SA FDI Surges Ttage and the Avarice of Cartels Is False Robertson Said

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June 20-26 2019 ESTABLISHED 1969 @ FingazLive www.fingaz.co.zw Facebook: The Financial Gazette

ZSE Report The All Share index increased by 0,29 percent on Tuesday to close ‘Alarming at 219,03 points. Delta added $0,0626 to settle at $3,8999 while Innscor gained $0,0498 to close at $2,7500 as Simbisa advanced by $0,0476 to close at $1,3000. The Industrial Index was up 0,29 percent to close at 731,22 points as the Top 10 Index gained 0,35 percent to close at 216,35 points. sabotage The Minings Index was flat at 266,63 points.

Currencies (Bloomberg) % change ◀ USD:ZAR 14,5315 0,06 EUR:USD 1,1204 ◀ 0,09 ◀ GBP:USD 1,2584 0,21 USD: JPY 108,4500 0,13 ◀

Stock Markets ◀ talk just a ZSE (All Share) 219,03 0,29 ZSE (Minings) 266,63 0,00 14,709,00 0,26 JSE ◀

FTSE 100 7 953,88 ◀ ◀ 1,35 Dow 26 465,54

Commodities 0,14

Gold 1 334,66 ◀ ◀ Platinum 804,32 0,02 0,58 govt ruse’ Brent Oil 61,78 ◀ Grains (Grain SA) White Maize ZAR 2 571,78 2.0 ◀

Shame Makoshori “Yes, there may be some people who are Soya ZAR 4 876,52 ◀ 0.8 Companies Editor exploiting a bad situation created by govern- Wheat ZAR 2 837,07 ◀ 2.4 ment to make (super) profits … but if business HE government’s claim that Zimba- exploits that situation it is not sustainable. bwe’s economy is failing due to sabo- They will wipe themselves out of existence,” SA FDI surges Ttage and the avarice of cartels is false Robertson said. and a deplorable act of deception by the State, The seasoned commentator’s views were FOREIGN direct investment (FDI) analysts say. supported by Zimbabwe National Chamber of in South Africa made a significant This comes as a number of senior govern- Commerce (ZNCC) chief executive Christo- recovery in 2018 after several years ment officials, including Industry minister pher Mugaga, who said the “culture of blame of low-level inflows, according Mangaliso Ndlovu, have claimed that some game in the country had been entrenched to the latest UN world investment businesspeople are allegedly sabotaging the during ex-president Robert Mugabe’s era and report. local economy by working to restrict competi- had continued to haunt business”. In contrast, investment in some tion and maintaining the prices of basic goods The trained economist added that the “harsh of the other large recipients in the in the country sky-high. tones” coming out of government, despite talk continent, including Nigeria, Egypt John Robertson, a veteran economist, said of efforts to woo foreign direct investment and Ethiopia, declined in 2018. The report, which is meant to business was only responding to the rampag- (FDI), would unfortunately continue to create support policymakers and help ing inflation, thriving parallel foreign currency impressions of instability in the country and them make decisions by monitor- market and the high cost of doing business in also work to dampen investor confidence. NEWLY-elected Chamber of Mines first female president Eliza- ing global and regional FDI trends, the country in everything it was doing. “It has become the culture of our govern- beth Nerwande-Chibanda. The Mimosa Mining corporate com- states that investment flows in SA “The business sector is actually a victim of ment to blame business whenever we have munications executive takes over the reins of Zimbabwe’s largest more than doubled to $5,3bn in bad policies created by government, such as problems since the Robert Mugabe era. You mining organisation at a time the sector is subdued due to a severe 2018, but this was largely attribut- unsustainable taxes. Thus, you cannot blame will remember the price freeze of 2005 which foreign currency crisis that has affected production, with gold the able to intracompany transfers by business … We need to fix the real problems,” led to the closure of companies,” Mugaga said. hardest hit. The mining sector accounts for about 20 percent of established investors. – Business- he told The Financial Gazette this week. To Page 2 Zimbabwe's GDP. Day Page 2 | June 20-26 2019 The Financial Gazette National News ‘Alarming sabotage talk just a govt ruse’

From Page 1 tions … to get the necessary buy-in from var- “Government must be sincere in its dealings with ious stakeholders and moderate the pain asso- business. We must deal with the problems affecting the ciated with the austerity measures,” he said, economy … and business must also be honest,” he said. adding that “the school of thought that some Tendai Biti, a former Finance minister during the era remnants of the previous administration were of the short-lived inclusive government, also blamed the pulling the strings or in the opposite direction current economic travails being experienced in the coun- were also a bit overplayed”. try on State profligacy, corruption and a lack of under- According to Ndlovu, the state has not only standing of economic fundamentals by the authorities. identified monopolies in the dairy, sugar and “Business is driven by profit. It needs a functioning poultry sectors, but they will break “these car- economy and prices are not going up because of sabo- tels by funding and creating competition as tage, but because the environment is terrible,” he said. well as tightening legislation”. “We have huge imports and we are not exporting. Meanwhile, Econometer Global Capital Our current account is 15 percent of GDP, which is too (Econometer) says there seems to be a seri- high. Then there is a premium on the American dollar, ous “lack of political will to tackle the coun- which has become a commodity ... and we have a terri- try’s underlying problems, as seen during ble monetary policy,” Biti said. the launch of the tripartite negotiating forum The feisty lawyer and Movement for Democratic (TNF)” and Nelson Chamisa's absence from Change kingpin also said contrary to claims that private mainstream dialogue. sector cartels were killing the economy, “those with “This could be an exercise in futility given strong links to the establishment were the ones calling that 44,3 per cent of electorate voted for him the shots”. Christopher Mugaga Persistence Gwanyanya (Chamisa),” it said. Another economist, Persistence Gwanyanya, said do. Government’s role is to create a conducive The Financial Gazette that instead of blaming “The violent repression of protests… in what was important was to get the business environment environment and blame games will not work. business, government should address foreign August 2018 and January… were universally right, not blaming each other for the country’s current Prices are going up in reaction to the interbank currency shortages and also work out strate- condemned by the international community, challenges. market, which is not functioning efficiently,” gies to increase confidence in the free-falling setting back Zimbabwe’s efforts to re-engage “We want everyone to concentrate on what they must he said. domestic currency. the international community,” Econometer “For as long as it is inefficient, the ex- “Perhaps in the context of sanctions I said, adding that the deadlock over last year’s change rate and prices will continue to rise. would agree that there is economic sabotage. elections was also partly responsible for un- We have seen improvements on the fiscal side, However, in as far as local business is con- dermining the attraction of FDI into the coun- but have been lagging behind on the monetary cerned, while there might be an element of try. policy side. We do not need to blame each oth- profiteering, people are mostly just reacting to After a brief period of economic stability er,” Gwanyanya said. the economic realities on the ground,” he said. in the country between 2009 and 2013, Zim- Kingstone Kanyile, Mtikikwe Financial “The main issue is to do with forex short- babwe’s economy has descended into chaos Services’ chief executive, also said the current ages and lack of confidence in the RTGS dol- again, with inflation hitting an official 98 per- economic turbulence was a result of “fiscal lar and bond notes, which has led to a free fall cent in May — the highest since dollarisation, and monetary policy inconsistencies” that had of the local unit on the parallel market and, while foreign currency exchange rates are run- increased economic risk. consequently, price increases driven by these ning amok. “It follows that during times of economic exchange rate movements,” Chikohora, a for- Rolling blackouts have also been wreaking uncertainty, all sorts of unexpected market mer ZNCC president, said. havoc on the economy, costing the country norms become everyday practice,” he said, Denford Mutashu, the Confederation of and business billions of dollars. adding that the hyperinflation and losses ex- Zimbabwe Retailers president, said the gov- “Movements on the foreign exchange perienced in 2008 were “a candid reminder of ernment must not make unilateral decisions market have … piled inflationary pressure on the need to work on mitigating a repeat of such when dealing with matters affecting the econ- business whose pricing is now determined by a scenario, and lessening risks”. omy and business. (that) market,” Econometer said. Trust Chikohora, another economist, told “The first issue is lack of wider consulta- [email protected] Axed Old Mutual boss fights back ETER Moyo, who was axed as Old Mutual CEO on Tuesday, is not going quietly. P Initially suspended three weeks ago with the insurer citing a conflict of interest due to his involvement with a financial services company that he helped found in the early 2000s, Moyo vowed to clear his name in court after Old Mutual accused him of wrongly pocketing more than R30 million in dividends from NMT Capital. Moyo is the "M" in NMT, and the other initials belong to Sango Ntsaluba, the executive chair, and Thabiso Tlelai, Peter Moyo a hotel and property executive who is also the CEO of the any conflict when Old Mutual was party to these decisions Don Group. through this director’s representation,” said Moyo in a state- Moyo was CEO at NMT when he was initially recruited ment issued through his lawyer. as the CEO of Old Mutual Emerging Markets in 2017, which In its 2018 financial statements, Old Mutual also lists R23 has raised questions among some analysts as to when the re- million of ordinary dividends from NMT and R24 million in lationship became problematic for Old Mutual. preference dividends from NMT Capital and NMT Group. Old Mutual said when it first suspended Moyo that the But it does not state whether these were paid. CEO had done nothing wrong or dishonest, and praised his NMT Capital on Tuesday issued a statement saying pref- performance. The standoff has since turned decidedly ugly, erence share dividends due to Old Mutual were “duly paid” with the insurer announcing on Tuesday that it intended to but there was a slight delay in payment and it was negotiating terminate the relationship with the CEO, accusing him of an extension of the date of payment with the insurer. potentially breaking company law in the process. He vehe- Old Mutual, on the other hand, said it found out about mently rejected this and said all transactions were done in the these dividend declarations only in the latter half of 2018 open with Old Mutual’s awareness. when its board committee tasked with monitoring relat- Old Mutual said NMT Capital, a diversified investment ed-party transactions was reviewing Moyo’s activities to see firm in which it holds a 20 percent stake, had declared two if he was still adhering to his employment contract. The in- sets of ordinary dividends valued at R115 million during surer said that it was not satisfied with Moyo’s explanation. its 2018 financial year without paying preference capital or “The board has not been provided with an acceptable ex- preference dividends that were due to it. NMT was initially planation why, in clear contravention of the relevant prefer- supposed to repay the preferential capital invested by Old ence share agreement with Old Mutual as well as Mr Moyo’s Mutual in July 2010, but the two parties agreed to roll it over employment obligations, ordinary dividends were declared a couple of times. Moyo said NMT started talks with Old while debt to Old Mutual was outstanding,” said Old Mutual. Mutual to roll it over again in 2018. Whether there was contravention of the preference share According to the Companies Act, dividends to preference agreement or even the Companies Act on NMT Capital’s shareholders should be paid before those due to ordinary side would depend on how the agreement between the two shareholders. Old Mutual said in the case of NMT Capital, parties was structured, said Warwick Bam, head of research preference payments due to it for the first round of dividends at Avior Capital Markets. declared in 2018 were not paid by the time Moyo’s invest- Old Mutual shares lost 0,3 percent on Tuesday, valuing ment company declared a second ordinary dividend. the company at R104.4bn. Since its listing on the JSE in June Moyo called the allegations “incomplete at best and 2018, shortly after Moyo’s appointment as CEO, the share misleading at worst”. He said the insurer had received R23 has shed 26 percent, although this is largely due to repricing million in ordinary dividends and an additional R20 million to reflect the Nedbank unbundling. Moyo was paid R50 mil- in preference dividends. “At all times, Old Mutual had a lion in the 2018 financial year, including a bonus for man- separate director on the NMT board. Importantly, he voted aging the separation of Old Mutual’s businesses into four, for all these dividends. It is therefore difficult to understand including the sale of London operations. - BDlive The Financial Gazette June 20-26 2019 | Page 3 National News SA firm hit by Zimbabwe crisis

Nelson Gahadza their nominal value following the introduction Omnia is expecting to report a full-year loss 59 cents and 139 cents for the year ended Business Reporter of an alternative currency in Zimbabwe ― the as drought, a volatile currency, changes in the March 31, 2019 compared with headline earn- RTGS dollar ― through the impact of the ac- mining industry and difficult global trading ings per share of 991 cents a year earlier. OUTH African chemicals and fertiliser counting treatment on the change in functional conditions weighed on earnings. Omnia, which raised funds for two acqui- maker Omnia Holdings (Omnia) says its currency,” the company said this week in a no- “In FY2019, Omnia experienced adverse sitions and the construction of a new fertiliser SZimbabwean operations are being im- tice to shareholders. market conditions, marked by droughts and plant, said last month it had agreed to restruc- pacted by liquidity constraints in the country. The latest development comes at a time late rains, a volatile rand, changes in the local turing talks with creditors. The group’s businesses in Zimbabwe in- when Zimbabwe is facing fertiliser supply and international mining industry, and overall The firm, which also produces explosives, clude Fertiliser Zimbabwe and Acol Chemical, challenges, failing to match demand and sup- difficult global trading conditions,” the group has also said it would undertake a rights offer which are involved in the supply of fertiliser ply. Demand for fertilisers has also been sub- said. of two billion rand ($137 million) to cut debt. and agriculture chemicals. dued due to a combination of late or below Consequently, the group said its headline Omnia is present in 31 countries while hav- “In addition, their financial results have normal rainfall coupled with poor liquidity loss per share, the main profit measure used in ing a predominant base in South Africa. been reduced to approximately one quarter of among farmers. South Africa, was expected to fall to between [email protected] Listed firms to report quarterly Omega Ukama “This means that the listed company is required cessitated by significant and numerous changes in Business Reporter to publish financial statements on a quarterly basis, the local and foreign capital markets, which had not but first and third quarter reports will be published been accommodated by the current rules. on the ZSE website only,” Tapiwa Bepe, the ZSE’s “In particular, the landscape has changed on the HE Zimbabwe Stock Exchange (ZSE) says public relations officer told The Financial Gazette macroeconomic front as well as in terms of techno- firms listed on the local bourse are now re- this week. logical advancements and updates in legislation over Tquired to report financial results on a quarter- Commenting on this development, Enock Rukar- the last 17 years,” Justin Bgoni, the exchange’s chief ly basis after the gazetting of amended Listing Re- wa, FBC Securities’ research and investment analyst, executive, said in a statement last week. quirements under Statutory Instrument 134 of 2019 said it is a welcome initiative “as it ensures timeous “The listing requirements, which had not been last week. information dissemination about the company”. comprehensively reviewed since 2002, are a prod- Up to this point, companies had only been re- “Financial statements provide a snapshot of a uct of wide consultations with various stakeholders quired to publish annual results and half-year interim corporation’s financial healthy at a particular point who include investors, issuers, Government of Zim- reports in the press or in electronic form, and to dis- in time and if this information can be provided quar- babwe, the Securities and Exchange Commission of Justin Bgoni tribute these to all shareholders not later than three terly it ensures effective decision making by external Zimbabwe, professional advisors and market partic- months after the end of the year or the interim period. stakeholders,” Rukwara said. ipants,” Bgoni added. and operated”. “Within 45 days after the end of the first and third He, however, noted that the requirement would He said some of the main objectives of the revised “The revised listing requirements also increase quarter of each financial year, issuers must publish come as an added cost to issuers “through auditors’ listing requirements include enhancing transparency, the protection of minority investors as well as im- their interim reports on their websites and submit the fees and the time devoted in the preparation of these disclosure and accountability in the governance of proving the regulatory environment by making it reports to the ZSE for publication on the ZSE Data financial statements”. listed companies “in order to build up investor confi- conducive for dually listed companies to list on the Portal,” reads the amended rules. The ZSE says the amendments have been ne- dence in the manner in which our market is regulated ZSE,” Bgoni said. [email protected] Page 4 | June 20-26 2019 The Financial Gazette National News Complete Gwanda: Court Zim records trade surplus with US Tabitha Mutenga South Africa, United Arab Emir- IGH Court judge Tawanda and its managing director (Chivayo)," Features Editor ates, and Mozambique remained the Chitapi has ordered the com- Chitapi said, before virtually empha- country`s major export destinations, pletion of Intratrek Zimbabwe sising an earlier finding or point that IMBABWE has recorded a absorbing 33 percent, 29 percent H US$40 million trade surplus and 10 percent respectively, while (Intratrek)’s 100 megawatt Gwanda the ZPC could not benefit from its solar project after a leave for execu- own foibles. Z with the United States of other countries absorbed 13 percent tion appeal by the local company. "For clearly unmeritorious con- America in the past five years, latest of the exports. This comes as company owner siderations, the respondent refuses to data show. In terms of imports, Zimbabwe re- Wicknell Chivayo was recently ac- engage and has filed an appeal for pur- Figures released by the Unit- duced its bill by 33 percent. quitted of fraud charges by another poses of delay instead of adopting an ed States (US) embassy in Harare “Total merchandise imports stood bench member Justice Owen Tagu attitude that advances the performance show that from 2013 to 2018 the at US$1,1 billion during the first and the Zimbabwe Power Company of the contract or its lawful termina- world’s number one economy im- quarter1 of 2019, a 33 percent de- (ZPC) has sought, for the umpteenth tion," he said. ported US$291,5 million worth of crease from US$1,7 billion accu- time, to reverse the flamboyant busi- “...there is no prejudice to be suf- Wicknell Chivayo goods from Zimbabwe and exported mulated during the fourth quarter of nessman’s legal victories, including a fered by the respondent if leave to US$250,7 million goods. 2018. This is also against US$1,8 bil- December 2018 ruling by the former. January 7 this year. execute pending appeal is granted Last year, the southern African lion recorded in same period in 2018. “The respondent... is appealing the In granting the application, Chi- because the court order essentially country exported goods valued at “The reduction of the import bill judgment for selfish, self-serving and tapi emphasised that the balance of declared that the relationship between US$26,2 million to the United States. reflects the impact of imports de- ulterior reasons. It is no wonder that convenience favoured the applicant, the parties is still in existence and the “In 2018, US total imports of ag- mand management measures under the proposed grounds... have no pros- the project's delay has been caused by parties must, using the provisions for ricultural products from Zimbabwe's implementation, including fuel pric- pects of success. It is disgraceful that the ZPC's own intransigence and there dialogue and dispute resolution pro- leading categories include raw beet es adjustment,” read part of the 2019 national projects are stalled by contra- has been no fraud or misrepresenta- vided for in the contract, engage and and sugar cane (US$16 million), first Quarter Treasury Bulletin. relate,” Chitapi said. dicting parties having merry dances in tion whatsoever on Intratrek's part in tea (US$5 million), tobacco (US$4 Diesel, petrol, tractors, wheat, ve- courts instead of... boardrooms and on The judge said whether by bad its dealings with the Zesa Holdings million), nursery products (US$732 hicles for transportation and crude project sites, and seeing to the projects judgment or wrong advice, the ener- subsidiary. 000), and spices (US$476 000),” the soya bean oil were the country’s ma- coming to fruition," Chitapi said, add- gy firm “had let the cat out of the bag Crucially, the ex-lawyer also re- embassy said. jor imports during the months of Jan- ing the "public was not interested in served a huge portion of the stinging and was clutching at straws to avoid the bickering of egoists and the elec- potential liability for payment.” In 2018, the southern African uary and February 2019. judgment's preamble to remind the country was the US's 180th largest The major import sources during tricity, which Intratrek was to produce embattled firm and its defence coun- “The appeal is motivated by fear was not for its consumption, but na- ... that engagements with the appli- goods export market. the period under review were South sel that it had "sought to entangle the During the first quarter of 2019, Africa, Singapore, and China, con- tional development". courts in circuitous pleadings, and cant (Intratrek) and recognition of the “It will remain a mystery that a declaratory order... has the potential to Zimbabwe’s merchandise exports tributing 33 percent, 28 percent, 10 averments simply to buy time when grew by 5,9 percent from US$886,1 percent, respectively. party to a written contract... spurns a it was fully aware that his prior rul- expose the respondent to paying mon- window for engagement ... especially ey, which it does not have,” Chitapi million realised in first quarter of “Resultantly, the trade deficit for ing was not defective nor did it seek 2018, to reach US$938,1 million. the first quarter of 2019 stood at so where the court in ordering engage- to prescribe proceedings on specific said. ment ... (and) has taken into account “The picture ... is that, with off- Exports for the period were main- US$165,9 million, constituting a 57 performance". ly dominated by gold (25 percent), percent improvement from the 2018 that the contract ... not only provides "...the court considered various shore funding having stalled on ac- flue-cured tobacco (18 percent), fourth quarter deficit of US$384,5 for engagement, but the order itself factual developments ... which frus- count of government’s inability to nickel mattes (16 percent) and nickel million, against first quarter of 2018, leaves it open to the parties to dis- trated the respondent (Intratrek under clear arrears with China Exim Bank... ores and concentrates (12 percent), the trade deficit improved by 79 per- cuss their disputes..,” he said, noting SC 2/19) from performing the con- the respondent became fearful that it further that the June 19 order shall be tract. The applicant (ZPC in the earlier may have to self-fund...,” Chitapi said. ferrochrome, industrial diamonds, cent.” given "full effect notwithstanding the matter and appeal) was found to have – Staff Reporter among others. [email protected] respondent's Supreme Court appeal of caused the arrest of the respondent [email protected] The Financial Gazette June 20-26 2019 | Page 5 Page 6 | June 20-26 2019 The Financial Gazette Top Companies Survey awards in pictures

Seed Co Zimbabwe managing director Denias Zaranyika (left) with Rwandese ambassador to Zimbabwe, James Musoni. Matilda Nyathi, Old Mutual Zimbabwe marketing head, inviting the guest of honour.

Standard Chartered Bank head of corporate affairs - branding & marketing Lillian Hapanyengwi Lawrence Mawoni and Gladys Ndaba from Old Mutual Zimbabwe. receiving their award from Modus Media CEO Pilate Machadu.

First Capital Bank managing director Samuel Matsekete (right) with Nqobile Munzara, Old OK Zimbabwe finance manager Brian Muradzikwa, receiving the Top Companies Mutual Zimbabwe company secretary. first runner-up award from Ambassador Musoni.

Lillian Mubaiwa, Old Mutual Africa – Marketing From left: FBC Holdings CEO, John Mushayavanhu chats with ZNCC CEO, Christopher Mugaga and Strategy and Planning. CBZ Bank senior manager - group marketing Joel Gombera. The Financial Gazette June 20-26 2019 | Page 7 National News Tobacco prices remain depressed

Tabitha Mutenga per kg has been maintained on the floor, very little tobac- Bernard Arnault Jeff Bezos Bill Gates Features Editor co had attained this pricing compared to previous years. “In recent days, there has been an improvement in HE Zimbabwe Tobacco Association (ZTA) says prices, though daily volumes are declining. On contract prices of the golden leaf have remained static at floors, after a significant weakening of prices to well Arnault joins US$100bn league Tan average US$1,65 per kilogramme this year, under US$2 per kg, there has been a welcome improve- compared to US$2,91 per kg last season. ment, with daily averages above US$2 per kg, as higher ERNARD Arnault, chairman of gnac has bolstered results for LVMH, the Tobacco is Zimbabwe’s leading foreign curren- quality leaf grades of commercial tobacco come onto the LVMH, entered the ranks of centi- owner of Dom Perignon Champagne and cy earner, accounting for nearly a fifth of Zimbabwe’s market and firmer prices are being paid for some lower billionaires Tuesday as the luxury Tag Heuer watches. The company’s shares US$5,3 billion export earnings in 2018, bringing in al- leaf styles. B goods maker climbed 2,9 percent to a re- have surged 43 percent this year, the third- most US$1 billion. “However, with close to 70 percent of the national cord 368,80 euros a share. His net worth best performer on France’s CAC 40 Index. However, the latest announcement by the ZTA is a crop sold, this recent improvement in prices has come has increased almost $32 billion this year, Arnault, 70, and his family are among blow for a country al- too late,” the association said. the most on the 500-member Bloomberg luxury tycoons who pledged more than “It is estimated that by ready in dire econom- On day 57 of this year’s marketing season, 171,2 Billionaires Index. $650 million in April for the reconstruc- end of the month close to ic straits. The usual million kg of tobacco at an average price of US$1,87 per France’s multibillionaires have added tion of Notre Dame Cathedral after the 190 million kilogrammes hype associated with kg had been sold, a decrease of 11,1 percent in volume the most wealth among European mem- landmark church was ravaged by fire. He should have been sold and the tobacco marketing and a significant 36 percent decrease in seasonal aver- bers of Bloomberg’s ranking in 2019, with controls about half of Paris-based LVMH with farmers estimated to season has this year age price. Arnault, Kering SA’s Francois Pinault and through a family holding company and also complete sales in mid-Au- been diminished by The seasonal auction price is down 41 percent, while cosmetics heir Francoise Bettencourt Mey- owns a 97percent stake in Christian Dior, gust, the national crop size the confusion caused the seasonal contract price is down 36 percent compared ers tacking on more than $40 billion be- the fashion house founded three years be- could reach plus or minus by RTGS$ and US$50 to 2018. Auction volumes remain on the decline, ac- tween them. fore his birth in 1949. 230 million kg.” percent payment com- counting for just 13 percent of the total volume sold to Meanwhile, the brothers behind the Arnault entered the luxury goods mar- ponent. date. Chanel brand, Gerard and Alain Wert- ket by acquiring a textile group that owned Zimbabwe Tobacco Association The situation has Daily volumes during the month increased signifi- heimer, saw their fortunes soar $9,8 billion Christian Dior. He sold all of the company’s also been compound- cantly, with close to 80 million kilogrammes sold in this week after the Parisian fragrance and other businesses and used the proceeds to ed by the growers’ attitude as they adopted a wait-and- May 2019. Daily deliveries in June have dropped as a fashion house reported its 2018 results. buy a controlling stake in LVMH in 1988. see approach while others who sold their crop were dis- large number of small-scale farmers start completing Arnault’s fortune of $100,4 billion now Bill Gates, the Microsoft Corp. illusioned by low prices offered by merchants. their sales. equals more than three percent of France’s co-founder, has donated more than $35 economy, underscoring the wealth gap in billion to the Bill & Melinda Gates Foun- The opening bale price of US$4,50 per kg, US$0,40 “It is estimated that by end of the month close to 190 his native country, where protesters have dation. Amazon.com Inc.’s Jeff Bezos, less than the price of the first bale last season, was not million kilogrammes should have been sold and with agitated this year for more benefits paid meanwhile, saw his net worth drop $40 good news for the majority of growers as they were not farmers estimated to complete sales in mid-August, the for by the rich. Even amid growing trade billion earlier this year after reaching a di- motivated by the opening price to deliver their crop. national crop size could reach plus or minus 230 million tensions, Chinese consumers’ appetite for vorce settlement with MacKenzie Bezos. ZTA noted that although a price ceiling of US$4,99 kg,” ZTA said. [email protected] Louis Vuitton handbags and Hennessy co- – Bloomberg Page 8 | June 20-26 2019 The Financial Gazette Leader Page

