AFRICAN SUN, LEGACY DEAL SOURS: Page 3 $4

News Worth Knowing ‘Zim such a small economy’: Page 7 February 28-March 6 2019 ESTABLISHED 1969 @ FingazLive www.fingaz.co.zw Facebook: The Financial Gazette

ZSE Report The All Share index dropped 0,12 percent on Tuesday to ‘Floating close at 151,99 points. Old Mu- tual lost a further $0,1361 to settle at $8,8539, while Hippo Valley Estates was down by $0,0374 at $1,7101 as Edgars decreased by $0,0250 to end at $0,1015. The Industrial index was down 0,13 percent to close at 506,99 points, and the Top 10 index lost 0,46 percent to close currency at 149,57 points. The Minings index was flat at 216,50 points.

Currencies (Bloomberg) % change ◀ USD:ZAR 13,8624 0,21 ◀ EUR:USD 1,1397 0,07 ◀ GBP:USD 1,3299 0,35 USD: JPY 110,4300 1,4 ◀

Stock Markets ZSE (All Share) 151,99 0,12 alone not ◀ ZSE (Mining) 216,50 0,00 ◀ JSE 16399,00 0,55 FTSE 100 7 096,71 0,76 ◀ 26 057,98 0,13 Dow ◀

Commodities (Bloomberg) 0,12

Gold 1 327,35 ◀ ◀ Platinum 868,05 0,76 ◀ sufficient’ Brent Oil 65,80 0,90 Paul Nyakazeya eign currency. We need to cloud seed the market Grains (Grain SA) White Maize ZAR 1 993,81 1,3 Online Editor with foreign currency,” he said. ◀ Soya ZAR 4 591,78 0,6 Chris Mugaga, the Zimbabwe National ◀ Wheat ZAR 2 338,58 1,3 HE Reserve Bank of Zimbabwe (RBZ) Chamber of Commerce (ZNCC) chief execu- ◀ and analysts agree that the recent intro- tive, said the 30-day maximum retention period Tduction of a battery of measures to stabi- for foreign currency earnings, was also poten- lise the foreign exchange market and commod- tially problematic. Warren Buffet ity prices by the central bank would not alone “The retention window should be pushed to solve the country’s economic challenges. 90 days, as 30 days is too tight. And because loses $25 billion This comes as experts have also warned that the interbank market for foreign currency has WARREN Buffett's company demand for hard cash in the country is likely to just been introduced, it will probably be volatile recorded a $25 billion loss in the remain high in the foreseeable future — with initially, and there needs to be a cushion for ex- fourth quarter to December 2018 Zimbabwe’s external payment backlog still at porters,” he said. due to a big drop in the paper val- US$600 million. “With the current arrangement, we might ue of several stock investments. And with banks having traded not much thus have exporters looking for havens outside The US billionaire said Berk- more than RTGS$5 million at last week’s cur- of the system,” Mugaga said, adding that “and shire Hathaway's businesses are rency auctions — against an aggregate monthly if they go to the grey market, then we will be performing well overall, but it demand of RTGS$200 million-plus — concerns defeating the very purpose of the interbank mar- has to record the market value about the adequacy of the new policy measures ket”. of its stock holdings at the end are not unfounded. Nick Ndiritu, a money manager at Allan ECOCASH chief executive Natalie Jabangwe at the launch of of each quarter and Buffett has “Companies need to boost production be- Gray, concurred saying: “Once the dust set- the company's mobile money service's real-time rewards pro- struggled to find attractive acqui- cause the floating of the US dollar alone will tles … the long-term success of any currency gramme in Harare last week. EcoCash is a subsidiary of Cassa- sitions recently. not, for example, enhance productivity in the reforms in Zimbabwe depends on the extent to va Smartech (Cassava), a fintech firm that was recently spun off Berkshire lost $25,4 billion, country,” bank governor John Mangudya told a which government can curb the growth of mon- from telecommunications group Econet Wireless and listed on or $10,31 per Class B share. This is down from last year's profit of local daily last week. ey supply and maintain fiscal discipline”. the Zimbabwe Stock Exchange. - Picture by Freedom Mashava — Picture by Freedom Mashava $32,6 billion, or $13,19. “We will arrange foreign lines of credit since “It is too early to tell how this new system -Bloomberg demand will be greater than the supply of for- To Page 2 Page 2 | February 28-March 6 2019 The Financial Gazette National News ‘Floating currency alone not sufficient’

From Page 1 foreign currency supply constraint will work, but it is an important step bottlenecks and the consequent un- in the right direction,” he added. viability of the interbank foreign “Given the persistent mismatch currency market”. between demand and supply of for- Research firm Akribos Capital eign currency, and the lack of for- said the success of the interbank eign reserves among other factors, foreign currency system was likely the weakest link remains the abil- to “reduce” parallel market trading, ity to sustain a stable market-de- as corporates shifted to the formal termined exchange rate,” banking market. group BancABC said in an advisory “The major point of concern was note last week. financial dis-intermediation, given It added that “in the event that that foreign exchange transactions the exchange rate remains under were being done in the parallel or persistent depreciation pressure, the alternative market, and there was economy may gravitate towards hy- limited activity in formal banking perinflation, leading to abandonment channels,” it said this week. of RTGS dollars while speeding up However, Akribos also said the Adrian Cloete Gift Mugano the pace of re-dollarisation”. Trust Chikohora parallel market would not “fade Economist Trust Chikohora said: for exporters. tions will undoubtedly slow down rate,” he said. away” completely, given that it re- “Demand for foreign currency will “Exporters have the answers to economic growth in the medium In this light, South African Air- mained a key source of foreign cur- remain high and the rate could move all our problems and government has term, it is still the best foot forward ways — which has nearly R1 billion rency for individuals and informal upwards if the supply side … is not to make life as easy as possible for towards creating a stable and pre- stuck in Zimbabwe — had since im- businesses. addressed”. them,” he said. dictable macro-economic environ- posed strict ticketing conditions in On Friday last week, Finance “I still advocate for us to do away “Right now, every exporter faces ment,” he said. response to the new measures. minister Mthuli Ncube told a Daily with the bond note and trade in forex a mountain of regulations and the The Oxlink Capital founder also Old Mutual Securities (OMSEC) News breakfast meeting that the 1:1 for now until economic fundamen- need for so many permits, all cost- said under the current economic en- also said a lot more needed to be policy had cost the economy and the tals are right because the RTGS dol- ing money, and so much so that some vironment, the only way to protect done to fix the economy, including State billions. lar is likely to continue losing value, have even given up trying to find the value of the RTGS dollar was enforcing fiscal discipline in govern- Gift Mugano, another economist, resulting in inflationary pressures, foreign markets,” Robertson told through a free-floating rate. ment. also said the 1:1 rate had created and distortions,” he added. The Financial Gazette. Muchemwa emphasised that ex- “The effectiveness of a foreign several problems, including corrup- On the currency retention thresh- He also said the two percent ports needed to improve to ensure an currency market and sustainabili- tion and other arbitrage opportu- olds, Chikohora said “exporters will transaction tax was adding to pro- adequate supply of US dollars. ty of the new RTGS dollar will be nities emanating from the inherent still need to surrender a portion of duction costs, making local goods Adrian Cloete, a portfolio manag- largely determined by the ability of distortions. their forex to the RBZ at 1:1, mean- less competitive in foreign markets. er at Cape Town-based PSG Wealth, the government of Zimbabwe to cut He said by liberalising the ex- ing that although exporters will now Brains Muchemwa, another econ- said South African companies with back on its deficit-financed expendi- change rate, the RBZ had thus wiped get more value for their money, they omist, said while the move by the significant holdings in bond notes ture activities. out the possibilities of such grey ac- will still not get full value”. RBZ towards “a full float” was com- valued at par with the greenback “The second pillar … of this pol- tivities. On his part, veteran economist mendable, a corresponding rise in would be hard hit by the new mon- icy is ensuring that the export indus- “By floating the change rate, the John Robertson said if exports were interest rates and reserve thresholds, etary measures. tries’ operating environment is con- competitiveness of exporting sec- properly supported, foreign reserves to further shore up fiscal prudence, “Those South African companies ducive for competitive commercial tors is expected to significantly im- would improve markedly and to would help to anchor the exchange … when preparing their statements, enterprise,” OMSEC said, adding prove,” he said. such an extent that government rate. would be impacted as they would that “any market distortion over the [email protected] would allow 100 percent retention “While the tight liquidity condi- have to translate now at a different interbank market rate could cause See also Page 8 $8bn coming our way – Ncube

Ndakaziva Majaka measures implemented by the govern- “There are other mining deals that securities. Markets Editor ment will see increased foreign capital we are still negotiating, but the US$8 Meanwhile, the Treasury chief high- competing for space in the country’s billion ones are already guaranteed. lighted that he would embark on a “non- INANCE minister Mthuli Ncu- mining industry. Capital can only come in where it deal investment roadshow” later this year, be says Zimbabwe has secured “The mining sector has been re- knows it can go out and we have ad- to court more investors for the country’s Fmining deals worth $8 billion, ceiving keen interest from various dressed the fixed exchange rate which various economic sectors. in a move that is expected to boost the quarters and we have so far secured has been hindering foreign direct “In June/July, we are going to have a country’s waning economy. US$8 billion investments that will see investment,” he said last week at a global non-deal roadshow. We will visit This comes as the southern African real money flowing into new projects breakfast meeting hosted by the Daily global capital markets like Frankfurt, Lon- country’s economy has been plunged in diamonds, platinum and lithium for News to review the Monetary Policy don, New York and of course, the West into crisis after foreign currency short- the next three years,” he said. Statement. Coast. ages recently stoked the fastest in- Ncube noted that these targeted This was after government had “After this one, we will then have a crease in consumer prices in more than deals alone have capacity to generate dropped its insistence that bond notes deal-signing roadshow as a follow-up, so a decade and caused shortages of food, over US$12 billion in revenues and were at par with the United States dol- there are definitely big things lined up for fuel and medicine. create massive employment opportu- lar as it overhauled foreign-exchange this year,” he said. Ncube said new currency reform nities. trading and effectively devalued the Mines minister Winston Chitando recently said Zimbabwe was looking at raising mineral contribution to the economy from the current $2,4 billion to $12 billion per annum by 2023. “Only 60 percent of the country’s land Mthuli Ncube has been mapped for exploration but the use project. This was the first big investment of old techniques and machinery could not since President Robert Mugabe’s ouster in allow for notable discoveries. Fundamen- November 2017. tally, I would like to state that the mining Karo’s platinum project will start in industry is poised to become a $12 billion 2020 and produce 1,4 million ounces a year industry by 2023 and you may be aware that of platinum-group metals at full output, po- in 2017, revenues were around $2,4 billion. tentially making it the country’s top produc- “Last year, we did about $3,4 billion. er by 2023, according to Chitando. In 2019, we are projecting about $4 billion Following this, Zunaid Moti’s African and we are getting to $12 billion by 2023. Chrome Fields set up a plant in Kwekwe All the milestones to achieve that are all in with the South African billionaire revealing place,”Chitando told officials of a Canadian that he had purchased about 15 000 hectares mining investor ― Polaris Seismic Interna- of lithium claims around the Mutoko area tional Limited ― who were in the country. in an expansion drive set to see the group According to the Chamber of Mines, the embark on diamond beneficiation as well. country needs up to $11 billion to modernise Smaller players like Russian-linked coal its mines and boost production to maximum miner, Liberation, have also found their way capacity over the next five years. to Zimbabwe. Interest in the country’s mining sector More recently, Alrosa, the world's larg- grew following the rise of President Em- est diamond firm, announced it plans to merson Mnangagwa in 2017, with Karo Re- launch in Zimbabwe on the eve of talks in sources, a company linked to Mnangagwa’s Moscow between Mnangagwa and Russia’s crony Loucas Pouroulis, pledging to spend President Vladimir Putin last month. $4,2 billion on a Zimbabwean platinum [email protected] The Financial Gazette February 28-March 6 2019 | Page 3

National News African Sun, Legacy deal goes belly up

Eric Chiriga and Adelaide Moyo Staff Writers

OSPITALITY group African Sun Limited (Afrisun)’s management Hdeal with Legacy Management Ser- vices (Legacy) has soured amid revelations that the two companies were going for arbitration this week. This also comes as the Zimbabwean safari operator’s parent Brainworks Limited has reportedly emerged as a serious takeover target of Asia Pacific hotel investor Minor International (Minor), in a development that has allegedly precipitated the South African leisure company’s anxiety and contract with Edwin Shangwa’s company. “I confirm that the case between Legacy … and Afrisun is scheduled to be heard on Edwin Shangwa Wednesday, 27 February, 2019…,” Muchad- eyi Masunda, chairman of the Commercial neers, who wanted $16 million in consulting Arbitration Centre, told The Financial Ga- fees for an Equitorial Guinea project and its zette. marriage with the South African firm has “Legacy, the claimant, is represented by run into problems after having been told or Alec Muza of Mawere Sibanda while Afri- advised that the deal was “costly, and unsus- can Sun, the respondent, is represented by tainable”. Raymond Moyo of Gill Godlonton & Ger- In 2015, Afrisun entered into a partner- rans,” he said, adding that the appointed ar- ship that saw Legacy managing five of the bitrator is Justice November Tafuma Mtshiya group’s flagship hotels in the country. ― a retired High Court judge. The agreement provided for the manage- South Afrca-based Robert Hodson, Leg- ment, refurbishment and expansion of the acy’s operations manager in charge of Zim- group’s strategic assets at a minimum cost of babwe, Namibia, Ghana and Nigeria, last $60 million over two years. week refused to shed light on the nature of At the time, former Afrisun chairman the dispute. Herbet Nkala said the group had approached “It’s a process (the arbitration) that is six international management firms before currently ongoing between us. I cannot com- settling for Legacy. ment about it at this stage,” he told The Fi- According to sources, the move to bring nancial Gazette. in the Legacy franchise was mainly driven According to sources privy to the devel- by Afrisun’s controlling shareholders Brain- opment, Minor intends to restructure Af- works, led by George Manyere then. risun ― a move which will affect Legacy’s In May 2015, Brainworks shored up its management contract ― if it successfully shareholding in African Sun to 55,11 percent acquires Red Rock Capital’s 33 percent after the closure of its mandatory offer to the stake in Johannesburg Stock Exchange-listed hotelier’s minority shareholders. Brainworks. The hotels under the management con- Afrisun is Brainworks' major asset. tract are the Elephant Hills, Kingdom Hotel, However, Brainworks chief executive Hwange Safari lodge, Monomotapa Hotel Brett Childs said: “Brainworks has no inten- and Troutbeck, Caribbea Bay and Fothrgill tion of disposing of its stake in Afrisun, it is Island put in the pipeline for future expan- one of our core assets.” sion. On the other hand, Afrisun CE Shangwa At the time, government said the tourism said: “I cannot comment on this matter at this ministry will monitor whether the union be- point because we are currently in a closed tween Afrisun and Legacy would add value period.” to the tourism industry and the economy. This is not the first time Afrisun has been Currently, Afrisun’s parent company is embroiled in high-profile legal troubles after Brainworks, which owns 57,67 percent. it was dragged to court by a group of engi- [email protected] SA already looking like junk in CDS market Colleen Goko ket pricing in moderate risk of a down- grade," Shireen Darmalingam, a Johannes- HE consensus among economists is burg-based economist at Standard Bank that South Africa will hold onto its Group, said in a client note. “Nevertheless, Tinvestment grade status for the time despite South Africa’s fiscal outlook now being. Derivatives traders are not so sure. even worse and the economic outlook even The cost of insuring South Africa’s gov- bleaker, we believe that Moody’s will likely ernment debt against default is higher than keep the sovereign rating unchanged.” Brazil’s, which has a non-investment grade Finance Minister Tito Mboweni’s budget rating from Moody’s Investors Service, S&P last week went some way toward allaying Global and Fitch Ratings. South Africa’s concern about a cut to junk. While bailing five-year credit default swaps were trading out the state-owned electricity company Es- at 184 basis points on Monday, compared to kom Holdings to the tune of R69bn, Mbowe- 162 for Brazil. ni assured investors the government would Moody’s, which ranks South Africa’s not take over any of the utility’s debt, as debt at the lowest investment level, is re- many had feared. Still, the country breached viewing its assessment on March 29. The its spending ceiling and forecast a widening CDS spread was 164 basis points when the fiscal deficit to help pay for the support. company last reviewed, and affirmed, the The slippage “points to an erosion of rating in November. S&P Global Ratings South Africa’s fiscal strength and highlights and Fitch Ratings both cut the country’s debt the government’s limited fiscal flexibility,” to junk in April 2017. Moody’s said in a statement on Thursday. “The current CDS signals the mar- – Bloomberg Page 4 | February 28-March 6 2019 The Financial Gazette National News Zimbabwe dairy herd Zim moves to ditch plummets to 32 000 Tabitha Mutenga of raw milk supply and in seeing Features Editor this gap, the Ministry of Industry and Commerce has allowed pro- indigenisation law IMBABWE’S dairy herd cessors to import duty-free pow- has declined to 32 000 from ders but that does not mean we Ndakaziva Majaka tations countrywide on the Bill. be exploited through corruption so there is Z192 000 as the industry have forgotten the supply side. Markets Editor President Emmerson Mnangagwa re- need to ensure this does not happen,” he continues to struggle to meet the “As an industry we are say- cently said the new law is part of his gov- said. national milk requirements, The ing that we need to fix the local IMBABWE is set to enact a new ernment’s efforts to improve the ease of Overtures to alter the controversial Financial Gazette can reveal. supply side so any processor who Companies and Other Entities doing business and attract much-needed empowerment law started in 2017 when Cleopas Murenzi, the Dairy Re- is importing duty-free milk pow- Zlaw that makes provision for for- foreign investment. government announced it was amending vitalisation Programme chairman, ders should also support the local eign-owned firms to set up business with- “That is why we have moved quickly to the Indigenisation and Economic Empow- acknowledged that the industry producer because we do not want out local shareholders. do away with the indigenisation law. The erment Act to reflect its policy position that was facing a number of challenges to wipe out the productive sector. Industry experts said the new law, move gained us 11 points on the global the 51-49 percent requirement only applied but had put in place strategies to re- With this arrangement where the which will replace the outdated Companies ease of doing business last year alone,” he to natural resource-based investments. build the herd as well as boost milk private sector is coming in to aug- Act passed in 1951 ― is expected to attract said. In this investment area, which is classi- supply, especially focusing on the ment government efforts we are new investment and do away with the con- Busisa Moyo, the former Confederation fied as the natural resources sector, foreign small scale producers. actually anticipating a growth in troversial Indigenisation Act. of Zimbabwe Industries president, said the investors are required to have 49 percent “It is true that for some time, milk supply as well as the herd,” According to the Companies and Other Bill would effectively render the Indigeni- shareholding, while Zimbabweans own 51 the performance of the industry Murenzi said. Entities Bill foreign companies wishing to sation and Economic Empowerment Act percent. had gone down especially when He added that the dairy revit- establish a place of business in Zimbabwe useless once it is signed into law. The new Bill states that all companies we compare with the performance alisation programme was assisting must formally apply to the government. “… This means a foreign company can already in existence will need to be reg- of the sector during the early 1990s small scale farmers to fully engage “Unless the minister is of the opinion now set up in Zimbabwe and be issued with istered again ― within 12 months of the when the herd (192 000 cows) pro- in formal dairying through a loan the registration of a foreign company is not a certificate. Indigenisation is effectively commencement of the law ― if/when the duced 260 million litres of milk facility. As a result in 2017, 400 in the public interest, the minister will issue dead and foreign entities will be able to set Bill is signed into law. vis-a-vi a low of less than 40 mil- heifers were imported in a bid to a certificate with or without conditions au- up business in Zimbabwe with great ease,” “To update and modernise the Compa- lion litres,” he said. rebuild the herd. thorising the foreign company to establish Moyo said on micro-blogging site Twitter nies Registry by re-registering all existing At its peak Zimbabwe pro- “We are tracking that herd and a place of business in Zimbabwe,” read part yesterday. companies and PBCs and removing all duced about 260 million litres of it is performing well, right now we of the Bill. Economist John Robertson said while defunct companies and PBCs within 12 milk in 1990-91 but the figure has are looking at about a 120 000-litre The document also notes that the min- this was a positive start, government need- months of the date of commencement of dropped to about 80 million litres contribution from the herd towards ister is involved due to security concerns ed to ensure corrupt-free implementation the Act resulting from this Bill,” it says. produced last year against national milk output,” Murenzi said. in connection with money-laundering and of the proposed changes. The white paper also allows official demand of 120 million litres. From the imported herd, the in- terrorism within the framework of Zimba- “Of course, we have been lobbying for company records and documents such as The industry is targeting an dustry is now looking at about 600 bwe’s obligations to the Financial Action this for a long time so it is a positive victo- minutes to be recorded and kept in any of annual production of 100 million cows under the Dairy Revitalisa- Taskforce. ry. However, what worries me is the min- the recognised official languages of Zimba- litres by 2019. tion Programme. Parliament is conducting public consul- ister’s involvement in the process. It may bwe. [email protected] “There has been a gap in terms [email protected] Law to protect consumers on cards Tabitha Mutenga ternational standards with the help of the Features Editor South African Consumer Protection Com- mission and protects consumers from un- IMBABWE is set to enact the Con- fair trade practices and abuse by suppliers sumer Protection Bill, which seeks of sub- standard goods. Zto shield customers against unneces- “Through this Bill, consumers can now sary price increases by businesses, by April. come together against the profiteers and Market experts say the Bill, gazetted on manipulators of the market place or the December 21, 2018, will help the market to market space. This Bill is a game-chang- have a redress mechanism when the rights er which will transform the way in which of the consumer are breached. producers of goods and services provide “We are hoping that when the Bill goes their services and interact with consumers. to parliament it will sail through and I hope Given the current economic environment, that by April it will be law,” Never Katiyo, consumers were being downplayed and the the Industry ministry director for legal ser- law will bring redress,” he said. vices, said during a meeting with the Parlia- The law is expected to establish a dis- mentary Portfolio Committee on Industry pute resolution mechanism, through arbi- and Commerce in Harare said. tration. Phillip Bvumbe, Consumer Council “It will improve equity in the market of Zimbabwe chairman, said the Bill was place; it will give us transparency, account- a game-changer for the consumer and the ability as well as protecting citizens from market and that there was need to fast-track consuming services and goods that are it into law as violation of consumer rights detrimental to their well-being. It will also goes on unabated in Zimbabwe. bring in a redress mechanism. “For us as consumers this is a landmark “We need to restore the dignity of our Bill. We started advocating for this law over people by assuring them that business and RESERVE Bank of Zimbabwe governor John Mangudya stresses a point during a Daily News breakfast meeting to 10 years ago and the Bill by now should manufacturers interact in the market place review his monetary policy statement last week while Finance minister Mthuli Ncube looks on. Mangudya said his mea- have been an Act. The journey has been in an ethical manner that does not degener- sures, which included the floating of bond notes and reintroduction of the interbank market, are necessary to preserve very long,” Bvumbe said. ate into unfair and unjust practices,” Bvum- the purchasing power of RTGS money and to restore export competitiveness in the economy. Picture by Anne Mpalume The Bill is benchmarked against in- be added. [email protected] Step up anti-corruption fight: Industry Tabitha Mutenga Doing Business report compiled by the EMCOZ called for the commence- ence, medical and health sciences. Features Editor World Bank for 2019 shows a slight ment of the Tripartite Negotiating Forum, “Acknowledging these skills deficits, improvement to position 155 out of 190 a platform on which social dialogue can focused skill training is needed in order HE Employers' Confederation of countries. direct labour market actors, in a way that to attain the 2030 upper middle income Zimbabwe (EMCOZ) says there “Clearly, we are not competitive as fosters harmony among the social part- country vision. In addition retaining the Tis urgent need for government to a nation. Mauritius and Rwanda, ranked ners and lead the economy towards eco- skills and minimising the impact of brain address the issue of business competi- 20th and 29th respectively, are the high- nomic growth. drain would also be consistent with this tiveness, social dialogue, skills deficit and est placed African countries in terms of “We have worked reasonably well vision. Without key and critical skills corruption if the country is to be a middle competitiveness and perhaps we need to with the tripartite partners in Zimbabwe economic development will remain a pie income economy by 2030. borrow a leaf from them. and we are confident that through social in the sky.” Murefu said. Israel Murefu, EMCOZ’s vice-presi- “Our competitiveness is still ranked dialogue we can improve the working He called on government to continue dent, said this, together with clear policy below the average sub-Sahara Africa environment. The major outcome that fighting corruption as the practice was sti- direction on currency reforms, was criti- region. We acknowledge government’s we anticipate from successful social dia- fling growth at country level. cal to stem rising inflation. efforts in effecting reforms that led to this logue is the coming into being of a social “The detection and investigation of “Without a stable currency that re- improvement, chiefly reforms made on contract,” he said. corruption should not only be the pre- tains value, any currency reform will improving the score for ‘starting a busi- Looking at the country’s skills deficit, serve of Zimbabwe Anti-Corruption be futile and will turn the clock back to ness’. Murefu urged government to find ways Commission but government is encour- 2008,” he told delegates at an EMCOZ “We also need to get our businesses Israel Murefu of curbing skills flight as this would neg- aged to borrow some of the tools used meeting in Harare last week. to produce and improve capacity utilisa- atively impact on the country’s Vision by the private sector such as subscribing He added that despite efforts by tion as well as other efficiencies so that external investments if it is to compete 2030. to the tip-off anonymous platform where government to retain business competi- our products and services can compete with other countries, especially from a The 2018 National Critical Skills Au- incentives and rewards are given to whis- tiveness, Zimbabwe was still struggling effectively within the region and beyond. country risk point of view where the right dit report last year identified significant tle blowers without necessarily unveiling compared to other African nations. The country itself also needs to be an at- policies are needed to change investor’s skills deficits in the fields of engineering their identities,” he said. Zimbabwe’s ranking in the Ease of tractive destination for both domestic and perception,” he said. and technology, natural and applied sci- [email protected] The Financial Gazette February 21-27 2019 | Page 5 DICOMM McCANN

Lets create the infrastructure we all want When you pay your taxes they go a long way to; • Provide better healthcare • Ensure education for all • Protect the nation • Develop infrastructure • Create employment

Pay your part & let’s create it.

