette National News SAA has US$85m stuck in Zimbabwe

OUTH African Airways (SAA) has approxi- mately US$85 million locked in Zimbabwe Sthat it cannot currently access due to the coun- try’s liquidity crisis. According to SAA regional manager, Winnie Muchanyuka, the funds are trapped in Zimbabwean banks. Zimbabwe is facing severe foreign currency shortages. Foreign currency is needed to transfer the proceeds of local ticket sales to airlines outside the country. The forex shortage has seen the Reserve Bank of Zimbabwe (RBZ) issue an exchange control direc- tive to banks to move funds to its coffers, in a devel- Tourists visiting Zimbabwe are allowed to use their own currencies when making payments. opment that is likely to further delay the payment. The RBZ guaranteed that the funds will be paid to the beneficiaries in US dollars, a move that is meant to preserve value after the country introduced a local currency as the sole legal tender, abandoning its former multi-currency system. Tourists to transact in US$ SAA said it will comply with the directive to Tabitha Mutenga to facilitate downstream payments in foreign move the funds to the central bank. from non-residents (foreign tourists). Features Editor currency. “SAA will comply with exchange control reg- “Effectively, tourism players can receive Zimbabwe still encourages the use of plas- ulations of the land and as such the debt will be payments in foreign currency from foreign HE Reserve Bank of Zimbabwe (RBZ) tic and electronic money in line with interna- moved to Reserve Bank as per statute, we await in- tourists when paying for non-consumptive says foreign tourists visiting the country tional best practices. structions from the bank as to how the process will and consumptive tourism services and goods are allowed to use their own currencies The country’s tourism sector is looking flow,” said Muchanyuka. T respectively,” he said in a presentation to the in cash or through credit and debit cards. forward to closing the year with an above 50 Another South African-owned company, Nam- Chartered Institute of Accountants Zimbabwe. This comes after the southern African coun- percent capacity utilisation, although challeng- pak Zimbabwe, has since agreed with the RBZ “Such receipts are credited into a nostro try last month ordered the Zimbabwean dollar es such as price distortions, fuel shortages and terms for its US$57 million trapped in Zimbabwe. foreign currency account of the local service to be the sole currency for domestic transaction power cuts are threatening the viability of the The Reserve Bank will pay Nampak Internation- provider.” and banned the use of foreign currency, which industry. al the amount owed by the Nampak Zimbabwe in However, according to the new law — Stat- had been in circulation for the past decade. The tourism sector has been identified as a quarterly installments over three years. utory Instrument 142 of 2019 — tourism op- William Kavila, RBZ’s deputy director for key economic pillar in the current transitional “An agreement was reached between Nampak erators are not allowed to pay local suppliers economic policy and research development, stabilisation programme and is seen reaching Zimbabwe, Nampak International and the Reserve of goods and services in foreign currency or said in terms of Statutory Instruments 323 A five million tourists and contributing -15 per Bank of Zimbabwe,” said Keith Nicholson, compa- charge domestic tourists in foreign currency. and 323 B, players in the tourism sector were cent to the gross domestic product from the ny secretary for Nampak Zimbabwe, is reported to Kaviya noted that prior exchange con- designated as tourism operators who are per- current eight percent, by 2030. have said. — Fin24 trol approval is required for the operation of mitted to receive foreign currency payments special foreign currency transitory accounts [email protected]

ForFor the the week week ending ending 13 17March July 20192019

For the week ending 13 March 2019 Life & ArtsNews Worth Knowing July 18-24 2019 Page 35 Bastille Day Celebrations in Paris and Harare

LL eyes were on inventor on the site where the Eiffel Tower now clove, allspice and cinnamon, was also Franky Zapata as he soared on stands. On this day, known as French Na- delicious, while thinly sliced Bayonne his jet-powered fly-board high tional Day, national unity was accom- ham melted in the mouth. above the flag-carrying plished, and it's this event that the French There were platters of Roquefort cheese, Acrowds celebrating Bastille Day in the celebrate every year on 14 July. made in the south of France from sheep's Champs Elysees last Sunday. Clutching a Following the ambassador's address, milk. Sometimes described as 'the cheese rifle, he echoed the focus on European speeches from Zimbabwean dignitaries of kings and popes', Roquefort is one of military co-operation, theme of this year's and the singing of national anthems, the most popular blue cheeses in the celebrations in Paris. world. Among the other cheeses, not all In Harare, however, where His Excellen- of which I was able to identify, was Cam- cy Ambassador Richard Boidin and Mme A Matter of Taste embert, a soft and creamy cheese made Agnes Moreau celebrated La Fete Natio- from cow's milk. It's deep, earthy flavour nale, or French