GOVT to ROLL OVER $2,2BN Tbs: Page 3 $4

GOVT TO ROLL OVER $2,2BN TBs: Page 3 $4

News Worth Knowing ‘New Zim currency illegal’: Page 3

March 28-April 3 2019 ESTABLISHED 1969 @ FingazLive www.ﬁ ngaz.co.zw Facebook: The Financial Gazette

ZSE Report THE All Share index retreat- ed 0,76 percent on Tuesday Spiralling to close at 120,87 points. PPC lost $0,33 to end at $1,32. TSL shed $0,1 to trade at $0,6 while Old Mutual dropped $0,0658 to close at $7,0437. The Industrial index was down 0,77 percent to close at 402,58 points, while the Top 10 index was ﬂ at at 113,49 points. The business Minings index was also ﬂ at at 201,72 points.

Currencies (Bloomberg) % change ◀ USD:ZAR 14,5905 1,21 EUR:USD 1,1259 0,06 ◀ GBP:USD 1,3215 ◀ 0,02 USD: JPY 110,5000 0,16 ◀ Stock Markets ZSE (All Share) 120,87 0,76 costs hit ◀ ZSE (Mining) 201,72 0,00 13 818,00 0,59

JSE ◀ ◀ FTSE 100 7 198,74 0,03 ◀ 0,22 Dow 25 713,48

Commodities ◀ Gold 1 311,74 0,30 ◀ Platinum 862,43 0,39 ◀ Zim firms Brent Oil 68,28 0,46 Grains (Grain SA)

Omega Ukama and Nelson Gahadza and companies have also been feeling the pinch White Maize ZAR 2 145,76 ◀ 0,2 ◀ Staff Reporters from the depleting demand” of goods and ser- Soya ZAR 4 781,71 0,01

vices in the country. Wheat ZAR 2 491,20 ◀ 0,4 IMBABWEAN businesses are groaning “So, there is need to compensate labour for under the weight of mounting costs driv- the erosion, but the problem then becomes the Zen by rising infl ation, burgeoning wage fact that there is little capacity to do that on the Lloyd’s loses £1bn bills, the escalating costs of imported inputs part of business,” he said. and the falling value of the local RTGS dollar. On its part, milk processor Dairibord said to natural disasters Christopher Mugaga, the Zimbabwe Na- the recent market developments had had a neg- INSURER Lloyd’s of London tional Chamber of Commerce chief executive, ative impact on its product supply and “the cost has reported a second consec- told The Financial Gazette this week that the of doing business, leading to consumer price utive year of losses as its syn- government’s recent monetary reforms had increases”. dicates were hit by a range of effectively worked to open “the fl oodgates of Going forward, the company said, it would natural disasters, although it said reality”. focus on “cost reduction and containment to that its results showed the “green “There is considerable pressure on business- sustain margins”. shoots of improvement”. es from labour and other issues, but the bigger Grain miller National Foods said its opera- Lloyd’s registered a £1 bil- issue is whether companies are comfortable tional expenditure for the half year to Decem- lion loss for 2018, against a £2 with a managed fl oating rate of the local cur- ber 31, 2018 had increased by 58,6 percent to billion loss the previous year. rency,” he said. $37,4 million — compared to the same period It blamed hurricanes Flor- “Export proceeds of this country will show last year. ence and Michael in the US, as you that the forex is there in the market, but it “Infl ationary pressure was evident across well as Typhoon Jebi in Japan (the market) is not keen on the offi cial rate,” all cost lines, particularly those costs with im- DAIRIBORD Holdings (Dairibord) chief executive Anthony and wildfi res in California, say- Mugaga said. ported content such as plant and vehicle main- Mandiwanza. The listed milk processor’s boss said his coming that it incurred £2,9 billion Sifelani Jabangwe, the Confederation of tenance costs,” Natfoods’ chairman Todd Moyo pany was forced to offl oad its Malawian unit due to deterio- of costs from major claims, well Zimbabwe Industries president, said: “Infl ation said. rating economic conditions in Zimbabwe. up from the long-term average of has signifi cantly eroded the value of wages, To Page 2 - Picture by Freedom Mashava £1,9 billion. – Financial Times Page 2 | March 28-April 3 2019 The Financial Gazette National News Spiralling business costs hit Zim firms