News Worth Knowing Where is our own Lee? N THE midst of a crushing economic crisis and stark reminder of Singapore’s won- derful transformation ― from an economic backwater to world class society ― by Ipublic policy professor Kishore Mahbubani, Zimbabweans cannot be faulted for wondering where our own Lee Kuan Yew will come from! While the Asian academic has told us about how the city state’s first prime minister had engineered the global trading hub’s revival ― once poorer than most African countries ― the China Institute senior fellow has also shared the three key pillars of that pioneering leader’s rule: meritocracy, pragmatism and honesty (MPH). By emphasising on meritocracy, Mahbubani says, Lee put the right people in crucial positions, particularly for key ministries like finance and economic development ― not the jobs-for-the-boys kind of politics, nepotism and patronage we see in these shores. On pragmatism, the shrewd tactician insisted that "it does not matter whether the cat is black or white, for as long as it catches the mice, it is the best cat". And lastly, Lee insisted on honesty, which Mahbubani said was probably the most important pillar and guiding principle of that community, as the Singaporean leader argued that for any nation to progress, it needed truthful leaders, who are also account- able, transparent and of unquestionable probity. And therein lies the lesson, if not what Zimbabwe is yearning for at the moment ― leaders who are not only serious about improving their lot at a time the economy is sinking into the abyss, but lifting its per capita income and gross domestic product (GDP) into the league of other progressive nations. But we have a government and bunch that is seemingly bent on perpetuating the people’s misery, and engaging more in self-enrichment activities. This is the same clique, if not cabal, which has seen it fit ― Robert Mugabe style ― to expend energy on “cooking up blame-game theories” and ignoring potentially THE construction of NMBZ Holdings’ new head office in the plush suburb of Borrowdale in Harare helpful dialogue when its subjects are suffering. nears completion. The dual-listed financial services group joins a host of other corporates that are As neighbouring Mozambique aand South Africa are basking in US$25 billion gas withdrawing to serene environments as clients complain of traffic and human congestion, high projects, and foreign direct investments-growth, Zimbabwe is making the headlines for parking fees, noise pollution and increasing number of vendors in the central business district. being ranked among the 10 worst countries for workers, according to the International The situation has resulted in most office buildings in Harare recording a high number of voids. Trade Union Conferedation. Picture by Freedom Mashava From pointing fingers at “alleged economic saboteurs within industry to individuals who are reportedly conspiring to unseat the Harare administration by manipulating American/RTGS dollar exchange rates”, Zimbabweans have been bombarded with all sorts of conspiracies by a “system” that is so alien to the truth. For, if it was steeped in morality, integrity and the need to empower its people, In- dustry minister Mangaliso Ndlovu and his Zanu PF colleagues, including Lewis Matu- Keeping your employees tu would tell us ― in line with their state media postulations ― “who exactly is stealing what in this country”. Instead of coming up with robust policy measures and interventions based on Lee’s MPH principle, for example, to mitigate this catastrophic economic disaster ― marked motivated during a crisis by record inflation, swingeing exchange rates and shrinking GDP ― we have a group that is fixated on obfuscating matters, reality and "importing dead bodies" from the T'S not easy being a business Below are a few are ways to The unified approach starts Bronx, New York. owner or a manager. Even at keep your employees motivated at the top. Even if employees And when the media dares to report on all these ills, it is accused of “perpetuating the best of times, it's much when times get tough. don't like the information or ac- headline risks” and branded cohorts, if not quislings, of the vanquished Mugabe re- I like a juggling act ― you have Focus on employee engage- tions given to them, they will be gime. As they are bombarded with empty rhetoric and promises, labour to hitch a ride in to keep many balls in the air. The ment: Keep your door open ― lit- watching how the owners and the Zupco buses, go home to pitch-black neighbourhoods and watch as inflation wipes situation moves a gear up during erally and figuratively ― so em- managers behave. Make sure they out their meagre salaries everyday, Zimbabweans must really be desperately clamour- an economic downturn, and it’s ployees who want to talk about know that you have their (and the ing for ― and needing ― their own Lee! even worse when you are leading whatever's going on can feel company's) best interests at heart, an organisation in Zimbabwe. comfortable coming to you. Be and that you aren't going to jump If you're in a similar boat, how seen around the office in a time ship. Southern Africa’s Leading Business and Financial Newspaper do you keep employees motivated of crisis. Recognise employees' con- Established 1969 during these tough times? Walk around the office, eat tributions and hard work during Publisher: Modus Media A crisis is the best time for lunch where you usually sit and times of crisis: It may not be a

EDITORIAL MARKETING managers to be honest, hunker be visible. When they approach good time for the company, but Editor-In-Chief & Chief Operating Officer General Manager - Marketing you, answer their questions as you will still want to pay atten- Christopher Goko: gok .zw .zw honestly as possible and as fully tion to who is doing good work. Brand Executive - Advertising Managing Editor Open Forum as you are able. It will help em- Nurture your relationships! Edwin Vengesa: ev .zw ployees feel less scared and more Make sure your staff know Senior Sales Executives involved. that they are appreciated, and that Senior Assistant Editor Christobel Washaya: cwashay .zw with Chris Gumun .zw .zw Keep the employees involved: the hard work they are doing is .zw John Kachembere People just want to help, espe- making a difference. Do some- News Editor cially in tough times. You may thing, whether it's a kind word, a John K .zw Sales Representatives - Harare have to call in experts, but when free lunch, a bottle of wine, or an Companies Editor .zw Shame Makoshori: smak .zw Frank Nyandoro: fny .zw down, and engage positively with possible, ask your staff to help. award, to recognise the work of Edreck: emudzingany .zw your team. Remember that you They'll be more than happy, and your staff members. Group Digital Editor Sales Representatives - Bulawayo are all in this together, no matter will generally have great ideas Create problem solving Paul Nyakazeya: pnyakazey .zw Clever Pedzisai: [email protected] your level or job title. Nobody about what would be best for the groups: Whether formal or in- Features Editor Brand Executive - Events wants to be unhappy or inse- team. formal, problem-solving groups .zw K .zw cure in a workplace, and a happy Be unified: Remember that it's help energise and motivate staff. Staff Writers Brand Executive - Subscriptions workplace really does make all not you against them. Make sure Again, people want to help and Tatenda Taka: t .zw Omega Ukama: [email protected] the difference. your employees know that you make a difference. It makes them Adelaide Moyo: [email protected] Subscriptions Representatives Nelson Gahadza: [email protected] Elizabeth Nyamaruze: eny .zw With all the price madness are on their side. feel good, and gives them the Freedom Mashava: [email protected] Ronald Madiviko: rmadivik .zw happening around us, coupled semblance of a bit of control over Production Supervisor Chief Executive Officer with the devaluation of the local their destinies during an other- Kudzai Rushambwa: krushambw .zw .zw currency and erosion of salaries crisis is the best time wise difficult time. and wages, it becomes impera- Remember that it won't always for managers to be Bulawayo tive for managers ― particularly go smoothly, and you may hit a Editorial, Advertising & Circulation 1st Floor, Princess Court, honest, hunker down, 2nd Floor, Green Bridge South, Eastgate Complex, Corner Forth Street/9th Avenue, chief executives and managing A few bumps along the way. I like and engage positively with P. O. Box CY 376, CAUSEWAY, Harare, Zimbabwe Bulawayo. directors ― to find ways to keep to think of these as great oppor- Tel: +263-242-781 572 Tel: (029)75873/75270 your team. Remember that Website: www Distributed by: ANZ employees motivated as a way of tunities to learn and grow both you are all in this together, no increasing production and mak- matter your level or job title. personally and professionally. VOLUNTARY MEDIA COUNCIL OF ZIMBABWE ing the workplace comfortable. As long as you have the compa- e Financial Gazette newspaper subscribes to a Code of Conduct that promotes truthful, accurate, fair and balanced Nobody wants to be unhappy news reporting. If we do not meet these standards, register your complaints with the Voluntary Media Council of When times are tough, and ev- or insecure in a workplace, ny’s best interests in mind, and Zimbabwe at: erybody at work is nervous, man- and a happy workplace really involve your team in the decision No 34 Colenbrander Rd, Milton Park, Harare. Telephone: 04-778096 / 778006 24 Hr Complaints line: 0772 125 659 agers must help employees to stay making, you can get through any- Email: [email protected] or [email protected] Twitter: @vmcz http://www.vmcz.co.zw | Facebook page: vmcz does make all the difference. Zimbabwe engaged, focused and motivated. thing life throws your way. The Financial Gazette June 20-26 2019 | Page 9 National News Zim misses out on $340bn cannabis market John Kachembere pacted economic development, further driving the Recent economic analysis for Zimbabwe fi nds sider either recreational or medical legalisation. News Editor government’s priority to stimulate multisectoral in- that deployment of medical and industrial cannabis Argentina and Australia are amongst some of the dustry growth,” read part of the report. programmes would create between 60 000 and 90 recent countries to legalise medical cannabis, while IMBABWE’S plans to tap into the billion New Frontier further indicated that one of the 000 agricultural and manufacturing jobs. European nations like the Netherlands and Italy are dollar cannabis market could suffer a major most signifi cant challenges facing the Zimbabwean Through medical and industrial cultivation, pro- beginning to explore their options. Zsetback due to the country’s deteriorating budget is the rising health-care spending. cessing, and exports, the industry could generate A Canadian fi rm has since approached Harare economic conditions, a new study has revealed. “About 13 percent of Zimbabwean citizens ― above US$300 million in revenues, based on mod- with a proposal to produce cannabis in a develop- The government last year legalised the produc- 1,3 million people ― have HIV/AIDS, and the cost est 50 000 hectares cultivation within fi ve years. ment that could earn the country millions of dollars tion of marijuana for medicinal and scientifi c use. associated with the treatment of associated condi- As a major global exporter of tobacco, falling in much needed foreign currency. And it approved the fi rst cannabis farm and pro- tions has increased signifi cantly since 2000. While demand leaves Zimbabwe at risk of declining ag- Zimbabwe has, for years, struggled with serious duction plant at the Zimbabwe Prisons and Cor- efforts to contain health-care spending resulted ricultural output and displaced workers for whom foreign currency shortages which have lately mani- rectional Services’ Buffalo Range in Chiredzi, after in a temporary reduction of expenditures by gov- cannabis cultivation could offer an occupational fested in acute fuel shortages. Ivory Medical, a Harare-based company, secured a ernment, it has increased again in the past several remedy. “I am aware that Canadians have been in town, 10-hectare piece of land at the estate. years,” the research fi rm said in its 2019 industry In January this year, Finance minister Mthuli working with local partners to try and acquire li- However, according to New Frontier Data (New outlook report. Ncube backed calls for Zimbabwe to grow cannabis cences and get into this business,” Ncube said. Frontier), setting up a legally regulated cannabis The report noted that medical cannabis may help for export to take advantage of the growing global In April last year, Zimbabwe became the second programme in Zimbabwe would be challenging be- reduce health-care costs in Zimbabwe as it has in legal marijuana market. African country after Lesotho to legalise marijuana cause of antiquated infrastructure and limited access other markets. Growing adoption of marijuana in several med- for medical and scientifi c purposes. to water. “More mature markets such as in Europe have ical applications such as cancer, mental disorders, Then Health minister David Parirenyatwa said “Zimbabwe has faced some signifi cant obstacles supply shortages that could be supported with ex- chronic pain and others is expected to propel reve- individuals and businesses would be able to apply to economic development. Economic output was ports of medical and industrial grade cannabis. Ex- nue growth in near future. for licences to cultivate cannabis for medicinal or negative from 2000-2008, and while it rebounded portation would also provide the government with Canada recently became the fi rst country in the scientifi c use. The plans were later shelved, with from 2009-2016, growth slowed considerably over needed foreign currency and help address trade defi - world to legalise cannabis entirely, which has now government citing the need for feasibility studies. that period. Signifi cant budget defi cits have also im- cits,” New Frontier added. led many other countries around the world to con- newsdesk@fi ngaz.co.zw

We have great pleasure in announcing and congratulating our new Presidium for the year 2019/2020.

Batirai Manhando Immediate Past President The Chamber is established for the purpose of promoting, encouraging, protecting and fostering the mining industry and doing everything necessary and advisable for these objects. Page 10 | June 20-26 2019 The Financial Gazette June 20-26 2019 Page 11 Companies&Markets The Financial Gazette ZSE TARGETS NEW PRODUCTS — 12 USD/BWP Sugar (USD/lb) Cotton (USD/lb) Nickel (USD/t) Palladium(USD/oz) THE Zimbabwe Stock Exchange says it is experiencing low activity due to lack of diversification into other securities, 0,11% 0,84% 0,22% such as government bonds and exchange-traded products. 0,06% 0,16% 10,6840 11,94 66,91 11 729,92 1 337,36 Ariston moves Zimplow’s to repair infrastructure

Omega Ukama Business Reporter mining venture GRO-INDUSTRIAL firm Ariston Holdings (Aris- ton) says it needs about US$1,5 million to repair Ainfrastructure that was damaged by Cyclone Idai on its farms. Zimbabwe, together with Malawi and Mozambique, was in March this year hit by Cyclone Idai, which caused catastrophic damage leaving more than 1 000 people dead and thousands more missing Paul Spear, Ariston’s chief executive, said damage on the pays off estates varied substantially, with the greatest effects being experienced at Roscommon Estate which is located in Chi- manimani. “While there was no loss of life, damage was incurred Nelson Gahadza on infrastructure, including roads, bridges, irrigation equip- Business Reporter ment, housing and to a lesser extent, orchards,” he said in the company’s financials for the half-year to March 31, 2019. ARM implements maker Zimplow The group is currently seized with rebuilding the in- Holdings (Zimplow) says its decision to frastructure that was damaged. Early indications are that Fventure into mining is paying dividend US$1,5 million is required for this rehabilitation work. after registering strong growth in the past few The group is engaged with the matter through an insurance months. claim. Vimbai Nyakudya, the group’s chief exec- Ariston had earlier said that some of its the macadamia utive, said the company is now on a solid path crop had been affected by the cyclone, however, Spear said despite Zimbabwe’s difficult operating terrain full year volumes for macadamia are expected to be in line and the recent drought which reduced yields in with the prior year. the 2018/19 agricultural season. “The average export price is higher than prior year as “Zimplow’s positioning to the agricultural quality has continued to improve,” he added. sector, looking after both large and small scale And with harvesting in stone and pome fruit having been farmers, as well as exposure to mining sector, completed as at half-year, production volumes in the fruits helps to create a balanced portfolio whose ro- had grown by 37 percent to 1 207 tonnes. bustness can be seen in difficult periods such as Tea production, which improved during the period under this,” he said. review by six percent to 1 954 tonnes, is also expected to be Nyakudya further indicated that the compa- in line with prior year. ny now has a malleable balance sheet structure Zimplow farm implements uptake has been 25 percent lower than prior year. The group, however, incurred an operating loss of $2,90 underpinned by the ability to manage the sup- million, down from an operating profit of $630 thousand in ply chain. the group’s operating profit by 784 percent to 232 countering the drop of 36 percent on local prior year, after expenses grew by 249 percent against prior With strength on its balance sheet, the group $13,4 million. market. year, “reflecting the effect of the depreciation of the RTGS$ is now able to configure market offering and “We continue to increase thrust on favouring Powermec recorded a 106 percent growth in against the US$”. take advantage of existing opportunities. non-monetary current assets such as inventory, volumes against prior year, with 35 generator “The majority of the group’s suppliers were quoting Zimplow’s revenue grew 86 percent to limiting uncovered foreign exposure and appro- unit sold while hours sold also improved by 21 prices in RTGS$ at an implied rate higher than the official $29,8 million in the five months to May 2019. priately gearing our balance sheet,” he said. percent against same period last year. interbank rate, which contributed to the growth in operating Nyakudya said growth in volumes and the The group’s Mealie Brand subsidiary per- The Zimplow boss further indicated that the expenses,” Spear said. impact of the exchange rate movement towards formed well during five months period, despite group is monitoring a strategy to penetrate min- Still, the loss was compensated for by fair value adjust- the end of May on the foreign denominated the drought that affected the region causing a ing and construction sectors to service the entire ments, which rose to $7,21 million compared to $0,50 mil- monetary assets such as export debtors, backed decline in agricultural activity. Perkins engine driven equipment. lion for the prior comparative period. by letters of credit and nostro balances, pushed He noted that export sales volumes grew by [email protected] [email protected] Page 12 | June 20-26 2019 The Financial Gazette Companies & Markets Local bourse targets new products

Adelaide Moyo He said over the past four years there has been a de- Business Reporter cline in foreign investor contribution to turnover and a corresponding increase in local activity. HE Zimbabwe Stock Exchange (ZSE) says it is In 2018, local investors were 69,1 percent compared to experiencing low activity due to lack of diversifica- foreign investors at 30,9 percent. In 2017, local investors Ttion into other securities, such as government bonds contributed 70 percent compared to foreign investors at and exchange-traded products. 30 percent. Justin Bgoni, the local bourse’s chief executive, said “The introduction of bond notes in 2016 seems to have the absence of more innovative financial securities partly coincided with the decrease in foreign investor participa- explains the current low turnover and few products it of- tion, possibly on fears that the trading currency would not fers compared to regional counterparts. remain as US dollar,” Bgoni said. “In comparison with other exchanges, the ZSE is not In 2015 and 2016, foreign investors were the major behind in terms of the number of equity listings but lags participators contributing 55,8 percent and 51,7 percent behind in terms of the liquidity. While the ZSE has man- respectively. Local investors contributed 44,2 percent in aged to retain a good number of equity issuers, it has not 2015 and 48,3 percent in 2016. diversified into other securities like government bonds, Bgoni noted that there was no trading on the listed exchange traded products and derivatives,” he said. corporate debt securities in 2018 as the issues remained Bgoni said while the volatile macroeconomic envi- The Zimbabwe Stock Exchange is planning to venture into exchange traded funds tightly held and “lack of benchmark yield curves meant ronment in the past few years has led foreign investors and the real estate investment trusts this year. that valuation of the listed paper would be difficult.” to withdraw trades, ZSE is planning to venture into ex- He further indicated that in 2018 major contributors to change traded funds (EFTs) and the real estate investment He said the ETFs gives retail clients funds and retail clients exposure to real liquidity on the bourse were the dually-listed duo of Old trusts (REITS) this year. access to sophisticated fund management estate at lower costs and allows pension Mutual and Pretoria Portland Cement (PPC), which were An ETF is a tradable basket of securities such as at low cost, is liquid and is fairly priced. funds to monetise their property invest- popular with foreign investors. stocks, commodities, or bonds. The REITS on the other hand give pension ments. [email protected] ZSE gains drive CSD securities

Nelson Gahadza Business Reporter

HE market value of securities placed on the Central Securities Depository (CSD) increased by 42,29 per- Tcent to $11,42 billion in May 2019, from $8,02 billion in April driven by gains on the local bourse, latest statistics reveal. Campbell Musiwa, Chengetedzai Depository Company (CDC)’s chief executive, said Zimbabwe Stock Exchange (ZSE) market capitalisation gained 42,38 percent to finish the month at $24,92 billion compared to $17,50 billion as at April 30, 2019. “Dematerialised (demat) securities accounted for 45,8 percent of the ZSE Equities market capitalisation as at May 31, 2019,” he said in market update. Dematerialisation is the process “Demate- of converting physical shares into rialised (demat) electronic format. An investor who securities ac- wants to dematerialise his shares counted for 45,8 needs to open a demat account with percent of the depository participant. ZSE Equities During the month under review, market capi- dematerialization penetration ratio talisation as at across all counters finished at 45 May 31, 2019,” percent. According to the CSD update, Proplastics, Art Holdings and Masimba Holdings are jointly top companies with the highest dematerialisation ratio of 96 percent, followed by First Mutual Properties at 91 percent. Of the top 25, Axia Corporation has the least dematerialisation ratio of 49 percent while Getbucks Financial Hold- ings is at 50 percent. Musiwa said the local bourse’ equities market continued with its upward trajectory with turnover for the month closing at $193,52 million compared to $116,3 million in April. He said CDC processed 910 securities deposits in the month of May bringing the cumulative number of securities deposits processed since going live a few years ago to 82,190. “The cumulative number of accounts on the CSD as at May 31, 2019 increased to 27,427 after 183 new accounts were opened in May. Local investors continue to dominate the CSD accounts that have been opened, accounting for 94 percent of CSD accounts,” he said. CDC recently said it will engage investors who are yet dematerialise their shares and deposit them onto the CSD platform while continuously exploring ways to improve the local capital market in spite of the challenges being experienced in the current economic environment. The online equities trading platform is also working with the ZSE to introduce new products and bring on-board new issuers of securities onto the CSD system. Zimbabwe’s capital market has always been dominated by the equities market since late 1990s and currently there are 60 issuers listed on the official ZSE list. In order to widen the range of investment products available on the market, the ZSE re-established a debt market, which is a financial market on which debt securities with a tenor of one year and above are issued, listed and traded. Such debt instruments include bonds, debentures and notes amongst others. The first debt instrument, Get Bucks Medium Term Note was listed on the ZSE on 26 April 2017. [email protected] The Financial Gazette June 20-26 2019 | Page 13 Companies & Markets SeedCo pins hopes on maize dryer John Kachembere in Zimbabwe,” he said, adding that the perienced steady sales outturn in the Democratic Republic News Editor group’s seed processing plants were gener- of Congo compared to prior year,” Nzwere said. ally in good working condition across the “In Mozambique, a sizeable tonnage was sold in part- EEDCO Limited (SeedCo) says it is pinning hopes continent. nership with Tobacco Companies while an in-country on a new US$10 million artificial maize dryer to help SeedCo, which registered a 323 percent market development was launched in the period under Sreduce post-harvest losses. increase in profit after tax to $91 million in review.” Morgan Nzwere, the listed seed producer’s chief execu- the year to March 2019, said it has resolved Meanwhile, the group’s revenue for the period under tive, described the new plant – to be unveiled in the next bottlenecks it was experiencing in Nigeria. review surged 16 percent to $73,4 million compared to eight months – as “a game changer” and will anchor the “We recorded a break-even perfor- $63,4 million achieved in the same period last year mainly group’s growth in the near future mance for the first time and the Nigerian due to upward price adjustments necessitated by the infla- “The artificial maize seed drier to be commissioned in business unit is being positioned for pos- tionary environment prevailing in the country. February 2020 is expected to reduce seed post-maturity itive contribution in the future,” Nzwere SeedCo’s gross margin shed three percentage points losses and expedite processed seed market readiness,” he said. due to the increase in the seed production costs, while said. In Ghana the company successfully overheads at $18,7 million were seven percent higher than This comes as the Food and Agriculture Organisation registered three maize varieties in Ghana in prior year despite huge inflationary pressures due to cost estimates that 30 percent of food produced for human con- the last 12 months and is closely monitor- reduction measures across the value chain. sumption is lost or wasted along the supply chain every ing rice trials. SeedCo’s market develop- Nzwere noted that Zimbabwe’s currency devaluation year, with most losses – averaging 40 percent – occurring ment is continuing in rest of Francophone had a knock on effect on the group’s property, plant and in Africa. West Africa equipment as well as on trade and other receivables. Nzwere said this has forced one of Africa’s largest seed “In Angola we saw sustained demand “The $3,9 million decrease in property, plant and producer to turn to technology to eliminate the losses. coming through and we launched in-coun- equipment resulted from the local currency devaluation. “Cob harvesting and seed drying technology will be try market development while watching This was partly offset by the subsequent revaluation of deployed to key markets following success of the pilot space in terms of SBU status. We also ex- Morgan Nzwere fixed assets,” said Nzwere. [email protected] ZECO banks on NRZ revival

Omega Ukama Business Reporter

ECO Holdings (ZECO), Zimbabwe’s only listed engineering firm, says it is hopeful that the Zrevamping of the country's railways will help bring it out of the woods. The group’s flagship subsidiary Delward relies on infrastructure projects, and the group has attributed most of its troubles to the lack of major projects in Zim- babwe due to the country’s persistent economic woes. Phillip Chiyangwa, ZECO’s chairman, said due to subdued economic environment and the unpredictable environment the group did not undertake any major projects in the year to December 31, 2018. “We hope the long-awaited revamping of the country’s railways will happen and that will impact positively Delward’s performance,” he said. “The group envisages entering into positive partnership arrangements within the country and the region as revamping of the country's railways take place with a positive spill-over to the group. Positive linkages with foreign players look more realistic this year.” In February last year, President Emmerson Mnan- gagwa officially took delivery of 34 coaches, 200 wag- ons and 13 locomotives as part of “an interim arrangement to stabilise” the southern African country’s state railways company, the National Railways of Zimbabwe (NRZ). Around the same time, NRZ, Transnet and Diaspora Infrastructure Development Group (DIDG) announced that they were finalising a US$400 million deal, which at the time was expected to have been settled by June last year. The deal has, however, stalled with government re- moving the exclusivity clause for the US$400 million deal after the DIDG failed to provide proof of funding for the project within 12 months of the framework agreement. Still, government said it plans to improve the inter- connectivity of NRZ with other countries in the region to improve the parastatal’s market share and revenue. And, with ZECO having reported yet another loss of $1,42 million for the year to December 31, 2018, the company will be hoping that these processes are expedited. During the period under review, the company recorded negative cash flows of $3 870 as well as a negative working capital of $4,5 million. “Management have concluded that the combination of these circumstances represents a material uncertainty that has cast significant doubt upon the company's ability to continue as a going concern and that, therefore, the company may be unable to realise its assets and discharge its liabilities in the normal course of business,” the company said in note accompanying its results. To save the situation, the company said it reduced its salaries and wage bill during the year under review. The Zimbabwe Stock Exchange-listed firm no longer gives management allowances and the company no longer have permanent employees. Meanwhile, ZECO’s shareholders have continued to hold on to the struggling engineering firm’s stock with the counter seeing extremely infrequent trades on the local bourse. [email protected] Page 14 | June 20-26 2019 The Financial Gazette

Zim agric yields lower than regional countries

Tabitha Mutenga cantly declined and is way lower than other regional coun- Featured Editor tries, the 2018/19 Agricultural Sector Survey has revealed. The report noted that several factors such as low skills ZIMBABWE’S crop and livestock production has signifi- and knowledge base of farmers, a weak research, education and farmer training and low levels of mechanization were combining to engender low productivity and low production in agriculture. The Financial Gazette @FingazLive Other factors also include shortage of inputs and equipment, reliance on rain-fed agriculture, limited access to market information and marketing facilities, limited access to finance, limited security of tenure, pest and disease at- tacks including the fall army worm, low capacity to manage post-harvest losses and increased incidence and intensity of climate shocks such as El Nino. The low production has resulted in decreased yield per hectare in terms of food crops compared to other regional countries such as Malawi, Zambia and South Africa. “Yield per hectare which has for a long time averaged less than one metric tonnes has increased from 0,44 tonnes per hectare in 2016 to 1,15 metric tonnes per hectare in 2017,” read part of the report commissioned by The Finan- cial Gazette in partnership with the Zimbabwe Agricultural Society. USD “However, on average, as noted by World Bank, Zim- babwe produced an average national yield of 0,64 metric $20 tonnes per hectare. This is way below regional comparator Hardcopy countries like South Africa, Zambia, Malawi and Kenya Magazine + CD who produced 5,3 tonnes, 2,8 metric tonnes, 1,67 metric Combo tonnes and 1,66 metric tonnes per hectare, respectively,” the survey said. For the 2018/19 season, maize average yields decreased USD by 51 percent to 0,48 tonnes per hectare. The yields range from 0,27 tonnes per hectare in the communal sector to 1,8 $15 tonnes per hectare in the A2 sector. Hardcopy With respect to wheat production, Zimbabwe compares Magazine ONLY well with Malawi and Kenya. However, Zambia performed exceptionally well as well as South Africa with an average yield of 7,2 tonnes and 3,7 tonnes per hectare which is well above Zimbabwe’s 2,2 USD tonnes per hectare. “With respect to soya beans, Zimbabwe compares fa- $7 vourably well with Kenya and outperformed Malawi whose national average yield is 0,87 tonnes per hectare. However, CD ONLY the World Bank noted that both South Africa and Zambia, although they witnessed low production output per hectare by international standards, they still performed better than Zimbabwe.” Turning to the production of apples, Zimbabwe’s yield was nine tonnes per hectare which compared well with Ken- ya’s 9,8 tonnes per hectare. However, Zimbabwe’s yield per hectare was four times lower than South Africa’s yield of 37,8 tonnes per hectare. “This explains why South Africa is competitive when it comes to production of apples therefore explaining the reason why South African apples are displacing Zimbabwean Get your copy apples,” said the survey which was sponsored by CBZ Bank and compiled by the African Economic Development Strat- egies. As for cucumber production, Zimbabwe is the least performer on the production of cucumbers with a national average yield of 1,7 tonnes per hectare which is way below South Africa and Kenya’s output of 15 tonnes and 10 today!!! tonnes per hectare, respectively. [email protected]