National Day, with a with paired with thinly sliced saucisson and a lunchtime reception in the garden of their Charlotte Malakoff slice of white bread, was perfection. residence, the focus was more on the Waitresses served chilled champagne as Sumptuous repast of French charcuterie and cheeses. French ideals of liberty, equality and fra- we walked from stall to stall of compa- Biennale, get in touch. rieties of bread pre-mixes. A graduate of ternity, than on warfare. guests were summoned to help them- nies and organisations with connections I was drawn like a moth to a flame by an Midlands State University, he provides English-speaking countries refer to Le selves to a sumptuous repast of French to France. The Alliance Francaise offers artistic display of freshly baked bread technical support for Lesaffre's bakeries, Quatorze Juillet as Bastille day, the day charcuterie and cheeses. Lovers of language lessons and a host of cultural made at Lesaffre's baking centre in Work- while conducting research for new when French workers, rioting over taxes, French cuisine will understand the re- activities that include art exhibitions, mu- ington. Lesaffre, a French company, ac- pre-mixes and new products. economic inequality, out-of-touch lead- spect that French cooks have for their in- sic festivals and the screening of French quired a majority stake in Anchor Yeast in Procurement officer Anna, who studied at ers, and the absence of bread in the shops, gredients, and the skilled techniques that films with English sub-titles. Farther on, 2015, and is now Zimbabwe's sole manu- Chinhoyi Institute of Technology, is re- stormed the prison fortress of the Bastille, were used in creating the cuts, cures and Motul, a global French company, was facturer of yeast. The world's leading pro- sponsible for sourcing the products re- releasing the seven resident prisoners, re- flavours of this unique feast. showcasing its lubricants for engines and ducer of yeast and related ingredients quired for the manufacture of yeast, such moving the ammunition stores and be- Pate de Campagne, a special occasion industry, while AGS Records and Man- used for baking, Lessafre began opera- as molasses from Chiredzi, oil and chem- heading the governor of Paris. July 14 dish, quickly found its way onto my plate. agement in Bluff Hill offered physical tions in Lille, in France, when two cous- icals. The secret of obtaining these essen- 1789 became a defining moment in West- Made from pork shoulder, pork fat and and electronic archiving for all paper ins founded a distillery producing ethanol tials, she said, is to pay in advance. ern history, a revolt leading to a revolu- offal, bound together with garlic, green work, records and important documents. from juniper berries. This led to a method Celebrations are over for another year, tion. peppercorns, brandy and double cream, AGS will also make digitised records of of producing fresh yeast, revolutionising and while Bastille Day may have been a Ambassador Boidin reminded his guests the finished product tasted sweet and heritage pieces and art works, so if you the baking industry in France. day of bloodshed, the National Day of that one year later, on the same date in earthy, rich and delicious. Another porky want to preserve for your grandchildren Lovewords Takawira is the Baking Cen- Unity and Reconciliation that took place 1790, a national day of unity and recon- product, saucisson, or dry-cured fer- that floor to ceiling painting by Gareth tre manager at Workington, supervising a year later is the one to admire and emu- ciliation was held at the Champ de Mars, mented salami flavoured with nutmeg, Nyandoro that you bought at the Venice the production of yeast and the many va- late. Nyaradzo partners Chicken Inn ASTLE Lager Premier going to have free funeral cover so getting funeral cover. In addition to Soccer League title aspi- that they focus on the ball,” he said. the bus, Chicken Inn will also have rants Chicken Inn got a “We are going to provide trans- the bus insured and serviced by the boost last week when they port so that the focus on the ball re- same company. Cwere handed over a 65 seater bus by mains high. We want to make sure Onias Moyo, Simbisa Brands’s Nyaradzo Group (Nyaradzo). they are able to fulfil their fixtures financial director, said the group, Tendai Kanjanda, Nyaradzo’s and play soccer. The club will also which owns and sponsor Chicken general manager, said the company’s benefit commission through distri- Inn, was grateful for Nyaradzo’s intention is to provide solution to bution of our product. This is finan- good gesture. football clubs so that they have fi- cial aid to help them fulfil other -fi “They promised before the sea- nancial independence. nancial needs that they might want.” son and they have lived up to their “The players, the technical de- Chicken Inn and Nyaradzo com- promise. It’s now up to the team to partment and some of the adminis- menced their partnership at the be- also live up to their billing,” said trators and some former players are ginning of the season with players Moyo. — Staff Reporter