My taxes, My duties – Building my Zimbabwe! Page 6 | February 28-March 6 2019 The Financial Gazette National News Zim economy faces more headwinds

John Kachembere quarter of 2019. percent in 2021, 3,9 percent tisation programme ― but in the absence of progress on such News Editor There were high hopes in 2022, 4,0 percent in 2023 measures, investors will remain wary. This will exacerbate that Zimbabwe’s economic and 4,2 percent in 2024 be- existing liquidity shortages that are already hindering reform, IMBABWE’S economy is expected to be fortunes will quickly turn for fore flattening to 4,5 percent and will mean that businesses will continue to struggle to buffeted by more headwinds in the coming the better following the depar- for the next three years. access imports,” the think-tank added. Zdecade due to fluctuations in weather con- ture of long-time ruler Robert Fitch Solution also noted The report further indicated that Zimbabwe's bleak exter- ditions, commodity prices and investor sentiment, Mugabe through a military that the flawed July 2018 nal position will continue to weigh on the economy over the an international think-tank has said. assisted intervention in No- elections have reduced the coming quarters, notwithstanding strong production of key This comes as the southern African country is vember 2017. However, the likelihood of a rapid re-en- exports including gold and tobacco. experiencing its worst economic crisis character- economy took a nosedive last gagement with the inter- “The current account will remain in deficit as rising oil ised by foreign currency shortages, rising prices October and foreign investors national community, and prices and demand for imports in order to support infrastruc- of basic goods, company closures, high unem- have given the country a wide a new deal with the Inter- ture development will offset rising export revenues. Invest- ployment and lack of investor confidence in the berth over human rights abus- national Monetary Fund ment flows are unlikely to pick up rapidly, given continued new government. es after the military shot rioters (IMF) remains unlikely until lack of clarity in some key policymaking areas and increas- “Although President Emmerson Mnangag- on August 1, 2018 and again in arrears owed to multilateral ing difficulties in accessing foreign currency,” the report said. wa has introduced some measures as part of an mid-January this year. creditors ― primarily the In an effort to address the foreign currency crisis, Reserve ambitious economic reform programme that will The United States-based World Bank and the African Bank of Zimbabwe governor John Mangudya last week re- promote the private sector, improve the overall research firm indicated that Development Bank ― are moved the controversial 1:1 exchange rate between the bond business environment and encourage foreign Zimbabwe’s economy will Emmerson Mnangagwa cleared. notes and RTGS against the dollar. He also introduced an direct investment, there has yet to be a tangible grow by 2,2 percent this year “The Mnangagwa gov- interbank market rate, which started trading last Friday with improvement in economic conditions,” Fitch before jumping to 2,5 percent in 2020. Gross do- ernment is pledging reforms ― including in- the US dollar trading at $2,50 to the new RTGS dollars. Solutions said in its country risk report for the first mestic product is expected to grow further by 2,8 creased property rights and a wide-ranging priva- However, Fitch Solutions said Zimbabwe's cumbersome and inefficient monetary system will remain in place in the short to medium term, constraining economic growth through repressed inflation and a severe liquidity squeeze. “While policymakers will seek to boost confidence through measures including the separation of nostro (external bank) foreign currency accounts and Real-Time Gross Settlement (RTGS) foreign currency accounts, creation of a viable exchange rate regime will only be possible if it is backed by adequate international reserves and macroeco- nomic stability, and this will only be achievable in the medium to long term,” the company said. Jee-A Van Der Linde, an analyst with NKC African Eco- nomics, concurred with Fitch Solutions and noted that Zim- babwe desperately needs to instil confidence in its monetary system. “The fact that officials finally came to their senses and ditched the notion that Zimbabwe’s quasi currency was at par with the US dollar is comforting. That being said, they did not have much of a choice, as a growing number of foreign traders have refused to accept bond notes as legal tender, which created major payment problems for companies such as grain millers and gold miners, during the last few months. “As we have stated before, the currency issue needs to be dealt with first, because it is crippling the very sectors needed to help turn the mismanaged economy around. Moreover, the intensification of shortages in basic goods, growing social unrest and demands to be paid in US dollars ultimately forced authorities to make a move. With consumer prices soaring, significant amounts of multilateral debt arrears, vir- tually no foreign reserves, and confidence at rock-bottom, Zimbabwe’s problems are still far from over ― nor is the road ahead any clearer. “We expect that the economy will come under considerable pressure in 2019, as government has basically kicked the can down the road in recent years by trying to stimulate the economy through excessive spending,” Van Der Linde added. [email protected] ‘Allied Timbers revamp advanced’ Ndakaziva Majaka Markets Editor

LLIED Timbers Zimbabwe (Allied) restructuring is now advanced, with government ascertaining the Atrue value of the state-owned firm's assets, a Cabinet minister has said. Last week, Finance minister Mthuli Ncube said government ― which is hunting for a new chief executive for Al- lied after the resignation of the parastatal’s boss last month ― was conducting independent valuations regularising the lease agreement between the Forestry Commission and Al- lied Timbers. “At Allied, we are working on a number of issues including valuations and ensuring the organisation gets a chief executive. We are also not happy about the squatters on the land and expect this to be addressed in due course,” he said. This comes as government is moving to partially privatise and list certain state-owned enterprises on the local bourse ― which has had a listing drought save for a few in the past two years ― following years of parastatal reform rhetoric. According to the Auditor and Comptroller General Mil- dred Chiri, Allied’s ability to continue as a going concern remains a uncertain as current liabilities exceeded total current assets by $11,8 million in 2017. “I draw your attention to the fact that this condition indi- cates the existence of a material uncertainty which cast significant doubt on the group’s ability to continue as a going concern,” she said in her report on the parastatal for 2017. Last month, Daniel Sithole, the former Allied chief executive, appeared in court for flouting procurement procedures at the state-owned company and ended up resigning. Sithole was charged with two counts of criminal abuse of office along with Allied’s procurement manager, Justice Chimusaro. [email protected] The Financial Gazette February 28-March 6 2019 | Page 7 National News ‘Zim such a small economy’ Adelaide Moyo small deposits can be explained in many jection in 2019 … is slightly lower than … Business Editor ways. 2018, reflecting the impact of unfavourable “It is a reflection of many issues and can weather on agriculture and macro-fiscal ESERVE Bank of Zimbabwe (RBZ) governor be interpreted as a mirror of over-expendi- vulnerabilities from previous unsustainable John Mangudya’s disclosure that 95,98 per- ture by the public owing to panic buying in fiscal and current account deficits.” R cent of the country’s 3,24 million individual October 2018, the festive period and back- The African Development Bank (AfDB) depositors hold balances averaging $80, accounting to-school spending patterns. It may also said Zimbabwe’s economy will grow by 4,2 for a total $213,42 million, is a clear sign of mas- show how much Zimbabweans do not keep percent in 2019 and 4,4 percent in 2020 but sive erosion of incomes and that Zimbabwe is such their money in the bank, opting to convert the country must liberalise the exchange a small economy, economists have said. it to hard currency, stocks or goods and ser- rate and tame deficits if it is to see “mean- Such a development does not augur well for vices to preserve value,” he said. ingful” recovery. economic development, as savings are required to In the meantime, Zimbabwe’s economy “The country’s protracted fiscal im- finance investment, which results in increased job is forecast to grow by 3,1 percent this year, balances have constrained development opportunities and consequently economic growth. down from 2018’s four percent — dragged expenditure and social service provision, However, in Zimbabwe’s situation, under which down by the anticipated poor performance undermining poverty reduction efforts. Un- depositors are unable to withdraw their money from of the agricultural sector and the generally employment pressures have been mounting banks due to a shortage of bank notes, most of the unstable economic conditions. as employment opportunities continue to money remains stuck in the banking system, but is In his 2019 national budget, Finance dwindle,” AfDB said. largely going towards purchasing basis necessities, minister Mthuli Ncube said: “Growth pro- [email protected] Brains Muchemwa leaving very little for savings. This is reflected by the fact that the bulk of deposits in the banking sector are held by corporates, according to Mangudya’s disclosures. Brains Muchemwa, an economist and Oxlink Capital chief executive, said the average deposit thresholds for individuals indeed confirm that the majority of Zimbabweans are living in poverty. “These paltry balances in individual accounts confirm, on one hand, the poor savings culture in- duced by high inflation expectations that result in households spending most of their incomes as they earn them in order to minimise the erosion of purchasing power,” he said. “On the other hand, it confirms the widely held suspicion that Zimbabwe has a very negligible middle class, indeed confirming the high jobless rate that has left the majority living on the edges of poverty.” Muchemwa said policy makers have an urgent challenge to create a stable and predictable macro-economic management framework to instil confidence that induces a savings culture. John Robertson, a respected economist, said given the earnings situation among individuals, the average bank balance of $80 may even be considered quite high. “We do have a small economy, but it seems likely to become even smaller. Falling disposable income is caused by rising taxes. We need more investors to generate more employment, but investors are also discouraged by high taxes, some of them imposed as costs for permits and licences that do nothing to help increase investor confidence,” he said. He added: “All this is needed to fund government wages as the civil service has increased to three times what it used to be. The employment rate in the business sector has fallen to below its level 40 years ago, so the economy is badly distorted, as well as far less productive than it used to be.” Robertson said to improve bank balances, the country has to overcome the extreme imbalances that have developed to keep thousands of civil ser- vants in unnecessary jobs. “These imbalances are discouraging investors, preventing employment creation and giving government all the excuses it needs to tax us even more. We need brave policy changes,” he said. The country is facing a plethora of challenges, among them fiscal indiscipline, corruption, ballooning debt levels, widening trade deficits, liquidity and cash crisis, foreign currency shortages, high poverty levels and worsening unemployment figures. The general populace faces high taxes and a high unemployment rate. Robertson said the 3,24 million depositors constituted about half the adult pop- ulation of the country, but fewer than one million have a steady job, so the majority are either earning money in informal employment or receiving money from relatives working abroad, or both. “If more people had regular incomes from good employers, the average deposit size would be greatly improved. An ability to build up reasonable savings, or reserves, would depend upon disposable incomes being a bit higher than living costs, but the rising inflation and the additional taxes are push- ing up costs faster than most of us can increase our earnings,” he said. “The two percent tax adds to production costs for the things we buy and when we spend our earnings using electronic payment methods, government collects another two percent tax from our bank accounts. A full tank of petrol today costs about $100 more than it would have cost at the beginning of January, so that is $100 less that we can spend on other things,” Robertson said. However, Denford Mutashu, the president of the Confederation of Zimbabwe Retailers, said the Page 8 | February 28-March 6 2019 The Financial Gazette Leader Page

News Worth Knowing Safeguards needed to guarantee MPS success HE hallmark of any progressive economy is found in the establishment of a strong and independent central bank. History has shown that a central Tbank is an important institution in any country, playing the crucial role of stabilising prices and advising governments on key economic policies. As such, it was refreshing when Reserve Bank of Zimbabwe (RBZ) governor John Mangudya last week heeded calls for a market-based exchange rate system and floated the Real-Time Gross Settlement dollars ― after 27 months of insisting that the local currency was at par with the United States dollar. The 1:1 exchange rate was not only unsustainable, but also fuelled inflation as corporates were forced to secure foreign currency from the parallel market at a premium. The central banker also immediately introduced an inter-bank foreign exchange market, which has been running smoothly since last Friday after he in- jected seed capital into banks. While we applaud these measures, which are important for stabilising prices and instilling confidence in the local market, there’s need for the RBZ to put in place safeguards to ensure their success. Zimbabwe twice liberalised the exchange rate and introduced an interbank market system in 2005 and 2008, but the measures were swiftly discarded when they failed to stem runaway inflation and stimulate the economy. With that in mind, it is crucial for Mangudya not to repeat the mistakes of old by ensuring that government doesn’t participate in this market as it can easily upset the fundamentals. The central bank should stick to its role of regulating the markets and playing the lender of last resort role. On the other hand, government ― through the Finance ministry ― should also stop interfering with the operations of the central bank. Zimbabwe is in the TOURISM and Hospitality Industry minister Prisca Mupfumira (in yellow) with Tanzania’s Transport throes of an economic crisis because the previous government saw it fit to cre- minister Isaac Kamwele (on her right) at the Robert Gabriel Mugabe International Airport at an occasion ate more electronic money, without any significant support, by issuing Treasury to mark the resumption of Air Tanzania flights to Zimbabwe last week. Picture by Freedom Mashava Bills. The amount of money circulating in an economy matters because demand has to match supply to avoid creating an inflationary environment. We are glad that Finance minister Mthuli Ncube said he has no appetite to pump more money into circulation and wants to institute fiscal discipline in the economy by allowing the central bank to focus on its core duties. Zim must take economic A broad consensus has emerged among policymakers, academics, and other informed observers around the world that the goals of monetary policy should be established by the political authorities, but that its conduct in pursuit of those goals should be free from political control. lessons from Botswana This conclusion is a consequence of the time frames over which monetary IMBABWE this week played post-colonial history and has shown tax evasion by taxpayers. policy has its effects. To achieve both price stability and maximum sustainable host to neighbouring Botswa- a willingness to cut spending when Evidence from Greece suggests employment, monetary policymakers must attempt to guide the economy over na for a bi-national commis- revenue declines. In 2004, officials that tax compliance rates rise as tax time toward a growth rate consistent with the expansion in its underlying pro- Z sion and the neighbouring country cut government spending by 18 per- rates fall, with corporate tax revenue ductive capacity without undue political pressure. Ben Bernanke, the former United States Federal Reserve chair, once re- has also pledged to assist our private cent in response to a revenue short- increasing to five percent of GDP marked that policymakers in a central bank subject to short-term political in- sector with a US$94,5 million credit fall. Botswana’s relatively cosmopol- from four percent after the rate of fluence may face pressures to overstimulate the economy to achieve short-term facility and a US$0,5 billion diamond itan attitude towards foreigners and company tax was lowered in 2005. output and employment gains that exceed the economy’s underlying potential. facility. migration has also kept it politically As such, government should im- Such gains may be popular at first, and thus helpful in an election campaign, A few decades ago, Botswana was stable. plement a low and uniform taxation but they are not sustainable and soon evaporate, leaving behind only inflationary one of the poorest countries in the As such Zimbabwe could enhance structure to increase compliance, pressures that worsen the economy’s longer-term prospects. world. It had a gross domestic prod- its economy if it adopts Botswana’s simplify the tax system and reduce Thus, political interference in monetary policy can generate undesirable uct (GDP) per capita of about $60 recipe for success by lowering taxes, avoidance and evasion. Useful les- boom-bust cycles that lead to both a less stable economy and higher inflation. in 1966. However, from the 1960s, balancing budgets, and becoming sons can be drawn from transition Ultimately this will affect the central bank’s credibility. When the central Botswana experienced the highest more tolerant of trade and foreigners. economies as well as from the Irish bank is not credible, the public will expect high inflation and, accordingly, de- economic growth rate in the world ― The Zimbabwe tax system is very model. mand more-rapid increases in nominal wages and in prices. averaging at least seven percent per complex and does not promote ease There is plenty of scope for the annum. Today, the country’s GDP per of doing business as businesses op- country to expand the fiscal space Southern Africa’s Leading Business and Financial Newspaper capita is $6 800, an 11-fold increase erating in the country have to make base and broaden the tax base by mi- Established 1969 in just over 50 years. at least 51 payments to be considered grating beyond broad-based taxes to Publisher: Modus Media It is interesting to note that Zim- tax compliant. alternative revenue sources. babwe, once considered a “jewel” Zimbabwe, which solely depends One promising option is correc- EDITORIAL MARKETING and the “breadbasket” of Africa, is on tax revenue to fund its entire na- tive taxes because they can promote Editor-In-Chief & Chief Operating Ofcer General Manager - Marketing tional budget after it was shut out by efficiency while raising revenues. Christopher Goko: gok .zw .zw international financial institutions for Countries such as the Philippines Brand Executive - Advertising Deputy Editor failing to pay up its debts, has struc- have introduced this option. Correc- Edwin Vengesa: evengesa@ngaz.co.zw Open Forum .zw tured its tax system to be dominated tive taxes, or “sin taxes,” are levied Senior Sales Executives Managing Editor by indirect taxes such as import and on goods and services that are con- Christobel Washaya: cwashay .zw with excise duties. sidered bad for the individual or so- .zw However, the general business ciety at large. Senior Assistant Editor .zw Chris Gumunyu: chris@ngaz.co.zw John Kachembere concern about the country’s tax sys- Examples include taxes on alco- Sales Representatives - Harare tem is that it has numerous tax heads hol, cigarettes and products and ac- News Editor .zw that are applicable to business and tivities with negative environmental John K .zw Frank Nyandoro: fny .zw Edreck: emudzinganyama@ngaz.co.zw now extending a begging bowel to investment. These exert a huge tax consequences. Corrective taxes can Markets Editor Sales Representative - Bulawayo its neighbour, which is less resource burden on them. This, coupled with improve fiscal revenues while- re Ndakaziv .zw Clever Pedzisai: [email protected] rich. Botswana’s economic miracle cumbersome investment approvals, ducing socially and environmentally Companies Editor Brand Executive - Events did not happen overnight and I hope increases the cost of doing business, undesirable activities, thereby pro- Shame Makoshori: smak .zw Kerina Chizemo: kchizemo@ngaz.co.zw that President Emmerson Mnangag- thereby scaring away investors who moting good public health. wa and his ministers will use the could contribute immensely to gov- A review of literature in many Online Editor Brand Executive - Subscriptions Paul Nyakazeya: pnyakazey .zw Tatenda Taka: ttaka@ngaz.co.zw bi-national commission to learn from ernment's tax revenue. countries has demonstrated that Subscriptions Representatives our neighbour. In addition, the current marginal tobacco taxes reduce tobacco con- Features Editor Ronald Madiviko: rmadivik .zw Since it attained independence in tax rates are high, thereby promoting sumption while providing a stable .zw Elizabeth Nyamaruze: eny .zw 1966, the Botswana government has and reliable source of fiscal revenues. Production Supervisor Chief Executive Ofcer been democratic and has championed The World Health Organisation Kudzai Rushambwa: krushambwa@ngaz.co.zw .zw workers’ rights, human rights, and has also been advocating a sugar tax Botswana has maintained a social welfare. on sugar-sweetened beverages to balanced budget through- Bulawayo The government’s recipe for suc- fight the scourge of non-communi- Editorial, Advertising & Circulation 1st Floor, Princess Court, “out most of its post-colonial cess over the years has been fairly cable diseases. The sugar tax, apart 2nd Floor, Green Bridge South, Eastgate Complex, Corner Forth Street/9th Avenue, history and has shown a willing- P. O. Box CY 376, CAUSEWAY, Harare, Zimbabwe Bulawayo. simple ― a fiscally conservative pol- from reducing consumption of sug- Tel: +263-242-781 572 ness to cut spending when rev- Tel: (029)75873/75270 icy of low taxes and little government ary drinks, also raises additional rev- Website: www Distributed by: ANZ enue declines: In 2004, officials spending. Botswana’s corporate tax enues for the treasury. cut government spending by 18 rate — at 15 percent — is the lowest Two years ago, South Africa in- VOLUNTARY MEDIA COUNCIL OF ZIMBABWE percent in response to a revenue among sub-Saharan African coun- troduced a 20 percent sugar tax on The Financial Gazette newspaper subscribes to a Code of Conduct that promotes truthful, accurate, fair and balanced shortfall. Botswana’s relatively news reporting. If we do not meet these standards, register your complaints with the Voluntary Media Council of tries. And its highest marginal tax sugary beverages as a strategic ob- Zimbabwe at: cosmopolitan attitude towards rate on income is 25 percent. jective of preventing and controlling No 34 Colenbrander Rd, Milton Park, Harare. Telephone: 04-778096 / 778006 24 Hr Complaints line: 0772 125 659 foreigners and migration has also Email: [email protected] or [email protected] Twitter: @vmcz http://www.vmcz.co.zw | Facebook page: vmcz Botswana has maintained a bal- non-communicable diseases and obe- Zimbabwe anced budget throughout most of its kept it politically stable.” sity. The Financial Gazette Page 9 | February 28-March 6 2019

‘New currency roadmap on cards’ coming an issue. Number two, those who couldn’t NM: We can’t guarantee the market rate, it’s IMBABWE last week introduced a new curren- take out their money as foreign investors in terms the market rate. Let’s be clear about that, but now cy ― RTGS dollars ― and devalued the bond of dividends and so on were sending out word that at least you know what it is. Previously you didn’t note for the first time in 27 months after the sur- Z ‘you know what, these people don’t have an ex- and neither was it official, it was run from the rogate currency was initiated. Government, through the change rate or monetary system in place so don’t streets. Surely, you can’t have the whole pricing Reserve Bank of Zimbabwe (RBZ), also introduced a invest in Zimbabwe’. But we have resolved that policy of a country being run from the streets. battery of measures, including the re-establishment of an by putting in place a very clear system based on Let’s be honest about that. Now we have brought inter-bank foreign exchange market in a bid to restore supply and demand and that is how markets work. some order into the market, but we can’t tell you domestic competitiveness and promote growth. The We have created a more certain environment now what it will be on a daily basis. It is what it is in measures are also meant to strengthen demand for do- and to me this is very attractive to foreign inves- terms of supply and demand. We have restored mestic forms of payment and preserve foreign currency tors. Investors can now take out their dividends. certainty on the market and the policymaker ― for external payments that include importation of goods We are confident that the current system will al- being the RBZ ― has restored leadership in the and services, foreign dividend payments, business and low for forex to be available and remove any im- pricing mechanisms within the economy and personal travel and servicing of external obligations. The pediments for foreign investors. that’s a good thing. Financial Gazette's News Editor John Kachembere (JK) JK: What guarantee, if any, do we have that JK: Now that we have a new currency, but caught up with Finance minister Mthuli Ncube (MN) to the rate will remain constant and the price of ba- the bond notes in circulation are only five per- discuss some of these and other issues. Below are excerpts sic goods will not continue rising? To Page 29 of the interview.