From Page 1 “Landlords think they can just multiply rentals by 2,5 Themba Ndebele, Truworths’ CE, also and it will be okay. But consumers’ incomes have not said trading expenses for his company had been increased by 150 percent,” he said. increased significantly during the half year to “It is very difficult for us to see eye-to-eye (with January this year. landlords). It looks like it is going to be tough to adjust “Inflationary pressures will persist in the to the devaluation,” Ndebele said. next few months on imported finished prod- The Truworths boss also said the clothing chain had uct lines with the official devaluation of the had to “make an additional cost of living adjustment for RTGS$ exchange rate and re-rating of the employees due to the rising inflationary pressures”. value for duty purposes from 1:1 to 1:2,5,” he In addition, Truworths had seen an 82,95 percent in- said at his company’s results briefing in Harare crease in landing costs for imported goods since the duty last week. calculation was changed from a rate of 1:1 to a floating “Another wave of price increases is inev- rate — which debuted at 1:2,5 and has since increased itable,” Ndebele, who heads the Zimbabwe to 2,9. Stock Exchange-listed retail apparel group Batanai Matsika, the research head at Morgan & Co, said, adding that this would “further dampen said although businesses were already severely bur- demand as personal income growth lags be- dened, “the need to provide a cushion for workers whose hind price increases.” wages have been devalued is very real”. The Truworths boss said many hard- “Inflation in the broader economy has persisted, the pressed businesses were also facing increased fuel prices, the two percent tax and the general price in- rentals. Themba Ndebele Batanai Matsika creases which have followed have all created the pressures,” he said. “We have seen that employers are trying to be innovative in easing the pressures by offering wages in US dollars and providing special allowances,” Matsika said. He added that the operating environment in the country had significantly pushed up companies’ cost-to-income ratios. “Companies have tried to adjust through pricing, but there is a limit to the levels that they can push prices up because they have to contend with diminishing demand, as well as market share considerations,” Matsika said. Israel Murefu, the Employers Confederation of Zim- Smallholder Irrigation Revitalisation Programme (SIRP) babwe (EMCOZ) acting president, said “while it is de- sirable to adjust salaries, there is a guiding principle that REQUEST FOR EXPRESSIONS OF INTEREST businesses should follow, which is the ability to sustain operations”. (CONSULTING SERVICES – INDIVIDUAL CONSULTANTS SELECTION) “The issue of inflation and loss of value is not only [ZIMBABWE] impacting employees, but employers also,” he said. “What is key is the sustenance of capacity, ability to SMALLHOLDER IRRIGATION REVITALIZATION PROGRAMME source inputs ... but if there is room to manoeuvre, there is no reason not to adjust incomes,” Murefu said. International fund for Agricultural Development IFAD)/OPEC Fund for International Development (OPEC) He also warned that there was a risk that hard-up businesses could end up retrenching, due to their failure to maintain salaries. Smallholder Irrigation Revitalization Programme Loan No./Credit No./ Grant No.:5000001640 “The cost of production has increased due to rising input costs,” Murefu said. Assignment Title: Senior Irrigation Engineer “Even duty has become more expensive even if it is pegged in US dollars. The moment you cross-rate with Reference No. (as per Procurement Plan): 2018 PP 3 the RTGS dollar, it becomes expensive and with current rates, you will pay three times more,” the EMCOZ boss said. [email protected] The Government of Zimbabwe has received financing from IFAD toward the cost of the Smallholder Irrigation Revitalization Programme, and intends to apply part of the proceeds to recruit Individual Consultants and a Programme Driver as follows: Corporates pump