Contact the numbersSubscribe below: Now Ronald 0784 929 187 Elizabeth 0715 543 311 Tatenda 0773 327 978

Email: [email protected]

The 2018/19 maize yields decreased by 51 percent to 0,48 tonnes per hectare. The Financial Gazette June 20-26 2019 | Page 15 Companies & Markets Powertel fights Africom merger

Shame Makoshori Postal and Telecommunication Regulatory Under the TSP, 11 State owned firms, six subsidiaries of Companies Editor Authority to provide the same service,” the the Industrial Development Corporation of Zimbabwe and source said. 17 units of the Zimbabwe Mining Development Corpora- OWERTEL says it does not understand the govern- Chasi confirmed receiving the Power- tion will be privatised by 2020. ment’s decision to merge it with two other state-run tel board’s views but said he was unable An additional two state enterprise have been lined up Ptelecoms companies, when it is in a sound financial to comment until he returns from a foreign for liquidation. health. trip, when he “will be able to give full de- Powertel is part of 11 public enterprises that are due to The Zesa Holdings unit was established to specifical- tails”. be merged under the strategy. ly provide information and communication technologies An executive who attended an annual Performance review of seven parastatals identified within the state-run power distribution giant, and to com- general meeting were the issue came un- under the institutional support for State enterprise reform mercialise excess capacity. But under the Transitional Sta- der the spotlight two weeks ago said Chasi and delivery project that is financed through a $3,2 million bilisation Programme (TSP), an ambitious blueprint an- promised to look into the issue after being grant from the African Development Bank is underway. nounced by Finance minister Mthuli Ncube in October, it is advised that his predecessor, Jorum Gumbo The Powertel board’s position was strengthened by the lined up for a merger with Africom and Zarnet. had bought into the idea. firm’s strong financial results for the year ended December However, people familiar with the matter told The Fi- “The board was of the view that with the 31, 2018, which showed the firm recovering from a $3 mil- nancial Gazette this week that the Powertel board told En- right resources and support Powertel can be lion loss during the year ended December 31, 2017 to $263 ergy minister Fortune Chasi that tempering with the com- a good cash cow for the utility and govern- 000 profit in 2018. pany’s operations will have adverse implications. ment. The view also was that the mandate Powertel’s revenue rose by three percent to $25,8 mil- “The board said if Powertel is dissolved, Zesa would the company is serving is still crucial to lion, from $25,1million in 2017. have to establish a new telecoms unit and licence it with the ZESA Holdings,” said the executive. Fortune Chasi [email protected] Economic meltdown delays Finsec listings Nelson Gahadza Business Reporter

INANCIAL Securities Exchange (Finsec) says Zim- babwe’s economic meltdown is hindering new listings on its fixed income board. FThis comes as the southern African country, which is facing NATIONAL UNIVERSITY OF SCIENCE AND TECHNOLOGY its worst economic crisis in a decade, is battling acute dollar shortages, fuel queues, power-cuts, and soaring prices among other things. Applications are invited from suitably qualified and experienced persons for the following post in the Vice-Chancellor’s Office: Garikayi Munema, the Finsec general manager, said the country’s volatile economic environment was making it difficult for investors to plan. DIRECTOR: PHYSICAL PLANNING, WORKS AND ESTATES (1 POST) “We have a pipeline which continues to grow,” he told NUST is entering an exciting phase developing and implementing its ambitious Campus Development Plans and ultimately, the University-City The Financial Gazette, “However, some of them get closer Concept. The Uni-City Concept involves multiple use campuses that seamlessly integrate academic, transport, commercial and residential to listing then something happens, either a policy announcement or new developments in the economy, and they have facilities which benefit the University and the City at large. to go back and plan again.” Munema said the introduction of Applications are invited from suitably qualified and experienced candidates to fill the above position. This is a full-time high level position “The fixed new currency reforms in October last of strategic importance to the University. Reporting to the Pro-Vice Chancellor: Innovation and Business Development, the ideal candidate income board year and February this year also great- must have at least an Honours Degree in Civil/Electrical Engineering, Architecture, Quantity Surveying, Town Planning or Construction is Finsec’s ly impacted on business. Management, plus at least four (4) years relevant working experience at senior management level. Possession of a Masters Degree in the alternative “It is those economic fundamentals above disciplines, as well as registration with relevant professional bodies and possession of a business related qualification would be added trading plat- that continue to shift. There are very advantages. form where enterprising people in the country who bonds are are eager to raise capital,” he said. Key Performance Areas usually traded The fixed income board is Finsec’s with investors alternative trading platform where The successful candidate will be required to carry out the following key responsibilities: getting the bonds are usually traded with investors fixed income getting the fixed income periodically . Management of design development to ensure co-ordination, cost effectiveness and compliance with design briefs, user periodically as as agreed. requirements and regulations; agreed.” To date, Untu Capital, which is a . Advise the Pro-Vice Chancellor on the most appropriate and beneficial strategies to be adopted for both the design team and micro-finance firm, raised its targeted construction of building projects; $5 million after successfully issuing three tranches on Fin- . Draw up and administer the annual departmental budget and oversee the purchase and storage of materials and spares for sec. buildings, infrastructure, construction and maintenance of vehicles; Initially, Untu raised $1 million from the first issue of the . Transport Management and Planning; notes and $2 million from the second tranche. Issuance of . Manage the maintenance programmes of buildings, site infrastructure (electrical, sewage and water reticulation systems as well the third tranche of $2 million closed on June 8, 2018 and as roads), sporting and recreation facilities as well as University grounds; the notes were listed on the fixed income board on June 11, . Oversee preparation and negotiation of contracts, leases, deeds, mortgages, and other real property legal documents on behalf 2018. The three tranches issued had fixed interest of nine of the University and recommend the acquisition and disposition of real estate properties, ensuring adherence to the University’s percent, 9,5 percent and 10 percent while their tenure is campus master plan. 2019, 2020 and 2021 respectively. Also, the Infrastructure Development Bank (IDBZ) CONDITIONS OF SERVICE raised $65 million through a bond which was split into two Medical Aid, Leave and Pension Benefits are offered. The information on salary and other benefits will be made available to the short-listed series. The first was for $15 million, with a coupon rate of candidates. eight percent and tenure of up to December 9, 2019. The second tranche was for $50 million, with the matu- APPLICATION PROCEDURE rity date being December 18, 2019 with a fixed interest of nine percent. All applications will be treated in strictest confidence. Applicants must submit six (6) sets of applications which should include a curriculum According to Munema, Finsec’s thrust is to be an al- vitae (giving full personal particulars of applicant including full name, place and date of birth, qualifications, employment and experience, ternative securities market offering alternative investment present salary, telephone numbers and the names, addresses (including email) and telephone numbers of three contactable referees) and opportunities to more diverse investors. certified copies of certificates addressed to:- “Traditionally, capital markets have been associated with huge transactions with institutional investors, but one The Senior Assistant Registrar (Academic) of our thrust is to de-mystify that and prove that securities Human Resources Department markets is also for the ordinary person in the street,” he said. National University of Science and Technology As a result, Munema, noted, the company is in the pro- P O Box AC 939 cess of developing a growth enterprise capital raise portal Ascot by small to medium enterprises. Bulawayo, ZIMBABWE He indicated that the platform has also been impacted by Tel. No. 263-292-282842/289435/289438/289456 the economic environment which continues to shift. Fax. No. 263-292-289057 “If someone is to come in and raise capital today, he is concerned with which currency am I raising, and by the The closing date for the receipt of the applications is Friday, 5 July 2019. time capital raise is complete, what will be the value. So we are fine tuning the product so that it addresses challenges The National University of Science and Technology is an equal opportunities employer. In the interest of promoting gender parity, female that issuers are facing,” he said. candidates are encouraged to apply. According to Finsec, the product is targeted at entities in need of capital to scale up operations and the innovations are meant to promote financial inclusion, broaden invest- ONLY SHORTLISTED CANDIDATES WILL BE CONTACTED. ment opportunities and promote a culture of savings and investments. [email protected] Page 16 | June 20-26 2019 The Financial Gazette Motoring Mitsubishi Eclipse Cross 2WD Classy crossover competes in congested space

instruments, supplemented by a simple head-up display, are viewed through a fully-adjustable steering wheel that houses Bluetooth and cruise control TOP GEAR with switchgear while the centre dash is Richard Wiley home to a nav-equipped infotainment system with USB, the functionality ITSUBISHI’S slightly odd- of which is spoiled by hard-to-see (in ly-named Eclipse Cross pro- daytime) red touch points that include vides another string in the volume controls. M The standard air con is operated via bow of the South African importer and the chance to caste aside the shadow rotary and push button controls while which the company has been operating the general ambience is enhanced by a under more or less since the “local-as- good quality roof lining and moulded sembly marriage” with MBSA was ter- carpeting and even if some of the trim minated all those years ago. detailing is nothing more than painted Indeed, the updated Pajero Sport plastic, Mitsubishi has done a good job with 8-speed auto and the more re- in masking the presence of harder bits cent Triton bakkie have collectively and pieces. lifted Mitsubishi spirits in RSA, albeit Motive power is provided by a 2.0 that local customers are creatures of four-cylinder petrol motor mated to — near-unbreakable habit such that even you guessed it — a CVT transmission. the most worthy vehicles may not at- Outputs of 110 kW and 198Nm should tract the attention they deserve. tell you that all-out performance is not The Eclipse is perhaps most accu- an Eclipse forte (0-100 in 12.1s/188k- rately described as a compact SUV — Bold frontal styling is being adopted across the Mitsubishi range m/h) but there’s enough pent-up energy a category occupied by virtually every on board to provide for effortless and manufacturer — but given the fact that quiet open road cruising. Indeed, the it’s more like a cross between a hatch- word cruise summarises this model’s back and a full-blooded SUV, I suspect strengths as in this mode, that trans- that the description “Crossover” could mission is not called upon to thwart the just as easily be employed. praiseworthy efforts of the engine. Whatever, this Mitsubishi is dis- When meaningful acceleration is tinctively-styled, utilising the com- required, or even in the process of sim- pany’s rather busy Dynamic Shield ply gaining speed after being baulked, front end which flows into a markedly the engine sounds rather strained and wedge-shaped profile delineated by a the transmission almost feels as though rising shoulder line that forces a com- it’s holding the vehicle back as the revs pression of window depth as viewed rise at a far greater rate than the speed. in profile. That well-defined shoulder This is a common CVT foible and in to all intents then supports large rear no way unique to the Eclipse, but sure- lamps that run up the D-pillar, Vol- ly Japan has a more responsive auto vo-style, with those lamps flanking transmission than the oft-used CVT? a split rear window which is divided The ride could best be described as 80:20 by a body-colour horizontal “measured” by which I mean it offers beam that I guess could be defined as a a good compromise between pliancy spoiler of sorts. and control, albeit that enthusiastic Some might say that this rather cornering generates some body roll, fussy piece of design impinges on rear- the extent of which is almost certain- wards visibility but if you’re forced to ly exaggerated by the relatively high park outside on a dewey night, the op- driving position. posite is true as the lower portion of Again, this tells you the Eclipse offers its best side when it’s not pushed the window remains relatively clear Cabin is comfy and well-equipped and provides a slot for the driver to too hard. Note that the spec includes see who’s conducting the much-prac- a brake-assist system, as well as elec- tised art of tail-gaiting. Further, the tronic stability and traction control. upper glass area is swept by a wiper Wind noise, with the exception of that’s neatly hidden under the rear some flutter around the (folding) wing spoiler and park sensors are provided mirrors, is very well suppressed and front and rear. road roar is muted except on coarse Other niceties include headlamps chippings, while the total absence of with truly brilliant illumination, sup- rattles and squeaks is a bonus. So, plemented by daytime running lights in terms of overall refinement, the and huge foglamps. And take note Eclipse does a fine job when its be- that the lower doors are equipped with ing driven with a measure of restraint sill seals to make sure your clothing which is probably the most common- doesn’t get muddied when getting in ly-employed style for most motorists or out anyway. There’s certainly no confusing the As for thirst, the Mitsubishi needed Eclipse with any of its many competi- just 8.2l/100km out on the open road tors and happy to report, the paintwork and consumed 10.3l/100km in a typi- is smooth and glossy and all panel cal urban environment. gaps are acceptably tight and even I also noted that the steering was which telegraphs that lots of care has endowed with just the right level of been taken in the assembly process resistance and felt linear from lock to which takes place in Thailand. Dare I lock, while the powerful brakes were say it, but this mid-range model actu- beyond reproach in all conditions. ally looks quite premium in the darker The test unit featured front wheel colours which show off the afore-men- drive but an AWD version is available tioned paint gloss to even better effect. for those who feel compelled to repli- Polished alloys add to the pleasing vi- cate Camel Trophy conditions. sual effect and are home to 225/55R18 Rising belt line and unusual split rear window is evident here As a complete package, the Eclipse rubber. makes a very strong case for itself in So far, so good but what about terms of its excellent equipment levels the interior? The overall impression this unit were showing early signs of 376/1159l is just about competitive for down the back which should keep which include seven airbags, smart ap- is good even if closer observation re- stretch or sag. the class. One detail hugely impressed phone users happy. pearance and good comfort levels. veals more hard surfaces than meets The 60:40 split rear seat with fold- me. The rear seat cushion employs re- Elsewhere, there’s soft-touch sur- I have reservations about high-alti- the casual eye. Well-bolstered and ing armrest offers decent space for cesses for the seat belt clasps so when facing to be enjoyed on the upper tude performance as the normally as- neatly-panelled front seats, with par- two adults, albeit the sloping roof line the backrest is folded down, those dash and front door cappings, odd- pirated engine is retrained by the CVT tial electric adjustment for the driver, creates a mildly claustrophobic effect. clasps don’t dig into the backrest and ments space and cup-holders are om- transmission but as long as you prefer feature leather facings which in the Luggage space is slightly compro- make permanent depressions in the ni-present, and the instrument cluster cruising to racing around, the Eclipse case of the driver’s seat cushion of mised by the presence of a full-size leather. is simply-marked and endowed with should prove to be a most pleasing spare but the seat up/down volume of There’s also a separate power point lovely, white lighting at night. Those companion. The Financial Gazette June 20-26 2019 | Page 17 Column Designing a sustainable pay structure

N EQUITABLE demand. A skill that is in demand remuneration today may be in abundant Astructure is a supply two years down the line. key component of any Instead, offer a discretionary business. A pay structure retention allowance that is not puts people in grades. guaranteed. It can be withdrawn Each grade will have a if the incumbent's performance minimum, midpoint and deteriorates below a certain level maximum salary. The and should fall away if the skills minimum salary reflects supply situation changes. what the business is willing HR Perspective Remuneration benefits to pay for any position at Pay practices have the biggest with entry into that grade. The impact on the profitability and Memory Nguwi midpoint is a premium sustainability of any business. reserved for above-average For this reason alone, companies performers. It is normally a cannot afford to just copy what reflection of your target market position (25th others are doing without linking the changes to percentile, median, 75th percentile, etc.). their business circumstances. We propose that The maximum salary, which in normal companies in Zimbabwe relook at the benefits cases no employee should earn, should be currently being offered in the country and see carefully watched. If an employee is being paid if these are still relevant and sustainable in at the top of their salary range as a reflection the current environment. One of the notable of their contribution they are probably due things employers need to take note of is that for promotion. So what should you get from employees would never say no to the benefits your human resources manager, maybe every offered to them as long as they benefit. quarter? Request for a compa-ratio report that Company vehicle ― This is one of the shows how far individuals are progressing most popular benefits in the country where within their pay ranges. The ideal compa-ratio the employer gives fully expensed company range is 80 percent to 120 percent. Anyone vehicles to eligible employees. One important being paid below the 80 percent mark is being point to note with this benefit is that regardless underpaid and anyone paid above 120 percent of the type of vehicle and fuel you give under is overpaid. Check that your top and consistent this benefit, the performance of the company performers are being paid between 100 percent will not change simply because you are to 120 percent compa- ratio. This is the starting giving the top-of-the-range vehicles to your point although other more technical analyses employees. The reason why employers have can be done depending on the technical know- fallen for this benefit is a competitive necessity; how of your HR advisor. because other companies are giving it and if Starting salaries for new employees ― we do not have this benefit we will lose staff. It Remember that giving someone a salary is is very true that in some instances if you do not taking a risk as this new person may or may offer fully expensed company vehicles your not deliver. If you start the new employee close staff will go where these are offered. The most to the mid-point (market premium) and they worrying practice regarding this benefit is that fail to deliver it means you are losing value. Zimbabweans love cars, very expensive ones It is always recommended to start all new for that matter. In some instances, companies employees at the minimum of their grade. If that are heavily undercapitalised still go ahead the new employee demands more, you need to purchase top-of-the- range vehicles. Besides to say to them I will offer you the minimum the cash outflow arising from the purchase of of e.g. $2 000 and will add an extra $1 000 to these vehicles, their running costs for most take you to the midpoint after probation if they companies run into thousands of dollars, if happen to be a good performer. The other way not millions. The key question is, “Is it still to deal with this is to say I will offer you $2 000 necessary to give fully expensed company as guaranteed pay and the extra $1 000 will vehicles or should you go the total cost route fall away if I discover that your value is not and reduce your costs significantly to give your at a market premium. This should normally business breathing space?” If you still want to happen after the probation review. go the fully expensed company vehicle route, Performance related pay ― If your maybe you need to consider cheaper vehicle organisation pays or decides to pay a models. This must be supported by a strict performance-related salary you must check if company vehicle administration policy to the system has been designed properly. The curb abuse, which tends to increase the cost of best systems are those that are self-funding. running the vehicles. Relook this benefit and You only share out of the extra value that save money without losing your best talent. has been created after taking care of the Medical aid ― Most companies provide shareholders. You must be careful that you are medical cover for their employees, spouse not rewarding people for what you are already and an average of three children. This is a paying them to do. In the market, most systems very good practice but it needs to be managed we are seeing are poorly designed. properly to reduce costs. It is prudent at this Benefits – Look at each benefit and see stage to share the cost of medical aid cover how it is supporting your business. You may with the employee (50/50). While you are be aware that most companies give benefits restructuring this benefit, you must make sure not because they make people perform better you allow the employee the choice to decide but because other companies are offering the who should be on their medical aid scheme. same benefits. To stop their employees from As an example; if the employee is not married leaving, they copy what their competitors but has a mother and brothers to make up are offering. Benefits such as loans (housing, for the four dependents, can they include car and personal) should first be accessed by them on the company medical aid scheme? your top performers. In practice, most policy The answer is why not? Why should they be documents use the length of service for discriminated against on the basis that they accessing such benefits. It is a bad policy that do not have children? The best way to handle offers a benefit based on time served instead of this is to say “the scheme covers the employee the value an employee brings to the business. and three dependents of the employee's choice Put most of the benefits into the total cost to and contributions will be 50 percent employee avoid incurring unforeseen and unbudgeted and 50 percent employer”. Several companies staff costs associated with such practices. are incurring huge bills related to medical Higher salaries-higher value ― Once aid because of the way their schemes are you give an employee a higher salary it does structured. Review your medical aid scheme not follow that they will consistently deliver with the view to make it more equitable and higher value to the business due to several sustainable. factors. Tying your business in a high-cost Education for children ― Most structure without corresponding value being companies that offer this benefit are very generated is not good business practice. generous. They often go to the extent of Instead, in the current environment, opt for paying university tuition for senior executives’ once-off payments that do not add to your beneficiaries. How sustainable is such a practice fixed cost should you decide to award any in the current environment? Restructure this form of increase. benefit to take into consideration the current Retention allowance ― This should only realities and address equity issues in the be given when it is really necessary. Again, process. This is one of the most inequitably please do not give this as a fixed component of distributed benefits in most companies as it is the salary. Remember skills are not always in To Page C9 June 20-26 2019 | Page 18 The Financial Gazette Column Monetary policy: Foreign exchange gains, losses

HE 2019 Monetary Policy and its trading, that is, from income owing to a variation in the the variation in the rate of exchange. It is important to accompanying legislation abandoned of a revenue nature. Revenue rate of exchange of currency note that, whilst foreign exchange losses of a revenue Tthe 1:1 parity rate of exchange nature exchange gains are between Zimbabwe and any nature are deductible, capital nature foreign exchange between the bond note and the United those which arise from the other country, the amount losses are capitalised. States dollar. Real Time Gross Settlement sale of goods or services in actually paid in Zimbabwean The new monetary laws led to both conversion (RTGS) system balances expressed in the the course of a taxpayer’s currency differs from the and translation of assets and liabilities. Conversion United States dollar immediately before the trade or on working capital amount of the liability that and translation of assets and liabilities are intricately effective date, February 22, 2019 were taken items such as debtors, had been incurred prior to interwoven, yet distinct concepts. The conversion of to be opening balances in RTGS dollars at settlement of trade creditors, the variation in the rate of an asset is when the asset is actually changed from par with the United States dollar. At the on bank deposits used in exchange — (i) the amount one currency to another. The asset itself actually same time, a new currency, the RTGS dollar the day-to-day business to be deducted shall be the changes in that it actually changes in form. A was introduced. In addition, every amount activities of the taxpayer or Tax Matters said amount actually paid in conversion mimics the transaction that happens when expressed in United States dollars (USD) in on inventory (stock). If the with Zimbabwean currency (ii) if one exchanges currency for another in a bureau de any piece of legislation was deemed to be in receipts and accruals occur in Marvellous Tapera the incurring of the liability change. RTGS on a rate of 1:1. And the conversion different years of assessment, and the payment therefor With translation of assets, on the other hand, the and translation of USD balances to RTGS effect shall be given to the increase or occur in different years of assessment, effect asset remains unchanged and it is only the basis of has created foreign exchange gains and reduction in the gross income in the year shall be given to the increase or reduction measurement that changes. For example, United losses which have tax implications for of assessment in which the amount was in the amount in the year of assessment in States dollars kept in a safe can be translated to taxpayers as more fully explained in this received. The foreign exchange gains taxed which the amount was paid.” another currency for the purposes of reporting. This article. will be on translation of assets and not on The amount to be deducted is the amount does not, in essence, change the value of the United Law and interpretation conversion as conversion of assets is a actually paid in Zimbabwean currency to States dollars kept in the safe as they remain the same The Income Tax Act brings into tax, transaction of a capital nature. Furthermore, the extent that it differs from the amount of in terms of their nature. In other words, the dollar foreign exchange gains realised from the Income Tax Act provides that: “When, the liability that had been incurred prior to bill itself remains the same, and does not change into a bill of another currency as with a conversion. Conversion does not create taxable profits, whilst translation does. Conversion does not give rise to trading activity and therefore should be presumed to be of a capital nature. On the other hand translation results from variation in exchange rate, which is a consequence of trading activity. The government, through SI32 of 2019, introduced a new currency now known as the RTGS dollar. SI33 of 2019 further provides guidelines for the conversion of balances from the United States dollar to the RTGS$. To that end, companies are required to convert their US dollar valued assets and liabilities to RTGS dollars. The rate of conversion however, depends on when the assets were held by the company and at what point the liabilities were incurred. The provisions entail that the conversion of the monetary values of assets and liabilities denominated in “The provisions entail US dollars to that the conversion of RTGS dollars the monetary values will be done at a of assets and liabilities conversion rate of 1:1 with the denominated in US dollars United States to RTGS dollars will be dollars for assets done at a conversion rate and liabilities held of 1:1 with the United before February States dollars for assets 22, 2019. This and liabilities held before in general means February 22, 2019. This in that there are no general means that there foreign exchange are no foreign exchange gains or losses gains or losses to be to be realised by the company if realised by the company the conversion if the conversion of the of the assets and assets and liabilities is to liabilities is to be be done at a rate of 1:1”. done at a rate of 1:1. There are exceptions to the 1:1 exchange rule namely (a) funds held in foreign currency designated accounts, otherwise known as “Nostro FCA accounts”, which shall continue to be designated in such foreign currencies; and (b) foreign loans and obligations denominated in any foreign currency, which shall continue to be payable in such foreign currency. In conclusion, the realisation of gains or losses depends on when the assets or liabilities were held by the company. If the assets and liabilities that were held before February 22, 2019 valued and expressed in US dollars were to be converted to RTGS dollars, the rate of conversion would be at 1:1. Such conversion if done in excess of 1:1 USD to the RTGS will nevertheless remain capital in nature. For assets and liabilities valued and expressed in US dollars held after February 22, 2019, contemplated for translation by the company, then the translation rate would be at a rate in excess of 1:1 with the US dollar. These will create taxable or deductible foreign exchange gain or loss, if they arise from working capital items and the settlement is done prior to year- end and non-taxable or non-deductible unrealised foreign exchange gain or loss, respectively if the assets and liabilities are still held at year-end. The same applies to amounts in Nostro accounts or short term denominated foreign currency loans. For long term loans and property, plant and equipment whether realised or unrealised the foreign exchange gain or loss does not give rise to taxable income or assessed loss. Meanwhile Matrix Tax School will be hosting its Cross Border Taxes Seminar on July 17, 2019. l Tapera is the founder of Tax Matrix (Pvt) Ltd and CEO of Matrix Tax School (Pvt) Ltd. He writes in his personal capacity. The Financial Gazette June 20-26 2019 | Page 19 Column The CEO’s new job description HE Korn Ferry Leadership Institute published sound well as industrial organisations, including trade and relationship management. research by Russell Pearlman that clearly re-defined unions. Most of the time these stakeholders lForging a supportive relationship with the Tthe age-old job of the CEO. Up to the mid-1990s the have conflicting demands on the CEO and the board of directors. top gun in the business organisation was called managing organisation. The acronym CEO now means “Chief director or general manager. The latter implied that the lInitiating and directing transformation ― Empowerment/Engagement Officer”, which incumbent was not a member of the board of directors while in processes, markets, business strategy and puts emphasis on engaging the new breed of the former was the first among equals as a director who employee composition. knowledge workers and giving them ownership manages the business. Sometimes they would take on the The modern CEO must learn and practise of their job responsibilities. role of chairman of the board as well, which rendered them new skills to meet an array of new demands, CEOs of the future should see themselves overly powerful. In the wrong hands such concentration of including: as ambassadors and politicians who drive power would lead to lapses in corporate governance such lTo inspire higher performance than to performance by inspiring others. Underpinning as conflict of interest and unethical conduct. Executives Only Corner dictate or demand it. all the above must be the strong leadership of Jack Welch, the legendary CEO of General Electric with lBuilding the talent bench to improve the the CEO in corporate governance, transparency, for several decades wrote that “Being CEO is as good as Shepherd Shonhiwa organisation’s short and long term performance. accountability and ethical stewardship of the it gets! You get paid a lot but the real payoff is in the fun”. lHiring or promoting the right senior organisation. For him and his contemporaries fun included lots of wine has generated new stakeholders who engender management to save on costs of blunders. “CEOs, like coaches, have to be motivators, and whisky, private jets and lots of golfing hours. Key new expectations on the CEO, thereby re- lAvoiding the obsession for short-term responsible for transforming individual self- stakeholders to worry about were the shareholders and defining their responsibilities: earnings targets in favour of long range. interest to shared interest” ― Gary Burnison. customers only, lThe spectrum of key stakeholders lThought leadership in research and Coaches don’t win games, players do. Players “The acronym CEO now who were not has enlarged to include consumers, development to advance technology. don’t lose games, coaches do! means “Chief Empowerment/ activists as those environmentalists, surrounding communities, lMaking employees feel engaged in their l Shonhiwa is a chartered director (SA) Engagement Officer”, which of today. regulators, legislators, local and international work and its environment. and has authored books on leadership. He puts emphasis on engaging The CEO investors, regional and international bodies as lTaking leading role in customer satisfaction writes in his personal capacity. the new breed of knowledge tenure of office was 15 years, with workers and giving them an average of 10 ownership of their job years. Recently, responsibilities. CEOs of the the CEO tenure future should see themselves as in industrialised ambassadors and politicians economies has who drive performance by dropped to a inspiring others.” maximum of eight years. However, the winds of change have blown across the terrain and being CEO is no longer as fun due to pressures from several fronts. Financial pressures: Business organisations have been transformed by new demands, which impact the CEO’s position: lExpectation to deliver consecutively better financial performance every year. In capital intensive investments like mining, results are published quarterly. lFear of being branded a failure, which attaches a long- term stigma to the incumbent. lHostile competitive pressures in the market, which undercut traditionally strong margins. lImported inflationary pressures as African economies are net importers of goods. lUnder these circumstances, 40 percent of CEO departures are attributed to their performance. Leadership pressures: The new business environment Designing a sustainable pay structure