JK: Towards the end of last year you told us that you had fruitful discussions with Afreximbank president Ben- edict Oramah in Indonesia where the regional lender offered Zimbabwe a facility to guarantee 1:1 convertibility of RTGS balances into United States dollars (US$) and availability of US$ for Nostro Foreign current Accounts. What became of that? MN: That is true. When we had the exchange rate fixed at 1:1 with the United States dollar we had the balance sheet to do that and that’s what we were doing. When you went to the bank to buy foreign currency and you were successful you would get it at one-to-one, is that not true? But now things have changed and we have announced a new policy and the market is determining the rate. But again we have the balance sheet to support the exchange rate and deal with any volatility. It is true that back then the one-to-one rate was backed and you were able to get your forex at that rate and if you wanted more or less than the one-to-one you would go to the parallel market, but that is not ours. JK: You and RBZ governor John Mangudya keep claiming that you got enough foreign funds to support the interbank foreign exchange market, how much capital did you secure from international lenders and at what rates? MN: In a market mechanism you should never, ever tell the market how much you have, because there’s a game theoretic behaviour at play, because once the market knows they’ll start speculating and so on and that is not very good for the country. So we never tell you how much we got, but all I can tell you is that we are very well resourced. But also let’s be honest, not all the RTGS balances will create demand for US dollars, people live here. So there’s a limit to that, which leaves about 40 percent or so and we are not too concerned about there being too much demand for forex. We are well within our means to take care of that. JK: You spoke about export balances expiring after 30 days. What is the rationale behind this and will exporters’ nostro balances remain denominated in US$ after 30 days. NM: No, no, no. you certainly have to offload them after 30 days, because what we don’t want is hoarding. Remember we are trying to match supply and demand. What we don’t want is for suppliers to hold back when demand is growing, and that’s a good thing to oil the markets. JK: What exchange rate will the central bank use on the retained portion of export receipts? MN: The market rate. JK: In that case won’t it be prudent then for exporters to retain 100 percent of their proceeds? MN: No, no, the thing about retention is that for critical imports, drugs, cooking oil and so on the forex must be available. And it also gives us certainty on the extent of the subsidy. We know that if the market runs through this completely we may struggle, as government, to provide cheap medicines, cheaper cooking oil and even fuel for your car. So we are aware of that but at the beginning we need a bit of subsidy. We can only subsidise if we have a retention in place then we know how much we are retaining. We want certainty. What I do in Treasury, because all of these things eventually come to Treasury, so I have to know the extent of my subsidy then I budget for it. And then it also goes into our deficit ratio. We have set a seven percent deficit for 2019, so I want to maintain that so that even if I go slightly over it shouldn’t be more than six percent. I need to know that retention figure and then the subsidy route to take. JK: But doesn’t that create an anti-saving culture as people resort to offloading their forex offshore or on the local market? MN: But why not save in the domestic currency? We want you to save in domestic currency and promote your own currency. That can only be a good thing. Also you can imagine that these rates are flexible and may start going up and you can earn more in interest going forward. JK: So does that mean banks will start offering savings interest like back in the day? MN: Oh yes they should. From now on interest rates should go up and depositors should get a good reward for their savings. JK: Do you honestly believe that some of the measures announced in the monetary policy will improve the ease of doing business in Zimbabwe? NM: These measures are fantastic for the ease of doing business, because what was going on before was that no one believed us on the one-to-one exchange rate and it was be- Page 10 | February 28-March 6 2019 The Financial Gazette The Financial Gazette February 28-March 6 2019 | Page 11 National News ASA woes mount as sacked workers sue Ndakaziva Majaka Markets Editor “Your Suspension and Vehicle Servicing Specialists” 1 Melbourne Road, Southerton, Harare, Zimbabwe. REDA Rebecca Mine (Freda) has Tel: +263 736 210 822, +263 775 069 039, +263 772 461 616, +263 242 665 154/5 been dragged to court by employees Fciting unfair dismissal after the ASA Resource Group (ASA) subsidiary sent home at least 26 employees in a restructur- WOULD LIKE TO ing drive last month. Toi Muganyi (pictured), Freda’s chief CONGRATULATE executive, said the gold miner ― presently under judicial management ― had let the staff go as part of streamlining measures to YEVAI MAKONI optimise the business. “Thirty workers are being retrenched but FOR A WELL at this point I cannot say anything beyond this,” the Freda boss said. DESERVED However, the employees ― who have approached the Labour Court through their lawyers ― are contesting the retrenchment, 2ND POSITION saying the workers council and the Re- trenchment Board were not informed of the AWARDED BY termination beforehand. to acquire ASA at 2,1 pence per ordinary They also argue that the retrenchment share in cash. papers were served a day after the notice of ASA suspended trading its ordinary MEGAFEST intention to retrench in violation of Section shares on the Alternative Investment Market, 12 C of the Labour Act. citing cash flow challenges before ultimately BUSINESS WOMEN This comes as ASA is offloading a 74,73 cancelling the London listing. percent stake in another local unit, Bindura The Africa-focused miner attributed its OF THE YEAR. Nickel Corporation (BNC). cash constraints to currency restrictions im- Conrad Mukanganga, BNC’s company posed by the Reserve Bank of Zimbabwe secretary, last year said the holding compa- and, following internal investigations, reve- YOU HAVE MADE ny ― currently under administration ― had lations that significant funds had been remit- entered into a sale and purchase agreement ted from operating in Zimbabwe but were US PROUD. with a United Kingdom-based nickel com- not properly accounted for. pany with complementary interests in south- ASA, formerly known as Mwana Africa, ern Africa. holds interests in gold, nickel, copper and di- In what promises to be the end of an era amonds in Zimbabwe, South Africa, Angola MAKOROKOTO!AMHLOPHE! at the Zimbabwe Stock Exchange-listed and the Democratic Republic of Congo. With over two decades of combined experience in the Automotive Industry, Fasfit Matlock Suspension Service mining concern, ASA is moving to cut its Its biggest assets are Freda Rebecca gold Centre is a fitment centre that offers services that range from checks and balances to full suspension overhauling. losses in light of flat nickel prices over the mine, Trojan nickel mine and BNC, which past two years. has a mill, concentrator, smelter and a refin- Our services include exhaust repairs, suspension repairs, on board disc skimming, headlight focusing, press fitting, BNC ― which recorded a nine percent ery. wheel alignment, wheel balancing, puncture repairs, scheduled vehicle services A, B & C with free expert reports revenue increase to $26,2 million for the half Earlier this year, ASA’s Zimbabwe units and advice. year to September 2018 ― has managed to ― BNC and Freda Rebecca Gold Mine ― continue operating in spite of an operational applied to the High Court to have the busi- crisis at ASA. nesses placed under provisional judicial In 2017, the ASA board confirmed that it management, citing a serious financial crisis The Financial Gazette @FingazLive had received an offer document from invest- that has seen its debts ballooning to over ment company Rich Pro Investments (RPI) $31,3 million. [email protected] Premier eyes increased gold mining operations

Ndakaziva Majaka announced November KME transaction,” Markets Editor said Roach. The Premier boss pointed out that while REMIER African Minerals (Premier) the London Stock Exchange-listed miner is moving to buy a 50 percent stake in was aware there would be considerable PHoney Badger Resources (HBR) as dilution to existing shareholders from the the junior miner expands its local portfolio deals, overall value created would out- to gold exploration. weigh the dilutive effect. George Roach, Premier’s chief exec- “The proposed terms of the new KME utive, said the $3,7 million sale would be transaction have reduced the overall acqui- settled in Premier shares as the miner ― sition cost to Premier while retaining the presently lobbying for government support key benefit of being able to carry out the to re-open its existing tungsten mine RHA further drilling required for the definitive ― expands local operations. feasibility study for Zulu at significantly re- “We believe there is potential to devel- duced cost while allowing Premier to hold op a significant gold mine in this region of 100 percent of Zulu,” he said. Zimbabwe that already hosts major gold Premier has been trying to get the local producers. Our initial exploration target is authorities to agree on a debt-for-equity two million ounces,” said Roach. swap that will see its shareholding in RHA HBR already has a resource greater than rise to 90 percent from 49 percent. 500 000 ounces and a further internal re- That has yet to happen, though Premier source in a semi-developed and previously said talks with the Ministry of Industry over mined deposit, he said. re-commissioning RHA had now started. Roach also announced the junior min- This comes as the resource-focused er was going to acquire a 50 percent share group recently announced that it had hit of the assets of KME, its contractor at the multiple high-grade intersections in an up- RHA tungsten and Zulu lithium projects. date on its drilling programme at the RHA Premier will issue $1,4 million worth of tungsten mine. shares for a stake in KME. In 2017, Premier secured over £1 mil- Under the original plan, KME’s assets lion for optimisation of the RHA project were to be combined with RHA and Zulu to ― located approximately 270 kilometres form a new company but that idea has now northwest of Bulawayo and made up of Subscribe Now been abandoned. The ownership structure 50 mineral claim blocks ― through a di- of RHA has been a sticking point. rect subscription for new ordinary shares “Existing Premier shareholders are like- to raise £1 020 000 before costs, with the ly to retain a substantially greater interest placing having been undertaken within the in our projects going forward than may company’s existing share authorities. have been the case with the previously [email protected] Page 12 | February 28-March 6 2019 The Financial Gazette National News Drop in gold deliveries drags economic growth

Paul Nyakazeya could have been better had it not been for the signif- tonnes, with 21,7 tonnes accounted for by small scale foreign currency supply bottlenecks were becoming Online Editor icant decline in gold deliveries in the last quarter of miners,” said OMSEC. increasingly unmanageable. 2018 due to the currency distortions that arose from In his statement, Mangudya said floating the For instance, gold deliveries declined by 41 per- HE decline in gold deliveries during the last the formal separation of RTGS balances and hard exchange rate will eliminate the dictation of prices cent in October 2018 and by December 2018 were quarter of 2018 dragged down Zimbabwe’s currencies in October 2018,” said OMSEC. in the economy by parallel market rates, which had 48 percent below the average deliveries prior to Oc- Teconomic growth, a leading equities firm has The gross domestic product growth rate for Zim- seen inflation rising to 56,9 percent in January 2019. tober 2018,” said OMSEC. said babwe for 2018 was estimated at four percent in The unsustainable fixed peg exchange rate be- Annual inflation in October 2018 rose to 20,86 In an analysis of the monetary policy statement 2018 and is forecast to grow by 3,1 percent in 2019, tween the RTGS dollars and hard currencies had percent and to 42,09 percent by December 2018. presented by Reserve Bank of Zimbabwe governor 30 basis points lower than the SADC region’s aver- resulted in significant operational challenges for key This was largely underpinned by goods with a huge John Mangudya last week, Old Mutual Securities age of 3,4 percent. The lower growth rate is premised sectors of production in Zimbabwe. foreign currency component cost that was sourced (OMSEC) said the decline in deliveries between Oc- on austerity measures. OMSEC said significant cost increases in -agri from the parallel market at about four Real Time tober and December due to the unsustainable fixed “Notwithstanding these challenges, the per- cultural inputs, unattractiveness of the local currency Gross Settlement dollars per US dollar compared to exchange rate was a major factor in the slowdown. formance of the mining sector reached an all-time component being paid to small-scale gold producers the official exchange rate of 1:1. “We believe that the performance of the economy high in terms of gold deliveries, which reached 33,2 and the lack of viability of sections of industry due to [email protected] Japan puts Zim under spotlight

Adelaide Moyo Business Reporter

IMBABWE remains one of the Zmost difficult destinations for foreign capital but investors with courage can take advantage of diversified opportunities to make profits, a Japanese official has said. Toshiyuki Iwado, Ja- pan’s ambassador to Zim- babwe, said the southern African country is a pre- ferred investment destination in the region as it was strategically positioned Toshiyuki Iwado and endowed with vast natural resources. “We don’t debate or deny that Zimbabwe is a difficult place to do business in but there are opportunities that make Japanese businesses want to come here. There are opportunities, especially in the mining sector,” he said. He said the country needed to work on measures to address foreign currency challenges. Iwado was speaking after a Japanese delegation from the Japan External Trade Organisation (Jetro) visited the country last week to scout for investment opportunities in the agriculture, mining, medical, infrastructure, finance, automobile and insurance sectors. The delegation, that comprised 16 companies and members of Jetro, expressed interest in different sectors. “Any country or government has some kind of problems or barriers but working hand in glove with government, we hope we will sail through the challenges,” he said. Jetro Africa Region executive director Hiroyuki Nemoto said the delegation had confidence in Zimba- bwe's potential. “Zimbabwe has so much potential for growth and we are satisfied with the engagements we have done so far. Our visit is the first step and the next step is to develop businesses here,” Nemoto said. “There are some challenges but we believe the new administration is creating a conducive environment for business. We had a direct message from the president and we believe in the potential Zimbabwe holds,” he said. Industry minister Nqobizitha Ndlovu has said government is committed to reducing the cost of doing business as the country seeks to attract and retain foreign direct investment. This comes as Zimbabwe struggles to attract significant foreign investment since the early 2000s when former president Robert Mugabe’s government was placed under sanctions by the United States and the European Union for human rights abuses and lack of respect for property rights. However, there was renewed hope when Emmerson Mnangagwa rose to power through a military coup in November 2017 that Zimbabwe will start attracting increased foreign investment after the new leader declared that the country was “open for business.” International investors continue to shun Zimbabwe due to policy inconsistencies as the country earned a paltry US$470 million in foreign direct investment (FDI) last year compared to Mozambique and Zambia, which raked in US$2,3 billion and US$1,1 billion, respectively. [email protected] February 28-March 6 2019 Page 13 Companies&Markets The Financial Gazette INVESTOR FLIGHT TO CONTINUE ON ZSE — p15 USD/BWP Sugar (USD/lb) Cotton (USD/lb) Nickel (USD/t) Palladium(USD/oz) FOREIGN investors will continue to flee the Zimbabwe Stock Exchange despite the central bank’s move to ring fence foreign liabilities such as dividends and portfolio investments, a 0,04% 0,08% 0,34% 0,11% 0,46% local equities firm has said. 10,5164 12,99 72,85 12 350,08 1 536,05 Ariston Pepsi survives on debt concern Indian bailout remains Adelaide Moyo Adelaide Moyo Business Reporter Business Reporter RISTON Holdings (Ariston) says the company’s ARUN Beverages says it is getting debt remains a major concern as the firm is financ- support from its sister companies in ing its capital expenditures through debt. India to meet foreign exchange re- A V The agricultural concern ended the year 2018 with a quirements in Zimbabwe. $15,782 million debt as compared to $15,033 million in This comes as the southern African coun- prior comparable period. try is experiencing acute foreign currency Paul Spears, the chief executive, told shareholders that shortages resulting in most firms failing to Ariston remains optimistic that its financial position will import critical raw materials. continue to improve and it will continue to manage its cash Krishnan Shankar, the Pepsi group chief flows to clear all legacy debt. executive, told The Financial Gazette that the “The company’s debt remains a concern moving for- Indian soft drinks manufacturer requires $2 ward, with the debt ratio remaining at 34 percent. We seek million in foreign currency a month to cover to reduce the debt by 40 percent, once the debt is out we still raw materials payments. have an opportunity to increase our operations,” he said. “... We have some problems with foreign He said there was a change to the structure of the debt as currency ... we are managing because we are a 52 percent drop in short term debt was offset by a 26 per- getting support from our own companies in cent rise in long term debts. Positively, the exercise appears India in terms of credit lines for raw materials to have decreased the company’s interest expenses by 42 and packaging materials. Other than that, we percent, down to $1,081 million, he added. are exporting some of our products and with The firm recorded a $2,854 million profit compared to a that we are managing our requirements,” he loss of $1,762 million in the prior year. said. Ariston said revenue was up 29 percent to $14,130 mil- “We are already given some of our require- lion in 2018, from $10,958 million recorded in the prior ments by the Reserve Bank of Zimbabwe. We year. are doing good business and, outstanding- Gross margin for the year increased to 36 percent from ly for us, Coca-Cola is not available on the Last year, Varun Beverages commissioned a $30 million plant with a capacity to 31 percent in prior year. market so we are able to source our market produce 600 000 bottles of soft drinks daily. Earnings before interest, tax, depreciation and amorti- requirements.” sation (EBITDA) increased 199 percent to $5,554 million Shankar said the firm is intensifying its planning to diversify into the agro-processing ment gazette dated February 8, 2019, Edwin during the review period compared to $1,862 million in pri- penetration in the export market to cushion business — particularly a potato and tomato Kondo, Zimbabwe Special Economic Zones or comparable period. itself against the shortages in the country. processing plant — to boost export earnings. Authority chief executive, declared Varun Ariston said it will continue to focus on the export mar- “We are exporting 10 percent of our prod- Last year, Varun commissioned a $30 mil- Beverages a special economic zone. ket to generate foreign currency. ucts to Botswana, Zambia and Malawi. We are lion plant with a capacity to produce 600 000 Special economic zones enjoy corporate “The majority of our crops are destined for the export looking at expanding to other regional mar- bottles of soft drinks daily. tax exemption for the first five years -of op market, and as long as the group focus on quality and main- kets like the Democratic Republic of Congo From the plant, Varun produces carbonated eration and a corporate tax rate of 15 percent taining its international accreditation, the strides made in (DRC), Mozambique and Namibia,” he said. PepsiCo products ― Pepsi, Mirinda Orange, thereafter. 2018 will be improved. Early indications are that export “We are looking at the export potential of Mirinda Fruity, Mirinda Green Apple, Miran- Raw materials and intermediate products prices and demand will continue to be firm in full year these products to neighbouring countries. Lo- da Pineapple, Mountain Dew and Seven-Up. imported for use by companies in special eco- 2019,” he said. cal consumption is one thing but we need ex- Since it started operations locally, the firm nomic zones will also be imported duty-free, Ariston said it expects its capacity to double in the sec- ports to earn foreign exchange for the country, has aggressively penetrated the market, forc- but the exemption does not apply where raw ond quarter of the year as it has invested about $700 000 which is very important.” ing competitors to lower prices. materials are produced locally. towards dryer plants at its operations. The Varun Beverages boss said the group is Meanwhile, in an extraordinary govern- [email protected] [email protected] Page 14 | February 28-March 6 2019 The Financial Gazette Companies & Markets Govt threatens construction industry

Shame Makoshori of them are going for up to four months before receiving Companies Editor payments and as a result, those working on government projects have been dealt a blow. OVERNMENT says it will not hesitate to ter- Many of them are facing cashflows problems due to minate contracts of companies that move out of delayed payments. Gconstruction sites each time their payments are They say during the time that they have to wait for delayed. payments, they would still require funding for day-to-day Kudzanayi Chinyanga, the director of roads operations operations. in the Transport ministry, said government views firms Zimbabwe’s construction industry has shrunk in the that pull out of construction projects as “mercenaries” past two decades due to foreign currency shortages. It has who abandon the State during difficult times. also been affected by high costs of doing business in the “Some of you act as mercenaries by removing equip- country, where costs like wages and other utilities rank ment,” he told delegates attending a procurement meeting among the highest in southern Africa. in the Capital. Government has earmarked $500 million for the rehabilitation of the Many firms have scaled down or closed, with 40 000 He further warned Construction Industry Federation of Harare-Masvingo-Beitbridge highway. workers losing their jobs in the past two decades. Zimbabwe members and other players against abandon- Chinyanga said after government announced it would ing state projects. trying to manage delayed payments but Government is supposed to pay con- be spending $500 million for the Harare-Masvingo-Beit- “Don’t move off site and assume that you are holding a we have given money to the Infrastructure struction firms within three weeks of com- bridge road, the ministry had been flooded by enquires by gun to my head. By moving off site you are inviting me to Development Bank. It is not virtual mon- pletion of a project. firms asking to move equipment to the site. terminate the contract, which I can do. I know that you are ey. It is there,” he said. However, construction firms say many [email protected] ZCDC scouts

AFRICAN DEVELOPMENT BANK GROUP for more

diamonds Ndakaziva Majaka Markets Editor ZIMBABWE COUNTRY OFFICE HE Zimbabwe Consolidated Dia- Date: 25 February 2019 Tmond Corporation (ZCDC) says it is moving Procurement Notice to conduct comprehensive diamond exploration in Mutare to increase its ADB/ITB/COZW/2019/0033 OUTFITTING WORKS FOR THE AFRICAN prospects in Manicaland. DEVELOPMENT BANK – ZIMBABWE COUNTRY OFFICE Morris Mpofu, ZD- CD’s chief executive, said the state-owned di- 1. The African Development Bank (the “Bank”) invites bids from the minimum Class A amond mining company Morris Mpofu contractors for the outfitting works and related services as described in the Invitation to — which engaged the Bid (ITB) which is available on the African Development Bank website Scientific and Industrial Research and Development Centre to conduct an Environmental Impact Assessment study for http://www.afdb.org/en/about-us/corporate-procurement/procurement-notices/current- the proposed diamond exploration project at Mutare Rural solicitations/ and also obtainable from the Bank’s office in Zimbabwe which is located at District Portal Q — was expanding its footprint across the country this year. Block 1, Ground Floor, Arundel Office Park, 107 Norfolk Road, Mount Pleasant, “Mutare has vast potential and this study is to find out HARARE. Bidders on category A should also be registered with CIFOZ and should be the extent of this potential. At the end of the day, we need to complying with all building industry requirements on social security and others. maximise and make the most of the resource but can only do so if we know its extent. We are restructuring our operations and the expansion drive we are about to undertake will see 2. The contractor should have capacity to handle outfitting works, which will include civil us investing heavily into exploration this year,” he said. works, partitioning works, mechanical, electrical, IT, Safety and Security installations. The area being explored in Mutare was previously mined by Diamond Mining Company (DMC). Bidders shall also register and shall receive the vendor number from the following link; “Restructuring will also take us to other parts of the https://eprocurement.afdb.org/sap/bc/webdynpro/sap/zsup_reg_submit# . country but Mutare is the main focus at the moment. As you may be aware, we have launched studies across the country 3. The Contractor shall clearly specify their country of origin. All works, goods and related to determine if the resource can be commercially and viably extracted,” he said. services to be supplied under this ITB shall have their origin in eligible member countries With alluvial diamonds fast running out in the Marange of the African Development Bank. A list of the eligible member countries is provided on area, the company has been spreading out, with exploration work planned for Chimanimani, Kezi, Binga and Mwenezi. the bid document and the Bidder may visit this link http://www.afdb.org/en/about- The company last month indicated that it would invest us/members/ for more information. $32 million in exploration projects to support a resource definition and expansion programme with output forecast to The shall be held on the th reach an ambitious 4,1 million carats by year end from 1,7 4. Mandatory site visit and pre-bid meeting 5 March 2019 million carats produced in 2018. from 09.00 hours at the address specified on the ITB. Bidders who have not attended In 2018, ZCDC commenced full-scale mining opera- the site visit and pre-bid meeting shall not be considered for this bid. The closing date tions at its diamond fields in Chimanimani after acquiring th the claims from DTZ-OZGEO this year. for this bid is 25 March 2019 at 10.00 hours shall be in the manner specified in Section The state-run diamond firm is also moving to carry out 2 of the bid document, and delivery shall be through postal, mail or hand delivery at the exploration work for gems in Marondera district as part of its expansion scheme. address given on this bid. Meanwhile, ZCDC is eyeing a 46 percent production ramp in 2019. According to Mpofu, the firm anticipates 5. Any request for further information shall be submitted to [email protected], an increase in output following migration to a conglomer- citing the bid reference number and description. The last date of receiving clarity and ate-based mining system from alluvial practices undertaken in the past. questions is by 17:00 hours Zimbabwe local time on 11 March 2019. The ZCDC boss is also on record highlighting that increased exploration and fresh green field projects are- ex 6. Late submission of bid response shall be rejected. pected to result in higher diamond production this year. ZCDC resumed diamond sales in 2018 and has so far invoiced over $49 million from diamond tenders held in last Thank you for your interest in doing business with the African Development Bank. quarter of 2018. The miner’s output has been rising from 965 000 carats in 2016 to 1,8 million carats in 2017 and is anticipated to invest more than $20 million in exploration and evaluation, in an effort to upgrade known resources and discover new kimberlite deposits this year. [email protected] The Financial Gazette February 28-March 6 2019 | Page 15 Companies & Markets Investor flight expected to continue on ZSE