TENDER NUMBER CONSULTANCY $10m into Cyclone 29/ZIMB/SIRP/30042019 Senior Irrigation Engineer Consultant Vacant Post Driver Idai rescue efforts IMBABWEAN corporates have pumped nearly $10 million into helping victims of Cyclone Terms of references (TORs) can be down loaded on www.moa.gov.zw or www.sirpzim.org. The same Idai, which brought floodwaters and destruc- can also be obtained from the address below during office hours (between 09:00 to 16:30 hours): Ztion to Chimanimani, and Chipinge, sparking a serious humanitarian crisis. Procurement Specialist (SIRP) With Strive Masiyiwa’s Econet Group donating $5 million-plus and Delta Corporation at $1,5 million, Ngungunyana Building Innscor Africa chipped in with eight truckloads of Office Number 11, foodstuffs worth $300 000 and followed by Stanbic Bank, which provided goods valued at $200 000. 1 Borrowdale Road The Adam Molai Foundation also sent in medical specialists and donated goods, including blankets, Harare mineral water, rice and other items worth $250 000 to Interested applicants who meet the driver’s position requirements should direct applications before assist those affected by the natural disaster. Fixed telecommunications firm TelOne donated Tuesday 26 April 2019 to: groceries worth $100 000, while SeedCo coughed up 60 tonnes of maize and mealie-meal. The Confederation of Zimbabwe Industries (CZI) The Human Resources Director, Ministry of Lands, Agriculture, Water, Climate and Rural launched the Donate a Blanket Campaign, while other Resettlement , 1 Borrowdale Road, Ngungunyana Building, Private Bag 7701, Causeway, Harare. companies such as NMB, Nyaradzo, Doves, Moon- light, Dairibord and Masawara also contributed significantly. Applicants should clearly indicate on the envelope the post they are applying for, and should include According to the United Nations, Cyclone Idai, that tore across southern Africa this month, may have 3 sets of the following; destroyed more than $1 billion worth of infrastruc- • ture, as the death toll from the storm climbed to more Cover letter, than 700. • Curriculum vitae and After devastating Mozambique’s port city of Bei- ra, Tropical Cyclone Idai damaged roads, bridges and • Certified copies of academic and professional qualifications. dams as it moved toward eastern Zimbabwe. More than 100,000 houses were partially or Only shortlisted qualified applicants being considered for interviews will be contacted. completely destroyed, and it also ruined more than NB: Eligible female candidates are encouraged to apply. 500,000 hectares of crops, just as farmers in the region were preparing to harvest their maize after a drought. – Staff Reporter [email protected] The Financial Gazette March 28-April 3 2019 | Page 3 National News Govt to roll over $2,2 billion TBs Tabitha Mutenga “You can change the profile of those TBs, reduce the current speculation on the market Features Editor you can have short dated TBs, which are at 20 and the current levels of inflation. to 25 percent and long dated TBs at seven to The former University of Zimbabwe eco- HE Reserve Bank of Zimbabwe (RBZ) eight percent and that will change the TBs pro- nomics lecturer, however, noted that govern- is expected to roll over at least $2,2 bil- file,” he said. ment cannot continue to roll over the TBs and Tlion stock of Treasury Bills (TBs), which According to Chakravati, the move will at some point they need to be liquidated. will be maturing in the next few months, a change the interest rates profile, which will re- “At the moment there are two ways of look- prominent economist Ashok Chakravati has duce the current speculative borrowing that is ing at this issue. In the short term you cannot said. taking place because of the negative interest liquidate them because that would create mon- The controversial government paper’s val- rates. etary pressures in the economy, the RBZ and ue increased to $7,5 billion by end of August “Another reason to have high short rates is all concerned have decided that this will be from $2,5 billion in 2016, crowding out the that everyone knows there is speculative bor- rolled over. In the long term, yes, they have to private sector from borrowing for productive rowing at the moment because there are nega- be liquidated,” he said. purposes while increasing monetary supply, tive interest rates. So the speculative borrow- Over the years, Zimbabwe, has failed to fuelling inflationary pressures in the economy. ing from the banks and other companies who access fresh lines of credit from international The TBs have been used to finance govern- are doing that are actually using borrowings financial institutions after failing to settle its ment’s budget deficit. from the central bank to influence the parallel external estimated at nearly US$9 billion and Chakravati said the central bank has few rate and buy goods, which they are stocking. arrears, resorted to issuing the issuing of TBs choices as redeeming the TBs will result in It’s all very distortionary,” he said. to finance various budgetary priorities new money being injected into the economy. Having high short term rates will therefore . [email protected] Ashok Chakravati Zim’s new currency illegal: Veritas