From Page C7 dependent on the employee having children. Why should that be the case when the number of children an employee has is not a business driver at all? This benefit must be level- based instead of basing it on the number of children that an employee has. DStv subscription ― This benefit has no place in the current environment. Why should a company pay DStv subscription for a senior employee when they can afford it on their salary. Other benefits ― There are so many other benefits that companies should never provide considering the current economic realities. Some of these benefits include holiday allowances, generators, housing security, social club membership, and subsidised lunch (unless the company is located where it is not possible for people to get their lunch), internet connection, etc. The list goes on and on. Other cash allowances ― There are several strange allowances that some companies are giving to their employees. Some of these are historical and some are a result of lack of direction. Some of the strange ones include; danger allowance, representation, retention, uniform, etc. Most cash allowances range from 30 percent to 60 percent of basic pay. The biggest danger with some of these benefits is that they are never accounted for as staff costs. You normally find them under administration costs. Many companies have no idea what their full staff costs are because they have allowed these to be accounted for under a different name. We see an opportunity for companies to save thousands, if not millions of dollars by restructuring their benefits structures to reflect the current realities in the economy. This will help companies not only save costs but allow them to be profitable. For most companies, the restructuring of the benefits will mean significant net savings per year, which may be reinvested into the business. l Nguwi is an occupational psychologist and managing consultant with Industrial Psychology Consultants. He writes in his personal capacity. Page20 | June 20-26 2019 The Financial Gazette Column Going to court should be last resort

Y EXPERIENCE in dealing with act in suits, rush to court for a stage known as a pre- On being advised about the shortcomings of their the public has taught me one without first exploring a trial conference. Here, the cases, some parties, without hesitation agree to settle, Mlesson, and that is not to rush to settlement process. parties appear before a judge rather than wait to be embarrassed in court. A party court with every matter that you receive Often, out of court or magistrate in chambers and who, out of unreasonableness, malice or mendacity, instructions on. Unfortunately, many actions are instituted when a formal conciliation is done. refuses to settle can be penalised at the end of the litigants believe that battling it out in the point of disagreement The judicial officer who trial ( that is if he loses) with an order of costs at a court is the absolute remedy for their legal is a trivial one, or one that plays the role of conciliator punitive scale. problems. no reasonable person can and not that of a “judge”, will A legal practitioner who acts improperly and fails While this may be true in some instances, deny. try to reason with the litigants to advise a client to abandon frivolous litigation can history and practice prove clearly that the While it might not and coax them to agree on all or also be ordered to pay costs of the winning party tendency to resort to court battles at the be possible to get two some of the issues in dispute. from his own pocket. slightest provocation is not only dangerous competing sides to agree on Those familiar with procedure It’s a sign of unprofessional conduct for a lawyer but can be a grave miscalculation. all aspects of the dispute, it will agree that many matters to be ordered to pay these kind of costs and the Law It is not always that court actions bring is possible, where serious Legal Matters have been settled at this stage Society of Zimbabwe usually punishes such lawyers the desired results because depending on the efforts are made, to get with without the need to go through with fines or suspension from practice. nature of the dispute and the attitude of the admissions on material VOTE MUZA rigorous litigation. There are three circumstances in which a party presiding judge, many a litigant has left the aspects so as to reduce the One advantage of the pre- may settle. These include a situation where one will court rooms frowning rather than smiling. areas of dispute. trial conference is that parties are for the be denying the obvious fact and is forced to admit Admittedly, litigation is invariably a A fact worth noting is that even court first time able to meet before a neutral and where parties strongly feel that their cases are result of people having failed to agree, but procedures provide for a settlement process person who is able to frankly and objectively strong on merits but still decide to settle on a without- practice has also proved the undeniable fact so as to avoid unwarranted trials. Both assess the weaknesses and strengths of their prejudice basis or without admitting any liability by that some lawyers, or litigants who self- Magistrates and High Court rules provide position, and highlight these to the litigants. way of bringing the matter to finality. The latter form of settlement is common in compromise situations where either one, both or all litigants make sacrifices in an endeavour to avoid prolonged litigation. Settlement is also possible prior to commencement of litigation. There are obvious advantages that come with an out-of-court settlement. Parties are able to escape payment of legal costs, some of which might be at a punitive scale in the event of losing the eventual trial. Payment of huge legal fees is also avoided. Further, time, which is important to lawyers and judges, is saved, and priority is shifted to more pressing and deserving matters. While courts are there to be used by those seriously in search of justice, they have shown no hesitation in frowning at those who abuse the legal process. This is evidenced by some rich litigants who approached the court and left the doors of the court room indigent and destitute. Achieving settlement is easy in all the other areas except matrimonial disputes. In divorces, maintenance, custody and access claims, parties have, in my experience, shown a lot of rigidity for various reasons. One reason is that at every separation of partners in marriage or cohabitation, there is a lot of bitterness, resulting in one or all the parties being vindictive. Rather than make concessions and agree to move on with their lives, estranged partners are ever ready to fight over such trivial issues as to who gets the dishes and spoons. Even where lawyers attempt to assist the adversaries to settle, the high degrees of anger result in some of the parties misrepresenting, exaggerating or doing many baffling things just to get as much as possible from the other party. Going to court has never been easy and many individuals have come out of such battles poorer, bruised in their ego and battered in their reputation. Litigation should therefore only be resorted to where it is really necessary or where it is a last resort. Even during the process of litigation, parties must be pro-settlement and avoid unreasonable demands or claims to facilitate easy and affordable resolution of the dispute. l Muza, a Harare-based legal practitioner, writes in his personal capacity. [email protected] West Africa inches close to a single currency

EST African finance ministers and central bank governors agreed on technical issues Wsurrounding the creation of a single currency for the Economic Community of West African States next year. "At a ministerial level, we’ve established a roadmap" for the establishment of a new currency, Ivory Coast Finance Minister Adama Kone told reporters Tuesday after the meeting in Abidjan. The 15-member regional organisation has set a target to have a single currency by 2020, following a gradual approach that allows countries to join the monetary union when they meet the convergence criteria. Ivory Coast and several other French-speaking Ecowas members already share the CFA franc and have done since colonial times, while members including Nigeria and Ghana have their own currencies. The finance ministers and central bank governors spent two days discussing technical issues including the exchange-rate regime and monetary policy framework before adopting a draft report that will be reviewed by regional heads of state at the end of the month. - Fin24 The Financial Gazette June 20-26 2019 | Page S1 COBRA SECURITY Congratulatory feature

Cobra Security wins Company of the Year award

OBRA Security Services, one of Zim- has remained resolute in ensuring that the babwe’s biggest security companies, company’s service remains tailored to cus- Cwas recently conferred with a pres- tomer needs. Currently, the company has im- tigious Company of the Year Award (2018- plemented an ISO 9001:2015 based Quality 2019) by the Zimbabwe Business Awards Management System and is enroute to Certi- Council. fication through the Standards Association of The Cobra Security Services, award rec- Zimbabwe. It is Cobra Security’s aim to be ognised Cobra’s excellence and outstanding impactful at both national and international service ahead of other companies in the Pri- level. vate Security Industry. The event was held at At the same event, based on his visionary a glamorous event held at the Crown Plaza leadership, Dr Brian Misheck Zvarivadza, the Hotel in Harare. company’s chief executive who founded it in The company’s business excellence repu- 1990, also won the Businessman of the Year tation has been increasing steadily, as it also Award, Security Services Industry at national scooped two awards in 2017 at the Zimbabwe level for 2019, shortly before being conferred Private Security Industry Awards; one as win- with an Honorary Doctorate of Humane Let- ner for Outstanding Contribution to the Private ters Degree by the International Institute of Security Industry Award and another as first Philanthropy in 2019. runner up for Best Cash in Transit Company. “The road to where we are today has not Cobra’s services include Manned Security been easy,” Dr Zvarivadza said, “These rec- Services, Cash and Valuables in Transit pro- ognitions have renewed our vigour to con- tection, Guards Training and Deployment, Pri- tinue on the path to business excellence. We vate Investigations, VIP Protection and Dog thank our customers and stakeholders for the Training. continued support, and as such, promise them The Security Company’s Top Management Brian Misheck Zvarivadza, Businessman of the Year nothing but the best service!” Page S2 | June 20-26 2019 COBRA SECURITY SERVICES CONGRATULATORY SPECIAL FEATURE The Financial Gazette

Brian Misheck Zvarivadza (centre) being congratulated by the chairman of the Zimbabwe Business Awards, Enrico Sibanda (left). Zim Business Awards: Celebrating excellence

HE prestigious Zimbabwe Busi- •To create a vibrant network of mem- ness Awards are the hallmark and berships, partnerships, associations and Tpremiere business awards in the affiliations so as to expand our strategic Republic of Zimbabwe, a national hon- business development alliances and sup- our, a celebration of excellence, inspi- port networks. ration and success by Zimbabweans for •To acknowledge, celebrate, honour Zimbabweans within the Zimbabwean and award business people and business business community that symbolise and entities with business awards and various celebrate Zimbabwean Business People. honours. The awards are hosted by the board •To facilitate participation in key of the Zimbabwe Business Awards who global events where business people and are publishers of the Zimbabwe Business business investors interact and engage Magazine and the Zimbabwe Business one another. Directory. •To host and manage the Zimbabwe The awards exemplify the best in business awards annually. business leadership, and they optimise •Raising and acquisition of funds from the core values of a successful leader in any legitimate sources and disbursement strength, innovation and ingenuity, which of these towards the furtherance of its ob- are values important in driving any busi- jectives. ness in a global economy. •Developing and strengthening part- The council’s mandate and vision is to nerships with Governments, Civil Soci- appreciate people and business. ety, Private Sector, Business partners and CONGRATULATIONS Purpose of establishment & func- other Global Business Support Organisa- tionality of the Zimbabwe Business tions on common areas of interest. Awards •To publish, print and distribute the •To foster and nurture businesses in Zimbabwe Business Magazine and the Zimbabwe, Africa and beyond. Zimbabwe Business Awards Magazine. FAST MILLERS The Directors, Management and Staff of FAST MILLERS would like to congratulate COBRA SECURITY COMPANY and CEO, Mr. Zvarivadza

The team at Spares Inn would like to extend a special congratulatory message to Mr. Brian Misheck Zvarivadza the CEO and Cobra Security Staﬀ for scooping National Business and leadership Award, Company of the year and the National Businessman of the Year Award.

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Genuine spares for special brands. CONGRATULATIONS! AMHLOPHE! 0772 516 519 The Financial Gazette June 20-26 2019 | Page S3

Advocate Honour Mkushi wins Megafest award

Advocate Honour P Mkushi won the 2019 Outstand- ing Advocate and Legal Leader of the Year award.

ACK in 1964 my dad was carrying me at the back of his bicycle and he said, Son I want you to do Bwell at school and become a lawyer. I am tired of paying heavy bills to the lawyers in Fort Victoria. You must have a degree and become the best lawyer in Southern Rhodesia. Ok dad I will try, was my reply. At secondary school my friends called me Stryver ― the lawyer in “Tale of Two Cities” and I was leader of the Debating Society and at university they called me ‘Petrochelli’, the lawyer in the popular TV series “Pet- rochelli”. After obtaining my honours degree in law at the Uni- versity College of Rhodesia in 1970, I was unable to join a law firm because of the rotten politics of the time where all the law firms were white. After seven months as a finance officer in government, Winterton Holmes & Hill opened one window for a black articled clerk and after stiff competition between us black law graduates, I won the position of the first black trainee lawyer and there met Sydney Sawyer, a white liberal who took me up as his junior. This eventually led to the formation of Sawyer & Mkushi in 1975. Sydney passed away in 1981 and I have never looked back. I love the practice of law; it’s excellent for mental discipline. You must have knowledge of the law, you must be conversant with the facts and you must apply it in a focused way and remain relevant in order to cap- ture your audience. It is important to listen and to control your emotions. Argue your case boldly with conviction and respect. Be happy to win 90 percent of your cases. The law practice is never boring because no two cases are identical, so be prepared to learn all the time. To aspiring lawyers my advice is you are not learned until you learn. Be patient, be thorough, don’t cut cor- ners and never forget that your client’s satisfaction is your own contentment. Fight for your client in a clean manner and the judges will decide where justice lies. When Megafest told me I was nominated for the ac- colade of Outstanding Advocate and Legal Leader of the year 2019, I said by whom and what was the criteria? Has the Law Society cleared this award? After the assurance from the organisers and from my fellow partners that this was an honourable and respectable award I agreed to remain in the ring. I don’t know who nominated me and how I won. I was just delighted and truly honoured to win this prestigious award. Thank you to my clients my fellow professionals for I am sure you had a hand in it. June 20-26 2019 | Page S4 The Financial Gazette The Financial Gazette ADVOCATE HONOUR P MKUSHI MEGAFEST LEADERSHIP AWARDS SPECIAL FEATURE June 20-26 2019 | Page S5 Megafest Leadership Awards Outstanding Public Service Leader of (CBZ Holdings) the Year Gold winner: Bernard Zvamada Outstanding Leader in Medical and (Parliament of Zimbabwe) Health Care of the Year Platinum winner: Fulton U Mangwanya Gold winner: Dr Stanley Ngwaru (Zimbabwe Parks and Wildlife) (Avenues Women Clinic) Platinum winner: Dr Tafadzwa Gutu Outstanding Marketing Leader of the (Premier Services Medical Investments) Year Bronze winner: Dennis Mambure Outstanding Leader in Real Estate (First Capital Bank) and Property Management of the Year Silver winner: Stella Nkomo Gold winner: Wasara Victor Trevor (Zimbabwe International Trade Fair) (Dollar Real Estate) Silver winner: Michael Chiduku Platinum winner: Millin Alexander (National Social Security Authority) (Property Wise Real Estate) Gold winner: Chengetai Madondo (Dicomm McCann) Young and Promising Business Per- Platinum winner: Tapuwa Mandimutsira sonality of the Year (Zimpapers) Silver winner: Lorraine Chindiya Mufambi Outstanding Educational Leader of (Rent a Car) the Year Gold winner: Dondo Platinum winner: Taurayi Mataka (Impala Car Rental) (Trust Academy) Platinum winner: Lynette Tariro Veremu (Grain Millers Association of Outstanding Accounting, Auditing & Investment Leader of the Year Zimbabwe) Gold winner: Lisbon Mhonda Outstanding Public Relations & Cor- (Swift) porate Affairs Leader of the Year Platinum winner: Farai Matanhire Silver winner: Sugar Chagonda (Zimpapers) (Zimbabwe Consolidated Diamond Company ) Outstanding Legal and Corporate Gold winner: Marjorie Fadziso Secretary of the Year MutemererwaSAWYER MKUSHI Platinum winner: Meryl Mahlangu (Seed Co Group) (Green Fuel) Platinum winner: Melody Mbira Harry (TelOne) PROVIDING LEGAL SOLUTIONS Outstanding Advocate and Legal Leader of the Year Outstanding Human Capital Congratulations! Platinum winner: Honour P. Mkushi Development Leader of the Year (Sawyer & Mkushi Legal Practitioners) Silver winner: Cynthia Ncube (Population Services Zimbabwe) Leading the Pack Outstanding Leader in Media of the Silver winner: Martin Kweza Makorokoto! Year (Zimbabwe National Water Authority) Silver winner: Mqhele Tshuma Gold winner: Patrick Mutandwa (Classic 263) (Seed Co Group) The Sawyer & Mkushi Team would like to congratulate Gold winner: Tonderai Katsande TK Platinum winner: Isaac Wisikoti Amhlophe! (ZiFM Stereo) (Brands Africa) Platinum winner: Wisdom Mdzungairi (Newsday) Outstanding Entrepreneur of the Year Silver winner: Georgina Duri Outstanding Leader in Local Govern- (Zanox Men) ment of the Year Gold winner: Dr Solomon T Chikanda Gold winner: Maxwell Kaitano (Vineyard Funeral ) (Chinhoyi Municipality) Platinum winner: Cynthia Bizure Sithole Platinum winner: Engineer Hosiah (Janjam ) Abraham Chisango (City of Harare) Outstanding Thought Leader of the Year Outstanding Leader in Hotel, Tourism Gold winner: Nyasha Nyambuya and Hospitality of the Year (Microhub Financial Services) Silver winner: Douglas Mukucha Platinum winner: Benny Luwisi (Chop Chop Grill House and Coffee (Africa Albida Tourism) Shop) Silver winner: Forbes Zaranyika Outstanding Industrialist of the Year (Air Namibia) Platinum winner: Baldwin Guchu Gold Winner: Crispen Chimumvuri (Simbisa) ADVOCATE HONOUR P MKUSHI (Cresta Oasis) Platinum winner: Tafadzwa Mushangwe Outstanding Business Leader of the (Cresta Hotels) Year Weour would Senior like to congratulate Partner you on your Mrwell deserved H.P award Mkushi as The Gold winner: Michael Monson Megafest Outstanding Advocate & Legal Leader of the 2019. We recognise Outstanding Leader in Engineering of (Monson Funeral Directors) your integrity, business-like and efficient delivery of service. the Year Platinum winner: Collen Mathaga on being awarded Gold winner: Lloyd Kuda Agere (Proton Bakers) (Cascade Consulting Engineers Zimbabwe) Outstanding CEO of the Year the Outstanding Advocate and Legal Leader Platinum winner: Misheck Siyakatshana Bronze winner: Samuel Mukubvu (Zimbabwe Energy Regulatory (Tanaka Ventures) Authority) Silver winner: Tanya Chigombe YZ HOLDINGSby (PVT) LTD (Provenly Safe Wear) Outstanding Banking and Finance Gold winner: Nyasha Matonda leader of the Year (Willdale Limited) Telephone : +263-242- 764364/5 28 Cleveland Avenue Gold winner: Lameck Gweshe Platinum winner: Nyasha Chizu E-mail : [email protected] FESTMilton Park (Lion Finance Zimbabwe) (Procurement Regulatory Authority of Platinum winner: Saul Chin’anga Zimbabwe) Harare AWARDS

11th Floor, Social Security Centre | 77 Parklane P.O Box 3312 | Harare Zimbabwe Tel: +263 242 796068 | 732939 | Fax: +263 242 792246 Email: [email protected] | www.sawyerandmkushi.co.zw Page S6 | June 20-26 2019 ADVOCATE HONOUR P MKUSHI MEGAFEST LEADERSHIP AWARDS SPECIAL FEATURE The Financial Gazette Who is Advocate Mkushi? Honouring DVOCTAE Honour P Mkushi is a stitution. Mkushi was a commissioner, drafting International professional exposure includes great business Christian, a married man and is 72. the new constitution for Zimbabwe in 1999. handling projects for clients like Davy Interna- He grew up in a family trading He was the chairman of the Council of Great tional, Dalgety PLC, BICC Cables Limited and Abusiness environment in Zimbabwe and he is a Zimbabwe University for six years, Zimpapers OSC of UK, Aerospatile, Thomson CSF Coop- minds holder of LLB. (Hons) London Law Degree and board chair for 12 years, 14 years at the Zim- eration, Mecaform and Airbus of France, Cele- is an Advocate of the High Court of Zimbabwe. babwe Mass Media Trust for, 10 years Leyland nia in Italy, Mannesman and Krupp Steel Works EGAFEST Business Awards are held annu- Mkushi has been in private legal practice Zimbabwe Motor Corporation, board chair for in Germany, Vashiotis Enterprises in Cyprus, ally as a way of recognising, developing and since 1971 (48 years). He is the senior partner eight years for the Commercial Union Insur- Unicorn International in Singapore, New York promoting professional business acumen at all of Sawyer & Mkushi Legal Practitioners, Attor- ance Company, he was also a board member Bay Company and Kodak in USA and China M business levels. neys, Notaries and Conveyancers with offices in for Lonrho Zimbabwe Limited — Motor & and Metallurgical Construction Company. These awards were introduced in 2008 as part of Dr. Harare and Kwekwe in Zimbabwe. mining and 17 years as the board chairman for Mkushi has considerable experience as Tafadzwa Matsika’s (CEO of Megafest Holdings) doc- He has extensive experience as a litigation the Standard Chartered Bank Zimbabwe Lim- project legal counsel in fields like acquisitions torate research and have been a common feature ever lawyer in both criminal and civil practice. Now ited. and mergers, establishment modifications and since and are supported through donations and spon- specialising in corporate and commercial law, Currently, Mkushi is the board chairman for winding up of quasi-governmental bodies, con- sorship. securities, property, mining, financial and bank- Windmill Fertilisers Limited, Marsh Insurance version of parastatals to commercial or private Since then several well-known business people, man- ing law. Brokers, Zimbabwe Motor Investments, Nis- enterprises, study and change of statutes and agers and corporates in Zimbabwe have been recipients He also has vast experience in constitutional san Clover Leaf Motors, Central Africa Cables regulations to facilitate required changes. of the Premier and Prestigious Megafest Awards. law which includes attending as part of legal ad- Limited, Aptics ICT (Private) Limited, Auto- He is a member of the International Bar As- The vision is to recognise high standards, service ex- visory team at constitutional conferences held motive Distributor (Private) Limited, Farm & sociation and Commonwealth Lawyers Associ- cellence and development within the Zimbabwean econ- in Geneva in 1976 and at Lancaster House Lon- Trade (Private) Limited, Cheziya Investments ation. omy. These awards are very important to us as they are don in the 1979 to negotiate the independence (Private) Limited and R P Mkushi & Sons (Pri- His interest includes academic clubs, tennis meant to recognise and honour luminaries of the Zim- for Zimbabwe and draft the Independence Con- vate) Limited. and fishing. babwean industry as a whole, for their outstanding contribution, exceptional efforts and achievements in their respective fields. “We believe the awards also encourage healthy competition among the Zimbabwean business people and players with the aim of growth within the Zimbabwean economy. We are also taking this opportunity to acknowledge the services and duties carried out by the organisations and individuals in the industry as a whole.” Founder of the awards, Tafadzwa Matsika told The Financial Gazette in an interview that the awards were built on the culture of celebrating achievements which would in turn foster productivity. “We are here as cheerleaders because in Africa we do not recognise the work that others are doing. We have hosted thousands of business executives in the past years and have become a leader in this space,” said Matsika. Matsika hinted that Megafest would be reaching out to the Zimbabwean business community in the diaspora through regional business awards in countries like South Africa. “We are going regional singing the same chorus. So we will be hunting for Zimbabwean business people beyond our borders,” said Matsika. Awards benefits The Megafest Business Awards are an opportunity to shine and demonstrate that you are an outstanding Zim- babwean business. The Megafest Business Awards connect the nations’ business leaders through its annual ceremony and year- round thought leadership programme to celebrate enterprise excellence. •The award is a great opportunity to raise your profile within the management community, helping to acceler- ate your management career as well as gaining recognition and acknowledgment for your skills. •It’s a great achievement, conferring tremendous prestige on the individual nominated as well as their company. •Taking part also offers a springboard to career progression. •This competition differs from other industry awards as it is designed and judged by the people who matter – the customers. •Creates a unique opportunity to challenge existing stereotypes, understand emerging trends and add value to organisations aiming to commercialise and apply new and innovative concepts. •Crucial in unveiling the perception of the market concerning your organisation. •Disseminating information about your company to various stakeholders and is also a very effective promotional tool. •It is a continuous process that seeks to enhance personal and company image as it moves into the future. •Reassurance and reinforcement to stakeholders that they are dealing with a strong recognised up market company. •Attracts, retains and enhances a productive work- force. Everybody wants to be associated with the best. The broad criterion for selection is as follows: The person should have made a significant contribution to their company and industry as a whole in Zim- babwe. The person should be making a continuous, notewor- thy contribution in the search for management excellence or the person should have been involved in a once- off event which would have brought long-term benefits to the nation and should be held up as an example and inspiration for others to emulate. The vision is to recognise high standards, service excellence and development within the Zimbabwean economy. These awards are very important to us as they are meant to recognise and honour luminaries of the Zim- babwean industry as a whole, for their outstanding contribution, exceptional efforts and achievements in their respective fields. The Financial Gazette CHAMBER OF MINES PRRESIDIUM & CONFERENCE SPECIAL FEATURE June 20-26 2019 | Page S7 Nerwande, CoMZ’s first female president

HE Chamber of Mines of Zimbabwe work. (CoMZ) recently elected Mimosa Mining Her down time is punctuated by travel, family TCompany corporate affairs executive, Eliza- getaways and personal care at the health centre. She beth Nerwande-Chibanda, as its new president, tak- has mentored and coached men and women from ing over from Bindura Nickel Corporation’s Batirai all walks of life at her own time and personal ex- Manhando, who has been president since 2017. pense. Nerwande-Chibanda will be deputised by Colin Her guiding principle is … Opportunity favours Chibafa, the chief finance officer at Unkie Mine, the prepared mind ― plan and pay attention to de- who will be the first vice president. tail. Demand Gwatinetsa, the managing director of Nerwande-Chibanda is married and has one How Mine, a unit of Metallon Corporation, takes child. over as second vice president. Officially opening the Zimbabwe Annual Min- Nerwande is the first female president of the ing Conference organised by the Chamber of Mines CoMZ, after Ellah Muchemwa, a former executive of Zimbabwe, President Emmerson Mnangagwa at RioZim, who acted as president of the chamber. said investments into the mining sector and min- Nerwande has previously served as the cham- ing value chain industries are welcome and safe, ber’s vice-president. She was the executive direc- adding that government remains ready to support tor of the Consumer Council of Zimbabwe (CCZ) the implementation of sustainable growth strategies from 1999 to 2003 and chief executive of Zimba- in the critical industry for the attainment of Vision bwe’s trade promotion body, ZimTrade, from 2004 2030. to 2006. CoMZ first female president Elizabeth Nerwande-Chibanda. “Investments into the mining sector and min- The CoMZ is a private sector voluntary organi- ing value chain industries are welcome and safe in sation established in 1939 by an Act of Parliament, ernment and other stakeholders, and the provision past, and has been instrumental in providing in- Zimbabwe,” said the President. although its origins go back to 1880. The members of a variety of services aimed at promoting health novative solutions in all her various roles. She is “We continue to prioritise the processing and include mining companies, suppliers of machin- and safety, manpower training, environmental pro- a focused, driven individual who thrives in service issuance of exploration licences in order to revamp ery, spare parts, and chemicals, service providers tection, and the support of mining associations. delivery excellence and completion of every task mineral exploration across the country. including banks, insurance companies, consulting Nerwande-Chibanda is the head of corporate she undertakes. “The facilitation for the opening of new and engineers, and various mining related professional affairs at Mimosa Mining Company responsible She holds an Honours degree in Industrial Psy- closed mines, capacity utilisation as well as proj- bodies and individuals. for high level, corporate communication strategies. chology and a BSc degree in social work. She sits ects expansions and local beneficiation are ongo- The mining company members of the CoMZ She served as the first vice-president of the Cham- on a few boards, where she is involved in providing ing, with increased momentum.” produce about 90 percent of Zimbabwe’s total min- ber of Mines of Zimbabwe. leadership direction. He explained that his administration remains eral output. Through her consulting work on leadership She is an entrepreneur with a 15-year-old busi- determined to pursue ongoing reforms to ensure the The activities of the CoMZ are guided by its skills training, she entered the mining industry in ness in personal /corporate image branding, inclu- country is thrust on the path to prosperity and de- constitution and strategic plan. The primary objec- 2009 where she worked with three mining houses sive of a health centre and conference facilities. Her velopment. Critically, President Mnangagwa said tives are to advocate and lobby in order to promote, on strategic forward planning issues. Prior to join- passion is in creating an environment where people the current situation where investors are moved encourage and protect the interests of the mining ing mining industry, she worked in the corporate with potential can participate in self-exploration from office to office “should stop”, as a number of industry in Zimbabwe. In so doing, the activities industry for almost a decade, as executive director with thew aim of re-branding self for success and potential investors have been left frustrated. of the CoMZ are concentrated in the fields of eco- for the Consumer Council Zimbabwe from 1999 to growth. “Let me once again reassure you that my ad- nomic policy, mining sector policy, investment 2003 and also as CEO for ZimTrade from 2004 to Nerwande-Chibanda loves reading, value add- ministration is committed to pursuing the ongoing promotion, labour and industrial relations manage- 2006, where she was subsequently appointed coming through training and giving back to those in reforms so that our country is firmly back on course ment, research on legal matters related to mining, missioner-general for Aichi Japan Expo. need. She currently sits on the compassion board towards prosperity and development,” said Presi- representation of the views of the industry to gov- She has sat on two international boards in the for her church, and always puts God first in all her dent Mnangagwa. June 20-26 2019 | Page S8 The Financial Gazette NEW PRESIDIUM Feature New leadership for CZI

ICHMOND Furnishers managing director In his acceptance speech at the CZI annual his support. I had subtle encouragement from pre- Henry Ruzvidzo was recently elected the general meeting in Harare, Ruzvidzo acknowl- vious presidents. I look forward with trepidation. RConfederation of Zimbabwe Industries edged the need for a collaborative effort in or- It will require wide consultation, and work by all (CZI) president, taking over from immediate past der to contribute towards shaping the country’s of us. I am certain we cannot be bystanders as our president Sifelani Jabangwe. economic environment. He went further to urge fate is written. I, therefore, call on all members to Ruzvidzo served as the CZI Mashonaland members to remain supportive of the organisation. play their part to shape the environment so that chamber vice president before being promoted to “I accept this honour to lead CZI in the next 12 our businesses survive,” he said. CZI vice president. months. I wish to thank the outgoing president for Ruzvidzo will be deputised by Walter Chigwa- CZI president Henry Ruzvidzo.