Adelaide Moyo nor, John Mangudya, announced that he had put in place Business Reporter adequate measures to maintain order and sanity through the establishment of an inter-bank facility. OREIGN investors will continue to flee the -Zim This would formalise the trading of real time gross set- babwe Stock Exchange (ZSE) despite the central tlement (RTGS) balances and bond notes with hard curren- Fbank’s move to ring fence foreign liabilities such as cies such as the US dollar on a willing-buyer, willing-seller dividends and portfolio investments, a local equities firm basis through banks and bureaux de change. has said. Mangudya told a monetary policy review meeting that Highlighting that shifting away from the 1:1 exchange the central bank and banks have agreed on a starting rate rate for the RTGS dollar to the US dollar is a positive step of US$1 to RTGS$2,50 when the interbank foreign trade towards improving competitiveness within the domestic begins. market, IH Securities (IH) said foreigners will continue ex- Mangudya said foreign liabilities or legacy debts, port- iting the local bourse through stocks like Old Mutual. folio investments and declared dividends are to be treated “With the silence on interest rates and the ring fencing separately after registering with the exchange control for of foreign liabilities such as dividends and portfolio invest- managed legacy debt settlement. ments, we expect to see normal activity on the local bourse Following the announcement of the mid-term monetary whilst foreign participants continue to exit the market policy statement in October 2018, the economy witnessed through fungible stocks such as Old Mutual and PPC in the a shift into an inflationary environment, where parallel short term,” IH said. Investors will continue to flee the Zimbabwe Stock Exchange despite the central market premiums increased to levels ranging between 300 Last week, Reserve Bank of Zimbabwe (RBZ) gover- bank’s move to ring fence foreign liabilities. percent and 400 percent. [email protected] …as MPS is expected to Shaping the Future for a bring stability Better Working World At EY we understand that investing in our people is the foundation Tabitha Mutenga for lasting success. Providing world class learning tools and skills Features Editor development opportunities, we look to create leaders that will impact our OLICY initiatives put profession and communities. in place by the Re- Pserve Bank of Zimba- bwe (RBZ) present the best EY pass rate 79 % opportunity for Zimbabwe to stabilise markets, but sig- National pass rate 61% nificant care must be taken 2 Candidates in the Top 10 to prevent the return of hyperinflation, according to BancABC. In its Monetary Policy Measures & Analysis released last week, after the John Mangudya announcement of the monetary policy statement (MPS) by RBZ governor John Man- gudya, BancABC, a member of the Atlas Mara Group, commended the central bank for the bold steps to move to Congratulations Makorokoto Amphlophe a market-determined exchange rate framework as it tries to our 2018 candidates for passing the Institute of Chartered Accountants of Zimbabwe (ICAZ) Assessment to address concerns of businesses and give itself more room to cease its quasi-fiscal activities (mostly through of Professional Competence. Not only did we score higher than the national average, we also had the export incentives). highest number of successful female candidates. “We are, however, wary of the negative market reaction which has tended to take the authorities by surprise, in part reflecting lack of confidence and the affinity to capitalise on arbitrage opportunities, given the persistent mismatch between demand and supply of foreign currency and the lack of foreign currency reserves, among others, the weakest link remains the ability to sustain a stable market determined exchange rate. Bridget Mauro Thembelihle Mabhena Amos Kambuyu Benson Magunde Elizabeth Mago “In the event that the exchange rate remains under per- 3rd nationally 3rd nationally sistent depreciation pressure, the economy may gravitate towards hyperinflation, leading to abandonment of RTGS dollars while speeding up the pace of re-dollarisation. This allows a trading mechanism between RTGS balances and bond notes with international currencies using the formal inter-bank market,” BancABC said. The bank applauded the RBZ for the establishment of the inter-bank foreign currency market to formalise the Kundai Tome Memorandah Murukayi Michelle Madimutsa Nancy Tadhuvana Prudence Chivaurah trading of RGTS dollar, stating that the move allowed for a trading mechanism between the RTGS dollar with international currencies using the formal inter-bank market. BancABC said the move would unlock surplus foreign currency sitting with exporters, which was previously in- accessible, and improve exporters’ viability as they will appropriately be rewarded by the exchange rate, thereby eliminating the need for export incentives. “Liberalisation of foreign currency trading is a major Ruramai Nhari Sean Curtis Shandirai Matsika Shingirirai Chuma Steve Chisveto step towards improving exporter viability and access to foreign currency. While the move may not eliminate the foreign currency parallel market, it will go a long way towards redirecting foreign currency trades to take place in the formal bank channels. “The establishment of inter-bank foreign currency market to formalise the trading of RGTS and bond notes with the US dollar allows exporters sitting on surplus foreign currency to trade their foreign currency at an eco- Tafadzwa Matunga Tarisai Murumbi Velile Ncube Zvikomborero Chikati nomically viable rate,” BancABC said. We also congratulate our alumni: The bank noted the downside of the inter-bank foreign Anesu Banda Luke Fish Rumbidzai Mutanga currency market as this could open the exchange rate to speculative attacks, resulting in perpetual depreciation of the RTGS dollar, with negative consequences on the local currency. [email protected] Page 16 | February 28-March 6 2019 The Financial Gazette Companies & Markets Air Botswana returns to Harare Tabitha Mutenga due to a route rationalisation exercise in order to reduce Features Editor operational costs on non-profitable routes. It re-enters the market at a time when regional and IR Botswana is resuming flights flights from Ga- international airlines are now charging fares in US dol- borone to Harare early April. lars, citing viability challenges. Most major airlines have A In a statement last week, Air Botswana said it stopped all ticketing in Zimbabwe due to difficulties in was embarking on regional expansion. repatriating foreign currency. “Air Botswana improved domestic connectivity in Zimbabwe owes international airlines about $136 addition to expanded regional expansion as part of the million and has been struggling to offset the debt. airline’s plans to transform business following comple- In October, the Reserve Bank of Zimbabwe commit- tion of the first phase of re-fleeting. ted itself to making monthly payments of $4 million to- “In support of increased commercial activities and wards the debt. movements of people between Botswana and its north- Air Botswana joins eight other airlines currently fly- ern neighbours, Air Botswana will recommence flights ing into Zimbabwe — South African Airways, Kenya from Gaborone to Harare and Lusaka. This will be a tri- Airways, Ethiopian Airways, RwandaAir, FastJet, Air angular operation starting off from Gaborone to Harare Air Botswana suspended flights between Gaborone and Harare in 2016. Namibia, Emirates and British Airways, which is oper- onwards to Lusaka,” the airline said. ated by Comair. Air Botswana general manager Agnes Khunwana increased efficiency per seat cost due to Air Botswana suspended flights be- Proflight Zambia recently suspended services be- said that the route expansion was being supported by the airline now operating bigger capacity tween Gaborone and Lusaka as well as tween Lusaka and Harare with effect from January 29. a revised fare structure, which has been borne out of aircraft. between Gaborone and Harare in 2016 [email protected] CashbackAPP invests $4 million in Africa

Freedom Mashava Staff Reporter

ASHBACKAPP, a global digital transactions outfit with an African footprint, says it has in- Cvested more than $4 million in technology in several countries on the African continent. Graham Phillips, CashbackAPP business development manager, said the firm was looking forward to working with companies with a solid understanding on their local markets such as EcoCash — a division of the Cassava Smartech financial technology business. “CashbackAPP has brought global technology to Zimbabwe and into Africa and has invested over $4 million,” he said during the launch of a real-time Eco- Cash Rewards programme in Harare last week. “We needed a company that has a deep understanding of the local market, an existing customer base and the ability to implement innovation. This we believe will enable us to be more effective in developing relevant solutions and enabling access to established channels of distribution. Zimbabweans are an amaz- ing people and are educated, technically savvy and innovative and adapt to new opportunities”. The system is designed to reward customers up to 15 percent of value transacted. Phillips noted that when CashbackAPP decided to enter the African market, and subsequently Zim- babwe, the company identified Ecocash as its ideal strategic partner. “We are elated that we have now cemented this partnership and produced a world-first product that brings the power of both innovators behind a unique digital reward offering. This deal with EcoCash is set to disrupt the market in Zimbabwe and significantly enhance the value proposition to Ecocash merchants and customers in the form of EcoCash Rewards, a highly innovative programme that will incentivise EcoCash payments and financial inclusion,” he said. Eddie Chibi, the Cassava Smartech chief executive, noted that once a payment transaction is complete, an EcoCash customer automatically accumu- lates points which they can redeem for value into their EcoCash wallet. “We are excited to introduce EcoCash Rewards as a permanent feature to our valued and loyal customers. The depth of customer entrenchment to our Eco- Cash platform requires us to offer a level of customer lifetime value,” EcoCash chief executive Natalie Ja- bangwe said. “Through data intelligence, we can understand our customers’ buying patterns over time, track their loy- alty to our platform and connect this with linkages to our merchant network, by mapping those value points within the EcoCash ecosystem,” she added. “EcoCash’s new offering would offer customers some relief, coming at a time when austerity measures have resulted in a general scaling back of consumer spending. Providing a win-win model that links the consistent value between consumers and retailers would unlock unprecedented value between consumers and merchants through incentivisation for repeat- ed purchases, thus creating ecosystem-wide benefits”, said Jabangwe. [email protected] The Financial Gazette February 28-March 6 2019 | Page S1 Megafest Eastern Region Awards 2019 Megafest Eastern Region Awards 2019

Megafest Holdings chief executive officer Tafadzwa Matsika

Public Sector award Associates Second runner-up: ZINWA Winner: Kenneth J Saruchera (Zimbabwe Open First runner-up: Rural electrification agency University) Winner:ZETDC Winner: Farai Matope (Netone) Winner: Harris Chapeyama (Mutare Polytechnic) Financial Institution supporting SMEs Winner: Dr Simbayi Gwatura (Wattle Company) First runner-up: FBC Bank Winner: Steward Bank Young Manager of the Year Winner: Keven Munhenga (Mega Market) Versatile and Disruptive Organisation of the Year Winner: Steward Bank Female Manager of the Year Winner: Nyaradzo Funeral Assurance Second runner-up: Tsitsi Useya (City of Mutare) Second runner-up: Tendai Zvinoira (Holiday Inn Best Social Investment Mutare) Second runner-up: Africa University First runner-up: Ashleigh de Klerk (Metro Peech & First runner-up: Metbank Browne) Winner: Econet Winner: Poniso Watema (Mutare Polytechnic)

Educational Sector Award / Quality Manager of the Year Winner: Milestone Group of Schools Second runner-up: Arthur Mupunga (NMB) Second runner-up: Lovemore Diya (FMC Finance) Outstanding Training Institution First runner-up: Tsaurai Mapuranga (Protyre) Second runner-up: Mutare Polytechnic First runner-up: Parshon Muranganwa (Econet) Second runner-up: Manicaland State University of Winner: Bernard Makoni (Border Timbers limited) Applied Sciences First runner-up: Mutare Teachers College Business Team Leader Winner: Africa University Winner: Joshua Maligwa (Mutare City Council) Winner: Engineer Joseph Magadza (Rural The Award for Customer Focus Electrification Agency) Second runner-up: Zimtile Winner: Abel Gurupira (ZETDC) First runner-up: Holiday Inn Mutare Winner: Charles Gambe (Zimbabwe Consolidated Winner: Toyota Mutare Diamond Company) Winner: Herbert Njonga (Africa University) Award of Excellence Winner: Eat n’ Lick CEO of the Year Winner: Wattle Company First runner-up: Dr Zefania Jaravaza (Nyanga Rural District Council) Company of the Year Winner: Dr Edward Pise (Makoni Rural District Winner: Mega Market Private Ltd Council)

Public Sector Leader Businesswoman of the Year Second runner-up: Kingston Chitotombe (EMA) First runner-up: Rachael Mugwagwa (Manica Skyview First runner-up: George Tonderai Bandure (Mutasa Hotel) Rural District Council) Winner: Dr Tsitsi Molly Mupfunya (Milestone Group Winner: Solomon Gabaza (Rusape Town Council) of Schools)

Entrepreneur of the Year Businessman of the Year First runner-up: Patricia Katakwa (Executive Family Second runner-up: Garikai Nhamo Gwenzi (Gutika Guest Home) Academy) Winner: Silas Taunda Kaja (Top Quality Panel Beaters) First runner-up: Gwinyai Mutsongodza (First Class Academy) Outstanding Entrepreneur Winner: Isiah Musabayana (Eat n’ Lick) Tawanda Chitiyo (Tawanda Energy Ltd) Outstanding Business Person of Year Astute Leader of the Year Bruce Henderson (Willton group Zimbabwe Winner: Misheck Mugadza (Muvingi/Mugadza Page S2 | February 28-March 6 2019 The Financial Gazette

RADIATION PROTECTION AUTHORITY OF ZIMBABWE

“…protecting people and the environment against radiation effects…” VACANCY NOTICE: CHIEF EXECUTIVE OFFICER Background

The Radiation Protection Authority of Zimbabwe is a statutory body responsible for regulating the use of nuclear and radiation technology in the country. The Authority was established by the Radiation Protection Act [Chapter 15:15]. The mandate of the Authority is “to protect people and the environment against the harmful effects of radiation”.

The Radiation Protection Board is searching for a dynamic and experienced leader to take up the role of Chief Executive Officer. The Chief Executive Officer will work closely with the Radiation Protection Board of Directors, leading the implementation of national policies and organizational strategies to ensure that the Authority achieves the set vision of being a world class regulator in fulfilment of its mission to protect both present and future generations from the effects of radiation. The ideal candidate for this position should possess international expertise in regulatory oversight and a proven track record for effective team management and results-driven leadership.

Responsibilities • Direct the Authority’s day-to-day activities in keeping with the vision outlined by the Radiation Protection Board. • Ensure protection of the public and the environment against harmful effects of radiation. • Principally oversee and manage the financial, operational and human resources aspects of the Authority in line with the strategic plan as directed by the Radiation Protection Board. • Ensure financial sustainability of the Authority annually. • Ensure adequate, competent and motivated staff. • Improve internal processes for effective service provision. • Promote the interest and welfare of the Authority. • Implement all Board resolutions and directions as given from time to time. • To perform such other duties as the Board may determine or as may be conferred on him or her under the Radiation Protection Act or any other enactment.

Qualifications and Experience • A degree in nuclear engineering, medical physics, safety management or a related scientific discipline. An advanced degree will be an added advantage. • A postgraduate degree in Management (MBA, MSc, MCom) with at least 5 years experience at senior management level. • At least 10 years of experience in radiation safety and regulatory activities. • Good knowledge of the International Safety Standards, IAEA’s Governmental, Legal and Regulatory Framework for Safety (IAEA Safety Standards Series No. GSR Part 1); International Basic Safety Standards (IAEA Safety Standards Series No. GSR Part 3); Code of Conduct on the Safety and Security of Radioactive Sources and the Guidance on the Import and Export of Radioactive Sources. • Good knowledge and fundamental understanding of radiation protection, security of radiation sources and safeguards. • Demonstrated analytical skills in drawing well-balanced conclusions when dealing with complex issues. • Ability to understand and interpret complex procedures and guidelines. • Excellent oral and written command of English.

Application Interested candidates should submit their application and detailed Curriculum Vitae including certified copies of academic and professional certificates, birth certificate and national identity documents and three (3) traceable references to:

The Board Chairman Radiation Protection Authority of Zimbabwe 1 McCaw Drive Avondale Harare

Or email: [email protected] To arrive not later than: 15 March 2019. Canvassing will disqualify applicants. Applications should state the position being applied for in the subject section. The Financial Gazette February 28-March 6 2019 | Page S3 Advertorial

Zimbabwe gets set for telemedicine Dr Spencer T. Mamvura bounds reaching most of the demerits mentioned including emergency ob- a natural death. Despite each other even in remote with the health profes- country’s populace. Sev- above, the Health min- stetric care in selected all the challenges, it is areas. sional are referred to the ealthcare de- eral state governments istry, with support from areas. Since its launch, highly important that the • It also encourages appropriate facility for livery is being for example Maharash- United Nations Popula- project has reached 60 government and the busi- local healthcare works further management Htransformed by tra and Andhra Pradesh tion Fund (UNFPA) and person of pregnant wom- ness community come up to remain in rural areas Implementation of advances in telemedi- have launched free med- funding from the Gov- en in rural areas. There together to try and find by augmenting (to in- telemedicine in Zimba- cine which is now rec- ical helplines. More than ernment of Luxembourg, has been an improvement ways which Zimbabwe crease or add something) bwe is very feasible and ognised as an essential came up with the inter- in the diagnostic capacity can strategically lever- professional support and will go a long way in 1,000 phone calls are re- enabler for support of vention of telemedicine of remote physicians on age on telemedicine and allowing them to contin- improving the quality of ceived each day seeking health systems across the in order to save lives of foetal conditions. improve the health status ue their professional de- health care. The already world, acting not only as medical advice, with 33 people in rural areas who The Zimbabwean of the country which is velopment. existing infrastructure an agent for reforming percent of the calls com- could not easily access health sector has not been also used as an indicator • It cut costs of un- can be capitalised on healthcare systems, but ing from India’s underde- medical services. spared with the current to measure the country `s necessary hospital and to deliver health to the also as an enabling tool veloped states. Working in Kenya economic meltdown that potential for investment GPs visit thereby pre- most remote areas and to share resources among Mongolia in Asia and India, World health has affected the coun- especially from the per- serving the fund for vul- cut on unnecessary hos- countries with similar has noted significant Partners (WHP) is a try in the last few years. spective of Foreign Di- nerable populace. pital visits. The lack of challenges without hav- improvement in health non-profit organization The public health sys- rect Investments. • Through self-mon- funding and properly ing to duplicate efforts. delivery after launching that delivers healthcare tem is overwhelmed and There are vast ad- itoring, chronic diseases documented policy and Lack of interoperable telemedicine. Mongolia services to rural and un- private healthcare fees vantages of telemedi- complications are picked framework in place for health systems and con- is one of the largest coun- derserved communities are beyond the reach of cine which can only be earlier allowing for time- telemedicine practices sensus on data standards tries in Asia yet sparsely by building branded, tele- many. In addition, lack of enjoyed by those who ous interventions are the major obstacles in is one of the major barri- populated with a popu- medicine-enabled health- adequate drugs, and spe- have implemented the the setting up of telemed- ers to the use of health in- lation of about 3 million care networks called cialist health personnel program. They include The major concern in icine in Zimbabwe, but formation. Mobile phone Sky. In Kenya, WHP to service the populace, but are not limited to the adoption of telemedicine if everyone concerned use has seen tremendous has launched The Sky has impacted negatively following; has been buy in from bring their energies and growth across the de- “Because Network in Homa on the health status of • Access to health- the important stakehold- resources together, this veloping world offering of the demerits Bay, Kisumu, and the country. The govern- care 24 hours a day no ers. Concerns have been insurmountable task will opportunities to engage Siaya counties ment is trying to cover matter where you are as raised about patient con- be accomplished and ev- e-Health applications. mentioned above, with support the gap by increasing the long as there is internet/ fidentiality and also how eryone will reap the ben- Telemedicine, simply from the re- capacity to train medical telephone connection. cases which cannot be efits. Let’s embrace tech- put, is the remote diag- the Health ministry, spective coun- doctors at Midlands State • Doctors attracts dealt with by telemedi- nology today and gain a nosis and treatment of try ministry of University and at Nation- new patients generating cine are going to be han- healthier tomorrow!!! patients by means of tele- ...came up with the in- health. WHP’s al University of Science income to their regular dled. Issues involving communications technol- tervention of telemed- commitment to and Technology to com- practice from the comfort the confidentiality and References ogy. Clinicians are now Every Woman plement the traditional of their homes or on their protection of a patient’s http://www.healthit. linking up with patients icine in order to save Every Child medical school of the own time. data can be minimised gov/topic/health-it-ini- from their desktop or mo- has greatly University of Zimbabwe • Practices that by restricting access to tiatives/telemedi- bile device connecting lives of people in rural expanded its While the govern- were once isolated are the identification system. cine-and-telehealth with patients in their own work in Kenya ment is making efforts now connected by a net- Computerised systems http://www.ehealthre- home or into other plac- areas who could not and is valued to resuscitate and bring work of physicians who used in telehealth must search.no/files/docu- es of care such as nurs- easily access medi- at a contribution back the situation to nor- share information regu- possess mechanisms that ments/WHO_CC_Annu- ing and residential care of 7 million USD. malcy, other alternative lated by the codes of eth- track use of personal in- al_report_2008.pdf homes, secure hospitals cal services...” Through the Sky solutions to health deliv- ics and laws applicable to formation, and access http://www.who.int/goe/ and even prisons. Tele- Network, women are of- ery needs to be adopted. the protection of infor- must require personal publications/atlas/zwe. medicine has evolved in fered reproductive health In Manicaland province, mation and only with the passwords. The key to pdf all disciplines of medi- people. It is characterized services and children are the government through patient’s consent, points preserving confidentiali- https://www.healted. cines and its effective- by harsh winters, poor offered testing and treat- POTRAZ and some ex- of view, diagnoses and ty is to allow only autho- com/blog/Telemedi- ness has been noted in road networks in rural ment for tuberculosis, ternal funders launched knowledge. rized individuals to have cine-in-India many countries which areas and high transports pneumonia, and diarrhea. out a pilot study on tele- • Both the doc- access to information. https://www.dai- include India, Mongolia costs. A journey to seek This has resulted in im- medicine which promised tors and patients can Again, a sound triaging lynews.co.zw/ar- and Kenya. treatment in the capital proved quality and acces- a major breakthrough for use computers, smart system should be put in ticles/2018/07/12/ Telemedicine in In- city can drain a family’s sibility of the maternal Zimbabwe. But the proj- phones and tablets that place so that cases which potraz-in-telemedi- dia has grown leaps and resources. Because of and newborn services, ect seems to have died will enable them to reach needs personal contact cine-initiative

The above pic depicts a patient using video call to review her CT scan results with her doctor (Adopted from the HealthIT.Gov Journal, Telemedicine September 2017) Page S4 | February 28-March 6 2019 The Financial Gazette

CONFERENCE CALL FOR PAPERS AND PROTOTYPE EXHIBITIONS Cnr Josiah Tongogara/Robert Mugabe Way. P.O. Box 640 Mutare, Zimbabwe. Telephone: 263-20-63141/63153, 0772136934-5/0714900016- 7/0735 054 661-2. Telfax: 020-66912. E-mail: [email protected] www.mutarepolytechnic.ac.zw

Conference dates: 01 – 04 May 2019 3. Environmental Management Agency Conference Venue: To be Advised 4. Ruziwo Trust 5. ARIPO representative INTRODUCTION 6. Research Council of Zimbabwe Mutare Polytechnic under the Ministry of Higher and Tertiary Education, 7. ZIMDEF Exercutive Science and Technology Development, will be hosting its second Research 8. Entrepreneurs and Innovations Conference at a venue to be advised, from the 1st of May 9. Scientist th 2019 to the 4 of May 2019. The conference seeks to break the silo mentality 10. Technologist by bringing together delegates from all Learning Institutions, Researchers, 11. Engineers Academics, Technologists, Environmentalists, and Industrialists. The conference aims at coming up with tangible sustainable research outputs 12. Researchers using locally available resources towards industrialisation through 13. Students innovation. It is a fora to share, showcase and analyse practical solutions to 14. Ministry of Higher and Tertiary Education Science and Technology societal problems. Development 15. Ministry of Energy and Power Development, (ZERA ) CONFERENCE THEME: 16. Ministry of Industry and Infrastructure Development Sustainable industrialisation and modernisation through heritage based research and innovation to solve national problems. GUIDELINES ON SUBMISSION OF ABSTRACTS AND FULL PAPERS SUB-THEMES 1. We are inviting abstracts of paper submissions aligned to the sub- • Waste management and waste to energy. themes that will be presented and discussed during the conference. • Renewable energy opportunities. 2. Abstracts (with a miximum of 300 words) on any of the sub-themes • Sustainable industrial growth through heritage based research, must conform to the Harvard Style of Referencing and Citation and innovation and entrepreneurship. should be formatted to font size 12 in Times New Roman font type. • TVET education for sustainable economic growth through science, 3. Your abstract should indicate the following: Title, name of author, engineering and technology. institution/affiliation, email, abstract, keywords and sub-theme in that order. • Sustainable product design, prototyping, manufacturing and business models a road map to industrial incubators and industrial parks. 4. Abstracts or full papers must be submitted electronically to the conference secretariat copied to all of the following email addresses: • Intellectual property resources and banking for economic transformation. i) [email protected] • Internet of Things, cyber-crime prevention in agriculture, mining, ii) [email protected] and manufacturing industry. 5. The Conference Committee reserves the right to select papers for • Climate change initiatives. presentation. • Emerging technologies in education and engineering. 6. All abstracts and papers received will be acknowledged and authors will be notified of acceptance or rejection (with reason) before being • Value addition of national resources. sent for peer review. • Unpacking Sustainable Development Goals (SDGs) for community 7. Papers will be subjected to peer-review. Authors of accepted papers development. will be notified of the outcome of the reviewed papers (4000 – 6000 • Technology, skills and knowledge transfer through national, regional words including references) by 29 March 2019. and international partnerships 8. All accepted and presented papers will be published in the conference AIM proceedings. The aim of the conference is to sustainably exploit natural resources, human capital potential, and break silo mentality to awaken the country’s industry. IMPORTANT DATES MILESTONES

OBJECTIVES 22 March 2019 Deadline for Submission of Abstracts • To promote linkages between learning institutions and industry 29 March 2019 Notification of selected Abstracts to provide sustainable designs, developments and solutions for 05 April 2019 Deadline Submission of Final Drafts of Full Papers technological-economic challenges. 08 – 19 April 2019 Payments of Conference Fee • To promote Education 5.0 through heritage based education, research and development. 01 May 2019 Arrival and Check-in • Stimulate commercialisation of products through prototyping and 02 May 2019 First Day of Conference reverse engineering. 03 May 2019 Second Day Exhibitions Day of Conference and Excursion • Showcase product design innovations from fields. 04 May 2019 Departure • Generate business incubators and industrial parks through partnerships with technocrats. CONFERENCE FEES: $320.00 EARLY BIRD REGISTRATION AND $350.00 FOR REGISTRATION AFTER 19 APRIL 2019. CONFERENCE ATTENDEES FEES WILL COVER, ATTENDANCE A BOOK OF ABSTRACTS, 1. Industry of Chamber and Commerce of Zimbabwe Executive WELCOME DINNER,EXCURSION, TEAS/COFFEE AND LUNCH 2. CDRU DURING CONFERENCE DAYS, EXCLUDING ACCOMMODATION. The Financial Gazette February 28-March 6 2019 | Page 17 Companies & Markets Vast terminates funding deal