Tabitha Mutenga Features Editor

IMBABWE’S parliamentary watchdog Veritas says the country’s new currency, the RTGS dollar, is illegal Zas it violates constitutional provisions. The southern African country, without a currency of its own for the past 10 years, in February converted bond notes and electronic money into a new currency that became part of Zimbabwe’s multi-currency basket. However, Veritas says that two statutory instruments (32 and 33 of 2019) used to give effect to the monetary policy statement (MPS) may not be valid on the grounds that they are unconstitutional by virtue of section 134(a) and (d) of the Constitution. “The statutory instruments provisions say that RTGS dollars are currency and that they are legal tender. Neither statutory instrument goes further to say that RTGS dollars must be used for pricing, recording debts, accounting and settlement of transactions. That is important because the fact that a currency is legal tender does not mean that it must be used for all purposes,” the watchdog said. Veritas noted that even though the Reserve Bank of Zim- babwe’s directive repeats the governor’s statement about the compulsory use of RTGS dollars, the directive is not a generally binding law. Directives issued by the central bank become binding only if they are published in the Govern- ment Gazette. “Although this directive seems to have circulated on social media, it has not been published in the Government Gazette nor has it been served on all traders, accountants and other people who are presumably expected to abide by it. Hence the directive is not binding on them. In so far as the directive purports to compel everyone to use RTGS dollars ex- clusively, therefore, it is generally ineffective,” Veritas said. In 2009 the British pound, the euro, US$, SA rand and Botswana pula were declared to be legal tender in Zimbabwe and that declaration has not been revoked. “Those currencies remain legal tender therefore and can be used interchangeably with RTGS dollars for all the purposes mentioned by the governor. Neither the governor’s monetary policy statement nor SIs 32 or 33 of 2019, nor the Reserve Bank’s directive, can alter that.” In his monetary policy statement, the governor said the use of RTGS dollars for domestic transactions will eliminate the existence of the multi-pricing system and charging of goods and services in foreign currency within the domestic economy, but Veritas states that there is no law prohibiting the multi-tier pricing system. “If he meant that market forces would compel sellers to stop pricing in foreign currency because everyone is using RTGS dollars, then he may be right, though prices are still being fixed in US$ so he may in fact be wrong. But if he meant that legally sellers will not be allowed to continue fixing prices in foreign currency, then he was certainly wrong. “Just as there is no law invalidating tenders of payment in foreign currency, so there is no law that outlaws multi-tier pricing, such as the fixing of different prices for goods according to the currency in which payment is made. A seller is entitled to stipulate that he will accept only US$ or any other currency for his wares, and buyers have no legal ground for complaint.” The MPS and the statutory instruments have created a lot of legislative confusion in the country. [email protected] Page 4 | March 28-April 3 2019 The Financial Gazette National News Inflation to slow Zim pins hopes on mining from April: RBZ John Kachembere Allowing them to directly import fuel eas- News Editor es the pressure on mining operations and helps Tabitha Mutenga shield them from the ongoing crisis, Stratfor Features Editor HE Zimbabwean government is pinning said. its hopes on the mining sector to revive “The Zimbabwean government's focus on HE Reserve Bank of Zimbabwe (RBZ) says the country’s Tthe country’s moribund economy, an in- reviving investment in the mining sector is like- annual infl ation, which reached a 10-year high of 59 percent ternational think-tank has said. ly to lead to a healthier national economy in the in February, is expected to slow down from April. The southern African country, facing its longer term, but it alone will not free the country T Getrude Kabaira, the central bank’s principal economist, said worst economic crisis in a decade, is currently of its recurring foreign currency shortages,” the Finance minister Mthuli Ncube’s 2019 Budget paved the way for seeking US$3,2 billion to avert a hunger crisis think-tank warned. the introduction of sound market reforms such as liberalising the and was recently devastated by a deadly cyclone “Increased investment in the sector could exchange rate, which helped correct price distortions. that left at least 250 people dead. boost the value of mining exports or, at the very “Infl ation has been increasing from around August 2018 and Stratfor, a United States-based research fi rm, least, sustain their powerful position in the Zim- rising from 42 percent in December 2018 to about 59 percent this week said President Emmerson Mnangag- babwean economy as current large mines are around February 2019. However this momentum is expected to wa’s decision to relax indigenisation rules in depleted, but Zimbabwe still faces a signifi cant dissipate from around April and the central bank right now is in- the diamond and platinum sector shows that the trade defi cit due to import dependencies.” stituting control measures to fi ght infl ation,” she told delegates at- country is now ready for foreign capital. Stratfor indicated that to reduce those import tending a Market Linkages Association forum on the implication “By boosting the attractiveness of its dia- dependencies, the country will need a kick-start of the Monetary Policy Statement on private agriculture. mond mining regions, which are considered in other sectors such as agriculture ― where to- This comes as central bank governor John Mangudya and some of the few that remain under-exploited, bacco is currently the top export crop, but food Ncube have repeatedly said that the county’s annual infl ation Zimbabwe could play a critical role in indus- Mthuli Ncube production still falls short of domestic demand. should fall to between 10 and 15 percent by the end of the year. try attempts to boost supply. Similarly, in the near Harare. Although mining has the potential to turn Ncube recently said his policies of restructuring and reform- platinum mining sector, consumers continue to In January this year, Russian diamond min- Zimbabwe’s economic fortunes around, experts ing the economy were beginning to be felt, with month-on-month scramble for palladium, which Zimbabwe also er Alrosa and China’s Anjin Investments were warn that the central bank’s foreign currency re- infl ation maintaining a downward trend, a crucial marker of eco- possesses,” the think-tank said. selected by the government to partner with the tention policy could stifl e investment. nomic stability. The metal is projected to spend eight years Zimbabwe Consolidated Diamond Company to Currently, the foreign currency retention He claimed things were getting better, even as the country is in market defi cit, and as emissions requirements begin production. threshold stands at 70 percent for the mining in- in the throes of intensifying fuel and foreign currency shortages. become more stringent, demand for palladium, Finance minister Mthuli Ncube recently industry, meaning that just 70 percent of the value “It is vital that economic agents, investors, consumers, and a catalyst in petrol-powered cars, is increasing. dicated that the country expected to receive at of exports is paid out in foreign currency, while indeed policymakers focus their attention on month-on-month Impala Platinum Holdings, which already least US$8 billion investments in the mining the remaining 30 percent is paid out in the local infl ation developments rather than year-on-year,” the Cam- operates several platinum and palladium mines sector within the next three years. real-time gross settlement (RTGS) dollars. bridge-trained economics professor said. Month-on-month infl a- in South Africa and Zimbabwe, recently an- “The mining sector has been receiving keen In an attempt to boost its foreign currency tion slowed down to 9,2 percent and 9,0 percent in November and nounced plans to establish a new palladium interest from various investment quarters and it reserves, Reserve Bank of Zimbabwe gover- December 2018, respectively, slightly increasing to 10,75 percent mine in Zimbabwe that could start production remains our desire to see these deals translating nor John Mangudya in February slashed this in January 2019 and dropping marginally in February. as early as 2024. into tangible economic contribution,” he said. threshold for small-scale mining operations to Economist Ashok Chakravarti concurred with Ncube, saying Mining experts assert that Zimbabwe's prox- Meanwhile, Stratfor said various measures 55 percent, a development that saw many small infl ation should continue on a downward trend as reforms kick in. imity to South Africa, where a robust supply being implemented in the industry, including miners selling their product on the black market. “Infl ation expectations down the road, especially after August chain for platinum group metals already exists, the “use it or lose it” policy will also stimulate And although larger mining operations still and September, are projected to be signifi cantly lower because we makes it even more attractive to investors. investment in the sector. enjoy the 70 percent threshold, insiders say the had a jump in infl ation last year in September and October with Australia’s Arcadia Resources is setting up Additionally, in the face of nationwide fuel corporates are also increasingly opposed to the the split between the RTGS and Nostro FCA accounts and by Sep- a lithium mine while privately owned Karo shortages resulting from the foreign currency retention system, as their ability to directly pur- tember the effect of that big jump will disappear. If you look at the Resources signed a US$4,2 billion deal to set crisis, Zimbabwe has exempted mining opera- chase fuel and other equipment from foreign current statistics, even if you do not believe them, the point is that up a platinum mine and refi nery and revived a tions from normal state-organised fuel import markets requires more foreign currency. infl ation is on a downward trajectory,” he said. Russian joint venture for a big platinum project procedures. newsdesk@fi ngaz.co.zw newsdesk@fi ngaz.co.zw