Vice-president-Walter Chigwada

Vice-president-Joseph Gunda

da, Zimplow managing director and Joseph Gunda, General Beltings general manager. In an interview with The Financial Gazette Ruzvidzo acknowledged that the industry was facing a number of challenges that were affecting competitiveness and capacity utilisation. “Industry is indeed facing a number of challenges that include foreign currency access, low levels of investment, competitiveness issues due to the high cost environment, rapid sustained depreciation of the local currency which makes trading in the RTGs difficult and also affects purchasing capacity of a large section of the market. “Industry will continue to lobby for policies that will address the structural weaknesses in the economy. Industry will participate in efforts to improve the cost of doing business environment,” he said. He added that industries had been resilient and many are facing collapse but required constant financial support. “Industries that are facing collapse have weathered many storms over a number of years and deserve support. The biggest challenges for manufacturing has been the lack of long term reasonably priced financing for modernisation. “Patient capital, which includes foreign currency, is also important and has been unavailable due to a number of factors which include country risk as well as the high cost of doing business,” he said. Edson Padya, Boc Gases managing director, was elected as treasurer. Chambers Manicaland President: Victoria Jakazi (Wattle Company) Vice presidents: Thomas Masese (Africa University); Joseph Mavu (Associated Foods) Mashonaland President: Gertrude Mashonganyika (ZFC) Vice presidents: Roseline Chisveto (Turnall); Eustice Mubvurungwa (Blue Ribbon Foods) Matabeleland President: Shepherd Chawira (Shepco) Vice presidents: Raymond Shonhiwa (BBR); Electra Mafunga (NRZ) Midlands President: Agatha Gandidze (Dendairy) Vice presidents: Rorani Zulu (Lesaffre); Allan Manhan- ga (Sable Chemicals) Industrial Associations chairman: Luckson Gwara, Motor Industry Association of Zimbabwe. The Financial Gazette June 20-26 2019 | Page S9

Simbisa wins Top Companies award

Rwanda now stands out for many good infrastructure, which covers over 95 percent of today for over five years we are among the first things. It has the highest number of women in the country. And of course, Rwanda also con- 20 globally and second in Africa,” Musoni said. politics anywhere in the world. More than half tinues to record impressive economic growth. The envoy called on Zimbabwe to “continue the Members of Parliament in the country’s “The commitment to dealing with corrup- to fight corruption and implement policies that lower house are female. tion is very high and there is zero tolerance improve the ease of doing business” in Zimba- Rwanda also has an impressive technology to corruption and this has led to an average bwe and create a conducive environment for track record. The country is known for the inno- GDP growth of about eight percent for almost investment and economic growth. vative use of technology to deliver essential ser- 15 years. When we started these reforms, the Simbisa has consistently been among the vices like blood. It also has extensive internet World Bank’s Business Report ranked us 149, To Page S10

Rwanda’s Ambassador to Zimbabwe James Musoni at the Top Companies Survey event. AST food chain Simbisa Brands (Simbisa) won the Top Companies Survey 2019 award for best per- Fforming Stock Exchange-listed company. OK Zimbabwe, the country’s largest retailer, was the first runner-up, while pan-African seed company, Seed Co ― which also won the environmental and social responsibility award ― was the second runner-up. The survey, held under the theme “Reality Check ― Adapting to a New Normal’ ― was sponsored by financial services giant Old Mutual Zimbabwe and hosted by The Financial Gazette. Ecobank was capped the best bank while Standard Chartered was the second runner- up. Econet Wireless Zimbabwe’s EcoSure won the life insurance segment top award, with CBZ Life coming second, while Zimnat scooped the short term insurance award. Guest of honour, Rwanda’s Ambassador to Zimbabwe, James Musoni, said the prestigious Top Companies Sur- vey was an important event to interface with key players in Zimbabwe’s economic landscape. He added that the awards were there to promote good corporate practices and provide a platform for networking among the country’s corporate leadership. “It is a very significant event on Zimbabwe’s corporate calendar,” he said. “We are all aware that this event is coming at a time when measures meant to address the country’s economic challenges are being implemented and this event and discussions here will be reinforcing what is happening in the country. “The structural adjustment measures being undertaken by government give optimism that this economy, with your support, should be able to rebound. “Of course we are aware of the challenges emanating from sanctions, we are aware of these, but we want to congratulate you that in the midst all these challenges, you have shown resilience,” Musoni said. Giving background to the Rwanda situation, he said the country experienced a worse scenario than Zimbabwe. “In Rwanda we experienced a much more difficult situation. Some time back in 1994, we had a genocide that claimed one million people within 100 days, left behind an almost failed state, no infrastructure, no skilled people, no resources like in Zimbabwe now, but as a nation we came together, in partnership with our friends and we were able to reorganise ourselves and in 2000 we were able to put our heads together as a country regardless of political differences and were able to come up with a common understanding as a country. “We came up with Vision 2020, a 20-year plan to turn around the country. We had the buy-in of the majority of Rwandans,” he said. Rwanda has emerged as a model for economic development. The country has taken great strides just 25 years since its horrific genocide. Page S10 | June 20-26 2019 2019 TOP COMPANIES SURVEY SPECIAL FEATURE The Financial Gazette Simbisa wins Top Companies award

Pilate Machadu, Modus Media CEO. Kennedy Mandevani, Old Mutual Investment Group’s chairman Simbiso Musa, chairperson of the judging panel. From Page S9 top-performing companies in Zimbabwe over the past two years and a top pick on the local bourse. The company recorded a $16,5 million profit after tax in the half-year ended December 31, 2018, up from $7,9 million recorded in the previous corresponding period, despite the tough trading environment. Its revenue for the period under review increased 44 percent to $143,2 million, with 40 percent of the growth coming from existing stores, while the rest came from 20 new stores opened during the half year. The group’s operating profit was up 82 percent to $27,4 million, while profit attributable to the owners of Simbisa increased 99 percent to $16,2 million. The best disclosure and investor relations award was won by Delta Corporation. People Management RE-Deﬁned Crocodile skin producer Padenga Holdings won the best investor relations award, while the special mention award went to hospitality group, African Sun Limited. Pilate Machadu, Modus Media ― the publishers of The Financial Gazette ― chief executive, added: “The Top Companies Survey promotes good corporate governance, ethical conduct and corporate social responsibility, while providing a platform for networking among industry captains and business leaders”. The survey encourages and promotes full disclosure of information regarding companies’ operations for the benefit of shareholders and the investing pub- Talent wins lic. “This year’s Top Companies Survey is being held games, but against the background of fundamental changes in our economy that have significantly affected the perfor- teamwork and mance of companies. Hence the theme for this year is: “Reality Check ― Adapting to a new normal.” intelligence wins “The year 2018, from which financial results for this year’s evaluation of winners is based, was a par- “Top Company ticularly difficult one. It was characterised by declining incomes, rising inflation, currency uncertainties, 2019 Winner” and foreign currency shortages. We hope and pray that the situation will not result in a toll that will leave some companies in the corporate graveyard before it gets better. “The Financial Gazette, which turned 50 this year, is first and foremost a business, economic and financial newspaper and we believe that one of the important roles being played by the Top Companies Survey is the promotion of the full and comprehensive disclosure of information by companies,” Machadu said. Kennedy Mandevani, Old Mutual Investment Group’s chairman concurred, saying the survey “provides convenient insights into the country’s leading companies’ business operations”. Simbiso Musa, chairperson of the judging panel, said during the period under review, companies were faced with a host of new challenges, which resulted in them slowing down and aligning to the new reality. “Other matrix had to be introduced during the judging, while others were phased out. We looked at consistent and a positive financial position, sustainability of business model, healthy financial position and tangible returns to investors,” she said. We at Providence wish you the best in your future endeavours Judges and analysts ― independent of both The Fi- nancial Gazette and Old Mutual Zimbabwe ― came up with the judging criteria and categories for the top awards. The survey has proved invaluable in promoting Congratulations, Makorokoto, Amhlophe corporate transparency, which is critical in giving direction to investors and shareholders. Decision-making among investors and shareholders is greatly enhanced where there is full disclosure from the companies in which they are invested. Good corporate governance, relevant and reli- able information also means less risk to investors and shareholders, resulting in a lower cost of capital, 20 Cambridge Road, Avondale, Harare, Zimbabwe. | Tel: 0242 308531 which naturally translates into higher valuations and returns. The Financial Gazette 2019 TOP COMPANIES SURVEY SPECIAL FEATURE June 20-26 2019 | Page S11

Simbisa Brands managing director Warren Meares after receiving the 2019 Top Companies Award. Consolidating the brand

E-MERGED from Innscor Improved margins saw operating Africa only four years ago, earnings and attributable earnings D Simbisa Brands has managed rising 82 percent and 99 percent re- to hold its own to become the best spectively. Being a highly cash-gen- performing company in this year’s erative business, the company has Top Companies Survey. been able to offer a generous divi- Welcome Mavingire tells us it dend despite its ambitious expansion comes down to the food, although plans. the quick service restaurants group Despite not being spared the ad- should be wary of the headwinds verse effects of foreign currency ahead. shortages, Zimbabwean operations Simbisa Brands Limited emerged continued to perform strongly with the Top Companies Survey 2019 win- increased customer count and higher ner on the back of consistent growth average spent. Some regional mar- and strong performance since its birth kets, especially Zambia and Ghana, out of a de-merger from Innscor Afri- were affected by their own currency ca Limited in 2015. volatility whilst Kenya had a more The holding company for a num- stable currency but consumer spend- ber of quick service restaurants such ing power was affected by increased as Chicken Inn, Pizza Inn, Nandos taxation on fuel. and Steers, which formed the bedrock Correcting governance shortcom- of the Innscor Africa Group at its for- ings mation in 1987, is now synonymous Board changes and retirements with food both in Zimbabwe and the over the past year have corrected the region where it has established a sig- previous anomaly where the board nificant footprint. had a higher number of executive Strengthening the brands directors at the expense of non-ex- As the name implies, Simbisa (a ecutive directors. Following the re- Shona word for making strong or tirement of Messrs Leighton Shaw strengthening), Simbisa has over the and Manoli Vardas in the past year, years invested in strengthening its the board of directors now comprises brands to make them ripe for fran- majority non-executive members. chising as well as acquiring new However, there is still need to in- brands. The footprint for these brands crease the size of the board and en- have been extended geographically sure more independent directors as beyond Zimbabwe to such countries well as addressing gender diversity as Zambia, Kenya, Democratic Re- within the board. public of Congo, Ghana, Malawi, The bumpy road ahead for best disclosure and investor relations Mauritius, Namibia and Swaziland. With the bulk of its earnings still The company recently added new derived from Zimbabwe, Simbisa re- brands to its portfolio including Ro- mains vulnerable to the vicissitudes at top companies awards. coMamas, Ocean Basket and Grill of the local economy. Rising inflation Shack, which has been performing and a collapsing local currency have well to date. drastically affected consumer dis- Apart from increasing its footprint posable incomes and fast foods and through adding store counters across eating out is now considered a luxu- its various markets, the group has ry. To hedge itself against value loss, 100 Kelvin road North Graniteside also introduced dial-a-delivery aug- Simbisa outlets had since October mented through a mobile application 2018 been offering dual pricing ― in as initiatives to reach more customers United States dollars and local RTGS and build brand loyalty. Dollars ― although it has been diffi- Latest financial performance cult to harness enough hard currency. Interim results for the six months Efficient procurement, responsive to December 31, 2018 released by pricing and wide distribution network Simbisa recently showed turnover remain key pillars for Simbisa going up 44 percent to $143 million on the forward and should help sustain the back of increased number of stores. company through the lean years. Page S12 | June 20-26 2019 2019 TOP COMPANIES SURVEY SPECIAL FEATURE The Financial Gazette Best Disclosures and Investor Relations Award: Delta Corporation terly basis, enabling analysts to almost accurate- disclosures. It is prudent that any dialogue rely forecast revenue flows. garding financial reporting and disclosure re- Their analyst briefings are comprehensive, form must be informed by current events and supported by a reasonable level of engagement. the current environment, or context into which Overall, this delivery has been constant, pre- such reforms might be introduced. senting a cutting edge which most companies The financial year 2018/2019 was inundated Patricia Murambinda, Delta corporate affairs executive, at the 2019 Top Companies have failed to emulate. with significant monetary reforms which threat- Survey Awards. Call for enhanced disclosure reforms ened a lot of business models. In such an envi- HIS award acknowledges companies that Delta is once again the winner of the Disclo- in a volatile operating environment ronment, whereby financials cannot be fully in- foster comprehensive disclosure pertain- sure and Investor Relations Award. Disclosures provided in connection with fi- terpreted at face value, companies need to walk ing to financials and operations as well Delta, as a company, has managed to be con- nancial statements are essential to an investor’s closely with investors with regards to bridging T understanding and analysis of the economics un- the information gap. The majority of companies as reasonable levels of engagement with stake- sistently transparent in a volatile environment. holders particularly the investment community. Delta`s disclosures are characterised by infor- derlying the information in financial statements. altered their business models and as such full The award speaks to companies which strive to mative cautionary statements, unlike other com- Since the reintroduction of the Top Compa- disclosures were pertinent. maintain vigilance and conform to facts wheth- panies which only warn investors to be cautious nies Survey in 2014, very little progress has been It was not prudent for companies to just pub- er they are advantageous or disadvantageous to without the background of the transaction. made on the market with regards to improved lish their results and not take time to explain the them. It also rewards companies that satisfy the Given the challenging operating environ- disclosure, hence a call to enhance disclosure numbers to their stakeholders. requirements by regulators, the stock exchange ment, Delta updated the market of the con- reforms by the regulator. There is significant The 2018/2019 financial numbers for most disclosure rules as well as companies that dis- straints at the Sparkling Beverages unit through- room for improvement as capital market players companies were characterised by adverse opin- close information in a timely manner in simple out the year. In addition, they also delivered have conformed to box ticking exercises, which ions from the auditors, a position which then financial language following the occurrence of comprehensive transaction updates. The mar- is highly inadequate. Consideration of disclo- needed companies to enhance their disclosure facts that require disclosure. ket has been closely following The Coca Cola sure reforms from the investor perspective is an capacity. The lack of such disclosures as ex- Nothing to hide Company transaction with detailed information important contribution that is yet to be included hibited by some companies is worrisome and Delta Beverages, the largest beverages com- available on their website. The company has in a substantial way in the current dialogue on hence the call for regulatory bodies to tighten pany in the country, continues to lead the way as issued quarterly trading updates. Currently it is disclosure reforms. disclosure requirements, with mandatory ana- in disclosure and investor relations, writes Sim- not a regulatory requirement on the Zimbabwe Significant focus should now be on how re- lyst briefings, quarterly trading updates as well biso Musa, who describes the lack of disclosure Stock Exchange but Delta goes a mile further to cent economic events and secular trends have as terms of references for disclosures in annual by most listed companies as worrisome. inform investors about their business on a quar- informed efforts to reform financial reporting reports. The Financial Gazette 2019 TOP COMPANIES SURVEY SPECIAL FEATURE June 20-26 2019 | Page S13 A thought provoking process

lTop insurer (long-term) ― most during the past year through Very often, analysts fail to incor- recognises the top life insurance dividends and capital gains (that porate these factors when valuing company licensed by the Insurance are supported by volume of trades). a company thus rendering a valua- and Pensions Commission of Zim- lBest ESG practices ― recog- tion incomplete. Accordingly, as a babwe. nises a company that upholds the panel, we are set to encourage the lTop insurer (short-term) ― sustainability and ethical impact of adoption of these factors in compa- recognises the top casualty insur- their business model to the operat- ny assessment. ESG factors cover ance company licensed by the In- ing environment. a wide spectrum of issues that tra- surance and Pensions Commission lSpecial mention ― this year, ditionally are not part of financial of Zimbabwe. the award recognises a company analysis, but have financial rele- lBest disclosure and investor that successfully implemented a re- vance. relations ― recognises a listed covery strategy and made a remark- In addition to the above, as per company that goes out of its way able turnaround through financial tradition, the judges maintained a to provide as much information as restructuring and creation of tech- Special Mention Award that goes to possible to the investing public, nical partnerships. a company that may not necessari- through detailed and informative This year, a new category was ly have been a winner in any of the annual reports, investor relations introduced in order to align the above categories but demonstrates website, analyst briefings, etc. survey with the growing global some positives towards creation lBest tangible investor returns interests over Environmental, So- of shareholder value that is worth ― recognises a company that man- cial and Governance (ESG) factors flagging out. Simbiso Musa, judges chairperson. aged to reward its shareholders the in making investment decisions. To Page S14

IMBABWE’S economic landscape is ever changing, and consistent with such an environ- Zment is the process of meticulously reviewing each and every aspect of the change and adjusting accordingly (reality check). Just as the economy had geared up for a rebound, this year our companies were faced with new challenges which presented an unequal playing field in the operating environment. Resultantly, the judges’ task this year was excit- ingly thought-provoking, as it also needed a great amount of dynamism in order to keep up with the mutable landscape. In addition to our usual consid- erations for a top company, other metrics had to be introduced and some phased out in order to buttress the model. So in light of the threat to business models posed by the difficult operating environment, sustainability concerns were key in the model calibration. In simple terms, we carried out a business model test awarding fundamental improvement of performance as opposed to inflation-enhanced performance. For- eign currency generation was also topical throughout the year and based on the monetary reforms, which were introduced in the period under review, it was prudent to adjust earnings accordingly. In our evaluation criteria, we considered both quantitative and qualitative factors, premised on the following guiding principles: l The recognition of: ― Consistent and positive financial performance; ― Sustainability of business model; ― Healthy financial position; and ― Superior tangible total returns to investors or shareholders; and lThe promotion of: ― Good corporate governance practices, including providing adequate disclosures, transparency and accessibility to investors and analysts; ― Environmental awareness and sustainable business practices; and ― Corporate social responsibility. We maintained a robust scorecard of quantitative metrics which covered the following: lEarnings performance – including assessment of growth and quality of earnings; lSize ― including levels of revenue generation and total assets; lFinancial health ― including gearing levels and capacity to service debt, and cost of capital; and lInvestor returns ― including share liquidity, share price growth and payment of dividends to shareholders. While the quantitative factors assumed a higher weighting in the overall evaluation, we also accounted for qualitative factors, based on evidence in the annual reports and other publicly available information that include: lGood corporate governance encompassing board independence, board composition, board responsibilities, and minority shareholder treatment; linvestor relations encompassing quality of disclosures at analysts briefings, frequency of trading updates, accessibility of directors/management to investor enquiries, accessibility of corporate information through various media including company websites; and lCorporate social responsibility and environmental consciousness. This year’s awards recognised winners in the following categories; lTop Company of the Year ― recognises the top company listed on the Zimbabwe Stock Exchange excluding banks and insurance companies. lTop banking institution ― recognises the top bank licensed by the Reserve Bank of Zimbabwe, excluding micro-finance institutions, whether deposit-taking or not. Page S14 | June 20-26 2019 2019 TOP COMPANIES SURVEY SPECIAL FEATURE The Financial Gazette A thought provoking process

From Page S13 We note with concern the poor appreciation of disclosures and investor relations in our capital markets. We are of the view that this has largely contributed to the depressed liquidity on the local bourse. Liquidity is still concentrated on the top 10 counters by market capitalisation whereas there are some sleeping giants which need to roar out their presence through improved disclosures and governance practices and investors will take notice. The judges convey their warm congratulations to the winning companies in the various award categories. We also urge others to benchmark themselves against the criteria and strive to be winners next year. We remain grateful to the sponsors, Old Mutual, for their continued support of this initiative. As usual, Old Mutual was excluded from participation by virtue of being a spon- sor in these awards, in order to preserve the independence and integrity of the awards. Judges ― Simbiso Musa (chairperson), Welcome Ma- vingire, Simbarashe Man- gwendeza, Evonia Muzondo, Tinashe Yafele, Yvonne Saiti, Farai Gwaka, Linda Tsarwe and Manatsa Tagwireyi. One of the judges, Welcome Mavingire.

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Subscribe Now The Financial Gazette 2019 TOP COMPANIES SURVEY SPECIAL FEATURE June 20-26 2019 | Page S15 The Success Story: CBZ Insurance Operations

N the short space of less offerings. Such a strategy companies in Zimbabwe. the Insurance industry. Life Limited roles at management and Africa where he spent 5 than nine years, CBZ has paid off for CBZ Life In 2017 Mureriwa Mureriwa is ably Mutizwa has worked executive level. years and then moved to IHoldings has made a as it has managed to go spearheaded the setting up supported by three highly in Zimbabwe, South Mutizwa’s career started Botswana before joining dramatic and decisive entry strongly since inception of a new Broker, CBZ Risk experienced principal Africa and Botswana at Old Mutual Zimbabwe in CBZ Life in February 2017. into Zimbabwe’s Insurance and now sits on an asset Advisory Services and this officers, who are the general with his experience the Technical and Actuarial Mutizwa is a fellow of space. The Group currently base of $27 million as at 31 new entity, which recorded managers of each of the spanning over 20 years division before moving to the Insurance Institute of boasts of three insurance December 2019. a profit in its second year of three companies as detailed (12 with Old Mutual) in other reputableinstitutions South Africa, a member entities, namely, CBZ Although commanding trading is already showing below: insurance business mainly which include Zimnat of the Institute of Risk Insurance Private Limited a market share of only about signs of great promise in the Jonah Mutizwa – pensions, life assurance, Life. He later re-joined (a Short Term Company), three percent CBZ Life insurance broking zone of Principal Officer CBZ and investments in various Old Mutual based in South To Page S17 CBZ Life Limited (a has used a low cost model Life Company) and CBZ which has seen its expense Risk Advisory Services ratio at only 28 percent the (an Insurance Broking lowest in the industry and Company). against an industry average According to Nobert of 54 percent. Mureriwa, the managing During the year to director of the Group’s December 31 2018, CBZ Insurance Companies, the Life’s net premium rose long term strategy is to build from $9,6 million to a significant portfolio of $10,8 million driven by insurance businesses with new business and higher a view to future dominance retention levels. The of Zimbabwe’s Insurance Company also managed to landscape. reduce staff costs to $1,2 Judging by the million from $1,7 million performance of the Group’s in the prior year which insurance operations in the resulted in the overall costs past few years, this strategic falling seven percent to objective is well within $3,2 million despite the CBZ Holdings’ reach. emergency of inflationary All three of the Group’s pressures towards the end Insurance businesses have of the year. As a result, the stood up to competition firm’s bottom line was up against established players, 18 percent to $4,4 million. grabbed some market The success of CBZ share and remained very Life and CBZ Insurance profitable in a tough is a significant milestone operating environment. reflecting the successful Mureriwa believes that diversification of the despite the challenges, all Group’s business which the three entities under his started in 1997. charge are poised for growth Management of CBZ and are destined to become Insurance Operations big players in Zimbabwe’s Profile for Nobert insurance industry. Mureriwa – CBZ Two of CBZ Holdings Insurance Operations units, CBZ Life and CBZ managing director Insurance Company The person credited have clinched runner up with CBZ Holdings’ awards in the best Life successful diversification Insurance Company and into the Insurance industry best Short Term Insurer is Nobert Mureriwa, categories respectively, the current managing reinforcing their dominance director of CBZ Holdings’ in the insurance sector of Insurance Operations. Zimbabwe. A lawyer by training, CBZ Insurance Mureriwa has quietly been Company is a short term working behind the scenes insurance company to design and implement the formerly known as Optimal Group’s strategies for future Insurance Company. It leadership of Zimbabwe’s was established in 2005 Insurance industry. After with operations starting on graduating with a Bachelor June1, 2005. of Laws Degree, Mureriwa As at September 30, worked for Old Mutual and 2018 the Company boasted then spent a few years at of 5,29 percent market share First Mutual Life as part of of Gross Premium Written the Executive team before (GWP) and 6,23 percent moving to South Africa share of total assets for the where he worked at Liberty non-life insurance sector. Life, one of the largest CBZ Insurance Company insurance companies in capital was reported at South Africa where he rose $7,86 million during the through the ranks to become reporting period. a director in the Liberty CBZ Life established Group’s Life business. in 2010 is the long term He moved to Zimbabwe insurance arm of the in 2010 and set up CBZ Life diversified financial service and became the company’s group. The business model founding managing for financial services group director. In 2012 he took is to provide a one stop over CBZ Insurance and financial service shop implemented changes that leveraging on the branch changed the fortunes of and distribution network for the company to become the retail bank to provide one of the most efficient clients with other service and profitable short term Page S16 | June 20-26 2019 2019 TOP COMPANIES SURVEY SPECIAL FEATURE The Financial Gazette Rwanda’s economic fundamentals

WANDA’s development thrust is The government, while taking a leading multi-pronged and anchored on fun- role in economic activity, has strongly en- Rdamental pillars such as: couraged the growth of private investment •Development of a shared vision after through the Rwanda Development Board comprehensive review and consultations. which was put in place in 2009. •Capital formation from both public and •Its role is to help oversee Rwanda’s private sector, savings and investments. business regulations, foreign investments, • Exchange bureaus and commercial tourism promotion, environmental conser- banks have historically been allowed to ex- vation and broader economic and develop- change foreign currencies at market-deter- ment planning. mined rates, a move partly aimed at easing •A new investment code and a one-stop access to foreign currencies by the emerging investment promotion centre were also es- private exporters. tablished in 1998 to provide a conducive •Competitiveness and an improved ease investment environment for both local and of doing business environment: foreign investors. •Zero tolerance on corruption Key result areas in Rwanda include: •Macroeconomic and Fiscal discipline: 1.Gross Domestic Growth which is av- Under this pillar Rwanda has undertaken eraging around eight percent over a decade. a number of expenditure cutting measures 2. World Bank Doing Business Report such as doing away with housing and vehi- ranked Rwanda 29th globally and second in cle for its high-level government officials Africa. including Cabinet Ministers. 3.Transparency International ranking on Rwanda has encouraged and facilitated a corruption rated Rwanda number 48 global- Private Sector driven economy: ly and fourth in Africa 2018.