Ndakaziva Majaka Emphasising that the termination up or subscribed for and Prelea said the In 2016, several companies that were mining in Markets Editor would not affect local operations as the funds were “to be applied both in repay- Chiadzwa were booted out on allegations of prejudic- firm was waiting for a $5,5 million facil- ment of $675 000 currently outstanding ing the fiscus and which led to the formation ofthe AST Resources Plc (Vast) has terminated its ity from Mercuria, the Vast boss said the on the Bergen convertible security and Zimbabwe Consolidated Diamond Company (ZCDC). funding agreement with Bergen Global Oppor- termination had been done “by mutual for general corporate purposes”. And having promulgated a new diamond policy late Vtunity (Bergen) amid indications that the Lon- consent”. Meanwhile, Vast was last week ap- last year, President Emmerson Mnangagwa’s govern- don-listed miner was about to commence exploration at With the Bergen deal convertible into pointed venture partner by the Chiadz- ment believes it in the process of ensuring accountabil- its Zimbabwean concessions in Marange. shares, Andrew Prelea’s company said wa Community Development Trust ity in the mining, processing and selling of the precious The company — whose shares were 8,1 percent — at the time — that the funding had (CCDT). mineral. higher on Friday following the announcement — said enabled it to carry out work on its Ro- “The... Trust has in principle been According to recently-promulgated law, only Rio it had cancelled the second tranche of a $3,2 million mania as well as local projects. granted the right to mine diamonds in Tinto-owned Murowa, Vast, the ZCDC, a Russian and bridging facility with the New York-based financier This also comes as Vast has just joint venture on the Heritage Concession Chinese companies will be allowed to mine gemstones for an alternative deal with Mercuria Energy Trading completed a 550 million ordinary share (Block T1A of the Marange Diamond in the country. (Mercuria). placement with SVS Securities and Fields) and has appointed Vast... in the The policy also covers all facets of diamond mining “Bergen... proved a valuable and flexible funding which raised nearly £1 million 000. exploration and mining of diamonds in in Zimbabwe such as exploration, processing, benefici- partner for Vast. Bergen was a reliable and responsible Under the offer — to existing share- the area,” the junior miner said, adding ation, marketing, security and law enforcement as well corporate citizen at all times during its dealings with holders or others known to the company that details regarding the project would as valuation. Vast..,” Brian Moritz, Vast’s chairperson, said. — about 114 million shares were taken be released to the market soon. [email protected] Red tape costs URL export markets Ndakaziva Majaka Markets Editor

NITED Refin- eries Limited U(URL) says it has lost out on scouted export markets due to delays by local export authorities in issuing relevant clearance documentation. Busisa Moyo, URL’s chief executive, said the agro-processing firm — which has been waiting Busisa Moyo for an export permit for its Botswana and Namibia export markets from the Ag- riculture ministry since last year — had lost out on two valuable export business due to beauracracy. “We talk of fixing issues around the ease of doing business yet local companies have a hard time with authorities. We still need permits from the Agriculture ministry and I told minister Mthuli Ncube this when he toured our plant. “Now they are fed up and we will have to start courting them again if we ever get the documentation relevant for us to export. As a result we are not exporting anything,” he told The Financial Gazette of the side-lines of the just-ended CEO Round Table conference in Victoria Falls. Moyo said while the firm had received a letter of support from its parent ministry, the export permits were yet to be issued. “Naturally, the customers are fed up. In October we got a letter of support from the Industry Ministry but we now need the Agriculture ministry to pull through,” he said. This comes as URL was last year forced to offload a truck that was ready to be dispatched as it could not get the relevant clearance documentation, despite having received the green light from the Ministry of Industry to proceed. The URL boss was quick to point out that Agriculture ministry officials were not forthcoming with the firm’s request for the relevant export documentation. “The Industry ministry is saying there are no permits needed but the Agriculture ministry is now locking us down because the person who is going to be saying the industry is short needs to be industry not agriculture. “They are also saying the permit needs confirmation form the Reserve Bank with approval for export. But this is costly for us in terms of time and we are very likely going to lose that market,” he said. Agriculture minister Perrance Shiri was not immediately available to comment. Zimbabwe recently embarked on a rapid results initiative which tackled some of the bureaucratic delays and lethargy that affected investments in the past, but a number of grey areas remain unaddressed relating mainly to 22 statutory instruments that need immediate attention, according to the industry leaders. Moyo, however, said the cooking oil producer will find new ways to penetrate regional markets. “We are working with distributors in Zambia, nursing Namibia… We used to export to Botswana early 2000s but I can’t go hard on that because of these problems where they are saying they need a letter,” he said. [email protected] Page 18 February 28-March 6 2019 The Financial Gazette Motoring ISUZU D-MAX 3.0 TD LX 4x4 6MT Taking an established concept to the max

cup holders to keep the thirstiest passengers happy. Aside from the aforementioned ex- TOP GEAR with ternal D-Max upgrades, all of which, Richard Wiley to be frank, are more cosmetic than practical, any potential owner will be delighted with the visual quality of the EE the letters KB, speak the letters paintwork. The test unit sported a fetch- KB, and the end result in the auto- ing shade of mid-blue metallic paint that motive world at least is surely the S glowed quite beautifully. Take a bow at same — an Isuzu springs to mind. No the Struandale paint shop — this surface more though as from late last year, the finish matches the best in South Africa. KB bakkie morphed into the D-Max and Panel gaps too are uniform and tight al- with the slightly longer nomenclature beit that the doors don’t close with the came a slightly longer equipment list greatest precision. along with a few upgrades designed to All that gloss is supplemented by add more home comforts. lots of chrome bits — a tad too many, Isuzu is not known for upsetting the methinks – as well as by practical bits apple-cart by making frivolous changes such as deep but flexible mud flaps, a to its bakkies and it’s this very conser- rubberised load protector on the rear vatism that has undoubtedly entrenched bumper assembly that’s also home to the brand in the hearts and minds of parking sensors and by (sensibly) un- those who mostly use their steeds for adorned running boards. purposes of earning an income ahead of Smart dual-spoke alloys that are showing off a new set of alloy wheels to home to 255/60R18 tyres, complete the jealous neighbours. Lots of chrome detailing for the D-Max LX visual treatment but what didn’t escape Thus the KB nomenclature had be- my notice is the fact that those smart come wholly associated with practical, wheels are attached to their respective long-lasting workhorses but changes in hubs by no less than six bolts which tele- consumer preferences, allied to a partic- graphs that hard work is still at the core ularly South African habit of using bak- of any Isuzu bakkie. kies as day-to-day transport when a few So, it should be obvious that the LX luxuries take on greater relevance, has D-Max is endowed with plenty of mod seen the Japanese manufacturer adding cons to supplement its practical virtues more tinsel to its presentation. but how do those practical virtues shape With the sad departure of “The Gen- up by the standards of 2019. In terms of eral” from the SA market, Isuzu took load capacity, the Isuzu is in the middle over the existing production lines (these of the pack, but it gives little away in have just undergone a revamp) in Stru- terms of towing muscle which is rated at andale, Port Elizabeth, and continued 3 500kg, braked. to churn out updated, locally-manufac- It’s in dynamic terms that the package tured derivatives of the D-Max in single falters somewhat but I say that advisedly cab, extended cab and double cab form. as it depends on the intended usage pat- The exact composition of the range to terns of each owner. Let it be known that be offered in Zimbabwe through local the D-Max is a better proposition off the importer, Autoworld, was not known at beaten track than on the city streets. In an the time of writing but expect to see the urban environment, it is a large ship to D-Max on display at April’s Trade Fair conduct and park, especially in today’s in Bulawayo. parking lots that are designed in the main Externally, the most obvious chang- for sub-compacts. es include a revised and chromed grille Some of the niggles in this operation- Improved trim levels and an optional 9-inch infotainment unit with satnav and chromed eyebrows over the re-con- al environment are triggered by a steer- figured headlamps, while inside the LX ing system which I recently described as models incorporate some new soft-touch being vaguer than an SAA recovery doc- surfacing and better disguise of the hard ument. Given that power assistance is on plastic bits achieved through more ob- tap, I simply cannot fathom why Isuzu vious graining. There are also flashes of has elected to use such low gearing. For piano black on display. the uninitiated, this means that more While no-one could claim the interi- turning is needed to achieve a given or looks plush, the titivations have soft- wheel angle and that, in the real world, ened some of the hard edges that will be means your arms are unnecessarily busy familiar to KB owners. This LX model getting around tight corners or into even also includes perforated leather seating tighter parks. I’m no chassis engineer but — electrically adjustable for the driver surely a 10% increase in gearing will not — as well as keyless entry and start and unduly increase steering effort, but it will a height adjustable (only) steering wheel certainly reduce the twirling motion! which allows reasonably unimpeded That vagueness also manifests itself views of the rather small analogue in- on the open road around the centre po- struments that flank a rectangular - dig sition but not to a disconcerting degree. ital display. That wheel also features It’s in this environment that the introduc- controls for the cruise system as well as tion of a 6-speed gearbox has worked Bluetooth and sound. The latter is sup- some magic. plemented by USB and HDMI ports You see, the rather venerable, Those front seats provide good thigh low-revving 130kW/380Nm 4-cylinder support but are a little lacking in lumbar 3.0 turbo D motor is of the old school support while passengers in the back Revised nose treatment marks out the D-Max LX variety and makes its presence heard are accommodated comfortably enough with rather a lot of knock, a characteris- with decent knee room, but as with near- pleasantly deliberate action which can to low speed ride comfort on broken sur- saying: “If it ain’t broke, don’t fix it.” tic it trades for greater tolerance of Afri- ly all bakkies, the relatively low-set seat be a tad obstructive if the middle-weight faces. It telegraphs more vertical move- This applies in many ways to this Isu- can-grade diesel fuels which it consumed forces a more knees-up posture than is and smooth-acting clutch pedal is not ment than its mu-X cousin and doesn’t zu. Sure, the growing leisure market at at the parsimonious rate of 8.8l/100km ideal. fully extended. Certainly, for off-road feel quite as softly sprung which all which the LX models are aimed, has over a week’s varied use. The centre dash is dominated by use, I’d recommend going for the translates into a somewhat restless feel seen to it that more and more equipment That sixth gear is very long and out an optional 9-inch infotainment screen 6-speed auto version which simplifies that doubtless will be less invasive with is loaded on board and that includes per- on the cruise, it allows the motor to run sourced from Alpine (an 8-inch screen dealing with nasties, something expe- a good load on board. haps too many flashes (excuse the delib- at little more than double idle speed at is standard) and which incorporates sat rience tells me the D-Max will be very At speed on smoother surfaces, some erate pun) of chrome. But underlying the 120km/h. nav and rear camera visuals. Immedi- good at thanks to the presence of 4H and calm returns but dips and crests can mod cons is an honest and well-proven All this means the rev counter hasn’t ately underneath is the familiar Isuzu ro- 4L drive, all accessible at the turn of a cause a disturbance in the shape of rather platform and engine that should with- even reached the 2 000 rpm mark, so the tary control console for the effective air switch and complemented by a diff lock. obvious vertical disturbances. Happily, stand the toughest of use for many, many engine’s grumbly nature is masked rath- conditioning. Also on-board are electric Ride is the bane of most bakkies as lots of safety nannies are incorporated, years. Its dynamic virtues lag behind in er well to the benefit of refinement which windows and powered external mirrors, they are set up to accommodate large including ESC and trailer sway control, some respects but that’s an understand- is further assisted by excellent suppres- so there’s no shortage of creature com- loads with the need for plenty of wheel not to mention six air bags and additional able trade-off for the inherent trustwor- sion of road noise and good isolation of forts, all of which are supplemented by articulation. The Isuzu, with its leaf braking controllers that work in tandem thiness of the brand which I feel is ulti- wind noise. generous oddments spaces and enough springs at the rear of a ladder-frame with the effective ABS-equipped brakes. mately happier in the bundu than in the That six-speed manual box has a chassis, Is no class leader when it comes We all know about that famous old shopping mall carpark. The Financial Gazette February 28-March 6 2019 | Page 19 Column Driver fitness tests: Option or prerequisite?

VERY year the police give statistics on road than younger and less experienced drivers. event that the model has identified a certain mended that for recruitment purposes, psy- traffic accidents. While the roads are in a poor We have established that psychometric driver’s road accident risk as too high, the chometric tests should be used. They have E state, the quality of our drivers leaves a lot profiles can be used to identify a driver’s driver may be re-assigned to other areas in the advantage of being objective and can- to be desired. The police attribute the cause mostly proneness to a road traffic accident with the organisation. Doing this will reduce the not be misrepresented. We also noted in our to human error which could have been avoided. The high accuracy. This implies that without costs incurred as a result of accidents. Such data exploration that holders and non-hold- errors include failure to observe road rules and regu- any prior road traffic accident record, the costs include higher insurance premiums, ers of a defensive driving certificate bear lations and failure to travel at safe speeds. company can use appropriate psychometric repairs which expedite “wear and tear”, the same road traffic accident risk. This In most of these accidents, the driver is licensed tests to decide whether or not you should lost productivity, both client and company affirms our approach that the use of psy- and has experience in driving. One is left to wonder hire a driver or machine operator in gen- property damage, loss of business or clients chometric tests is highly recommendable. if just having a drivers’ license is enough to ensure eral. and even loss of lives. l Nguwi is an occupational psychol- safety on the road. Evidently, it is not. This, howev- The same approach can be used to iden- Demographic variables such as driving ogist and managing consultant with In- er, does not in any way condone having unlicensed tify training needs among drivers who are experience can be misrepresented by pro- dustrial Psychology Consultants. He drivers on the road. already part of the organisation. In the spective drivers. For this reason, we recom- writes in his personal capacity. There are some underlying factors involved that are not highlighted in our procedure of getting a drivers’ licence. These underlying factors can only be highlighted through driver fitness tests. NEWSWorthKnowing HR Perspective “ ” Driver fitness with tests are high qual- Memory Nguwi ity, scientifically validated tests used in traffic psychology research and practice. They can also be called traffic psychology ability tests. On one hand, they serve to highlight performance deficits in potentially dangerous drivers while on the other they are used to select “drivers with increased responsibility”. There is a new chef in town, serving you with all Certain groups are classified as drivers with increased responsibility and these include taxi drivers, bus drivers, driving instructors and drivers of vehi- the news worth knowing straight to your phone cles transporting dangerous goods and heavy loads. A number of individual related factors lead to bad driving. It will not be enough to consider a drivers’ licence alone during the selection of drivers. One re- DAILY!! search report, Reducing Workplace Accidents Using Analytics, Industrial Psychology Consultants (IPC), found that certain attributes of an individual can be used to predict proneness to road traffic accidents. Some of the factors assessed include stress tolerance, reaction time and observation skills. The tests are classified into three main dimen- sions, which are planning the journey, executing the journey and dealing with unforeseen situations. Under each dimension, there are tests to ascertain the drivers’ skill in that respective dimension. The full set of driving simulation tests will result in a comprehensive report on the driving strengths and weaknesses of each candidate tested. In one organisation, We have estab- a study of drivers using lished that psy- the simulation testing “chometric profiles found that there was no can be used to identify relationship between a driver’s proneness to holding a defensive a road traffic accident drivers licence and the with high accuracy. number of accidents. Business warms up to This implies that with- This could point to theMnangagwa’s promises out any prior road traf- fact that the defensive fic accident record, the driving exercise in its company can use ap- current form needs im- propriate psychometric provement as it has tests to decide whether no impact on accident or not you should hire proneness. Below are a driver or machine the full findings of the operator in general. In study: l the event that the model We established has identified a certain that the psychometric attributes of an individ- driver’s road accident ual can be used to pre- risk as too high, the dict proneness to road driver may be re-as- traffic accidents. SMS the word “FIN” to signed to other areas in l We built a logistic the organisation” regression model that distinguishes drivers HOW TO who had a road traffic accident record and drivers who did not have a record with an accuracy rate of 33567 approximately 72 percent. SUBSCRIBE (Available to Econet subscribers only) l Concentration and reactive stress tolerance di- mensions had a statistically significant relationship Subscribe for ONLY 12c/day with road traffic accident records. l There was no significant evidence in the data that we analysed to suggest that holders of a defensive driving certificate (DDC) are less prone to ac- FINGAZ LIVE is the most informative and most efficient daily mobile news platform in Zimbabwe on cidents than non-holders. In other words, there was breaking national news, relevant economic news, trending societal issues and latest sporting news. no significant evidence to suggest that holders of a DDC are better drivers than non-holders. l The age of a driver and the number of years www.fingaz.co.zw booking@fingaz.co.zw The Financial Gazette @FingazLive an individual has had a driver’s licence have fairly significant relationships with the number of road traffic accidents. In other words, older and more ex- 2nd Floor, Green Bridge South, Eastgate Complex, Harare, Zimbabwe. Tel: +263 (242) 781571-8 perienced drivers are likely to have fewer accidents Page 20 February 28-March 6 2019 The Financial Gazette Column Finance Act No. 1 of 2019 gazetted HE much awaited Finance Act The new law provides for re- ed from offshore or is that any person 15 percent VAT on imported services. VAT registered opera- No 1 of 2019 was gazetted in a mitting VAT in foreign currency to domestic sources. who imports ser- tors were therefore exempted from this tax as long they used TGovernment Gazette Extraor- the Zimbabwe Revenue Authority There are penal- vices and consume the services to produce taxable supplies, which is no longer dinary dated February 20, 2019, but (ZIMRA) for taxpayers trading in ty implications for them in Zimba- the case. Additionally, such services may also be subject to almost all its clauses have been back- foreign currency, or in either legal not remitting VAT bwe is liable to 15 non-resident tax on fees or royalties in terms of the Income dated to take effect from January 1, tender or foreign currency where in foreign curren- percent VAT on Tax Act whose general rate is 15 percent, subject to exemp- 2019. the person has traded in legal tender cy as stipulated of imported services tion or reduced rate, which may apply in terms of double tax- The Act ratifies Statutory Instru- that is not foreign currency. A “legal equal to the amount no matter what the ation agreements between Zimbabwe and the non-resident’s ment 205 of 2018, which revised in- tender other than foreign currency” of tax payable (100 services have been country of residence. termediated money transfer tax from means bond notes and coins, or mon- percent in the for- used for. However, Time of supply rules expanded 5 cents per transaction to 2 cents per ey paid by means of an electronic eign currency plus services that are Output VAT is generally triggered when an invoice is is- transaction value, revises VAT on im- transfer of funds through an account other miscellaneous ordinarily exempt- sued by the supplier or recipient upon the supply of goods or ported service rules, introduces the (other than a nostro foreign currency penalties. Tax Matters ed or zero rated if services or when any payment of consideration is received law on payment of VAT in currency account) with a banking institution; VAT on imported with the supplier was by the supplier upon supply of goods or services, whichever of trade, provides for payment of in- (means bond notes and coins, or services Marvellous Tapera ordinarily resident occurs first. This has been amended to include the time goods come tax in Zimbabwe by non-res- RTGS), whereas “nostro foreign cur- VAT registered outside the scope are delivered or services are made available to the recipient. ident broadcasters and suppliers of rency account” means any account operators should of VAT on imported It entails that movables supplied in the absence of an invoice e-commerce products etc. designated in terms of Exchange brace for new VAT on imported ser- services. This presents a major shift will be deemed to be supplied at the time they are dispatched In this article we cherry-pick and Control Directive RT/120 of 2018, vices because the Finance Act has from the current rules where only and for immovable goods, when the recipient takes posses- demystify some of the contents of held with a financial institution in changed the definition of imported imported services which are used sion and for services, at the time the services are performed. the Finance Act no. 1 of 2019. Zimbabwe, in which money in the services to make it apply to all im- or consumed in the production of Therefore taxpayers who have neither issued an invoice nor VAT payment in forex form of foreign currency is deposit- porters of services. The implication non-taxable supplies are subject to received any payment for the supply cannot avoid output tax if they have delivered movable goods, let out possession of immovable property or performed services. Intermediated Money Transfer Tax Statutory Instrument (SI) 205 of 2018, which revised the rate of tax on transfer of money mediated by a financial institution from five cents per transaction to two cents per value of transaction with effect from October 13, 2018 has been confirmed. The effect of this provision is that the nullity in the law previously made through S I 205 of 2018 is sort of regularised through the enactment of this provision. The effect is that whatever Intermediated Money Transfer Tax (IMTT) that was collected since October 2018, albeit without sufficient legal authority to do so is ratified. Meanwhile, this tax has been disallowed as a deduction for income tax purposes. However, the provision of the deductibility of IMTT is silent on the commencement date. All the other provisions are clear in so far as their commencement of operation into law is concerned. In terms of section 132 of the Constitution “an Act of Parliament comes into operation at the beginning of the day on which it is published in the gazette, or at the beginning of any other day that may be specified in the Act or some other enactment.” Given the silence of the provision on the disallowance of the IMTT as a deduction on the commencement of the provision, it appears that the provision will commence beginning February 20, 2019, which is when the Finance Act 1 of 2019 was gazetted. Furthermore, there are number of exemptions that you will need to consult your tax advisor for detail. Penalties for violating transfer pricing rules Multinational companies and local entities engaged in intercompany transactions should brace for penalties for violating transfer pricing rules. A 100 percent penalty on the shortfall tax is levied for deliberately avoiding, reducing, postponing or evading tax through use of transfer pricing. For taxpayers who have not kept contemporaneous transfer pricing documentation to support the transaction giving rise to the amended assessment, there is 30 percent penalty on the shortfall tax and the same penalty if a taxpayer has not complied with transfer pricing guidelines. In the absence of fraud or tax evasion and the taxpayer has kept contemporaneous transfer pricing documentation and complied with transfer pricing guidelines, but nevertheless there is understatement of tax, a penalty of 10 percent of understated tax applies. Non-resident suppliers of satellite broadcasting and e-commerce services With effect from January 1, 2019, satellite broadcasting and e-commerce platform service providers domiciled outside Zimbabwe who receive or accrue income from persons resident in Zimbabwe for services rendered in Zimbabwe shall be liable to tax in Zimbabwe if they receive revenues in excess of $500 000 in any year of assessment. The income shall be taxed at a flat rate of 5 percent without deduction of expenses from such income. Directors of wound up companies liable to tax debts Directors of companies that are wound up voluntarily or deliberately put into liquidation with the intention of avoiding tax are made jointly and severally personally liable for tax debts of those companies if such directors open a similar entity under the same directorship operating the same business or if the whole or a substantial part of the old company business and property wherever situate is transferred to another company or entity which will be or has been formed, incorporated or registered under any law. It does not matter that some of the directors did not join to form or start new companies or no longer act in similar positions. Conclusion Besides widening the tax base, the current Finance Act tightens the screws on tax administration through imposing stiff penalties for failing to comply with the law. It is also unique in that government has expressed its preference to be paid in foreign currency and we wait to see how this inter plays with recent pronouncements by John Mangudya, the Governor of Reserve Bank of Zimbabwe, in his Monetary Policy Statement. Meanwhile Matrix Tax School will be hosting its 2019 Victoria Falls Tax Conference from May 22 to 25, 2019. Also join us at our 2019 VAT Seminar on March 21, 2019 for an indepth understanding of VAT rules. l Tapera is the founder of Tax Matrix (Pvt) Ltd and CEO of Matrix Tax School (Pvt) Limited. He writes in his personal capacity. The Financial Gazette February 28-March 6 2019 | Page 21 Column Value-destruction traits of a founder CEO ANY entrepreneurs accidentally become the In the 1980s one man created a simple point of view, the buyout offer was reasonable. first chief executive officer of the business business model of retailing basic fast-mov- However, clearly ego-driven, the founder Mthey created. It happens mainly as the auto- ing foodstuff to the lower income market. In CEO led the board and management to stage matic progression with the growth of the business from a short period he had a chain of mainly small a counter management buyout, which succeed- a small idea to a substantial sole proprietorship to a town stores. At that time it was strictly a fam- ed on the back of a consortium of historically medium size limited liability business and beyond to a ily business with him directing business op- friendly banks to the CEO. public listed enterprise. erations and the wife doing administration. The new business was undercapitalised for This is a self-determining process where the CEO After a few years an opportunity arose to buy its size, leading to a gradual decline of stocks does not apply for the job, get interviewed then appoint- a small but growing grocery wholesaling busi- and revenue, which had a domino effect on the ed ― he/she is there as the result of their enterprise to ness, which he did with its small team of man- empire. The new funders replaced the founder launch the business. They get caught up in the “found- agement. He led fast growth of the wholesale Executives Only Corner CEO but it was too late to change the business er’s trap” where they cannot dismount the tiger while empire which became dominant in the home with model and reverse the decline. The turn of the it’s in motion because they do not trust others to be as country and extended to nine neighbouring Shepherd Shonhiwa decade saw the empire fall into extinction. good or the business demands still need their expertise African countries. The founder CEO had been the builder and or there isn’t a suitable alternative yet. The 1990s saw a sea change in the grocery strong enough to force a new business mod- destroyer of the business value in one lifetime. Whatever the reason, the incumbent CEO might oc- wholesale market with the entry of a combined el and strategy. Meanwhile, competition was He should take a leaf from the tradition of cupy the seat for decades against today’s norm of aver- model of retail and small wholesale. This group building up and the share price of the business American politics ― “to concede defeat with age CEO tenure of five years. was well placed to be the first to take advantage lost traction on the stock exchange. This cre- grace in order to position yourself for a bigger By its nature, the CEO position is specialised and of this new combined shopper model but it did ated a perceived trading discount compared to win next time” (Tim Naftali) powerful in and outside the organisation. If the wrong not because the founder CEO refused to see it the underlying value of the business. A group of l Shonhiwa is a chartered director (SA) person occupies it at the start the deficiencies enlarge as competition. investment houses saw this and mounted a hos- and has authored books on leadership. He proportionately with the growth of the responsibilities. The board, hand-picked by him was not tile take-over. From a purely shareholder value writes in his personal capacity. The paradox of the “bull in a china shop” sets in when the rough and tumble guy who started the business is now expected to observe the finesse and etiquette of the blue blood executive elite. The founder CEO also has the opportunity to establish the first board of directors which he leads, comprising members who are either like him or are sufficiently abiding to support the CEO’s vision all the time. Then you have a CEO who leads the board and holds majority shareholding in the business, resulting in concentration of power in one being. VACANCY NOTICE: REGISTRAR The Zimbabwe Open University (ZOU) is the largest and comprehensive Open, Distance and Electronic Learning (ODeL) University Mboweni seeks in Zimbabwe that offers lifelong learning in an affordable, cost effective and flexible manner. Applications are invited from suitably qualified, experienced and highly motivated professionals to fill the post of Registrar that has arisen at the University.