Slice grill and burger staff at the official opening. Slice Group unveils new offerings Freedom Mashava “We also thought of the grill and we under- Staff Reporter stand people in this area like grilled chicken, burgers and salads. It was a crazy idea and l said IMBABWE’s second largest fast let’s start with Avondale, and here we are.” food franchise company Slice Group Eve Gadzikwa, the Slice Distributors depu- launched its first and new Slice Grill ty chairperson, said the opening of the new & Burger at Avondale Shopping Cen- brand will result in the company satisfying cus- Ztre in Harare last week. tomers from different classes of the communi- The group has 25 outlets across the country, ty. which consists of Chicken Slice, Pizza Slice, “From the humble beginnings, Slice has Slice bakery and Creamy slice. grown in size and importance, gradually estab- Tawanda Mutyebere, Slice Group’s chief lishing itself as a locally, nationally and region- executive, said his idea to provide affordable ally recognized fast food outlet,” she said. and delicious food to long distance travelers “We take pride as we get requests to open along Harare-Masvingo road was now bearing branches across the country and outside”’ she fruit. added. “The crazy idea come in 2010 when I The country’s fast food industry has seen thought about constructing a restaurant in my significant growth in the last decade, with a home area such that when people are traveling substantial number of companies such as Sim- to South Africa they will stop by and eat, and bisa Brands Limited, Kelly’s Chicken, Chicken that was the beginning of Chicken Slice,” he Village, Eat and Lick, Mambo’s, Papa Chino said. and Meat and Eat servicing the industry. The Zimbabwe Gems will today play against Mala- News Worth Knowing wi with whom they are level on four points. A win for the Gem will keep their hope of finishing as high at Sport fifth at the 2019 Netball World Cup in England alive. Page 36 July 18-24 2019 to spot who is from where: the left arm spinner is likely to be Bangla- deshi, the seamer local, the enforcer SPORT SHORTS South African or Afro-Caribbean, the correct opening batsman from Mumbai. Yes, these are stereotypes, COSAFA throw but they became so for a reason. Brexit be damned, this is a coun- Zifa under the bus try that not only attracts the best tal- THE Zimbabwe Football Association's (ZIFA) bid to have ent from around the world, it gives their former president, Philip Chiyangwa, recalled from the A team them a chance to shine. Morgan, leadership of Council of Southern Africa Football Associa- who has played for Ireland, is the tions (Cosafa) has hit a snag. man who should get the most credit Chiyangwa was elected Cosafa president on a five-year for turning the perception of the team mandate at the Southern African Football Associations con- around. While before there would gress held in South Africa, in December 2016. have been serious cribbing about En- Responding to Joseph Mamutse, Zifa's chief executive's gland being exploitative in the way it letter to have Chiyangwa recalled, Cosafa secretary-general, cherry picked players to fill its crick- Sue Destombes, said the allegations being levelled against et team, now there is a sense that this Chiyangwa were purely domestic issues that had no basis of many is more of what the world needs. at Cosafa level. Morgan acknowledges differ- Destombes also told Mamutse that although Chiyangwa ences is background and upbringing was Zimbabwean he was elected to lead Cosafa in terms of while not highlighting them. Morgan the regional body’s constitution for which Zifa do not have assures every player that he will get a mandate. the rewards due to him if he is willing “We are in receipt of your letter dated 10th July 2019, the to put in the hard yards to get there. contents of which have been noted and we respond as fol- Morgan makes England cricket look lows. Your allegations against the former President of Zifa, good at a time when it seems like whether founded or unfounded, are domestic in nature and he might not be around to enjoy the should, therefore, be dealt with in Zimbabwe. These issues coloursish-Asians, Blacks and people from ers who take up Kolpak contracts fruits of the legacy he helped create. have nothing to do with Cosafa. The President of Cosafa EADERS of a certain vin- tage will remember Mike Ethiopia. I cheer for them,” Tebbit and ply their trade in this country. When asked if he would be right was duly elected by the General Assembly of Cosafa in De- Marqusee’s book ‘Anyone told the Indian Express in an inter- But, unlike before, there is a dis- up there with Bobby Moore, who cember 2016 in accordance with Article 10.3 of the Statutes, R won the 1966 World Cup, or Martin she said. but England’, an outsider’s look at view last year. tinct feeling that this is not a case the game we all love that went on “The race isn’t an issue like it of England stealing players from Johnson, the rugby player who led Destombes said Zifa did not have the right to recall Chi- to become a classic. Marqusee, who used to be. The time to talk stuff like around the world to strengthen their England to the title in 2003, with a yangwa as Cosafa president despite his nationality. calls himself “a deracinated Ameri- ‘whether it’s in the blood’ is gone ranks. Rather, it is the case of setting Mount Rushmore style immortalisa- “The Zimbabwe Football Association, a member of can Marxist” wrote a book that was now. It has gradually washed away. up