Zimnat Life holds march to mark launch of US$ funeral plan

IMNAT Life Assurance on last required. week marked the launch of its The minimum cover is US$500. The ZGadziriro/ Lungiselelo United maximum is US$5 000, which means the States dollars funeral policy with a march amount of cover can be extended beyond from Zimnat House to Joina City in Harare, US$1 000 for each family member, depend- generating considerable excitement in and ing on the premium paid. around Joina City. Family members aged from 18 to 65 are At the same time, Zimnat descended on covered by the policy. Other dependants and other shopping malls throughout the coun- children above the age of 23 may be cov- try to publicise Gadziriro/ Lungiselelo, a ered at an additional premium. Extended funeral cash plan that with a monthly pre- family members, including parents, can also mium of less than five United States (US) be covered up to the age of 75 for an addi- dollars pays out up to US$6 000 for a family tional premium. of six. The premium can be paid on a monthly, Because premiums are paid in United quarterly or annual basis. A discount is ap- States dollars, payment under this plan is plicable, if premiums are paid for the whole guaranteed in United States dollars, which year. The plan has an option for vigil and means the policy is not affected by any fluc- tombstone cover. tuations in the local currency. There is no waiting period in the event of Gadziriro/ Lungiselelo provides for the accidental death. No medicals are required principal member, spouse and four children. to sign up. Each of them are covered for an amount Following the march, members of the of US$1 000 in the event of their death to public were able to apply for the policy at give a total of $6 000 presuming premiums Joina City, where Zimnat staff were sta- continue to be paid. tioned for the whole day. Those who signed The monthly premium is US$4,99. up also stood a chance to win prizes. The number of family members covered Some walked away with t-shirts and can be more or less than six, with the premi- caps among other prizes. um being adjusted accordingly. The policy The policy can be applied for at any can even be taken out by a single individual. Zimnat branch or agency or online through Premiums vary with the number of peo- the Zimnat self-help web portal, selfcare. ple to be covered and the value of cover zimnat.co.zw. The Financial Gazette SPECIAL FEATURE June 20-26 2019 | Page S17 ones. “Business and profession- Good back-up power now essential for security systems Record number of chartered al leaders who stand out over AFEGUARD Security has “Making sure you have ad- added advantage of providing time as positive role models advised householders and equate battery back-up to work an image of what activated the secretaries graduate are those who understand that Sbusiness people to ensure throughout the duration of an alarm. Roboguard is essentially their talents and responsibil- their properties are secure and extended power cut, which it a do-it-yourself system. Wireless that security alarm batteries are RECORD number of ties, make decisions and com- consequences for the environ- ities and privileges can and seems in many cases can be as and easy to use, it is available for should be used to make this a adequate to protect their proper- long as 12 hours on average per indoor and outdoor use. students graduated as municate with the wide range ment or for society. ties during electricity load shed- day, is important,” he said. “Thousands of these units chartered secretaries of stakeholders necessary for “Over a professional ca- better world. A “I urge you to be proactive ding, particularly at night. He said Safeguard recom- have been installed. It is an on June 8, 2019 at an historic business effectiveness and reer difficult choices are like- The recently introduced load mended serious consideration excellent security product for graduation ceremony at which success. ly to be made highlighting in ensuring that your voice is shedding, which is seeing some be given to installing solar pow- a Zesa free situation,” Chitiva the first students from a joint He said many of them conflicts between self-inter- heard, even when you are in areas going without electricity er for the security system. said. Great Zimbabwe Universi- were destined to end up in est and personal sacrifice for a minority, and to continue to for more than 10 hours every “Small solar systems con- “It is also important to con- think critically as you develop ty and Institute of Chartered leadership positions in the pri- the greater good or between day, is leaving both residential nected directly to security sys- trol and restrict access to your your careers and your place of and business premises vulner- Secretaries in Zimbabwe pro- vate or public sector but point- self-interest and a professional tems should not be expensive premises. Physical security bar- gramme graduated alongside ed out they would initially be influence in the organisations able to burglary and theft, if to install. They are an excellent riers such as razor wire fences, responsibility to prioritise the to which you will devote your back-up power is not planned investment, as, if batteries are burglar bars and Xpanda secu- other ICSAZ students. sharpening their skills during public interest. There were 293 graduates a particularly challenging pe- efforts and talents over the correctly. looked after correctly, they deliv- rity doors and screens for doors “One thing that we can coming years. “Security system batteries er security and significant peace and windows can help keep who completed their final riod. say with certainty is that there are normally charged by mains of mind,” he said. intruders out,” he added. ICSAZ examinations last year, “Be open to new thinking, “Our recent financial is a great need for strong and electricity. If there are prolonged He said wireless technology He said that, since most peo- three graduates from 2017 and problems in Zimbabwe have accept constructive criticism responsible leaders in Zimba- power cuts, then the battery that is not reliant on mains elec- ple make sure their cellphones 32 graduates from the joint increased awareness in the and acknowledge the reality bwe, in Africa and in global is being used without being tricity is also an excellent option. are charged, the Safeguard SOS Great Zimbabwe University general population of the im- that learning continues be- charged. The more a battery is Examples of such technolo- App, which can be downloaded Master of Commerce/Gradu- portance of business success economies,” he said. yond formal qualification,” used the shorter its life generally gy included the Video Alarm, from Play Store by Safeguard ate ICSA programme. combined with integrity for He said strong leadership he said. is, as batteries are rated to a num- which Safeguard was the first rapid response customers, pro- There were also seven the welfare of citizens and the requires ability, courage, resil- The President’s Floating ber of cycles,” commented Safe- to introduce and which is still vides another excellent back-up students awarded the new Di- stability of the state. ience and support from those Trophy for the top student guard Alarms managing director in use around the country, and when there is no electricity. ploma in Forensic Accounting “They have also remind- around one. from throughout Zimbabwe Reason Chitiva. Roboguard, an early warning “If an emergency occurs, and four Institute of Business ed us of the impact of good “You must build on the was presented to Effort Sam “It is important that batteries unit that emits infrared sensor you just press a panic button on are not run flat, as this has a neg- beams that can detect motion up the app and Safeguard immedi- and Accounting Studies stu- or bad organisational gover- positive legacies, particularly Chirau. Second overall was in the light of what we have ative impact on the battery’s life to 20 metres away within a 110 ately dispatches the nearest rapid dents presented with diplo- nance on the quality of life of Last Manyakara. Phanuel Ke- and for how long the battery can degree arc. response team to assist you,” he mas. families, communities and the all learned from the negative nas Zimunya came third. hold a charge. The Video Alarm has the said. Addressing the students country at large,” he said. ICSAZ president Letitia Gaga He said it could be argued urged them to use their unique that many of the current fiscal, talents and energy to make a economic and business chal- positive impact on their com- lenges were born out of poor munity, adding that she meant business decisions and/or community in the broadest inadequate responses by peo- terms. ple in leadership positions to “This could be your fami- changes that took place over ly, workplace, neighbourhood, time in the structures of the place of worship or simply a country’s economy. stranger you meet in the city He urged the graduates during the course of your to work hard to develop the day,” she said. skills, attributes and experi- “I challenge you to use ence needed to secure senior your talents and energy, de- positions. He warned that ca- veloped and polished by your reer progression was general- qualification, to make a posi- ly accompanied by increasing tive impact on your communi- responsibility and account- ty,” she said. ability. She went on to urge them “In the majority of cases, to give generously of their responsibility for the contin- time, expertise, financial ued survival of organisations means, insight, experience in a very competitive world and advice to others, and to and for the job security of the give a helping hand to a per- many people who rely on such son in need. organisations to sustain their “Always be found on the livelihoods can be simultane- side of selflessness. Never be ously invigorating and truly found on the side of selfish- stressful,” he said. ness,” she said. “In a plethora of business The guest of honour, Mr situations a balance has to be Richard Summers, a past struck between creativity and ICSAZ president, told the morality, for example when graduates that, with their new strategies are considered to qualification, they had the maximise returns that may tools to evaluate opportuni- have long-term destructive The Success Story – CBZ Insurance Operations From Page S15 Management South years’ experience in the Africa and holds a Master short term industry in all of Business Admiration key operations departments; (MANCOSA – South Africa. underwriting and client Profile for James services (10 years), marketing Mharadze – Principal (four years) and claims (One Officer CBZ Insurance year) with half of those being Limited at senior management and Mharadze has 17 years’ executive level. post-graduate experience in Part of his experience the insurance industry. He includes working for an started his carrier with AIG international broking firm Zimbabwe, moved to Zimnat with an office in Zimbabwe, Lion as chief underwriter and an experience which set joined CBZ Insurance at its him up for senior posts in formation in 2006. Mharadze his subsequent attachments rose through the ranks to including being the CEO become senior manager of an insurance entity with underwriting, joined CBZ Life for four years as senior interests in medical aid, short manager sales and marketing term and life insurance in his before re-joining CBZ last assignment before joining Insurance as principal officer CBZ. in 2016. Mharadze has deep He is a holder of a BA technical knowledge of both (Hons) Financial Services short term insurance and life from Edinburgh Napier assurance business. James University UK and Master in is an executive committee Business Leadership (MBL) member of the Insurance Degree from UNISA. He is Council of Zimbabwe. also a fellow of the Chartered Takawira Chinyani – Insurance Institute UK and Principal Officer CBZ Risk fellow of the Insurance South Advisory Services Africa by examination and Chinyani has over 20 election. Page S18 | June 20-26 2019 PROPERTY SPECIAL FEATURE The Financial Gazette Property investment and ownership

Mike E. Juru glory of sharing knowledge with my countrymen and being a focal point. HE story of my life continues and it is con- The real estate sector is one type of investment firmed, I cannot have my peace whilst in the fuel that is misunderstood as it seemingly requires various Tqueue and the very fact that the queues are now professionals to explain their different roles. For those shorter has translated to me having to get out of my car who have embarked on it, they have gone through var- after fuelling, stand outside my car by the roadside or ious emotions ranging from excitement and joy after forecourt and start clarifying queries from fellow fuel acquiring the first property but as they move onto the seekers regarding property. second if not third property investment, regrets of hav- Fortunately, I only have to endure this once a week, ing used a not so effective investment vehicle arise. since my tank capacity can last me that much time and I always draw attention to the fact that only person- distance covered in a week. I am not sure if I want this al circumstances best determine how one can invest to end as I am enjoying a once in a lifetime moment of and own property. This basic rule applies to the owner-

INTEGRATED PROPERTIES REGISTRATION OF SUPPLIERS OF GOODS AND SERVICES 2019/2020/2021 ship structure of investment property as Holding a property in a family trust there is no right or wrong answer. I will can be beneficial as you don’t need to Integrated Properties is currently working on registration of its suppliers. Accordingly current and share the pros and cons, dos and don’ts specify the share of spouses and still prospective service providers, for the below listed categories, are invited to submit their documents: of the available options and ultimately have the flexibility to distribute income CLEANING ChEmICALS AND SERVICES CONSTRUCTION AND hARDwARE the final choice belongs to the individ- in the most tax effective manner from 1. Carpet cleaning services 1. Aluminum Specialists ual who will enjoy the benefits of their year to year. This is one of the best as- 2. Motor vehicle cleaning services 2. Borehole drilling and allied services choices. set protection ownership structure which CONSULTANCy SERVICES 3. Carpenters Firstly, acknowledging that property further works on estate and succession 3. Customer service training 4. Ceiling specialists investment and ownership are two dif- planning. The downside includes the 4. Environmental Impact Assessment 5. Construction and material supplies ferent areas of study is of critical impor- set-up costs, higher compliance cost for services 6. Fencing, Precast Walling and Structures. tance. Property investment refers to de- tax returns and losses cannot be distrib- 5. Integrated Business Management System 7. Civil works liberately putting resources together to uted and as such are not suitable for loss Standards training services 8. Electrical Engineering purchase a property with the intention making properties. 9. Landscaping, Swimming Pools and Outdoor 6. Manpower development training services of earning a return on the investment, Buying a property in a unit trust, the Living specialists 7. Payroll System either through rental income, future re- interest of the beneficiaries (unit holders) EmPLOyEE bENEFITS 10. Painters 11. Plumbing sale of the property or both. are fixed, just like shares in a company. 8. Funeral cover The owner of a property is the person The benefits include asset protection, 9. Medical aid 12. Roof Slating, Tiling, and Sheeting in whose name the immovable property especially when you have a company 10. Pension fund 13. Roof Water Proofing and Tanking 11. Personal loans Specialists is registered in terms of the Deeds Reg- as a trustee, estate planning but also the 12. Housing loans 14. Scaffolding istries Act. It is a fact that one may own downside are the set-up costs and high- ELECTRICAL AND ELECTRONICS 15. Shop fitting a property without it being necessarily er compliance costs for tax returns, not 13. CCTV installation and service 16. Solar and Renewable Energy Contractors an investment as well as one investing suitable for holding loss making prop- 14. Electrical services and maintenance 17. Steel works and fabrications without necessarily owning it. Confus- erties. This structure is appropriate for 15. Internet and Data (ISP) 18. Suppliers and Hirers of Earthmoving ing my readers is not my intention, I holding the investment properties be- 16. Networking equipment and accessories Equipment and Construction Equipment will clarify below. tween unrelated parties or doing joint ICT - PRINTING AND STATIONERy 19. Ventilation, Air Conditioning suppliers There are various ways in which one ventures and property development. 17. Computer sales, consumables repairs 20. Walling Tiling, Mosaics Marble Workers, can buy and own a property. These in- A company is a legal entity in its 18. Printers, consumables and hardware Terrazzo Specialist, Reconstructed clude individual (natural person), com- own right and different to its sharehold- repairs Stonework. pany, partnership or a trust. An optimal ers. It is very possible to buy a property 19. Promotional materials OThERS property ownership structure can save through a company and there are many 20. Supply of stationery 1. Accommodation and conference facilities investors thousands in tax, during and advantages for buying property through TRANSPORT AND LOGISTICS, mOTOR 2. Advertising agencies or after their lifetime. Further, it can a company which include ability to tax SERVICES AND SPARES 3. Catering services and equipment protect personal assets in the event of plan through dividends, tax paid by the 21. Car hire services 4. Corporate wear bankruptcy. company can be passed on as credit to 5. Courier services 22. Motor vehicle sales, repairs and spares The recommendation is to engage shareholders with dividends. 6. Joinery and Shop fitting 23. Motor vehicle servicing professionals before making an offer to This ownership structure provides a 24. Fuel and lubricants 7. Maintenance and calibration of machinery buy so as to ensure the best investment much higher level of protection for your 25. Tyres and accessories 8. Office equipment 26. Wheel balance and alignment 9. Personal and Protective clothing vehicle is used to make the offer, which personal assets like family home. There 10. Travel agents will be the basis for which the agree- are however risks associated, such as, ment of sale will be prepared and further although you’re not personally liable, if Interested service providers should submit the following for consideration: the title deeds issued in the event of a you are a director, you will have legal • Company Profile which includes company address successful sale. There is need to come obligations like ensuring solvent trad- • Certified VAT Registration Certificate up with the right structure from the onset ing. Another consideration is that your • Certified CR14 in each and every situation. compliance costs are higher. A company • Certified CR6 Investing in property in one’s own structure is ideal for taxpayers who carry • Current Tax Clearance Certificate (ITF263) name is the simplest and obvious struc- on property development business and • Payment Terms ture, with the benefit of no set-up cost therefore don’t expect any capital gains • Certified Certificate of Incorporation and minimum compliance. The risks or negative gearing from their property • At least three traceable references associated with this ownership structure portfolio. • The submissions should be in marked separate sealed envelopes for each category being are the exposure in the event of bank- For the sophisticated serious inves- applied for ruptcy as such; there is no protection tor, use of the more complex structur- for one’s property if unable to pay debts ing like holding investment property NB: By submitting the above documents, it does not automatically mean you will be added to our even if they do not relate to the respec- in a trust with a company trustee or a Suppliers Database. There will be an evaluation process that will take place first. tive property. When it comes to tax, you company with trust as a shareholder. It’s pay at individual tax rates which are best to take advice from an experienced Interested service providers should send their documents or hand deliver to: generally higher than corporate tax but accountant before deciding on any of Integrated Properties (Pvt) (Ltd) also one can take advantage of nega- the more complex structuring options 6th Floor Green bridge South tive gearing to make a tax claim. In the for your property investments. Eastgate Complex event of disposal and securing another In summary, there are costs and tax- harare, property, capital gains tax can be rolled es associated with property acquisition, Zimbabwe over for as long as it is a principal res- holding on and disposal, and these can idence. Ideally, this structure is for first be managed from the ownership struc- Clearly marked for the attention of head human Capital and Administration or email documents time property investors, people wanting ture. The engagement of appropriate to [email protected]. Closing Date is 1 July, 2019. to take advantage of negative gearing or professionals guarantees savings and those who don’t consider asset protec- the benefits outweigh the cost associat- tion a risk. ed with acquiring the service. Property Further to individual ownership, this investment requires hands-on compe- can extend to registering a property in tent professionals for success and guar- the children’s names. Whilst a brilliant anteed satisfaction. idea in the event of one wishing to bor- l Juru is the CEO of Integrated row against the property, there are legal Properties. The views expressed in procedures to be followed such as get- this column are his own and in no way ting High Court consent to register a reflect the thinking of the professional bond on a property registered in a mi- bodies and associations that he works nor’s name ― talk about losing one’s with. He can be contacted on meju- rights over one’s own investment. [email protected] The Financial Gazette FOREIGN NEWS June 20-26 2019 | Page S19 Stop paying for these mistakes Simon Brown ing spent, the profitability (return on capital) is significantly less. Taking it a step further, we can surely assume that if the OE is Sasol. Its Lake Charles jaunt was initially initial costing had projected the $12,9 billion amount, the supposed to cost some $8,9 billion, but it kept on project would never have been undertaken? Wcreeping higher and earlier this year Sasol said So now Sasol sits with an asset that it massively over- the costs could be as much as $11,8 billion. paid for and that will deliver returns well below what was That was absolutely and finally the maximum it would expected. cost, the company said. But then came the latest announce- The question of course is who gets fired? Does it even ment, in which Sasol now admits it’ll be costing somewhere matter? Shareholders carry the cost — and the markedly between $12,6 billion and $12,9 billion. reduced returns — while the executives take their salaries That’s a cost overrun of almost 50 percent and is com- home (perhaps with reduced bonuses) and they are free to pletely insane. Now sure, when building something cost ride off into the sunset. overruns are part of the deal. There is also a bigger issue here that I have written about If you’ve ever built a house (or even just done an ex- before. The desire to always be growing. tension or some remodeling) you’ll know all about cost What was wrong with Sasol that it needed to pivot to- overruns. In fact, when costing a build, the person pricing it wards a chemical company, as opposed to just an oil and generally adds between 10 percent and 15 percent extra for gas company? Sure, changing dynamics in its core markets this exact reason, and it always seems to get used. may have reduced long-term profitability. But 50 percent? The problem is that when the project But notice that the attempt to solve that problem has now was being conceived, the long-term profits would have been led the company straight towards reduced long-term profit- based on the $8,9 billion figure. With an extra $4 billion be- ability. – Fin24 BRI and a prosperous Africa

HE African Union, which houses a number of African countries who stand Tto benefit from China’s investments has thrown weight behind the Belt and Road Ini- tiative (BRI). Once started as a homage to the Silk Road of ancient civilisations became modern Chi- na’s attempt to create a wide network of trade routes and development projects. As of 2019, 71 countries joined China’s flagship initiative, consisting of around 70 percent of the world population and 40 percent of the global GDP, which is estimated to be as high as $90 trillion. While the focus of the new Silk Road was on the previous routes through Asia into East Africa and Europe, the new Silk Road, BRI, has spilled over into African Union countries such as Liberia, Morocco, and Tunisia. Some of the success stories from African development projects include the Addis Ababa Light Rail which cut travel time to and from the city. Through the BRI, China has built a light- rail system in Abuja, Nigeria, the first to be built in Western Africa. Chinese construction companies also assisted Angola in rebuilding their Benguela Railway after it was destroyed due to civil war in the region. As a result, the country can transport goods from Angola’s western coastline to the border of the Democratic of Congo, thus fa- cilitating trade. Voices on the ground have a similar tone. China Global Television Network held an essay contest where people from across the world spoke about their experience with BRI. One essay touched on how, through the BRI, Uganda had the Kampala-Entebbe Ex- pressway, cut the author’s travel time to the airport significantly. Chinese funded projects have also led to the construction of the Isimba and Karuma hydroelectric power stations, two new sources of electricity to Uganda which will ultimately aid development. In Rwanda, road construction projects have seen young citizens become involved in the construction sector through their employment. This ultimately improved their welfare and provided work skills. In the spirit of BRI’s trade ambitions, Egypt now looks to make the idea of the Cape to Cairo road a reality. Since taking the reins as chairperson of the African Union, Abdel Fattah el-Sisi of Egypt plans to construct a superhighway through multiple African nations eventually ending in Cape Town, to open countries to trading in Cape’s ports and Egypt’s gateway to the Eu- ropean Union. — IOL Page S20 | June 20-26 2019 The Financial Gazette Foreign News Land reform, private investment can go hand-in-hand

Darryn Faulds The project is viewed as a good venture for investors and the community, especially HE debate around land expropriation as there is a shortage of affordable luxury without compensation has dramati- accommodation options inside the park. Tcally cooled off since the middle of The lodge will also be managed by last year when the topic was on just about Nkambeni Safari Camp, a division of Tour- every South African’s lips. vest Accommodation and Activities, South The topic briefly made the headlines Africa’s largest inbound tour operator. The again this week with President Cyril Rama- lodge is expected to create new job oppor- phosa and Deputy President David Mabuza tunities, uplift the community and generate receiving the final report of the Presidential sustainable income for members. Advisory Panel on Land Reform and Ag- Tourvest recently announced at the re- riculture. cent African Travel Indaba 2019 in Durban But it’s clear that well into 2019, South that it’s investing a meaningful amount in Africa has fresh challenges with these most the Mdluli Safari Lodge. notably being a new national government The total investment now stands at settling in after the sixth general election R34m, with more opportunities for inves- and a struggling economy. tors to enter the project. Interestingly, one way to create Members of the Mdluli Safari Lodge much-needed jobs potentially rests with board include Nelly Mdhluli and Buyile equitable land reform combined with a Mdluli as non-executive directors as well venture capital investment initiative such as as experienced corporate veterans Malcolm Section 12J. Segal (non-executive director) and Nick This is exactly what has transpired with Dennis (non-executive chairman). a one-of-its-kind Section 12J project called In recent comments about the project, Mdluli Safari Lodge, situated in the Kruger Mdluli community chief Inkhosi MI Md- National Park. luli, said he views the project as bringing The story with Mdluli Safari Lodge “stability and social cohesion to the com- starts in 1960s apartheid South Africa when munity” while ensuring that “schools, roads the Mdluli community were forcibly re- and clinics shall be upgraded, and poverty moved from their land inside the Kruger eradicated through the creation of skills and National Park. The apartheid government employment opportunities”. then relocated the community to the west Woven into South Africa’s Income Tax of the park. Act, Section 12J enables investors to pro- It would only be decades later, after the vide much-needed capital to small-to-me- dawn of democracy in 1994, that the com- dium enterprises while receiving an imme- munity would undergo a successful land diate tax deduction equal to 100 percent of claim process to secure freehold title to the their investment. 850 hectares that they were previously re- The end result is that investors in the top moved from. The land today is registered tax bracket can see relief of up to 45 per- under the Mdluli Community Trust. cent. In turn, their risk capital is also sub- Looking to maximise economic op- stantially reduced. portunities from their land, the communi- On the flip-side, SMEs — which are the ty decided to enter a partnership with the engine room for economic growth — re- private sector via Mdluli Safari Lodge ― a ceive a better chance at success and, ulti- 12J-backed hospitality venture that official- mately, becoming large taxpayers in future. ly opens its doors in October this year. As of February 2019, in excess of R6 Mdluli Safari Lodge will feature 50 lux- billion has been ploughed into Section 12J ury double air-conditioned én-suite tents, funds in SA, helping countless SMEs get private patios, indoor and outdoor showers off the ground. as well as an elevated 360-degree viewing What Mdluli Safari Lodge shows is that deck atop a large rock formation. As a result the right private investment vehicle coupled of working closely with South African Na- with land reform can unlock fresh econom- tional Parks and Kruger National Park reg- ic opportunities for the country. The op- ulations and requirements, other key fea- portunities are particularly abundant in the tures include an eco-friendly, sustainable tourism sector, which has been highlighted design that has sought to ensure minimum as a big area for growth by the likes of the impact on the existing environment. World Bank. – Fin24 Facebook rallies as analysts praise new crypto move

ACEBOOK shares rallied on Tuesday after the company unveiled plans for a Fnew cryptocurrency, a move that analysts saw as a potentially major new profit stream. Shares rose as much as 2,9 percent, though they pared much of that advance, last trading up 1.1percent on the day. The stock was on track for its fourth straight positive session, extending a recent climb. Facebook is up nearly 17percent from a low hit earlier this month. The digital currency, called Libra, is The recent advance has been fuelled, expected to launch as soon as next year. It in part, by anticipation over the crypto an- was designed as a way for Facebook users nouncement, and the release of a white pa- to send and receive money through its mes- per detailing the initiative spurred additional saging services. enthusiasm, for both Facebook and digital Loop Capital Markets wrote that this currencies. service represented “a large global opportu- “We view Facebook’s introduction of nity,” and a way for Facebook to diversify the Libra currency as a potential watershed away from advertising revenue. “This is moment for the company and global adop- among the most important initiatives at the tion of crypto,” wrote Mark Mahaney, an company and may be critical to commercial- analyst at RBC Capital Markets who has ising the value of its messaging infrastruc- an outperform rating and $250 price target ture,” analyst Alan Gould wrote. on Facebook shares. “In terms of scale and Citi, in a report published June 17, wrote importance, we believe this new financial that Libra could represent “a meaningful infrastructure could be viewed similar to Ap- new product and profit stream” over the ple’s introduction of iOS to developers over coming years, calling it a path “to printing a decade ago.” even more money.”– Bloomberg The Financial Gazette June 20-26 2019 | Page 21 Column Managing external communications