to get SA out This is a 3-year performance-based contract. of junk status The Registrar reports to the Vice Chancellor Main Duties and Responsibilities OVERNMENT is prioritising regaining SA's investment grade rating on its debt as part of a. Advising and assisting the Vice Chancellor, Council, Senate and other Committees of the University on matters Gits plans to revive a stagnant economy, Finance related to corporate governance and interpretation of University Statutes and Ordinances; Minister Tito Mboweni said. b. Secretary of the University Council, Senate and their principal committees Moody’s Investors Service is the only one of the c. Assist in the development and formulation of rules, policies and regulations to enhance the University's capacity three major credit-rating companies that still assesses to discharge its various duties and mandates; South Africa’s debt at investment grade. d. Advising the Vice Chancellor in the maintenance of good order and proper governance of the University; S&P Global Ratings and Fitch Ratings cut their rat- e. Assisting the University management and structures to maintain the good image of the University through ings to junk during former President Jacob Zuma’s ten- ensuring good public relations and discipline among staff and students; and ure, which was characterised by political uncertainty due to multiple cabinet f. Performing any other duties as may be assigned by the Vice Chancellor. reshuffles and corruption scandals. Qualifications and Experience “It’s priority number one because we a. Master's Degree in Business Administration, Educational Administration or equivalent; have to get out of the b. An earned PhD, would be an added advantage; status that we are in c. Ten (10) years relevant post qualification experience in an educational Institution or similar organisation in a and back to proper in- senior management position; vestment grading and d. A qualification in ODeL at certificate, diploma, or degree level would be an added advantage. we are working hard at this,” Mboweni said Attributes and Skills Required in an interview with Bloomberg TV on the sidelines of the G-20 a. Self-motivated, dedicated and highly responsible individual; meeting in Argentina b. Ability to effectively communicate with a wide variety of people of different backgrounds both within and outside on Saturday. the University; c. Good management and human relations skills. Tito Mboweni “The change will happen because of the things that we need to do ourselves.” Women candidates and differently abled persons are encouraged to apply. While Mboweni said he is not sure how long it will take to recover investment grade status, the main fo- Candidates who do not have the stipulated requirements need not apply. cus for government needs to be on enhancing policy certainty and credibility, lowering debt and showing Interested and qualified persons should submit eleven (11) sets of the application consisting of an application restraint in fiscal support for struggling state-owned letter. certified copies of educational and professional certificates and Curriculum Vitae, with contact telephone companies. numbers and names and contact details of at least three (3) referees. All envelopes should clearly indicate the “We need to demonstrate action around the fiscal stance and the budget standpoint of South Africa and post being applied for. show that we are taking steps to reduce the debt that is accumulating,” Mboweni added. “We need to take se- Applications should be received not later than 7 March 2019 and be should be addressed to: rious steps to show that we are moving to restructuring the economy and reigniting growth.” Postal Address The Chairperson of Council Credit ratings agencies have flagged slow economic The Chairperson of Council Zimbabwe Open University growth, embattled state companies and high debt levels Zimbabwe Open University Or Hand Deliver to; 3rd Floor, Corner House Building Corner Samora Machel as key risks to the country’s debt rating. P.O BOX MP 1119 Avenue and Leopold Takawira Street. Mboweni slashed economic growth forecasts in half Mt Pleasant Harare, Zimbabwe for 2018 to 0,7 percent in his maiden mid-term budget Harare, Zimbabwe in October after the economy plunged into a recession in the first half of the year. He also said government debt will peak later and at NB. Only shortlisted candidates will be contacted higher levels than previously anticipated. Gross domestic product hasn’t expanded at more than 2 percent annually since 2013 and unemployment is at 27,5 percent. “When we do these practical things, I think the ratings agencies will look at us and say these folks are back in business,” he said. ― Bloomberg Page 22| February 28-March 6 2019 The Financial Gazette Column Confusion surrounds legal status of Zim’s multi-currency regime

N 2009, the Reserve Bank Act (Chapter ing this legal tender through investigate the status of the ments issued in 2018 and 2019 appear not to have been 22:15) (“the Act”) was amended by Parlia- regulations appears not to have foreign currency legal tender forthright in so far as informing the public about wheth- Iment through the introduction of Section been followed. arises from the confusion that er or not foreign currencies are still legal tender. 44A whose effect was to allow the Minister of During the process of pre- the public is experiencing and The situation has been compounded by utterances by Finance to introduce regulations that legalised paring for this contribution, I this is whether or not the said certain political actors, which appear to suggest that it the use of foreign currencies as legal tender. dug deep into the library and foreign currency legal ten- is now a crime to accept foreign currency when trading The minister was expected to publish, made telephone calls to some der is still part of our finan- goods locally. It turns out, however, that people on the through regulations, the various foreign cur- Reserve Bank of Zimbabwe of- cial system. An easy answer ground continue to purchase and sell certain goods and rencies that the country was to use or went on ficials for guidance on the ex- would have been provided services in foreign currency, be it United States dollars to use as legal tender. It looks like this did not istence of any such regulations by the regulations that I have or South African rand or any other foreign currency for happen as the minister went on to introduce and my efforts were in vain. just referred to. This would that matter. the multi-currency regime through monetary Everything points to the fact have been by way of checking Certain developments that are demonstrated by var- policy statements made around the relevant that no such regulations were whether or not the provision ious policy changes introduced by the Reserve Bank of time. Various other notices were introduced in made in terms of Section 44 as Legal Matters relating to foreign currency le- Zimbabwe appear to suggest that there is a hesitant and the subsequent years adding more foreign cur- read with Section 64 of the Act. with gal tender was repealed or not. cautious move to do away with the multi-currency re- rencies to the list. The procedure of introduc- My interest in wanting to VOTE MUZA Monetary policy state- gime. However, as I have indicated, Section 44A of the Reserve Bank of Zimbabwe has not been repealed and after a diligent search, I have still not laid my hands on any regulations confirming that the multi-currency regime is no longer part of our financial system. This confusion is not assisting the public. In 2018, the monetary authorities gave permission to banks to have corporates and/or natural individuals VACANCY NOTICE: VICE CHANCELLOR operate FCA nostro accounts as well as what are now called RTGS dollar accounts. Since 2009, the United (RE- ADVERTISEMENT) States dollar in particular, had become the The Zimbabwe Open University (ZOU) is a dedicated Open, Distance and Electronic Learning (ODeL) State University in Zimbabwe established in These two claus- major driver of our 1999. The mandate of the University is to empower people through Open, Distance and Electronic Learning. ZOU has ten (10) Regional Campuses es are manifestly in Zimbabwe, with a Regional Campus located in each Province of the Country. ZOU also uses the affordances of Information and Communication financial system. The “controversial and Technologies (ICTs) to reach out and service local and international students. The Council of the Zimbabwe Open University is inviting suitably separation of the legal qualified, experienced and highly motivated candidates to apply for the position of Vice Chancellor which has arisen in the University. tenders in the banking grossly unfair as they system clearly points expose a State sanc- The Vice Chancellor is the Chief Executive Officer of the University in terms of the ZOU Act [Chapter 25:20]. The Vice Chancellor reports to the to a drastic shift and tioned pilferage of the University Council. The Vice Chancellor's position calls for a versatile and respected individual with proven leadership qualities, administrative capabilities as well as teaching and research credentials. an acceptance that public’s wealth. How Zimbabwe was mov- can authorities explain 1.0 PERSON SPECIFICATION with the University Strategic Plan and in the context of the ing towards its own the justification for broader national industrialisation and modernisation agenda and local currency. The wiping away values of The candidate should be a seasoned academic and intellectual, who Education 5.0; setting up of a pay- possesses the following key competencies: 2.5 Raising the University profile and its global ranking through say liabilities that were excellence in technology-based learning, research, innovation, ment system to cater for electronic transfers incurred in United 1.1 Be a holder of an earned Doctorate Degree from a industrialisation and commercialisation; States dollars and have recognised University and be a Full Professor; 2.6 Identify and promote the development and commercialisation of between FCA nostro 1.2 A practitioner with qualifications and proven experience in emerging technologies to advance Zimbabwe's industrialisation accounts seems to them transformed just ODeL. A Certificate, Diploma, or Degree in ODeL would be and modernisation agenda; suggest that payment by the stroke of a pen an added advantage; 2.7 Ensure that the University provides technological solutions to the in foreign currency lo- into the virtual RTGS 1.3 Have at least ten (10) years working experience at a senior surrounding communities and the nation at large, with a focus on cally is valid. dollar?” administrative level, preferably in an ODeL University; Heritage studies; Statutory Instru- 1.4 Be an accomplished Higher Education or related field 2.8 Foster strategic partnerships and working relationships between administrator with a proven track record for creating a and among various University stakeholders that include staff, ment 33 of 2019, Pres- technology-driven and innovative learning, teaching and students, the public and private sectors; idential Powers (Temporary Measures) (Amendment of research environment in a diverse ODeL institution or 2.9 Negotiate strategic linkages with local and international Reserve Bank of Zimbabwe Act and Issue of Real Time related Higher and Tertiary Education or Research institutions regarding instructional resources and the use of Gross Settlement electronic dollars) (RTGS dollars) Institution; information and communication technologies for key academic was gazetted. Section 4(1)(b) provides that all money 1.5 Have proven experience in networking, team building and and administrative activities of the University; that was in banks and denominated in United States resource mobilisation; 2.10 Attract high end skills to advance the creation of technology dollars shall, from the effective date, be RTGS dollars. 1.6 Have proven management capacity including knowledge of driven start-ups and incubation of industries to generate public financial management, strategic people management income for the University and employment for its graduates. It further goes on to, under Section 4 (1)(d), provide and be able to generate financial support from both public that all value of assets and liabilities that were in United and private sectors; 3.0 REMUNERATION AND CONDITIONS OF SERVICE States dollars shall be values and liabilities in the RTGS 1.7 Have demonstrable knowledge of the structural, legislative dollar. and regulatory frameworks for managing an Open, Distance The University offers: These two clauses are manifestly controversial and and Electronic Learning (ODeL) Institution; grossly unfair as they expose a State sanctioned pilfer- 1.8 Have proven understanding of education 5.0 and 3.1 A highly attractive and competitive remuneration package in age of the public’s wealth. How can authorities explain Heritage based development. accordance with the University Terms and Conditions of Service. 3.2 Medical Aid, and Pension benefits. the justification for wiping away values of say liabili- 2.0 RESPONSIBILITIES 3.3 A five (5) year performance-related renewable contract. ties that were incurred in United States dollars and have them transformed just by the stroke of a pen into the He or she will be the chief academic, administrative, financial and The full details of the conditions of service will be disclosed to the virtual RTGS dollar? disciplinary officer of the University and shall: shortlisted candidates. Serious constitutional implications arise as it is clear that the State has brazenly deprived citizens of their 2.1 Provide visionary and strategic leadership through the Candidates who do not have the stipulated requirements need not wealth without any just basis. If one was owed in Unit- planning and implementation of the University's Strategic apply. ed States dollars say three years ago, it turns out that Plan; 2.2 Initiate, recommend and monitor policies, systems, and one can now only recover the liability in RTGS dollars. procedures that ensure sound academic and administrative 4.0 EXPRESSION OF INTEREST It would not matter whether there was a specific agree- functions of an ODeL institution; ment that the indebtedness would remain in foreign 2.3 Lead the development activities of the University, the setting Interested and qualified persons should submit ten (10) sets of the currency and this is because a statutory provision su- up of new Faculties and raising resources to support such application consisting of the application letter, certified educational perseded any terms and/or conditions that parties may initiatives, which include the development of Open and professional certificates, Curriculum Vitae, contact telephone numbers and names and contact details of at least three (3) referees. enter into. Educational Resources (OERs); These regulations appear to have been introduced 2.4 Formulate and implement Education Programmes in line All envelopes should clearly indicate the post being applied for. mainly for purposes of legalising the RTGS dollar as a currency. One would wonder why name this curren- Applications should be received not later than 14 March 2019. Applications should be addressed to: cy through its payment method instead of just calling it Postal Address The Chairperson of Council perhaps a “virtual dollar”. The Chairperson of Council Zimbabwe Open University I also find the attempt by Statutory Instrument 33 of Zimbabwe Open University Or Hand Deliver to; 3rd Floor, Corner House Building Corner Samora Machel Avenue 2019 to amend the Reserve Bank Act seriously anom- P.O BOX MP 1119 and Leopold Takawira Street. Mt Pleasant Harare, Zimbabwe alous. The President, being the head of the Executive, Harare, Zimbabwe has no constitutional power to amend an Act of Parlia- ment as such business is the preserve of the legislature. For any enquiries please contact the Legal Services Manager on the following However, we have lived in this brazen constitutional vi- telephone numbers, +263-242-753396, +263-242-793007/8 olation where the Presidential Powers Temporary Mea- NB. Only shortlisted candidates will be contacted sures are used to legislate where such would have been the role of Parliament. No matter how desperate and urgent issues may become, the rule of law needs to be respected and adhered to as this discourages impunity. l Muza, a Harare-based legal practitioner, writes in his personal capacity. [email protected] The Financial Gazette February 28- March 6 2019 | Page 23 Column Enjoyable strategies HR can adopt HE role of the human resources function in creating Deepening relationships at work can be done in a number of ways in- an environment in which employees would be inter- cluding inviting someone to lunch and exchanging notes, reaching out to Tested to work in cannot be overemphasised. This is an a new employee, or volunteering to take on an extra project outside your area that has not received much attention. It does not matter department. where one works. It does not matter what position one holds Research has shown that many professionals want to feel like they are or what office one occupies. The question is “are you happy making a positive impact at work and attaining successful results. If they are at your workplace?” not reaching their full potential, it is common for employees to start wonder- Creating an enabling environment is a panacea to sus- ing if they are in the right career or job. Abraham Maslow, one of the found- tainable productivity yet lip service is paid in this area. Some ing fathers of psychology, described this desire as self-actualisation. If you organisations believe that as long as an employee comes to Phil Chitagu are not fully utilising your intellect or strengths, you might feel as though work, all is well and whatever happens around the employee you are in essence, cheating yourself. Questions to ask as you think about is his or her prerogative, the “indoda iyazibonela” approach with managers and colleagues, it can lead to a major source of frustration your future are: What areas would you like to grow in within the organisa- ― each man for him/herself. Is this the culture that we want for professionals at workplaces. It is difficult to do one's best work when tion? Are there any special projects or activities you can take on to help you to see permeating through our value systems right from cen- one does not feel supported by colleagues. The way one communicates with grow? When you are unhappy in your area of operation, discussing with the tral government? The answer is obviously “no”. We need a co-workers determines the level of happiness at work. If one is a rabble rous- manager about additional ways you can be helpful is a good idea and can system that corrects itself and one that makes everyone feel er, that will be reflected in the manner one gets responses from colleagues save you from being unhappy. There is nothing as stressful as working in at home even at work. An unhappy employee is like a cancer or the supervisor. Such response determines the outcome and nature of areas you are not happy about. You will never enjoy work but it is only when to the organisation and a source for its downfall. future conversation which, to a larger extent, affects relationships. Given you open up that your concerns can be registered and addressed. The happiness begins with leadership who should come that employees spend about 95 percent of their time at work, the need to be One strategy might be to properly utilise strengths to increase levels of up with deliberate plans to ensure that the workplace does happy is paramount since 95 percent of “hell” is not good for the body and happiness at the workplace. Management of employees should be based on not resemble a “hell”. Happy employees are the most pro- productivity. Critical questions have to be asked in some situations. Such strengths as opposed to weaknesses. A Gallup research on strengths shows ductive and the happier they are, the more companies are questions include but are not limited to these. Can you collaborate with your that companies with happy employees outperform the competition by 20 productive and successful. I want to be happy at the work- colleagues productively to achieve set goals? What can you do to deepen percent and happy salespeople close 37 percent more sales. How about this? place and so should the rest of other employees. But with so your connection with colleagues at workplace? To Page C12 much pain that employees are experiencing in Zimbabwe as a result of the current economic challenges, is it possible to be happy at work? What can HR do? To address these questions, it is important to understand why employees are not happy at workplaces in the first place. A simple question to ask each employee is “Are you happy?”. Such a deliberate question will generate a lot of debate with varying responses. According to the 2017 Mind the Workplace report by Mental Health America, 71 percent of workers in the United States were either actively looking for new jobs or had the issue in their mind everytime, often, or sometimes while at work. Regardless of all of the potential causes of these feelings, the report states that most people are unhappy at workplaces. Can this be the case with MINISTRY OF DEFENCE AND WAR VETERANS AFFAIRS Zimbabwean companies? We wait to see the unfolding trend in the area. The issue is how the HR function is handling any thoughts or feelings of unhappiness in order to keep em- CONDOLENCE MESSAGE ployees engaged and productive particularly in this VUCA (Volatile; Uncertain; Complex and Ambiguous) environment, where there is evidence of unhappiness at Zimbabwe- an institutions. The report further states that most people vent regular- ly to their family, friends, and co-workers, but do not ever achieve happiness or the true career success they will be looking for. If one is searching externally for another job to find happiness, one might land a new position and still experience feelings of serious dissatisfaction. It is therefore imperative to understand some of the reasons why employees are not happy at work. I take cognisance that this is a topical and debatable area that requires further research to understand the level of happiness or lack of it and what can be done to inculcate a culture of happiness at workplaces. Disengagement A number of employee engagement surveys have been conducted in Zimbabwe by leading consulting companies and it is a fact that the level of disengagement at workplaces is high. By definition, engaged employees are those who Professor Callistus Dingiswayo Ndlovu are involved in their work and enthusiastic about it and the workplace. Those who are not engaged may be passively The Minister of Defence and War Veterans Affairs, Comrade (Cde) Oppah Chamu Zvipange Muchinguri-Kashiri (MP), going through the motions without energy or passion, and Deputy Minister of Defence and War Veterans Affairs, Cde Victor Matemadanda (MP), the Secretary for Defence and are unsatisfied with their work or workplace. Actively dis- War Veterans Affairs, Cde Martin Rushwaya, Commander Defence Forces, General Philip Valerio Sibanda, Service engaged employees take things a step further by undermin- Chiefs, General and Air Officers, Senior Officers, Men and Women of the Zimbabwe Defence Forces, Management ing and sabotaging their employers. The Gallup State of the and Staff of the Ministry of Defence and War Veterans Affairs and their families join the Ndlovu family and the nation at American Workplace report found that roughly two-thirds large in mourning the death of liberation stalwart Professor Callistus Dingiswayo Ndlovu, who passed away in South of all employees are not engaged at work. When such a big Africa on 13 February 2019. number is disengaged, it follows that they are also not happy! Late Professor Ndlovu, who has been declared a national hero, was committed to serving the people of Zimbabwe Stressed out throughout his political career. He became involved in politics as far back as 1960 when he joined the National It is a fact that high levels of stress have been described Democratic Party. In 1963, during his studies in Lesotho, he became the ZAPU Branch Chairman in that country. as an epidemic in today’s working world. Many people see The late national hero subsequently pursued studies in United States of America in 1967 where he became the it as a badge of honour to be “stressed out”, or having a high ZAPU Branch Chairman. During his studies in that country, he went on a diplomatic offensive to garner international stress level means that they are working hard. The reality is support for the Zimbabwe Liberation Struggle. As a distinguished scholar, the late Professor won several awards that being stressed out is not sustainable for your physical or whilst teaching in the United States. Due to his commitment to the national liberation struggle, he persistently and mental health over the long term, and often leads to feelings consistently championed the cause of the black majority drawing the wrath of the Rhodesian Regime leading to his of unhappiness at home or workplace. It is important to in- arrest in 1966. trospect and understand one’s causes of stress at work. Are the causes external, as a result of circumstances imposed by The late national hero was the political advisor to the ZAPU delegation that attended the Geneva Conference in other people? Or are you stressed by internal factors such Switzerland. He also became the political advisor of the ZAPU delegation that participated in the Lancaster House as your performance, abilities, or negative attitude? These talks in the United Kingdom in 1979. The talks led to the country’s independence from colonial rule in 1980. pointers are important as one tries to deal with unhappiness at workplace. At independence, the late Professor Ndlovu was elected Member of Parliament and he subsequently held a number Negative mindset about everything of Cabinet appointments. At the time of his death, he was the ZANU PF Chairman for Bulawayo Province. According to psychological research, it has been established that how one views situations at workplace and in life The Zimbabwe Defence Forces shall forever cherish the late Professor Ndlovu’s commitment to serve the people of have an effect on the results one produces on a daily basis. Zimbabwe. Professor and author Raj Raghunathan discusses the mindset of happy professionals, in his book If You Are So Smart, Why Aren’t You Happy? He outlines a scarcity-minded approach to thinking, where one believes that one’s “win” will May his soul rest in eternal peace. come at the cost of someone else’s loss. This mindset is ‘The Zimbabwe Defence Forces: Creating a secure environment for sustainable socio-economic development.’ believed to be prevalent in today’s corporate culture, where people say you must “watch your back” because others are out to get you. In contrast, one has to think about inten- tionally creating a more abundance-oriented approach in the workplace. Focus should be on the opportunities for growth ZIMBABWE DEFENCE FORCES or promotion that one has and stop comparing oneself to Inserted by ZDF Public Relations Office, others. Such an approach eliminates jealousy and hatred at Tel: 0242-250042 workplace. www.mod.gov.zw Poor relationships with managers, colleagues When there is lack of connection or poor relationships Page 24 | February 28-March 6 2019 The Financial Gazette Column Ethics for finance professionals