a system where everyone wants tion, Morgan was placid. “Not at all. Cosafa, should not seek to use the Office of the President of the classic outsider’s take, not the Assimilation has already occurred. to be included and then legally and There’s no Mount Rushmore. Prim- Cosafa to resolve domestic disputes and in so doing, bring immigrant’s, looking at cricket in The more non-ethnic English get otherwise work their way through rose Hill, that’s about it.” the Zonal Union and the Presidency into disrepute. It is the general and England in particular into the English cricket team, the the ranks to rightly and deservedly When asked if there would an prerogative of any Member Association to consider whether through a lens that threw out rose more it will become obvious that the represent a proud cricket nation at open bus celebration and ticker-tape or not to participate in the activities of the Zonal Union," tinted glasses and bacon-and-egg door is open to full integration.” the peak of its One-Day Internation- parade, Morgan was just as calm. Destombes said. ties at Lord’s. It was a runaway suc- In 2019, when England won al cricket powers. “ I take the bus through London. It She said she hoped Zifa would act in a responsible man- cess because it felt the pulse of the their first cricket World Cup, they Take almost any street in London doesn’t bother me if there is one. ner and seek to resolve any differences so that the focus of rest of the world at the time. were led by a proud Irishman who or Birmingham or Manchester and Well, I’m just delighted to win.” the leadership can be on football development and reaching Readers of a similar vintage continues to live in Dublin; their best you will find the same mix. White And finally, when it was put to the full and considerable potential which Zimbabwe has. - will also remember Norman Tebbit bowler, Joffra Archer, is Bajan and Englishmen of privilege, white En- him that the World Cup win would Sports Reporter and his infamous Tebbit test, which only recently qualified to play- un glishmen from the working class, change his life forever, Morgan asked immigrants in England to der this flag; their key batsman and people of Indian, Pakistani, Sri was nonplussed. “I hope it hasn’t prove their loyalty to Queen and all-rounder, Ben Stokes, is New Zea- Lankan, Bangladeshi, South Afri- changed that much. I enjoy my life. Rainsford steps down country by supporting their adopted land born; their main spinner, Adil can, Australian and New Zealand I lead quite a quiet one, so I hope it nation at sport. Tebbit walked that Rashid, is from the Mirpuri com- origins, living together, working to- hasn’t changed too much. I would from ZC board love it to change for everybody else back in his later years. “Tebbit Test is munity, tracing his origins to Azad gether, making the country stronger. FORMER Zimbabwe international cricketer Edward who wants it to change, but I enjoy immaterial now. If I were in charge Kashmir, Bradford-born; Their From a cricketing per- Rainsford has declined his appointment as a board member my life.” of cricket, football or athletics in most exciting bats- spective it is of Zimbabwe Cricket (ZC). - economictimes.com the coun- try, I would be man, Jason Roy, is easy Rainsford was elected on special skills to be part of the choos- ing Brit- as South African new board elected in Victoria Falls last month. as any of the However, the Sports and Recreation Commission (SRC) Proteas play- had directed ZC not to go ahead with the election citing a number of irregularities. As a result, the entire ZC board led by chairman Taveng- wa Mukuhlani was suspended creating chaos in the local game since the International Cricket Council (ICC) does not allow external interference. In a letter to Tavengwa Mukuhlani, the suspended chair of the ZC board from Rainsford's lawyers Samukange/ Hungwe Attorneys, the former Zimbabwe fast bowler said he was not taking the offer. “Our client advises us that at the Annual General Meet- ing of Zimbabwe Cricket held on the 14th of June 2019, he was nominated as a board member/director in terms of section 35 (4) of the Zimbabwe Cricket Constitution,” said Samukange/Hungwe Attorneys. “While the nomination was done in his absence, our cli- ent has not received any formal notification of this nomina- tion and consequently has not accepted such nomination. “Our instructions are that, Mr Edward Rainsford respec- tively declines the nomination/possible appointment into the Zimbabwe Cricket structures as he is pre-occupied with other criket related commitments at the moment,” they said. The suspended Mukuhlani-led ZC recently suffered an- other blow after the High Court dismissed, with costs, its urgent chamber application seeking to overturn the deci- sion of the SRC. Zimbabwe’s future in Test cricket and a as Full Member England beat New Zealand to win the men’s World Cup for the first time after one of the most amazing games of cricket ever will be determined at an ICC board meeting in England this played was tied twice. It meant England were crowned world champions by virtue of having scored more boundary fours and sixes week where Mukuhlani and the interim ZC board have all – 26 to New Zealand’s 17 – in the entire match. been invited to make their presentations. - Sports Reporter