HE goals of any organisation can Targets are set in respect of each feedback from the market place. Various Equally important is the necessity to much less impact if the website is not only be pursued in the context of group, with a regular assessment of goals methods have been used to quantify ser- ensure that messages contain substance updated. Several exciting new products Ta complex series of relationships followed by implementation of appropri- vice quality, including the SERVQUAL rather than “hype”. and services have been launched by us- with external bodies. ate actions. model. One company recently responded to ing innovative technology such as virtual To communicate effectively with the Feedback Getting the message right a competitor initiative with a statement reality presentations. customers, various interest groups and Just as feedback is a crucial part of Most businesses are now operating in by the chief executive that they were not There is no point in using high tech- the community at large, organisations the internal communication process, it is “over excited” by the development. This nology solutions if the recipient of the should have an integrated communica- a vital issue in relation to external com- was interpreted by the media as compla- message is unlikely to respond to these. tions strategy. Many companies seek to munications. Businesses must actively cency on the part of his company and its The medium chosen should reflect the achieve this by working to a stakeholder seek feedback in order to keep appraised share price fell alarmingly as a result. preferences of the receiver to achieve model. One major bank, for example, of feelings, intentions and actions of the Speed of response maximum impact. produces an annual communications groups of stakeholders described above. In a challenging competitive envi- Communication is often regarded plan to take account of relationships For example, regular meetings with sup- a “goldfish bowl” where all actions are ronment, organisations have to respond as a common sense process, yet it is a with: pliers are essential. transparent. Organisations must ensure quickly. Sometimes genuine harm can be lack of attention to the fundamentals of l Customers Some retail groups enhance the two- that the messages they convey are unam- done by not responding at all or respond- communication that can often damage a l Regulatory bodies way communication process by using biguous. Quoted companies in particular ing inadequately to developments in the company. l Political parties consumer panels to gauge responses to can be especially vulnerable to market market place. Irrespective of the technology avail- l Suppliers new and existing product lines. sentiment, so the concept of primacy Using the technology available able and its impact, those responsible for l Media Service quality initiatives are becom- (getting it right first time) is absolutely Technology can “score” for the or- communications should remain aware of l The community ing a regular feature of business strate- crucial. ganisation if used properly. All business- the basic reality that “Communication is l Education and training establish- gy. It is not possible for all businesses Technology ensures that messages es have to use the right method for the the art of being understood”. ments to compete on price alone, so quality is travel fast. Businesses have to accept message, so the full range of media have Reproduced with permission from AC- l Trade federations and other bank- an essential differentiator. Service qual- that “spin doctoring” is now a permanent to be considered. For example, a press CA’s Accounting and Business magazine ing institutions ity can only be assessed by gathering feature of the commercial environment. release on a new product or initiative has accaglobal.com/ab. SA media battles falling revenues: Reuters study

EWSROOMS are going to have rely on subscription and membership models to ensure Ntheir sustainability in the face of declining revenues across various mediums, a study found. The recently released Reuters Institute Digital News Report for 2019 unpacks SA's media landscape. It shows that, while consumption of news in print form is declining, consumers are increasingly relying on digital platforms for the news. The research was conducted between January and February 2019. “Despite relatively high trust levels in the news overall, revenue for news media has been on a down- ward path for several years, with a 12 percent drop in ad spend last year for television, 5,6 percent for radio, and 7,7 percent for print,” the report states. “With newspaper circulation dying, broadcast revenue dropping and journalism resources eroding, news is going to have to increasingly rely on subscription and membership models to sustain volume and quality.” The research shows that, of those sampled, 16 percent of respondents claimed to pay for online news. There has also been a “surge of goodwill” through reader donations to independent publications like Daily Maverick and amaBhungane to support their investiga- tive reporting. “But this is an uncertain form of income, and with no sustainable revenue model available currently, South African media houses are facing a grim future,” the report warned. Consumption of print media is also continuing its decline, as data for the first quarter of 2019 shows that newspaper circulation declined 5 percent year-on-year, the research indicated. “Daily newspapers were the biggest losers, with a 10,5 percent drop, but weekly newspapers were almost as badly affected, with a 7,9 percent decline year-on-year," the report read. Data for the last 10 years shows a 49 percent drop in circulation for newspapers. “No newspapers have a convincing route out of the print mire into a sustainable digital future,” the report read. Paywall and subscription models implemented by papers like the Mail & Guardian and Business Day are showing “disappointing numbers”. The study pointed out that most digital advertising revenue goes to big social media and search platforms. Meanwhile, 90 percent of respondents said they get their news online, including on social media. Data measured by IAB South Africa shows 11 of the top-15 local sites are news sites, but this does not necessarily translate into digital revenue, according to Reuters. Respondents also indicated that they share news online, with 36 percent using messenger apps, 40 percent using social networks and 39 percent commenting on news using social media or news websites. Social media is increasingly becoming a gateway to news. “A third (of respondents) said they prefer to come across news via social media, ahead of direct access (28 percent) through a news website or app.” In its conclusion, the Reuters Institute stressed that the opportunities afforded by the digital world must be leveraged to rebuild ties between producers of news and those who consume it. - Fin24 Page 22 | June 20-26 2019 The Financial Gazette Column Developing company’s succession plans

LOT has been said about acquire planning and leadership skills, as ones. More often than not, managers want to avoid organisation succession planning well as a broad vision of the organisation internal candidates if they realise that they have A but little has been done on the and its objectives. Consider sharing your not been developing their subordinates. Experience ground to live and walk the talk. Succession succession planning with human resources has shown that those who do better are sometimes planning is as critical as other strategies if and your board of directors. This process overlooked as discussions for succession planning the organisation is to survive the tide. This should not be shrouded in secrecy lest the are done. Funny statements like “I do not have depth is a topical issue in any organisation. whole process is perceived negatively. in my department, are sometimes heard”. When At times, organisations suffer due to Phil Chitagu Give regular feedback to protégés you then ask questions about what the leader has lack of succession planning. We have ― When someone uses well-honed done to develop subordinates, glaring gaps in the seen this even in Zimbabwe and it may with a multitude of favourable outcomes, presentation skills or outperforms on a manager are also revealed. This justifies why some justify why we are where we are today. At not least of which is staff retention. project, make note of it. Keep track of organisations prefer to do external recruitment at times, the crisis situations we have been The process has advantages for staff these achievements in a top-performer file the expense of internal candidates. experiencing might have been due to lack members, by giving them a self-esteem so you have something to reference the In conclusion, a succession plan is an investment of deliberate plans to groom successors. boost and an answer to the question of next time a management position opens. in the company's future. If one is making plans to This does not relate to the country in what is next for them. As for managers Diligently chronicling topics like strong move up the ranks in the C-suite, always bear in mind particular but to other establishments as and employers, it is a proactive measure work and achievement will also come in you will need a successor, too, who is enthusiastic well. We have witnessed situations where that gives them an alignment of talent handy during performance reviews. about being a boss at any given opportunity. individuals due for retirement request for development with the company’s future Organise exposure to peak performers Understanding the importance of identifying more time to plan for their future. The leadership needs. Such a process bonds ― As top performers are identified, offer potential for future leaders and developing a biggest question is what else can you plan employees and the organisation. mentoring relationships, job shadowing succession plan helps employees feel valued for in the little time left when you failed to There is no universally accepted silver and training, which are true articles of their contributions and eager to realise their full plan for 60 years? bullet approach to succession planning value to help them develop new skills and potential within the company. This development As organisations discuss this subject, at as there are many authors with different refine existing ones. Good leaders not only bonds the employee to the organisation, which times there is a lot of tension, jostling for philosophies on the subject. What I will require technical acumen but also strong is a key aspect for sustainable productivity and positions, backstabbing and vuvuzelling highlight is what I have seen working interpersonal skills, including standout profitability of the (unnecessary noise and distractions). elsewhere: verbal and written communication business. “At times, organisations suffer By definition, succession planning may Be deliberate and proactive ― It should abilities, as well as tact and diplomacy. Every manager, due to lack of succession be defined as a process of stop-gapping be noted that it can take time to find These soft skills are critical for top in any given set planning. We have seen this each and every position in the organisation and prepare a promising candidate for a performers so that they transition into the up ― whether in even in Zimbabwe and it to create stability for the same. Succession leadership role. As such, it is critical to groove easily. government or may justify why we are where we are today. At times, the planning may also be defined as a strategy follow a deliberate process. Even if the Conduct a trial run of the succession private sector, should organisation does not think it will need a crisis situations we have been for identifying and developing future plan ― It might be critical to take a vacation have a successor and experiencing might have been leaders in the company for positions that replacement in the near future, preparing leave to have a potential successor step the process should someone to assume an important role due to lack of deliberate plans are considered critical. The process may in and assume some responsibilities. The be deliberate. If to groom successors. This also cover all levels depending on the creates an invaluable safety net. employee will gain experience while you you are a manager, Keep an open mind ― Even if the does not relate to the country nature of the business. Succession plans learn how prepared the person is to take executive, CEO, in particular but to other obvious successor may be the second are used to address the inevitable changes on a bigger role. The process also includes director, or in any establishments as well.” that occur when employees resign, retire, in command, do not disregard other exposing the potential leader to other key leadership position, are fired, get sick, or die. The succession promising employees. Look for people projects, talent exchange programmes you need to answer the questions: Who is your planning process makes sure the business who best display the skills necessary to and in other situations seconding the successor and what have you done to develop such is prepared for all contingencies by thrive in higher positions, regardless of individual to similar operations regionally an individual? It is no longer a secret that every identifying and training high-potential their current title. This process is not only or internationally. leader in Zimbabwe needs a successor at a point workers for advancement into key roles. limited to the private sector but also in Develop a hiring strategy ― Once in time to ensure that there is no paralysis of Succession planning is a critical but government as well. This process is not internal employees have been identified as operations in the organisation and human resources often overlooked process for companies, for the blue-eyed guys but those who can successors for key roles in the organisation, practitioners should be consulted on how to conduct and something they all need to continue drive the business when need be. talent gaps should be identified. In this such a process. to run smoothly. It is also a manageable The vision should be known ― It is regard, succession planning can help the l Chitagu is the current IPMZ vice president event, not a major organisational crisis. fundamental to include potential managers identify where to focus the recruiting for PR, research and customer care. He writes in The end result is a well-oiled machine in strategy conversations to help them efforts. This process is not for the lazy his personal capacity. The Financial Gazette June 20-26 2019 | Page 23 PETROZIM IN THE COMMUNITY

Who is Petrozim Line (Pvt) Ltd Petrozim Line Pvt Ltd (PZL) owns and operates the Feruka – Msasa multi- product fuel pipeline. It is a strategic national company that is responsible for the bulk transportation of at least 80% of the fuel used in Zimbabwe. It also services the hinterland market with supplies also going to regional countries like Zambia, Malawi, A child at Gunda Primary School enjoying the slide. Botswana and the Democratic Republic of Congo. The company continues to increase its footprint in Southern Africa as it seeks to continue delivering energy solutions that power family, communities and nations. The company’s strategic thrust is to focus its brand and protect its infrastructure while being responsive to the needs of its stakeholders.

PZL CSR programme Through a vibrant Corporate Social Responsibly (CSR) programme, the company PZL staff at the commissioning of the play centre at Gunda Primary continues to provide succour to needy members of the community. This has seen the School. company involved in the construction of clinics, mothers’ waiting homes, crèches, classroom blocks and bridges. In addition, the company has also assisted some female sports teams, paid school fees for the disadvantaged talented pupils at primary, secondary and tertiary levels and donated to various charitable causes. The company continues to promote the cause of the girl child while also uplifting the lives of the communities, particularly those within the vicinity of the fuel pipeline. We show case below some of the Company’s activities in the community.

Part of the PZL staff that attended Gunda play centre commissioning.

Ofﬁ cial opening of Gunda pre-school play centre. Welcome song by From left Gunda Primary School Acting Head Ms Millicent Mugariri, Children playing on swings at the play centre. Gunda Primary School choir Mrs Elizabeth Chakanyuka, Rusape Circuit Education Inspector, Air

Commodore I.R Chiganze, Mrs Kelly Makoru retired Head inspecting the play centre.

Part of PZL staff members who attended the session with Board Chair Air Commodore I.R Chiganze in the middle with children in the background.

PZL Board Chairman Air Commodore IR. Chiganze ofﬁ cially opening the pre-school play centre at Gunda Primary School in Makoni District. Children playing on seesaw.

1 Page 24 | June 20-26 2019 The Financial Gazette

Sister in charge of Mubvurungwa Clinic Ms Farisai Murungu giving a vote of thanks.

Sister in charge Ms Farisai Murungu giving the ribbon / key to PZL Board Chairman, Air Commodore I.R Chiganze to ofﬁ cially open the clinic. Children at Gunda Primary playing on play centre donated equipment.

Part of PZL Staff attending the ofﬁ cial opening of the clinic at Mubvurungwa clinic in Makoni Rural District.

PZL Board Chairman Air Commodore I.R Chiganze ofﬁ cially opening the clinic, Chief William Tandi looks on.

PZL Board Chair Air Commodore I.R Chiganze receiving a present from Gunda Primary School child.

PZL donated 2 stoves to Mubvurungwa clinic.

Part of the fence at Gunda Primary School that was donated by PZL. From right to left PZL Board Chair Air Commodore I.R Chiganze, Chief William Tandi, Hon MP Christopher Chingosho, the General Manager Mrs .C .Katsande, inside the gazebo at Mubvurungwa.

Dimbiti Mothers’ shelter crowd attending the ofﬁ cial commissioning of the Mothers’ Shelter in December 2018, in the background are squat toilets built by PZL.

From left: Ms Millicent Mugariri Acting Head Gunda Primary School,Trisha Gambiza receiving school uniforms donated by PZL.

Part of the crowd that attended the opening of the clinic at Mubvurungwa in Makoni District.

Dimbiti Mothers’ shelter and adjacent gazebo (cooking shelter) also built by PZL. Mubvurungwa clinic block and gazebo built by PZL in Makoni Rural District.

2 The Financial Gazette June 20-26 2019 | Page 25

Children dancing welcoming the commissioning of the Dimbiti Mothers’ shelter. Water tank & borehole donated by PZL to Bromely (Whiteside} Primary School in the Goromonzi Rural District Council.

Flowers of Hope children sitting on chairs donated by PZL.

Guests of honour the Hon Chidhakwa ofﬁ cially opening the Dimbiti Mothers' shelter.

Mrs E. Chikovo, Director Flowers of Hope Children Trust, and Secretary Mr F. Shonhiwa, receiving chairs donated Staff inspecting borehole constructed by PZL at St Ludger Primary School. by PZL.

Borehole constructed by PZL at Chitsva in Makoni Rural District.

PZL donating Ultra care sunscreen lotion to the Rotary Club of Chitungwiza for people with albinism.

PZL donated some building materials towards the construction of St Clair (AMWEC ) Clinic in Murehwa. PZL sponsored Nicole Musarira (left) to attend World Karate League in Croatia. Looking on are her colleagues.

PETROZIM LINE (PVT) LTD: No. 6 Seagrave Road, Avondale. │ P.O. Box CY2179, Causeway, Harare, ZIMBABWE │ Tel: +263 242 304 464/5 │ Fax: +263 242 304 421 │ Email: [email protected] 3 Page26 | June 20-26 2019 The Financial Gazette The Financial Gazette June 20-26 2019 | Page 27 Page28 | June 20-26 2019 The Financial Gazette The Financial Gazette June 20-26 2019 | Page 29 Page30 | June 20-26 2019 The Financial Gazette The Financial Gazette June 20-26 2019 | Page 31 Page 32 | June 20-26 2019 The Financial Gazette National News Mozambique signs US$25bn gas deal NADARKO Pe- “will bring tens of billions bique’s location between troleum Corpora- of dollars of investment” the Pacific and Atlantic Ation (Anadarko) and revenue to the govern- basins is an advantage that approved a US$25 billion ment, he said. will help the country com- liquefied natural gas proj- Developing the hydro- pete with a booming num- ect in Mozambique which carbon resources is crucial ber of LNG suppliers. could help transform the for the southern African Flexible commercial economy of one of the nation, which has strug- arrangements, including world’s poorest countries gled to service its debt in an innovative co-purchase Anadarko chief execu- the past. Nyusi could use agreement with Tokyo Gas tive Al Walker signed a fi- Anadarko’s planned in- Co. and Centrica Plc, have nal investment agreement vestment in the project, helped the project secure with Mozambique Pres- called Mozambique LNG, “high-quality customers ident Filipe Nyusi in the to showcase his achieve- in a crowded LNG mar- capital, Maputo. Anadarko ments ahead of elections ket,” Frank Harris, head of sees Mozambique having in October, and hope to LNG consulting at Wood the potential to become compensate for the prob- Mackenzie Ltd. said in an one of the largest LNG lems with borrowings, ac- emailed note. suppliers in the world, and cording to Jonker. Gas from the Anadar- the project, expected to Mozambique LNG is ko-operated offshore field export to countries in Asia at the center of a new re- will be sent to a processing and Europe, will play a big structuring deal the gov- plant on land, where it will part. The project will be ernment reached with a be liquefied and then ex- funded with US$11 billion core group of its Eurobond ported. The onshore plant of equity and US$14 bil- holders last month. While is being built in the north- lion of debt. investors will no longer ern Cabo Delgado prov- “Over time this project have access to future rev- ince, an area where sus- will double this country’s enue from the project, the pected Islamic insurgency GDP,” Walker said at the in-principle agreement began in 2017. While the signing ceremony. allows the administration company says it hasn’t It’s taken the American to pay a lower interest rate been targeted, one of its company nearly a decade until after the country’s convoys was attacked and to green-light the devel- gas production begins in a contractor beheaded in opment after discovering 2023. February. gas in Mozambican waters Occidental Petro- Anadarko has imple- in 2010. The country had leum Corp. agreed to mented a resettlement to draft new regulations buy Anadarko earlier this program in the area, and for its nascent oil and gas year. Once the deal is is building roads and an industry, even as uncertain completed, Total SA has airport. The company has global demand for LNG an arrangement with Oc- said it will continue to slowed down plans. The cidental to acquire all of develop the infrastructure Mozambique government Anadarko’s African assets until Total takes over. expects US$95 billion for US$8,8 billion, includ- The Exxon-led project, of revenue over 25 years ing Mozambique LNG. called Rovuma LNG, is from this project and oth- The project will have planning a 15,2 million- ers led by Exxon Mobil the capacity to produce tonne-a-year facility ad- Corp. and Eni SpA. 12,9 million tonnes a year jacent to Anadarko’s and “It is the start of a new in the first phase, with expects to reach a final era for Mozambique,” the scope to expand to as investment decision by said Darias Jonker, a Lon- much as 50 million tonnes. the end of the year. Eni don-based director at con- It has contracts with key approved another US$7 sultant Eurasia Group Ltd. global importers in Asia billion project in 2017. The size of these projects and Europe and Mozam- – Daily Maverick Customers reward NetOne Business Reporter such as network reception, network cov- erage and voice quality among house- IMBABWE’S telecommunication hold and corporate consumers. subscribers say they are satisfied “Overall, consumers were satisfied Zwith NetOne’s services, a new with the call success rate, SMS delivery survey has revealed. and quality of services that utilize USSD According to a 2018 Consumer Sat- offered by their service providers,” the isfaction Survey report commissioned report said. by the Postal and Telecommunication “Usage of mobile telephone services Regulatory Authority of Zimbabwe (PO- declined to 93 percent among household TRAZ), NetOne took the overall leader- consumers from 99 percent recorded in ship score of 5,59 out of a score of 7 for the 2015 survey. However, usage of mo- call success rate for household consum- bile telephone services declined signifi- ers and 6,29 for corporates. cantly among corporate consumers to the On the other hand, other mobile net- level of 53 percent compared to 74 per- work operators had an average call suc- cent reported in 2015,” the report added. cess rates of 5,46 for households and 5,6 The study, which was conducted by for corporates. Topline Research Solutions, also re- Customers highlighted NetOne time- vealed that postal services usage on the ously responds to faults and offered af- market has declined significantly as two fordable products and services. percent of household consumers were The POTRAZ report also revealed using the services compared to 4,3 per- that NetOne had the lowest complaints cent recorded in the 2015 survey. In the incidences and of the complaints lodged period under review, postal services us- 94 percent of household complaints were age significantly declined among corpo- fully resolved and 100 percent of corporate consumers to the level of 9 percent rate complaints were resolved. compared to 21,9 percent reported in Industry experts said the state-owned four years ago. telecommunications giant should be do- “Usage of internet and data services ing something right as it did not only on the market grew significantly as 34 score positively in the POTRAZ con- percent of household consumers were sumer satisfaction report, but in 2018 using internet and data services in 2018 received numerous accolades from dif- compared to 29 percent recorded in the ferent stakeholders for offering the Best 2015 survey. Internet and data services Customer Services in the mobile net- usage remains very high among corpo- work business. rate consumers to the level of 86 per- According to the report all mobile cent compared to 83 percent reported in network operators were generally per- 2015,” read part of the report. forming well on the network parameters [email protected] The Financial Gazette June 20-26 2019 | Page 33 Page 34 | June 20-26 2019 The Financial Gazette National News ‘Zim needs proactive actuaries’

Omega Ukama twelve months ago, it is starting to look like Business Reporter the country is going down the same path as it did in 2008. POSB seeks US$10 million offshore IMBABWEAN actuaries have been Makwanya told delegates attending the so- Nelson Gahadza champion government projects. challenged to come up with solutions ciety’s fi fth annual convention in Harare last Business Reporter “Part of the privatisation pro- to economic problems being experi- week that actuaries needs to be proactive in ceeds will be channelled towards fur- enced in the country. solving the country’s well-documented eco- HE People’s Own Savings ther digitisation of the bank,” he said. ZThe country is facing its worst economic nomic ills. Bank (POSB) says it is en- He noted that POSB will contin- crisis in a decade, punctuated by fuel, electric- “We are having to refl ect on how we can gaging a European bank to ue to create products for the lower ity and foreign currency shortages, high unem- solve the pensions, savings and protection cri- T secure a US$10 million line of credit end market, which has been the ployment rate, high trade and budget defi cit sis that we fi nd ourselves in. Failure to resolve to meet growing demand for foreign backbone of the bank’s performance. and skyrocketing infl ation among other things. the problems in these industries will erode currency. Kandlela indicated that in the fi ve Loreen Makwanya, the Actuarial Society confi dence in the savings industry for genera- Admore Kandlela, the bank’s year journey from 2014, the bank’s of Zimbabwe (ASZ) president, said it was tions to come. A country that does not mobilize chief executive, told shareholders at deposits have grown to $185 million critical for actuaries to help the country move savings impacts its ability to develop economi- a recently-held annual general meet- compared to $84 million in 2014. forward. cally,” she said. ing that the institution had failed to “The bank has also managed to “We need to infl uence the course of events Makwanya said the society was not only secure funding from the region’s De- record growth in profi t margins due as they happen, life should not be spent writ- battling with the current problems but also the velopment Finance Institution. to effi cient deployment of resources ing corrections. We need to build capacity to legacy hyperinfl ation issues of responding to “We are looking to raise about and reducing costs,” Kandlela said. allow pro-activeness and thought leadership,” the commission of inquiry fi ndings. US$10 million and it will be a start- Admore Kandlela He said the non performing loan Makwanya said. “Most critically how should we be setting ing point,” he said. by government following years of ratio is currently at six percent, a de- “The Actuarial Society is dealing with very long-term assumptions with the level of vola- Kandlela said the bank had main- perennial losses and as part of its re- cline from 14 percent in 2014. diffi cult issues. Issues that no syllabus could tility in this economy? What types of products tained its rand account after discon- form process. He said the bank’s balance sheet have prepared us for, and require our deep work for an environment like ours, impact on tinuing correspondent relationship as Kandlela noted that an evaluation continues to grow year on year and analysis, imagination and collaboration to pull different stakeholders, particularly policyhold- a result of high costs of maintenance. committee has been put in place to the bank is now stable and has capac- through.” ers and pension fund members,” she said. As Zimbabwe’s risky profi le de- evaluate the four bids within 14 days ity to grow. In 2008, pensions and savings in Zimba- A report by a commission of enquiry set up teriorated, several European banks in line with the Procurement Regula- Kandlela said so far in the year, bwe were wiped out by an episode of hyperin- by former president Robert Mugabe to look discontinued their relationship with tory Authority of Zimbabwe (PRAZ) the bank has managed to perform fl ation, which was recorded as one of the worst into conversion of insurance and pension val- local banks. Since then, some local regulations. positively, from December 2018 in history. ues from the Zimbabwe dollar to the United banks are failing to access dollar “We fl oated a tender for the trans- level. This position was confi rmed by the con- States dollar found that the ASZ had not regu- clearance services as there are few action advisory which was closed on The bank will soon introduce version of these balances from the Zimbabwe lated its members as expected, placing this ob- foreign banks still offering that ser- the 6th of June whose purpose will an international debit card which dollar — which was ditched after suffering ligation on external professional bodies such vice. be to pursue a due diligence on the has previously been uneconomic to value erosion due to the hyperinfl ation — to as the institute and Faculty of Actuaries of the On privatisation of the bank, he bank with a view to ascertain its val- launch. the United States dollar with policyholders and United Kingdom. said at least four international in- uation and help in bargaining over He said this will see both corpo- bank account holders retaining bare balances “However, these bodies have no mecha- vestors have expressed interest to bids,” he said. rates and individuals that generate after the exercise. nisms for detecting malpractices or unprofes- acquire a stake in the bank. Kandlela said the prvatization foreign currency or individuals with And with offi cial infl ation having reached a sional conduct by their members in Zimba- POSB is among several state en- process will set the bank on a solid free funds able to utilise the card. ten year high of 97,9 percent for May from 2,7 bwe,” the report read. newsdesk@fi ngaz.co.zw terprises earmarked for privatisation footing to write more business and newsdesk@fi ngaz.co.zw

The Partners, Associates and Staff of Titan Law have the pleasure to congratulate you on your appointment as SRC Board Chairman. We wish you a successful term.