THICS plays a crucial role in everything necessary professional quotients to fit their role Through maintaining high standards of qual- ethics. That’s why the ACCA Rulebook isn’t just a list of that accountants do. Members of the public and stage of career. A key quotient is technical ity in the practice of audit and other assurance, rules, but sets out a framework that helps us to resolve or Eand clients trust professionals in all fields skills and ethics (TEQ): The skills and abilities to and in practice management, finance profession- avoid ethical dilemmas in a way that shouldn’t conflict with to commit to a high standard of ethical behaviour perform activities consistently to a defined stan- als can ensure there is quality control. Addition- our personal ethics. and a willingness to “do the right thing”. dard while maintaining the highest standards of ally, assessing and responding to risks of material In the global fight against corruption in all its forms, it is Given the complexity of many financial trans- integrity, independence and mis-statement within the vitally important that potential whistle-blowers have a clear actions as well as the importance of best practice scepticism. appropriate legal frame- view of not only the avenues available for speaking up, but to business and society, professional bodies such Finance professionals work can aid in detection also the full path ahead of them as they go through the whis- as the Association of Chartered Certified Accoun- must think and behave with and reporting error and tleblowing journey. tants (ACCA) have a particular responsibility to integrity, independence and fraud. This isn’t just the right thing to do, it’s also best for the uphold and lead on ethical issues. professional scepticism. There are wider busi- business. If employees feel that wrongdoing will be dealt The ACCA Code of Ethics and Conduct (the They must also demon- ness issues when it comes with promptly, fairly and in a transparent manner, they are Code) is binding on all our members and stu- strate this to stakeholders including regulators, in- to ethics and ethics underpins everything profes- far less likely to make the issue a public one. dents, as well as any partner or director in an vestors, colleagues and entities that are the subject sional accountants do. An ethical dilemma may In order to foster a successful speak up arrangement, or- ACCA practice. It is based on the International of audit and assurance engagements. Vigilance is be resolved by applying a conceptual framework. ganisations need to consider how the arrangement interacts Ethics Standards Board for Accountants (IESBA) also needed in observing and applying local and However, to achieve this, we first need to under- with cultural issues. While cultural challenges are surmount- Code, and the fundamental principles that we set international laws, regulations and standards re- stand fundamental ethical principles so we can able, this might take a little more time and effort using suit- out are the same as IESBA’s. lating to engagements for the audit and assurance ensure there’s minimal risk of them being under- able strategies to address issues such as regional differences To stay vigilant to omissions, errors and de- of historical financial statements and other sub- mined. and language. liberate accounting violations, all professional ject matters ― such as ISAs, federal company An honest appraisal of the threats to those Additionally, it’s highly worth it for businesses consid- accountants will need to develop and balance laws, and regulations on data protection. principles requires the application of personal ering the use of an external independent channel that sits alongside their internal conduits. It may feel counter-intui- tive to set up channels that are external and possibly more formal when you are trying to build trust internally. Howev- er, if people use independent external channels and have a positive experience, the trust developed from the experience can transfer to others, including internal channels that they may use in the future. Now more than ever, how an organisation does business is just as important as the results they achieve. It’s no secret that many of the great reputational disasters of recent years have been made worse by attempts to sweep them under the rug. If effective speak-up arrangements are implemented throughout corporate governance, public sector accountabil- ity and professional responsibility, it will create robust risk management, which is in an organisation’s highest interest. Ethics and Trust In A Digital Age, ACCA’s recent global study of 10,000 professional accountants, found that 95 percent of those at CFO level or higher believe ethics is very important to their company’s reputation, internally and externally. That commitment grows because they recognise that in an automated age, human judgment becomes more integral to how decisions are made. When faced with a data breach or a company’s exposure to supply chain irregular- ities, customers and investors won’t look to a systems bot to blame. While the rise of robots has been flagged as a threat to professions, it actually represents a new frontier where the skills and judgment of professionals are critical. Accoun- tants are therefore set to remain at the frontline of ethical challenges in business. But doing the right thing in a digital age, digital must also be a whole business concern. Enjoyable strategies that HR can adopt

From Page C11 It is hard to ignore those numbers. Companies with happy employees outperform the competition by 20 percent! If the above is anything to go by, how can the HR function create happiness at the workplace? Strategies that are costly include but are not limited to the following if HR is to create an environment to ensure employees remain focused and productive. l Consistently deliver praise and recognition ― everyone needs to be praised for good performance. Silence kills potential and creativity. l Make work fulfilling ― give meaningful and enjoyable assignments including supporting the man on the ball. Show support to your troops. l Offer meaningful perks ― rewards should be in line with performance. l Invest in your team’s personal and professional growth ― determine the employee’s career growth at early stages. This is important in order to harness individual potential which is key for organisational success. l Hold fun events that allow people to interact and bond ― bonding of employees is key in driving performance as well as eliminating unhappiness. The feeling of oneness is key for productivity in any organisation. l Incentivise wellness (and make it fun) ― Employees who come up with innovative ideas about wellness should be incentivised. This is key for company growth as well as creating happy moments across the organisation. l Build trust ― Trust is the glue that binds together the relationships at work. Building trust across the organisation is key to happiness. The questions on do you trust yourself, your boss, your peers, your subordinates are key in developing sustainable trust in the organisation. This is an area that requires further introspection given what is generally happening in Zimbabwe. In order to move forward, there is need for trust building in every institution and HR plays a pivotal role in addressing this and other aspects highlighted above. l Chitagu is the IPMZ vice president and writes in his personal capacity. The Financial Gazette February 28-March 6 2019 | Page 25 National News Zim attracts few African airlines Tabitha Mutenga Features Editor

IMBABWE continues to be an attractive destination for a few airlines and travellers despite the growing Zuncertainty in the country’s economy. Air Tanzania resumed flying to Zimbabwe and Zambia last week using an Airbus 220-300, while Air Botswana is expected to fly into Zimbabwe twice a week from April 2, 2019. East Africa’s rapidly expanding airline, RwandAir, also recently announced that it is planning to increase tourist traffic from that region into Zimbabwe following a rise in load factors since it introduced the Kigali-Harare route in April 2016. Tamuka Macheka, the Zimbabwe National Chamber of Commerce (ZNCC) president, said regional airlines were repositioning themselves in anticipation of an economic boom in the country. pensable for tourism, which anchors on reliable connectivity for the benefit of travellers. This is sion,” she said. “Some of the airlines are getting very high load factors and convenient air services to facilitate the arrival evidenced by our signing of the Solemn Commit- Besides the regional airlines, British airline (90 percent), especially those servicing the Victoria Falls des- of larger numbers of tourists to a region or coun- ment on the Single African Air Transport Market, Virgin Atlantic is expected to start a London-Ha- tination and when you look at the occupancies in Harare and try. Government has engaged in the liberalisation a testimony to Zimbabwe’s commitment to the rare service in the second quarter of 2019. Victoria Falls, they are quite high and it shows that for the of air transport markets to enhance destination full implementation of the Yamoussoukro Deci- [email protected] past 12 months, tourism has been on the rebound and in all this activity, Zimbabwe is positioned as the hub for southern Africa in terms of travel,” he said. At peak, the country had 48 airlines coming in and out of Zimbabwe. Macheka, who runs Mutare-based Golden Peacock Ho- tel, said the tourism industry was expected to benefit from the influx of regional airlines. “Strategic positioning developments are happening in the country, even embassies, are repositioning themselves, for example the American embassy. Such investments mean that they are seeing opportunities ahead. We are slowly going back to 1999 when tourism was driving the economy, with 48 airlines flying into Zimbabwe. “Signs that things are shaping up are there although there are disturbances here and there. Obviously these airlines are actually reading those signs and are taking positions because it will be very difficult to do so once the economy is flourish- ing as competition will be tough,” he said. Amid all this excitement, Air Zimbabwe is also expected to receive one of three Embraer E145 aircraft purchased last year from the United States of America. Zimbabwe’s premier resort has been the biggest draw- card for major African airlines since government completed the $150 million expansion of the Victoria Falls International Airport in 2016, reconfiguring it to handle intercontinental jetliners. This optimism has been driving a wide range of investments and airlines into the country. “With the growth in arrivals, it means the regional connectivity requirement also increases. Tourism is always viewed in a regional context and at the moment Zimbabwe has emerged once more as a major regional attraction after years in the doldrums,” tourism expert Shingi Munyeza said. The country projects that tourist arrivals will reach three million this year from 2,5 million in 2017. By 2028, international tourist arrivals are forecast to total five million. The upsurge in foreign air traffic has renewed confidence in the frail tourism industry, shattered by devastating economic and political volatilities that triggered crippling travel bans. The entry of regional airlines has recharged the travel industry, transforming the troubled tourism sector from bust to boom. “Zimbabwe remains a top destination in Africa and we are also at the centre of southern Africa, which makes us an ideal interchange for the region. The Robert Mugabe Interna- tional Airport expansion project also reflects confidence for the future. “The airlines are clearly seeing an opportunity despite the current economic problems, which will not last forever,” Vince Musewe, an economist, said. Zimbabwe has reported steep rises in foreign airline frequencies since traditional tourism markets lifted travel restrictions from 2009. The return of Air Tanzania and Air Botswana are testimony that regional airlines are jostling for approval to fly in and out of Zimbabwe. A total of 18 international airlines stopped flying into the country at the height of a political and economic crisis and these include Lufthansa, Qantas, Austrian Airlines, Swiss-air, Air India, Air France and TAP Air Portugal. African airlines that no longer fly into Harare include Air Mauritius, Linhas Aereas de Mocambique, Royal Swazi Airlines, Air Sey- chelles. Ghana Airways, Air Uganda and Air Cameroon also pulled out of the route. Although African airlines are said to be struggling, performance is improving and a few are able to generate profits. According to the International Air Transport Association (IATA), African airlines are expected to report a $300 million net loss in 2019, a slight improvement from the $400 million net loss in 2018. “Performance is improving, but only slowly. Losses are expected to be cut in 2019 as fuel prices decrease. The region benefits from higher-than-average yields and lower operating costs in some categories,” IATA said in a statement. However, few airlines in the region are able to achieve adequate load factors to generate profits. On the occasion of Air Tanzania’s return to Harare after two decades, Tourism and Hospitality Industry Minister Pri- sca Mupfumira applauded the role of the aviation industry in boosting the country’s tourism industry. “The aviation industry plays a critical role and is indis- Page 26 | February 28-March 6 2019 The Financial Gazette National News

Kariba Dam Zim, Zambia cut Kariba power generation

AMBIA and Zimbabwe reduced only generate up to 500 megawatts each,” power generation to around half Kapata said, referring to the jointly owned Zcapacity at their power stations at firm which manages the Zambezi River. the Kariba Dam as water levels in the res- A joint technical committee bulletin ervoir fell, Zambia’s state-owned ZESCO issued on February 19 by companies in- Ltd said on Monday. cluding power utilities in Zambia, Zimba- ZESCO spokesman Henry Kapata said bwe and Mozambique indicated that wa- power generation on both the Zambian ter levels in the Kariba Dam had dropped and Zimbabwean sides had been restrict- to 43 percent of its capacity. ed to 500 megawatts (MW) each from to- “As the inflows into the Kariba and tal capacities of around 1 000 MW. Kafue Gorge upper reservoirs are lower “The Zambezi River Authority gave than the outflows, the reservoirs’ storage us an annual allocation of 19 billion cu- is decreasing,” the bulletin said. bic metres of water and this means we can — Reuters BAIC to open vehicle plant in South Africa

EIJING Automotive International Last September, the local media report- Corporation (BAIC), the Chinese ed that the construction had been moving Bstate-owned company that com- at a snail’s pace and all small, medium and mitted to invest R11 billion in South Afri- micro enterprises (SMMEs) had vacated ca, now claims that production was set to the premises due to non-payment. commence before the end of this year at its The reports quoted Mandla Mpangase, vehicle plant in Coega. the spokesperson for the IDC and BAIC South Africa’s Industrial Development SA, as stating that BAIC SA, as the proj- Corporation (IDC) has a 35 percent share- ect owner, had earlier that month made its holding in the project. latest progress payment to BIDR, the main BAIC in July held what it described as contractor for phase one of the project, and a “milestone event” to prepare for semi- the responsibility for prompt payment of knocked down (SKD) production of vehi- all SMMEs fell on BIDR. cles at the plant. BAIC said data released by the Coega The company said at the time that “full- Development Corporation showed that scale production” of its X25 compact sport total local labour employed on the project utility vehicle (SUV) at the plant, its first since its commencement until last year to- to be produced and assembled outside Chi- talled 1 839 people. na, would commence in the fourth quarter Production at the plant was to be ramped of last year. However, serious doubts have up over a three-year period from the com- been expressed in motor industry circles mencement of production to 50 000 vehi- about the claims that the vehicle was man- cles a year, with production thereafter up- ufactured in South Africa. scaled to 100 000 units a year. BAIC said yesterday that construction Of this, 40 percent were destined for of the plant has been “making steady prog- sale in South Africa and 60 percent for ex- ress” under its newly-appointed chief exec- port markets, including countries in Africa utive locally, Nemo Tian. and South America. Tian said that the new timelines had The plant forms part of BAIC Interna- been established and a new work schedule tional’s long-term globalisation strategy. has been adopted for all contractors on site, BAIC SA has a network of 20 opera- with principle contractor Beijing Industrial tional dealerships in South Africa. Designing & Researching Institute (BIDR) It's estimated that about 120 BAIC ve- set to commence construction activity in hicles had been sold in South Africa last the second quarter of this year. year. He said that full-scale vehicle produc- Tian yesterday claimed that the project tion would commence on completion of was well on its way to exceed the target- the assembly and welding facilities, with ed 35 percent SMME participation and all construction set to be completed next to date construction tenders to the value year. of R44,1 million had been allocated to “This is BAIC International’s first over- SMME’s. seas project of this magnitude. We've ex- “We remain committed to our contrac- perienced some challenges and have learnt tual obligations of providing work to small from them, with the support and guidance local businesses and their development,” of our local shareholders,” he said. Tian said. — Business Report The Financial Gazette February 28-March 6 2019 | Page 27 National News Aligning beneficiation to sustainability

Selina Zhuwarara it comes to establishing and broadening beneficiation are the sustainability and long-term supply of the re- ALLS for the wider implementation of mineral source, availability of demand, access to markets, lack beneficiation have become louder across many of domestic markets, infrastructural deficiencies, energy Cdeveloping countries. constraints, technological deficiencies, poor economic The calls emanate from a consensus that there is an in- environments and skills deficits. In order to overcome herent advantage for mineral rich countries to establish these challenges, countries can look at regional capacity internal capacity to process their minerals into semi-fin- instead of national capacity. ished or finished materials. Therefore, sharing infrastructure, resources, skills, The principal advantage of beneficiation is derived technology and markets between countries can become from the multiplier effect created by a broader scope of a viable means of approaching the beneficiation initia- manufacturing and industry capacity. tive. The SADC Protocol on Mining creates a frame- This consequently ignites economic growth. Not- work that allows countries to partner constructively on withstanding the appreciation of the significance of ben- issues relating to the development of the mining sector. eficiation, it can be agreed that it is yet to develop and Calls for the implementation of mineral beneficiation have become louder across The protocol allows for collaboration on initiatives extend at the intended scale especially in Africa. many developing countries. that support developing human and technological ca- The reasons for this position are varied but chief pacity, research, training and the utilisation of existing among the causes is the adoption of policies, strategies, beneficiation has also been encountered of growth in beneficiation are varied. facilities in the mining sector. The future of economic and initiatives that are not grounded in the solid analysis in many other mineral rich countries. As However, the main challenges that de- growth in Africa rests with intra-African trade and re- of economic sustainability. with Zimbabwe, the causes for stagnation veloping countries are faced with when gional synergies. To Page 28 In order to improve this position, policy makers need to re-align initiatives with domestic capacity, economic viability, sustainability and implementation practicality. The rapid evolution of technology also requires policy makers to broaden strategies and align them to the tra- jectory of market and technology dynamics. In order to achieve the rewards of beneficiation many governments in developing countries need to go back to the drawing board and engineer radical solutions to take the cause to fruition. Zimbabwe has adopted various local content and beneficiation initiatives over the last few years, some of these initiatives generally include the imposition of lev- ies on the export of unprocessed minerals, the compulso- ry setting aside of product for domestic processing, the selective restriction of mining consumables that can be imported and the application of fiscal rewards for actions and strategies that support beneficiation and the use of local services and goods. Regardless of these efforts, beneficiation is yet to successfully extend in scope and capacity within the mining sector. One such initiative of government was the 2010 Min- erals Marketing Corporation of Zimbabwe Regulations which provided for the setting aside of 10 percent of produce received from all diamond producers. The intention of the regulations was to create a constant supply of diamonds for the local cutting and polishing industry to access. Despite the best intentions the initiative failed to produce the desired outcome and consequently the sector has failed to grow as projected. The lack of growth of the cutting and polishing industry in Zimbabwe is a result of many factors but the main challenges were lack of adequate capitalisation and a weak policy framework that ultimately did not incubate the fragile inception of the sector. The local cutting and polishing industry needs to be deliberately supported in order for it to access capital, technology and markets. Botswana on the other hand has managed to establish a successful diamond manufacturing industry and key to their success was their ability to take advantage of the knowledge, skill, market access and industrial capacity of their principal investment partner De Beers. In addition to this synergy, Botswana has considerable diamond reserves which comprise a high proportion of clear gem and gem quality stones. This unique geology enables the country consistent access to high quality stones and thus a quasi-sustainable basis for the creation of a cutting and polishing industry. This is one of the factors that enabled them to successfully negotiate for De Beers to relocate its international sales operation to Botswana. Be that as it may, Botswana’s cutting and polishing sector has been noted to incur a high cost of production in comparison to the Indian cutting and polishing industry and this has affected its potential to extend beyond its current capacity. This shows that the establishment and support of a cutting and polishing industry has to be robust and is continual, it goes beyond having the resource. Govern- ments need to look at creating a competitive environment in order to enable the sector to compete with international capacity. There is need to revise the basis and scope of the establishment of Zimbabwe’s downstream diamond industry in order to mimic the success achieved in Botswana. Beneficiation policies in the diamond sector need to speak to the critical questions relating to access to product, access to capital and technology, skills and capacity, cost of production and demand and access to markets. It is hoped that the entry of Alrosa into the Zimbabwean diamond industry will yield a revival of the cutting and polishing industry. The partnership presents an opportunity to learn and draw from the experience of Alrosa and ultimately cul- minate in the revision of policies and initiatives that are sustainable and viable. The stagnation that Zimbabwe has experienced with Page 28 | February 28-March 6 2019 The Financial Gazette National News Samsung Galaxy S10 has a Aligning built-in cryptocurrency wallet beneficiation to

AMSUNG is one of the first major smart- Samsung also announced support for the Technically, it’s possible to turn any Android sustainability phone makers to include a cryptocurren- cryptocurrency called the Enjin Coin, an Ethe- phone into a wallet that holds the keys to your From Page 27 Scy wallet in its latest flagship Galaxy S10 reum-based digital currency for gamers that was digital tokens — just install the Android app for In order to circumvent the limitations of individual phones. The wallet lets users store bitcoin, Ethe- founded in South Korea. It also said it would sup- the web browser Opera. That wallet currently nations, collaborative efforts can absorb inefficiencies, reum, and a beauty-related cryptocurrency called port contactless payments using cryptocurrency. only supports ether, with other tokens planned to infrastructural deficiencies and serve as conduits for the Cosmo Coin. It’s a cold storage wallet, meaning Samsung is one of a few companies that have be added later. What would really be impressive dissemination and sharing of knowledge, technology, it's not connected to the internet. launched blockchain-related phones, and its par- is if the phone had additional ways of incorporat- skills and encourage economic growth. The Galaxy S10 phones also support select ticipation in the trend could influence other playing blockchain that we hadn’t seen before. For instance, there are approximately eight diamond decentralised apps (Dapps). Currently, Sam- ers in the market. Last year, Sirin Labs unveiled For instance, HTC’s decentralised chief of- producing countries in the Southern African Develop- sung’s main Dapp that’s available is called the Finney phone with a wallet for storing crypto- ficer Phil Chen has professed great hopes for ment Community region, that is Botswana, South Af- Cosmee, and it lets users earn Cosmo tokens in currency, which costs $1 000. blockchain-related phones, where they might rica, Zimbabwe, Namibia, DRC, Angola, Lesotho, and exchange for leaving beauty reviews in the app. Then there’s the HTC Exodus, which has been give users some way to store keys to their online Tanzania. All these countries have the same goal, that Cosmochain, the South Korean blockchain start- available for preorder since last October and can identity and “own [their] own identity.” is to create sustainable downstream industries for their up behind Cosmee, describes its app to The Verge only be purchased with cryptocurrency. It’s got But for now, it looks like these phones’ main diamond wealth. Instead of individually approaching as a blockchain-powered beauty review app — a wallet for storing digital tokens as well that’s cryptocurrency-related feature is just the cold this task, these countries can combine their capacities to the blockchain is supposed to be a useful way to notably partitioned from the rest of the phone for wallet and a center for decentralized apps. establish and supply stones to a regional diamond man- record all the reviews reliably. greater security. — theverge ufacturing hub. Not only does this create a sustainable supply of diamonds for beneficiation, it also establishes a wider market reach both regionally and internationally. Each country can reserve a portion of their diamond produce for this regional beneficiation hub. The model can be applied across different mineral sectors and the location for each respective hub can be selected based on which country in the region has the best conditions and capacity to sustain hosting the beneficiation centre. As highlighted above, one of the key components of establishing successful manufacturing and beneficiation sectors is the access to reliable and adequate energy supplies. This discussion is pertinent in developing countries because internal capacity to satisfy energy requirements are generally still being developed. In the context of beneficiation, the access to adequate energy cannot be tabled without a corresponding reference to the development of clean energy sources. The last two decades have made it abundantly clear that climate change is an urgent global challenge that poses a threat to the existence of humanity. There is resounding consensus that our energy sources and consumption needs must change in order to ensure that hu- mankind can advance and develop without violating the safe boundaries of earths pliability. Following from the same, the drive for alternative energy sources has gar- nered significant momentum over the few years. Mining finds itself at the heart of the climate change discussion because while it has historically enabled and provided the ingredients of industrialisation and technological advancement through metals and fossil fuels, it is now faced with the need to transfigure its focus in the age of climate change mitigation. While the need for fossil fuels will not immediately cease, policy makers in developing countries need to structure mineral resource plans, and specifically beneficiation initiatives, with a bias on renewable and clean energy sources in order to foster sustainability. The global mining industry is currently shifting towards smart and sustainable mining which is aimed at limiting the impact of extractives on the climate and environment. This strategy is also seen as a long-term cost-effective model for the sector’s viability. This is a cause that now needs to start taking centre stage in the mineral resource plans of developing countries. The era of aggressive climate change mitigation has also brought about the proliferation of new economic models. One such model which looks at the efficient use of minerals and energy is the concept of the circular economy. A circular economy simply means the adoption and implementation of various strategies aimed at efficient use of resources and the reduction of waste and re-purposing of waste. In the case of mineral resources, it means continually re-using, re-cycling and re-purposing scrap. Metals and precious minerals can be repeatedly re- used instead of discarded. A good example of this model are projects that embark on large scale smelting of scrap which are now producing a significant portion of raw materials required for car manufacturing requirements. International companies such as Novelis re-purpose scrap aluminum for Jaguar Landrover and are their sole aluminum supplier. In Japan companies such as JX Nippon Mining and Metals, Sumitomo Metal Mining and Mistubishi Mate- rials are pioneering the re-purposing and extraction of essential minerals from scrap metals. In the event that this mineral recycling industry can increase its output, it can fundamentally affect the supply and demand dynamics of mineral resources. In this light it is no longer adequate to build mineral resource policies based on the demand dynamics that currently subsist. Developing countries need to broaden the capacity and value chain of their mining sectors beyond supplying raw minerals or beneficiation of minerals and look into integrating new economic models such as circular economies and the opportunities they present. The Financial Gazette February 28-March 6 2019 | Page 29 National News $28 billion bill ignites PPPs call

Shame Makoshori ative for Zimbabwe. Government must adopt project undertaken by Group Five about four Companies Editor PPP as a management reform (innovative use years ago, the country has not been able to car- of market forces), PPP as a problem conversion ry out most projects since dollarisation in 2009. London bullion HE Zimbabwe government requires pri- (universal fix for governance problems), PPP as Mputa said this was affected the construc- vate sector assistance to raise $28 billion a risk-shifting tool,” he said. tion industry, which has cut about 40 000 jobs Trequired for the country’s infrastructure In 2015, the African Development Bank since the mid-1990s.’ development, analysts have said. (AfDB) estimated that the funding that Zimba- “In mid-1990s, construction industry em- market boon Tafadzwa Mputa, the managing director at bwe required to rehabilitate its dilapidated in- ployed over 50 000. Currently employed is Sesani, a construction industry firm says gov- frastructure had surged from previous estimates around 10 000 (20 percent of 1990s). Industry ernment’s capacity to rebuild infrastructure on of $14 billion to $20 billion. has shrunk to 20 percent capacity of the 1990’s for Zimbabwe its own has been affected by the prolonged eco- It said to create a seamless infrastructure level. Low profitability and constant viability nomic crisis that it has been dealing with. network with the capacity to drive economic re- challenges since 2000. Low levels of confidence “Government's capacity is very limited due covery, Zimbabwe would have to invest at least and high end-user dissatisfaction. Low levels of gold exports to tight fiscal pressures,” he said while present- US$2 billion per annum in a decade from 2015. investment. Substantial under-achievement due ing a paper at a recent prodcurement confer- The additional $8 billion now estimated by to inadequate resources,” he said. ence. the construction industry has emerged after He said available infrastructure project were “The magnitude of funding requirements for allocations to key capital expenditure projects short term. Nelson Gahadza infrastructure refurbishment alone without new have been affected by the liquidity crisis that There was no chance for contractors to in- Business Reporter development ($28 billion) makes the case for has battered revenues to Treasury coffers. vest in recapitalisation to reduce underlying public-private partnerships (PPPs) a key imper- Apart from the US$206 million trunk road costs. [email protected] IMBABWE is losing millions in Zpotential revenue from gold exports due to the country’s lack of access to international markets, a government official has said. The country currently cannot sell to global buyers who have better prices as it remains outside the London Bullion Market (LBM) since 2014. Polite Kambamura “We are now im- ploring the Ministry of Finance and the Reserve Bank of Zimbabwe (RBZ) to re-engage LBM so that we can be re-admitted and that is where we will be able to Global Buyers with better prices requirements,” Polite Kambamura, the deputy minister of Mines and Mining Development, told mining stakeholders at a meeting this week. “Currently we are selling to the Rand Bullion of South Africa, and that is why we are not getting good prices because the market is limited,” he said. He said last year, the country produced 33,3 tonnes of gold, which is more than three times what is required for admission into the LBM. Of that production, 11,61 tonnes came from primary producers and 21,6 tonnes from artis- anal miners. “But unfortunately from November last year, production started to go down with a total of 1,4 tonnes delivered to Fidelity. In December, we had 1,64 tonnes; in January we had 1,77 tonnes. “Our average monthly production is 2,5 tonnes. There- fore, from November last year, we were below target at 47 percent capacity. For February, it is bad news and we are much below that, especially after the governor announced the Monetary Policy Statement (MPS). We have only received 20 kgs to Fidelity,” he said. Kambamura said the Mines ministry has come up with strategies to mobilise gold and redirect it to Fidelity. “We have a target of producing 100 tonnes per year and by 2023, the mining industry will be contributing $23 billion to the economy,” he said. [email protected] ‘New currency roadmap on cards’ From Page 9 cent of the $10 billion we have in the market, is government going to print more notes to ease the current cash shortages? MN: You don’t just print. There are rules around it. There’s what I call targeting reserve money or what is called high powered money, which is currency in circulation. That is the $1,8 billion in RTGS balances, the balances of banks within the central bank. You target that and say we want growth of so much, which will not fuel inflation. There’s a whole science around the printing of extra fiat money. You just don’t print. And when you are introducing a new currency like this you don’t want too much liquidity, you want less liquidity so that you can stabilise the currency and reduce volatility. So some of the cash challenges we are facing are not necessarily a bad thing at the beginning of a new currency. JK: You recently indicated that we are going to have a new currency within the next 12 months, now with the introduction of RTGS dollars, should we still expect another currency to replace the new one? MN: We have a roadmap and we’ll come back to you on that. Page 30 | February 28-March 6 2019 The Financial Gazette National News Ziscosteel suitor gets ultimatum

Ndakaziva Majaka ance with government and Li failing to workers without terminal benefits. Since then, govern- Markets Editor come to a compromise on the project. ment has been struggling to bag an investor for the entity. The minister said while the Chinese Last year, the minister even told industrialists at the NDUSTRY minister Mangaliso Ndlovu says govern- New Year had slowed down progress with Confederation of Zimbabwe Industries congress that ment is prepared to tender and scout for a new inves- the latest submissions, government ex- government was still in the market scouting for an in- Itor for the Zimbabwe Iron and Steel Company (Zis- pected feedback from Li soon. vestor. costeel), if differences with current suitor are not ironed. “We can’t have an agreement where In 2006, Indian firm Global Steel Holdings Limited Ndlovu said submissions had been made to Zhang Li we are not confident of Zimbabwe com- courted Ziscosteel and was about to inject $400 million in — president of R&FA, the firm which pledged a $1 bil- ing out with something that’s why we are a rehabilitate, operate and transfer arrangement. lion investment for resuscitation of the defunct steel firm looking at it clause by clause. It is taking However, an investigation by the Parliamentary Port- last year — for the Chinese investor to meet government longer than we expected but I think very folio Committee on Foreign Affairs, Industry and Inter- at a compromise. soon we should be making progress. national Trade revealed the deal would have disadvan- “An interested investor expressed interest but we are “As it stands we have given them the taged Zimbabwe. not satisfied, there are a lot of demands that need to be issues that we need to be clarified and In 2011, Essar Africa Holdings’s bid to take-over the honoured and government is working on seeing if the in- addressed and they are working on that. moribund parastatal, in a deal worth $750 million, also hit vestor can meet us halfway… They were affected by their New Year a brickwall due to bickering in the inclusive government. “If we discover that the positions are far apart to rec- holidays and soon we should be having To make the steel maker attractive, government passed oncile we can open up again or find another option,” the progress,” he said. the Ziscosteel Debt Assumption Bill seven months ago, a minister told state media. Ziscosteel — which at its peak had a 5 development that will see Treasury assuming the compa- Since Ndlovu’s assumption of office at the industry 000-strong workforce — officially closed ny’s debt which stood at 494,8 million as at December ministry, the $1 billion deal has been hanging in the bal- Industry minister Mangaliso Ndlovu its doors in 2016 and laid off its remaining 31, 2016. [email protected] ZimCoke in $87m investment

Ndakaziva Majaka Markets Editor

IMCOKE Limited (ZimCoke) says it is going to invest about $87 million into a coke ven- Zture with Hwange Colliery Company Limited (HCCL) and Zimchem. The company will also invest $12 million in Zim- chem. “We intend to invest $75 million into HCCL’s coke division that will bring them into production. We also will invest about $12 million into Zimchem to enable the company to process all the products from coke to operations,” said the company’s consultant, Eddie Cross. Coke is a fuel with a high carbon content and few impurities, made by heating coal in the absence of air. It is the solid carbonaceous material derived from destructive distillation of low-ash, low-sulphur bituminous coal. While coke can be formed naturally, the common- ly used form is synthetic. The form known as petro- leum coke, or pet coke, is derived from oil refinery coker units or other cracking processes. ZimCoke — in the last stages of taking over a coking plant within now defunct steel company, Zis- costeel — anticipates to produce 500 000 tonnes of coke annually for both local and export markets. According to the coke company’s chief executive, Bill Moore, ZimCoke will invest a total of $133 million towards resuscitation of the coke oven battery plant segment at ZiscoSteel. “In Phase 1, the ZimCoke operation will be the rehabilitation of Coke Oven Battery Number 3 with the by-products plant. This will produce between 250 000 and 300 000 tonnes of coke per annum and produce export sales of $65 million. “Phases 2 and 3 will each add a further 125 000 tonnes so that in full production, ZimCoke will man- ufacture at least 500 000 tonnes of coke a year,” he said last year. ZimCoke and ZiscoSteel signed an agreement of sale last year, whereby ZimCoke acquired the coke-making assets of ZiscoSteel, consisting of the plant and machinery, land and buildings and associated infrastructure of coal handling and rail wagons. Moore said ZimCoke already has an off-take arrangement with Glencore. In August last year, government signed a $1 billion deal with Chinese investor, Zhang Li, through his company, R&F for the resuscitation of Zisco- Steel. The ZimCoke project is expected to have strong forward and backward linkages and ripple effects on the engineering, chemical processing and road-making industries. Transportation of the coal from Hwange to Zim- Coke and from ZimCoke to South Africa will be by rail. [email protected] The Financial Gazette February 28-March 6 2019 | Page 31 National News Zim moves to regulate cryptocurrencies

Omega Ukama lieve that we must not be left behind. We believe that Business Reporter these could also be an essential tool to allow us to improve the rate of financial inclusion,” Msemburi told IMBABWE’S capital markets regulator says it stakeholders attending a Zimbabwe Financial Inclusion has plans to formulate a regulatory framework for Forum in Harare on Tuesday. Zcrypto currencies in the country. Still, SECZIM’s stance on virtual currencies would This comes as governments and regulators across the have to be informed by the broader discussion on the world are struggling to define and implement definitive matter. rules for the rapidly emerging asset class. The South In May last year, the central bank ordered local cryp- African Reserve Bank last month published a document to-currency exchanges to cease operations just after di- that offers recommendations for policy proposals to recting banks to deny them service. The major exchange, industry participants and gives an overview of the per- Golix, was granted a suspension of the ban on its opera- ceived risks and benefits associated with crypto-assets. tions by the High Court but the directive to banks is still Kundai Msemburi, Securities and Exchange Com- in place pending further court proceedings. mission of Zimbabwe (SecZim)’s head of corporate are now looking at what kind of regula- tained that it does not recognise virtual Market experts say as long as this case remains un- finance and market development, said the country was tory framework we would have to put in currencies as “securities”, is warming up resolved, it is difficult for there to be any mainstream keeping tabs on international developments to come up place for the protection of the end inves- to the asset digital asset class after its rise transactions in virtual currencies. with apt regulations. tor,” he said. in prominence. The securities legislation would also need some “After receiving a number of enquiries from people The latest pronouncements show that “Now that virtual currencies are be- tweaking before we see SecZim presiding over virtual who want to setup virtual currency exchanges online, we the regulator, which has previously main- coming topical across the globe, we be- currencies. [email protected] Zimtrade calls for increased exports IMTRADE says there is need for the country to increase value-added exports in order to reduce the Zcountry’s trade deficit. The southern African country has been registering an average of $3 billion in annual trade deficit for the past 10 years. Allan Majuru, the ZimTrade chief executive, said companies focused on value-addition are struggling to meet their targets against a backdrop of foreign currency shortages for retooling and acquisition of critical raw materials. “Some very key sectors and companies are struggling to produce given the high cost of doing business. As the national trade body, we continue to lobby for an environment which can ensure sustained production, competitiveness and growth in value-added exports which will subsequently reduce the trade deficit and also create employment,” he said. Recent Zimstat data reveals that improved export figures in 2018 were undermined by a rising import bill and the stifling of the production of locally produced value-added goods which increase returns, create jobs, and reduce the country’s reliance on imports. Zimbabwe’s total exports in 2018 increased by 17 percent, from $3,5 billion recorded in 2017to $4,1 billion in 2018. Offsetting this positive trend, imports also increased by 29 percent from $5 billion in 2017 to $6,4 billion in 2018, an increase which outpaced the country’s export growth and widening the trade deficit by 53 percent. Majuru said as the case in previous years, the 2018 exports were dominated by export of minerals which accounted for 53,5 percent and unmanufactured tobacco at 21,3 percent. “This heavy reliance on revenue from exports of unmanufactured products is a missed opportunity to increase returns, create jobs, and reduce imports. For these reasons, value addition will be vital to reducing Zimbabwe’s trade deficit going forward,” he said. This comes as successful countries and businesses considered the world as a market that they could exploit to expand their reaches, and thus they sought ways to improve their competitiveness. Majuru added that current trends in some industries are worrying, with a reduction in value-addition being recorded, in particular, although more raw tobacco was exported in 2018, 23 percent less manufactured tobacco products were exported as compared to 2017 after processers were unable to import necessary chemicals, papers and filters required for value addition. He said this meant that Zimbabwe missed out on some of its share of the $25 billion cigarette industry. “Another case of increased exports but reduced value addition was in the export of raw hides and skins which increased by 70 percent from $20 million in 2017 to $33,9 million in 2018 while export of finished leather and leather products declined by 13 percent.” He however said some positive trends included an increase in exports of building and construction materials from $45 million to $50 million. “The export of clothing and textiles rose from $21 million in 2017 to $28 million in 2018 while horticulture was the big winner in 2018, more than doubling from $52 million in 2017 to $112 million. “This was driven in part by some new entrants into horticulture exports for commodities such as cauliflowers, shelled macadamia, other mushroom varieties, kidney and bambara beans, kale among others as well as the coming online of macadamia and citrus orchards planted some years back,” he said. — Staff Reporter [email protected] Page 32 | February 28-March 6 2019 The Financial Gazette National News Pressure on banks’ margins remains

Omega Ukama Zimbabwe, where the capped interest Business Reporter rates are below the prevailing and increasing inflation rate, threaten real re- HE Bankers Association of Zim- turns in the sector,” IH Securities said ... as SA banks pull the plug babwe (BAZ) says banks’ profit in a note published recently. margins will continue to be un- Banks have been grumbling about T IMBABWE is in a under US sanctions). der pressure from inflation after the the interest rate situation since last Catch-22 situation as South The nature of the regulations, central bank governor John Mangudya year. African banks are de-risk- however, makes it difficult for did not liberalise interest rates in his “What we have is an interest rate Z ing from supplying the troubled foreign banks to know whether monetary policy statement (MPS) last that is controlled on the loan side and southern African country with US they are dealing with specially week. an interest rate that is going up on dollar notes, an official with the designated nationals or not, hence Lending rates are currently capped the deposits sides and therefore the central bank told miners on Tues- the decision by most South Afri- at 12 percent, which analysts say when margins will get squeezed,” Benson day. can banks to de-risk from dealing contrasted against an inflation rate of Ndachena, NMBZ Holdings’ chief fi- Speaking at a post 2019 Mon- with Zimbabwean institutions. 56 percent, implies negative real re- nance officer, said at a business event etary Policy Statement review “Ordinarily we import the turns. last year. meeting with small-scale miners, cash from South Africa, and most Some constituencies in the business “Hopefully, if things were liber- Reserve Bank of Zimbabwe dep- of the banks, due to what we call community were expecting that the alised then we would have a situation uty director for financial markets de-risking issues, have now given MPS would bring reforms in this re- where interest rates would fluctuate on William Manhimanzi said the us notice that they can no longer gard, but Mangudya was silent on the John Mangudya both sides but at the moment we are central bank was struggling to provide our own local banks with matter. faced with a scenario where loan side pay miners in hard cash as it was cash (US dollars), so we are in a “It is common cause that infla- rates are controlled and the deposit effects on money supply, which were failing to import notes via South Catch-22 situation,” said Manhi- tionary conditions invariably result in side rates are creeping up,” Ndachena the key drivers of inflation, are being Africa. manzi. realignment of costs across different said. decisively addressed. Zimbabwe pays its gold min- He said the only South Afri- facets of bank operations. Such re- Meanwhile, CBZ Holdings, which “The consensus view at the mo- ers in cash, but has been failing can bank that was still facilitating alignment might include deployment has a commercial banking unit, last ment is that if fiscal deficits have large- to do so of late as the usual sup- cash imports into Zimbabwe was of digital banking systems to improve year said it was shifting its focus from ly been contained, it also follows that pliers, South African banks, have First National Bank (FNB). efficiencies. Bank margins will- cer lending activities in response to the in- inflationary pressures are also likely to been cutting ties amid fears of “The only bank that remained tainly come under pressure in the short terest margin squeeze. dissipate in the very near future,” he being fined by the United States’ was FNB, and they gave notice in term,” Webster Rusere, the BAZ pres- “With our margins being squeezed, said. Office of Foreign Assets Control December 2018 that they would ident, told The Financial Gazette this it was important for us to focus on Analysts at local advisory firm, IH (OFAC). no longer be supplying our own week. non-funded income, and we have done securities, indicated that the near-term Zimbabwe is under United local banks with cash.” Rusere was however optimistic that very well in that respect. outlook for the local banking sector States sanctions and unless other- The move has not only affect- inflation would start to go down soon. “Our revenue growth over the first was gloomy. wise authorised or exempt, trans- ed banks, as money transfer agen- “However, the direction of interest six months of the year 2018 was driv- “We are bearish about performance actions involving the greenback cies such as Western Union are rates in the medium term generally de- en by non-funded income to minimise in the banking sector going forward, are penalised if they involve an failing to pay out remittances to pends on expectations for future infla- the pressure on interest income,” Colin particularly given the dislocation be- entity or individual listed on the beneficiaries due to their inability tion. Our view at the moment is that in- Chimutsa, the CBZ chief financial of- tween interest rates and both current specially designated nationals list to bring in cash through their lo- flation should quickly subside as fiscal ficer, said last year. and expected inflation. (a list of individuals and entities cal banks. — Fin24 deficits and the resultant expansionary “The current economic situation in [email protected] The Financial Gazette February 28-March 6 2019| Page33 Page 34 | February 28-March 6 2019 The Financial Gazette The Financial Gazette February 28-March 6 2019 | Page 35 FORMER Sri Lanka captain Sanath Jayasuriya News Worth Knowing (46) has been banned from cricket for two years after admitting two breaches of the International Cricket Sport Council's anti-corruption code. Page 36 February 28-March 6 2019 SPORT SHORTS NFL owner charged for prostitution

BILLIONAIRE Robert Kraft — owner of the New England Patriots — was charged with two counts of soliciting prostitution at a massage parlour, according to probable-cause affidavits released by Florida prosecutors. The 77-year-old widower faces up to a year in jail if convicted of the two misdemeanor charges. Kraft will also be required pay a $5 000 fine, do 100 hours of community service, and attend a class on human trafficking. He will be arraigned in Palm Beach County Court on April 24, ESPN reported. According to affidavits obtained byPalm Beach Post reporter Olivia Hitchcock, Kraft paid for manual stimulation at the Orchids of Asia Day Spa in Jupiter, Florida on January 19 and January 20, 2019. Kraft is not in custody, but “his attorney has been provided the summons,” said Palm Beach County State’s Attorney David Aronberg at a press conference. Kraft through a spokesman has denied the allegations. The Palm Beach County State’s Attorney’s Office case against Kraft and about two dozen other men who are also accused of soliciting prostitution stems from a broader police investigation into possible human trafficking of women Main picture, former Zimbabwe national cricket team captain, Andy Flower. Clockwise from top left former tennis star Byron Black, Zimbabwe who were kept as prostitutes by other people. — cnbc.com warriors duo of Peter Ndlovu and Bruce Grobbelaar. Zimbabwe National Rugby team at the 1987 World Cup, former number one golfer Nick Price and Sports minister Kirsty Coventry. — Infographics by Paul Nyakazeya I feared Rafael Nadal — Federer ROGER Federer believes he has overcome his fear of playing left-handed players, despite struggling for many years against great rival Rafael Nadal. The Swiss admitted he used to ‘fear’ taking on lefties A golden past, sports during his teenage years but he now boasts an excellent record against those who play with the opposite hand. Though he has lost 23 of his 38 meetings with Nadal, Federer has only suffered defeat to a left-handed player on 36 occasions on the ATP Tour. worth knowing Indeed, Federer has the seventh-best record in Open Era history against left-handers. Five of the players ranked above him never faced Nadal, who is widely considered to Paul Nyakazeya Hamilton Masakadza, Prosper Utseya, Brendon tional news agencies. be one of the finest lefties ever to play the sport Online Editor Taylor, Graeme Cremer, Craig Ervine and Elton These were the first Olympic Games to be Nadal enjoys the best record against left-handed stars, Chigumbura. staged in Latin America and the first to be staged boasting an 86,5 percent win ratio. IFTY years ago one of Zimbabwe’s best In the same year that Andy Flower was born, in a Spanish-speaking country. Considering Nadal accounts for 64 percent of Federer’s cricketers, Andy Flower was born. He was The Financial Gazette newspaper was first pub- The games were the third to be held in the last losses against left-handers, it’s understandable that he feels Fone of world’s best wicket-keeper for more lished in April becoming the oldest business and quarter of the year, after the 1956 games in Mel- he has banished the demons of the past as he prepares to than 10 years in the 90s and early 2000s and sta- financial newspaper in the country. It is southern bourne and the 1964 games in Tokyo. take on Nadal’s compatriot — and fellow leftie — Fernando tistically by far the finest batsman the nation field- Africa’s leading business newspaper well known According to ESPN the games will be re- Verdasco in Dubai. “I don’t fear the lefties anymore like I ed and the world admired. for its in-depth and authoritative reportage an- membered for the controversies which include did in my teenage years, so that’s good,” Federer said after For the cricket gods and the sport’s religious chored on providing accurate, fair and balanced the expulsion from the Olympic Village of US a hard-fought 6-4 3-6 6-1 win over Philipp Kohlschreiber. followers, he was an epitome of extraordinary news. It remains Zimbabwe’s most enduring in- sprinters Tommie Smith and John Carlos after “I think that’s because I was able to improve my game. excellence and remains one of the most respected dependent newspaper. they raised their fists in protest of racial inequal- Every player tries to play to your weakness or tries to make cricketers. He is a former England cricket coach In that same year and month, Paolo Maldini ity during the US National Anthem, and Czech you play bad. No different with Verdasco.” a feat that speaks volumes about his playing days an Italian football legend was born. gymnast Vera Caslavska turning her head to the Federer won’t be forced to take on Nadal this week as he and how this cricket crazy nation view him. He played as a left back and central defender side during the playing for the then Soviet Union pursues a 100th career ATP title. — mirror.co.uk He played for the Chevrons together with his for A C Milan and Italy national team. He spent anthem to protest the Soviet military invasion of brother Grant, Henry Olonga, Alistair Campbell, all 25 seasons of his career in the Serie A with the then Czechoslovakia. Guy Whittall, Murray Goodwin and Stuart Carl- Milan, before retiring at the age of 41 in 2009. Despite being an authority in business and Tiger Woods eyes world top 10 isle a fine crop of player who brought the best out He is the first and only player (for now) to finance over the past 50 years, the papers has wit- of each other. have is number three soccer jersey retired by the nessed and covered milestones in the country’s TIGER Woods is rounding into form and inching closer and Flower’s last match for the Chevron was on Italian giants. Maldini told Milan they can only different sports including, the Zimbabwe Hockey closer to the Top 10 in the Official World Golf Ranking. February 10, 2003, during the World Cup in Ha- reinstate his retired number three shirt if one of team — the golden girls winning gold at the 1980 After his solid finish at the WGC-Mexico Championship, rare against Namibia. his children plays for the club in future. Olympics in Moscow, in the then Soviet Union, Woods now sits at No. 12. For world cup debutant Namibia it was a There’s been a long-running debate about Nick Price being ranked the number one golfer in Woods has played in three events so far in the 2018-19 major story in Windhoek. But the match would when “the internet” was born, with many tech- the wold in 1994, the Zimbabwe rugby team — PGA Tour season and has improved on his performance in make headlines for a different reason. Sports an- heads citing April 7, 1969 as the web’s official the Sables’ first participated at the world cup in each one. He opened the year with a T20 finish at the Farm- alysts expected Namibia to loss, and that they did birthdate. The same month The Financial Ga- 1987 which was co-hosted by New Zealand and ers Insurance Open. He followed that up with a T15 at the by a considerable margin. zette was first published. That is the day the first Australia. Genesis Open at Riviera. But the highlight of the game was an act of official request for comments, was published — The pink paper also celebrated the success Then last week, Tiger showed flashes of brilliance on his ‘political defiance’ by Flower and Henry Olonga which included research, proposals, and ideas for of Byron, Cara and Wayne Black on the tennis way to a T10 finish, his first top-10 of the season. That was who wore black armbands when they came out the creation of true internet technology. court and the success of Peter Ndlovu the longest enough to jump Tony Finau for 12th in the world ranking. to play. It is also the year the first person landed on the serving African footballer in the English Premier Finau finished four shots behind Woods in Mexico. Now black armbands are traditionally worn moon. Apollo 11 began its historic voyage to the league from 1991-2004. Woods began the season at No. 13, which he reached by cricketers on the field when someone’s death moon on July 16, 1969. During these 13 years he played for Coventry with his victory at last year’s Tour Championship. That’s is being mourned. The two however said they It reached its destination on July 20 and on City, Birmingham City, Huddersfield Town and pretty incredible when you consider that he began his most were mourning the death of democracy in Zim- July 21, Neil Armstrong became the first person Sheffield United. recent comeback at the 2018 Farmers Insurance ranked No. babwe. to step onto the lunar surface, with Buzz Aldrin The paper also covered Bruce Grobbelaar’s 668th. In was an open secret that both men were following him about 20 minutes later. colourful career in England from 1981-1994 Tiger has famously racked up a record 683 weeks ranked aware that such a move meant their careers were The mission marked the beginning of the US turning out for Liverpool for over a decade and No. 1 in the World in his career, and he most recently held over. Flower was retiring anyway after the tour- putting a dozen men on the moon as The Finan- then Southampton and minister of Sports, Kirsty the top spot in May of 2014. Only two players remain be- nament and Olonga would never play for the cial Gazette’s reach spread in Zimbabwe. Coventry winning gold at the 2004 Olympics in tween him and a return to the Top 10 in the ranking: Jason Chevrons after the World Cup ended. The Pink paper covered the famous 1969 Athens. At the tournament, Coventry won three Day at No. 11 and 2018 Open champion Francesco Molinari Flower is still credited for paving the way for Summer Olympics held in Mexico from October medals, including a gold medal in the 200 meter at No. 10. Only 0.3305 points separate him from overtaking players such as Tatenda Taibu, Raymond Price, 12 to 27 through publishing stories from interna- backstroke. [email protected] Molinari for 10th. — golf.com