“nulli secunda”,

second to none. Senior Partner: Gerald Nqobile Mlotshwa The Financial Gazette June 20-26 2019 | Page 35

‘We have navigated the difficult terrain’ is to drive export sales in light of the dip prices. This has had a direct influence on the volumes N THIS interview with our reporter, Nelson Gahadza in local sales performance. This has been and CT Bolts remained profitable despite the decline in (NG), Zimplow chief executive, Vimbai Nyakudya, a game changer. Powermec recorded a economic activity driven by growth in sales volumes of I(VN) (pictured) speaks about how the group’s diver- 106 percent growth in volumes against high tensile steel bolts by 98 percent. sified portfolio has helped the farm implements maker prior year, with 35 generator unit sold NG: Does this reflect what to expect at the end of navigate Zimbabwe’s tough operating environment. Be- while hours sold also improved by 21 the year? low are excerpts of the interview. percent against same period last year. VN: I believe so because most of our business is yet The Barzem business has been skewed to come. You know we are a seasonal business and most NG: As an agro-concern, what has been the over- towards fleet maintenance to capital of the business happens between August and Decem- all impact of climate change on the business? expenditure. Parts uptake through the ber. The group is also positioned to take advantage of VN: One key thing that has impacted us has been counter grew six percent while hours opportunities as they come along. The firm export sales drought. In the past five years, the country has experi- sold through the workshop grew by 164 orders, the demand for alternative power and solid per- enced two major droughts, that is during the 2015/2016 percent to 3,367 hours. formance from Barzem and Farmec are expected to spur season. We are back into the same situation again this Farmec was impacted by drought, the 2019 financial performance. season. If you look at our markets, they have been down drop in yields as well as soft producer [email protected] and yields have been low. If the yields are affected, our customers have got less money to spend on capital expenditure which we offer in form of equipment. This applies even to a small-scale farmer who requires an ox drawn plough. They will not spend on capital expenditure. The drought has also aggravated the situation by reducing agricultural output for the 2018/19 season. NG: How has government’s interventions on the monetary and fiscal space affected your business? VN: Government policies have to a certain extent helped us. We believe what they have done on the monetary front is quite commendable. As a country, we were grinding to a halt in terms of foreign currency supply and the introduction of the interbank market was a huge step in the right direction although it will cause discom- fort amongst everyone in terms of the rising prices. But it provides a bit of predictability in terms of the direction where the business is going. We now have a market where we can access foreign currency, rather than going into the unofficial market. The fact that they have been trying to liberalise it much more brings positive results. NG: Does your business have a huge appetite for foreign currency? VN: We are a net importer as much as we earn foreign currency. We have businesses like Barzem and Farmec, CT Bolts and Powermec, which require foreign currency. In terms of specific figures, it depends on the season. During the main season we need as much as US$1 million (per month?), but between January and June, it will be something around $400 000 to US$500 000. With several banks that we use we are able to get $50 000 here, $20 000 there, and by the end of the month it will be something significant. NG: What is your split in terms of exports and local sales? VN: In the past three years exports have been less than 20 percent of our total group revenue and that has been the trend. NG: In terms of re-tooling, what are you looking at? VN: We are into manufacturing and the objective by government, especially through SI 64, which is now SI 22, has been for industry to strengthen its capacity to industrialise. That is what we have been doing. We want to improve on systems and compete with global players. We are looking at initiatives that will bring those advantages. It is not like we will do an outright rebuild of the factory, because it will be costly. But we are just looking at some provisions of factories. NG: Is your balance sheet solid to support such initiatives and new projects? VN: Very much, but in this environment, you have to be cautious. Even if you look at our borrowing level, we could have gone for more, so we are quite strong. The company now has a malleable balance sheet structure underpinned by the ability to manage the supply chain. With the strength of the balance sheet, we are able to configure our market offering to the circumstance and take advantage of opportunities as they come. NG: Would you give an update on operations to date? VN: Performance for the five months period to May, 2019 shows that group revenue grew 86 percent to $29,8 million. The growth in volumes and the impact of the exchange rate movement towards the end of May 2019 on the foreign denominated monetary assets such as export debtors, backed by local currencies and nostro balances, pushed the group’s operating profit by 784 percent to $13,4 million. We continue to increase thrust on favouring non-monetary current assets such as inventory, limiting uncovered foreign exposure and appropriately gearing our balance sheet. In terms of business unit performance, Mealie Brand performed well during the five months period despite the drought that affected the region, causing a decline in agricultural activity. Volumes of implements grew 49 percent driven mainly by the export markets. The thrust there Page 36 | June 20-26 2019 The Financial Gazette National News Zim reels as power cuts intensify

IMBABWE’S power cri- country was generating only about a sis deepened this week as third of its power requirements be- Zload-shedding was extended to cause of ageing equipment at its ther- 18 hours a day. mal plants and water shortages at hy- Zimbabweans, already reeling dro units. from severe cash shortages, a 100 “At Kariba, the water levels have percent inflation rate and an intolerant gone very low and we are now gener- regime now have access to power for ating only 358MW against the usual only four hours a day. Mostly in the capacity of 1,050MW due to reduced dead on night. water levels. The power cuts reflect badly on the “At Hwange Coal Power station government of President Emmerson there are six units that are supposed to Mnangagwa, whose Zanu-PF par- be working but only three are operat- ty was re-elected on promises to end ing. As a country we are not generating load-shedding. enough power,” she said. The power crisis is yet another The power cuts are a glimpse of headache for the troubled Southern Fortune Chasi how corruption has fuelled the coun- African nation that is in the grip of its try’s economic crisis. worst economic crisis in 10 years. autocratic 37-year rule the economy Last week Chasi fired the entire Miners have been told to import collapsed. Zesa board for not acting on malad- their own power, pushing up cost of Power utility Zimbabwe Electric- ministration at the state company. production. ity Supply Authority (Zesa) first in- Zesa CEO George Chifamba and The hardest hit miners are small- troduced an eight-hour load-shedding the company's top managers are fac- scale players who in 2018 were re- schedule in May but power cuts were ing charges related to dubious dealings garded as the heroes of the economy drastically extended this week. with contractors. after contributing more than 50 percent Addressing a post-cabinet meeting These include an alleged $5m pay- of gold output. on the power crisis, Energy minister ment to controversial businessman Small-scale miners’ spokesman Fortune Chasi acknowledged the situ- Wicknel Chivayo for a solar project Dosman Mangisi predicted a slump in ation had spiralled out of control. that never materialised. production as most miners depend on He said heavily indebted Zesa Another scandal involves Hwange the national grid. owes millions to Eskom. Colliery, which supplies coal to “Our miners are struggling to work, “There is no miracle about it … Hwange thermal power plant. we need urgent intervention from gov- the situation is dire. As a country we The coal company was suspended ernment to get special provisions for should have never allowed ourselves from the JSE and the Zimbabwe Stock power supply.” to get into this situation. Exchange last November after it was The country is also facing a short- “We owe HCB (Mozambique) and placed under administration. age of wheat. Farmers say the power Eskom $83m. I am not sure as to when At hearings into Hwange in Zimba- cuts have affected irrigation, dampen- the payment will be made,” he said, bwe’s parliament in 2018, allegations ing prospects of good harvests. adding that huge debts owed to Zesa of fraud and corruption were made by Many Zimbabweans say life is by local consumers compounded the board members against the colliery’s much harder under Mnangagwa, problem. management. Hwange’s debt to the who took over from former president Deputy Energy minister Magna government stands at $138m from Robert Mugabe. During Mugabe’s Mudyiwa at the weekend said the $120m in 2018. — BusinessDay

ForFor the the week week ending ending 13 19 March June 20192019

For the week ending 13 March 2019 The Financial Gazette June 20-26 2019 | Page 37 National News Hippo delays financial results

Omega Ukama may result from the group’s review of its due by June 30, 2019 which will now be financial statements until October 2019, having secured Business Reporter financials are likely to impact the compa- published on or before July 31, 2019 fol- a voluntary suspension of the listing of its shares on the ny’s financials,” Hippo said in a statement lowing the granting of an extension by the Johannesburg and London Stock exchanges, while these ISTED sugarcane processor Hippo Valley Estates on Wednesday. ZSE for the publication of the abridged au- reviews are completed. (Hippo) says its financial results for the year ended “As a result, the board is performing dited financial results,” Hippo said. Hippo, however, said it is not aware of any “deliberate LMarch 31, 2019 will be delayed due to an account- its own internal review of the company’s This also comes as Tongaat has con- or fraudulent errors, misstatements or financial malprac- ing policy review at the company’s group level. financial statements to critically assess the cluded that reliance on the 2018 finan- tices” by the company in the financial information previ- This comes as its parent Tongaat Hulett (Tongaat) company’s accounting policies in the con- cial statements is no longer appropriate ously released, that might have been aimed at misleading revealed that certain malpractices would result in the re- text of dynamics in the local environment. and that the financial information therein the investing public. statement of its audited consolidated financial statements “The review of the company’s should not be relied upon. “The board continues to give these matters its urgent for the year ended March 31, 2018. financials has resulted in a delay in the And to conclude the financial review attention and a further announcement will be made as and “Hippo adopted the Tongaat accounting policies and release of the company’s financial re- and the associated forensic investigation, when appropriate,” Hippo said. as such, any changes to the group accounting policies that sults for the year ended March 31, 2019 Tongaat has delayed the publishing of its [email protected]

Pyxus’ tobacco shipments were minimally affected by Cyclone Idai. US firm unfazed by cyclone

YXUS International (Pyxus), a US-based agro firm with operations in Zimbabwe, says it has managed to Pmitigate the effects of Cyclone Idai on its local operations. The New York Stock Exchange-listed firm — which owns Mashonaland Tobacco Company — said its tobacco shipments were minimally impacted by the cyclone, which left a trail of destruction in the eastern parts of Zimbabwe. “We continue to see the benefit in the implementation of strategic initiatives to enhance the leaf business,” the firm said. Pyxus said for the fiscal year 2018, full service volumes increased by 4,9 percent to 400 million kilogrammes (kgs), despite the impact of Hurricane Florence and foreign tariffs on United States tobacco. “These decreases were offset by an increase in leaf volume, mainly attributable to larger crops in Africa, the timing of leaf shipments in South America and the continued development of the other products and services segment,” Pyxus said. Gross profit as a percent of sales increased to 13,9 percent for the year ended March 31, 2019 from 13,3 percent for the year ended March 31, 2018. Sales and other operating revenues decreased 2,4 percent to $44,4 million during the review period from $1,846 million. Selling, general, and administrative expense increased 16,5 percent to $24,5 million from $148,3 million during the previous comparable period primarily due to start-up costs associated with the development of new business lines. Gross profit as a percent of sales increased from 13,3 percent for the fiscal year ended March 31, 2018 to 13,9 percent in current review period. Net loss attributable to Pyxus International, Inc. was 234 percent to $70,5 million for the fiscal year ended March 31, 2019 from net income of $52,4 million recorded in prior comparable period. “Our financial performance this year is a reflection of the strong performance of our leaf business as well as the significant investment in our new business ventures. Our leaf team addressed challenging market conditions with ef- ficiency and agility, resulting in a 4,9 percent increase in full service volumes to 400 million kgs,” Pyxus said. Pyxus said its liquidity requirements are affected by various factors including crop seasonality, foreign currency and interest rates, green tobacco prices, customer mix, crop size and quality, and the extent and timing of facilities expansions. “During the year ended March 31, 2019, the company utilized surplus cash to reduce long-term debt with the purchase and cancellation of $27,3 million of its 9,8 percent senior secured second lien notes, leaving $635 million outstanding at March 31, 2019,” the firm said. At year end, the firm’s available credit lines and cash to- talled $608 million.— Business Reporter [email protected] Page 38 | June 20-26 2019 The Financial Gazette National News Paynet, EcoCash forge partnership

AYMENT service vendor Paynet the companies said. Zimbabwe (Paynet) has partnered Even though BAZ says the shutdown PCassava Smartech’s mobile money will not affect most of the banking processes service EcoCash in a free of charge salary in the country, concerns are rising that sala- payments service offer. ries for over half a million workers will be This comes as the payment service pro- disrupted. vider, which has been the major salaries The National Social Security Authority processor in Zimbabwe, last week said it delayed payments to some pensioners due suspended services to Zimbabwean banks to the suspension of services by Payment. because they owe US$470 000. Meanwhile, local banks have reportedly However, the Bankers Association of already started working on alternative soft- Zimbabwe (BAZ) argued that the suspen- ware to replace Paynet. sion arose from a dispute whereby the ven- Commenting on the issue, Ralph Wa- dor has requested for settlement of local tungwa, BAZ’s vice president said individ- services rendered in United States dollars. ual banks may have to ﬁ nd alternatives for “Paynet and EcoCash have announced Paynent, including reverting to “manual” and introductory offer to provide Paynet’s entries in the interim. secure, encrypted, and tested salary pay- “We pay them in U.S. dollars, but our ment services free of charge to senders and argument is that since they are a local busi- recipients through to August 2019. Thereaf- ness, they must be paid locally or they will ter, the service will be competitively priced have to queue up for forex like everyone compared to any alternatives available in else. They were mostly doing salaries, but the market,” the two companies said in a because of this we may have to make other statement on Wednesday. plans,” he said. The companies are offering to process And in a footnote accompanying its salaries using the same processes as Paynet statement on Wednesday, Paynet warned the used to offer with banks, payments will public that “The Paynet Template being sent however be to EcoCash numbers instead of by banks to their customers in no way indi- bank accounts. cates Paynet’s endorsement of the methods “You will then remit the required funds being used”. —Business Reporter into a trust account using ZIPIT or RTGS,” newsdesk@ﬁ ngaz.co.zw Ivory war comes to Zimbabwe Shame Makoshori Companies Editor

IMBABWE will next week hold a meeting targeted at compelling the Zworld to lift a ban in international trade of elephants and ivory. Tourism minister Priscah Mupfumira said about 500 delegates, including heads of State from across Africa, have signed up for the summit, which provides a platform to share strategies for saving the con- Expression of Interest tinent’s jungles from extinction. “The summit is most opportune to refl ect on this important species as well as Environmental Impact Assessment for the recalibrate strategies to ensure that appropriate benefi ts accrue to nations and Priscah Mupfumira Afreximbank Regional Office and Trade Centre respective communities. We will discuss how wildlife impacts the ordinary people, how we can manage human-wildlife con- may be supported by its neighbours, as The African Export-Import Bank (Afreximbank) is a pan-African multilateral financial frustrations have been brewing, with Na- institution established in 1993, by African Governments, African private and institutional fl ict. We want to come up with resolutions mibia revealing during the Elephant Sum- investors as well as non-African financial institutions and private investors for the purpose which will be good for conservation and of financing, promoting and expanding intra-African and extra-African trade. The make sure people living with wildlife also mit in Botswana last month that its ivory Bank, headquartered in Cairo, Egypt, established its first branch in Harare, Zimbabwe, benefi t,” she said. stockpiles worth N$125 million had be- in July 1996. This comes after Zimbabwe, Zambia, come costly to maintain. Namibia and Botswana recently agreed At the Botswana summit, the countries The Bank intends to construct its permanent Southern Africa Regional Office and to fi ght for the lifting of a decades long agreed to develop a common position on Trade Centre in Harare, Zimbabwe. The Bank contemplates constructing a landmark, embargo, which has had dire implications elephant management and to speak with modern, futuristic and iconic office complex on a 12,000 square meter stand in the across a region with over 250 000 jumbos. one voice on behalf of communities. Newlands area. For this purpose, the Bank intends to engage a consulting firm to carry In southern Africa, elephants are a President Mnangagwa called on the in- out an Environment Impact Assessment. symbol of success in conservation and ternational community to enable nations to generate most of Zimbabwe the revenue trade and better benefi t from their natural The Bank hereby invites expressions of interest from reputable and suitably qualified from Zimbabwe’s $1 billion tourism in- endowments. firms. The expressions of interest should be delivered to the e-mail address below no dustry. “The ‘one size fi ts all approach’ of ban- later than 1500hrs (CAT) on 12 July 2019. Consulting firms making submissions should But under the Convention in Inter- ning everything under CITES is neither include the following information in their expressions of interest; national Trade in Endangered Species sustainable nor desirable,” he said. (CITES), ivory sales have been banned to Namibian President, Hage Geingob 1. Company registration, ownership structure and profile. curb mindless poaching with huge impli- said the population recovery over the past 2. Proof of experience carrying out Environmental Impact Assessments over the past 5 cations on ecosystems and biodiversity. several years attests to Africa’s manage- years. In Zimbabwe the 84 000-strong element efforts. 3. Proof of knowledge of the Environmental Management Act and relevant statutes. phant herd, which is twice the carrying “Changing times call for appropriate 4. Proof of technical and managerial capacity. capacity, has been affecting conservation management strategies to be developed in 5. Annual financial statements for the past 3 years. efforts. order to maintain the historic coexistence Harare last month threatened to pull out between our people and elephants. To that For further information and submission, please email: [email protected] of CITES in order to sell its elephants and end, Namibia supports the realisation of a ivory to raise funding for conservation. shared approach towards elephant conser- Botswana has lifted a hunting ban on vation via the KAZA agreement, thereby, wildlife because too many elephants were remaining committed towards a common Transforming Africa’s Trade destroying crops and sometimes kill peo- vision for the management of Southern afreximbank.com ple. Africa’s elephants,” he said. Zimbabwe’s withdrawal from CITES newsdesk@fi ngaz.co.zw Life & ArtsNews Worth Knowing June 20-26 2019 Page 39 Traditional fare at The Cave Affair HE Cave Affair Coffee Bar and on a chilly Sunday morning, passing the we pulled into the car park the skies various dining areas, and the kitchen, the rate is 7 to 1. Pork trotters sim- Restaurant is open every day of the Glen Forest Memorial Park turnoff ( a road became grey and a chill wind blew. where food is braaied over glowing mered in tomato sauce ( US$2) were Tweek. Surrounded by a grove of sa- more and more frequently travelled as the Undeterred by wintry weather, deter- coals, or simmered in large cooking silky smooth and delicious. I chose cred mazhanje trees, it’s a hop, skip and a cost of living soars) and drifted over the mined dog walkers helped their Ger- pots. Menu choices were chalked up sadza rezviyo (US$1) over white sad- jump away from the granite hills of Dom- speed humps at Hatcliffe. Shop keepers in man Shepherds and Golden Labs out on a large blackboard outside, close to za, partly for health reasons. Zviyo boshava, a National Heritage site in the Chi- wooden shacks on the left hand side of the of their 4x4s, and set off up the moun- an open air dance floor and stage. (millet) is known to be nutritious, help- namhora communal lands, popular with road advertised all manner of goods for sale, tain in search of fresh air and adven- We sat in the main dining room at a ing with weight loss, regulating blood mountain climbers, walkers and lovers of from cement to tyres to gutters. Bunches of ture. A hot meal taking precedence sugar levels, delaying dementia and rock art. Although visitors can picnic or fresh rape and pyramids of red tomatoes over these attractions, George and I building muscle power. If we had time braai (bring your own wood) at the foot of were in demand. Resisting the temptation to walked over to the restaurant. A Matter of Taste to climb the rocks after lunch, this the rocky outcrop, there are times when only stop and look for bargains, we continued on- Constructed like an African village with meal would be helpful! a hot, sustaining carb-fest of traditional food wards past Domboshava village, eventually with adjacent and interleading rooms Other traditional favourites are on from the nearby Cave Affair restaurant will turning right at the sign post for the site. with low, thatched roofs, the Cave Af- Charlotte Malakoff offer at The Cave Affair, such as ma- suffice. Fitful rays of sunlight caught the red and fair offers patrons a variety of dining zondo and oxtail. Salad lovers will find We drove north towards Domboshava gold lichen-covered dome of the rock, but as experiences. To one side of the spa- Greek salad, Garden salad, and an in- cious main dining room is an intimate round wooden table, decorated with triguing creation called Cave salad area, partially concealed by wooden carved ndoros, symbols of power and (50c). The menu is far from glamor- poles and thatching, where a couple wealth. The sweet sounds of The Pow- ous, so don't expect to be offered a can discuss important issues over a cup er of Love, Jennifer Rush's 1984 hit, souffle of mopane worms and mbam- of Tanganda tea, a hot chocolate or a drifted through the window from a baira, or a mazhanje gelato for dessert. Zambezi beer. A passage way leads to well-tuned sound system, as we took But you will eat your fill of good food, another dining area, large enough for a turns to wash our hands with warm and the wait staff will attend to your small family, or a group of friends re- water poured from a jug. By the time every need, whether it be a gas heater quiring a degree of privacy. Open air our order arrived, the music had to warm the room, a tooth pick or an- paved areas, great for al fresco meals switched to sungura, Zimbabwe’s other Pepsi from the bar. on sunny days, are surrounded by pro- most popular music genre. After a leisurely lunch, we checked lific banana trees and tropical plants. All the best pieces of a well-cooked out an eye-catching display of Shona Whichever way you turn, the magical and flavoursome road runner chicken sculpture a few metres away from the mazhanje trees provide a backdrop for stew – drum stick, wing and thigh – restaurant. Although some small, well- this unusual restaurant. were served, alongside tsunga ine dovi made pieces stood out, trade was slow. We were greeted by friendly and (mustard greens with peanut butter). There was a chill in the air, and it attentive staff, who led us to the well- At US$2 and 25c respectively, this de- was time to return to Harare. stocked bar, before pointing put the livers bang for your buck, even when Comments to: [email protected]

The Cave Affair Restaurant and Bar, Domboshava Caves. BRAZIL great Marta Vieira da Silva (33) has become the most prolific scorer in World Cup finals history. Her 17th Women’s World Cup goal against Italy on Tuesday in her fifth World Cup tournament saw her News Worth Knowing overtake Germany’s Miroslav Klose as the outright leading scorer in either the men’s or women’s tour- Sport nament. Page 40 June 20-26 2019 SPORT SHORTS France not favourable: Ferrari FERRARI say they expect to struggle compared to Mer- cedes at this weekend’s French Grand Prix. Sebastian Vettel won on track at the last race in Canada before being stripped of the victory because of a penalty for dangerous driving. Ferrari team boss Mattia Binotto said the French track will not suit the car. “Paul Ricard was a tricky circuit for us last year and we know this kind of track isn’t particularly favourable for our package,” Binotto said. However, Mercedes F1 boss Toto Wolff said Ferrari’s straight-line speed advantage could again pay dividends for the Italian team. “We expect another tough fight in France,” Wolff said. “The circuit features some similarities to Montreal and the long straights will present a challenge for us. “However, unlike Canada, the corner characteristics are spread across a range of speeds, which should play to our advantage. We’re looking forward to the chance to put a few things right again.” Mercedes’ Lewis Hamilton dominated in France last year, after Vettel collided with the Briton’s team-mate Valt- teri Bottas at the first corner. — bbc.com Screaming on the inside: Osaka TOP seed and world No. 1 Naomi Osaka admitted that she had been “screaming on the inside” when she neared a first-round exit at Birmingham’s Nature Valley Classic. But Osaka is an ex- Former Sables coach Peter de Villiers pert at brinkmanship, and she recovered to post a 6-1, 4-6, 6-3 victory over Maria Sakkari. Osaka was relieved to have won through shortly before the rain started falling in Birmingham, thus limiting the day’s results to just six completed singles matches. This was better than the men managed at London’s Fe- ver-Tree Championships, which suffered a total washout for only the third time since 2001. ‘Sad to hear this from “For me, it’s always a bit nerve-racking to play on grass,” Osaka explained after the match. “Especially since I haven’t been able to practise that many times here, it's a bit tough to adjust. But I think everyone was hitting indoors, so I couldn’t be the only one complaining about the situation.” Beast’ — De Villiers Osaka prefers the predictability of hard courts, and in the ear- ORMER Sables coach Peter de Villiers said stand that we allow ourselves to be controlled by go that route, he inherited that from us. ly stages of Tuesday’s match, she looked baffled and bemused it was sad to hear Tendai Mtawarira saying either outside forces, or money, or power and all “If you look at the records that we broke with by the mysterious green stuff under her feet. Fthat the former national coach’s “methods those kinds of things. So yah, I just hope for him those players, when I took them over, especially in Fortunately for her, Sakkari was in generous mood, com- and approach didn’t really work with the Spring- to get well soon (Mtawarira has been injured), so New Zealand and all around the world – if I used mitting eight double-faults and converting none of the six break boks”. that he can actually fight for a place in the World his players better than what he could use them, points she held during the deciding set. De Villiers responded to an extract from Cup. then there must be something that I did right. It was when Osaka trailed 0-40 in one lengthy service game Mtawarira’s book ‘Beast’ during an interview by “He was a number eight, he had some ball- “Quite rightfully, they were experienced play- that she heard those internal screams. But she found some strong journalist and television host, Robert Marawa on sense. Very quiet – you couldn’t use him as part of ers, they did win a World Cup. So, why would I serves to escape danger, and earn a second-round meeting with the Room Dividers segment of the Marawa Sports your senior group because he had that mentality go in there and change the whole thing? Kazakhstan’s Yulia Putintseva. — telegraph.co.uk Worldwide programme on Tuesday evening. of ‘submissiveness’, if you can call it that, coming “I think my management style and the way I The book will be launched on July 1. from Zimbabwe. They always… everybody else understand people, and how I can identify the… In an extract that was released to Netwerk24, is better than them. guys’ abilities to actually become better than that, I was used – Caster Semenya Mtawarira wrote: “He was a fantastic coach of the “Some players weren’t actually happy that I think that was everything in my favour. CASTER Semenya says athletics’ world governing body “used” Junior Springboks, but I think at the high level, he was there, but I could see something in him. “I got John and Victor the other night, and her like “a human guinea pig” by insisting she takes medication he was probably lucky that a very good group of I could see that there’s a lot of potential that we what made me feel very good about myself was to control her testosterone. players was handed over to him. have to fulfil. It took hard work and belief to get John saying he understands now why I did things South Africa’s Semenya, 28, is in legal dispute with the “His methods and approach didn’t really work him there.” like that – and he never had the freedom from any- IAAF, who have said the 800m runner must take medication or with the Springboks, and as players, we had to be De Villiers also refuted the suggestion that one else in life to grow and take responsibility.” compete over a different distance. careful what we said to the media. he had “inherited” Jake White’s 2007 World The publishers of the book, Pan Macmillan, The two-time Olympic champion says the drugs made her “What you said would get back to Peter and Cup-winning Bok squad when he took over in said in a statement on Tuesday: “A few commen- feel “constantly sick” and have “unknown health consequenc- affect your place in the team. The media did not 2008. tators who have had pre-launch access to the book es”. like Peter, and thought he was a bit of a clown. “I don’t want to say anything about what’s in have honed in on one paragraph, that they inter- “I will not allow the IAAF to use me and my body again,” “There’s no doubt that he was happy to be at the papers on this (Mtawarira), because I’m quite pret as critical of former Springbok coach Peter said Semenya. the forefront of a team that could operate on its tired of black-on-black violence by now,” he said. de Villiers. Semenya spoke out as the Court of Arbitration for Sport own steam. “We’ve all been used by some sinister force “However, when they focus on a short extract, released a 163-page document explaining in detail why it had “Most of the work was done by the players, out there to divide us, so that we actually think they fail to provide context within the greater rejected her appeal against the IAAF's rules. with Dick (Muir) and (Gary) Gold (Bok assistant that we owe them everything for our existence. journey of the rugby player. Since the Court of Arbitration for Sport’s decision she has coaches) very influential.” So, things are actually not what you really see. “It is disappointing that commentators have gone to Switzerland's Federal Supreme Court (SFT), which has De Villiers said that he had worked hard to People have been paid to say a lot of things in life. failed to look comprehensively at the full story, temporarily suspended the IAAF ruling. have Mtawarira, who hailed from Zimbabwe, se- “And I’m not implying that this is the same which details the support De Villiers has giv- “The IAAF used me in the past as a human guinea pig to lected for the Bok side. thing. But it’s sad that you won’t hear the same en to Mtawarira over the years, and the respect experiment with how the medication they required me to take “If you look at how I fought to actually get stuff from Victor (Matfield) or John (Smit) about Mtawarira has for the man who helped him on his would affect my testosterone levels,” added Semenya. him citizenship in South Africa, and how I fought me… All those guys, Bryan Habana – you won’t Springbok journey. “Even though the hormonal drugs made me feel constantly to get him to be selected for this team, and how I hear the same stuff about me. It is sad that he “Peter was the coach who first picked me for sick, the IAAF now wants to enforce even stricter thresholds fought for his teammates to accept him for who he (Mtawarira) will say that. the Springboks, and he stood by me through all with unknown health consequences. I am concerned that other was… It’s sad to listen and see this kind of stuff,” “Everybody talks about the team we inherited the trouble with the Minister of Sport, so I’m re- female athletes will feel compelled to let the IAAF drug them De Villiers said. from Jake White. Eighty percent of that team, I ally grateful to him,' says Mtawarira in ‘Beast’.” and test the effectiveness and negative health effects of different “But then again, I understand it. I do under- coached either at Under-19 or Under-21. So, if we — iol.co.za/staff reporter hormonal drugs. This cannot be allowed to happen.” – bbc.com