inaUgUraLZIMBABWE INAUGURAL ZiMbabWe RAL ZIMBABWE SECTOR SECTOR INAUGURAL ZIMBABWE INAUGURAL SURVEY LAUNCH SURVEY2 0 1 8 - 2 0 1 9 2018 - 2019 SECTORCOMING SOON SECTOR For enquiries contact Roberta: 0772 110 285 SURVEY LAUNCEmail: [email protected] SURVEY LAUNCH 2 0 1 8 - The 2 Financial 0 1Gazette 9 @FingazLive 2 0 1 8 - 2 0 1 9 COMINGFINANCIAL PARTNER SOON COMING SOON For enquiries contact For enquiries contact Roberta: 0772 110 285 Roberta: 0772 110 285 Email: [email protected] Email: [email protected] #GetInvolved The FinancialCOMING Gazette @FingazLive SOON!!! The Financial Gazette @FingazLive

Organised by: spOnsOred by: FINANCIAL PARTNER For enquiries contact FINANCIAL PARTNER Roberta: 0772 423 445 Email: [email protected] The Financial Gazette March 28-April 3 2019 | Page 5 National News Tobacco earnings no relief for Zim

Paul Nyakazeya Online Editor

HIS year's tobacco proceeds will not help improve Zimbabwe’s liquidity challenges, eco- Tnomic analysts have said. This follows high expectations that tobacco earnings ― which traditionally reach US$800 million a year ― could help ease foreign currency shortages, but farmers are holding on to their crop due to low prices. The marketing season opened on a low note last week with farmers delivering 3 886 kilogrammes (kgs) of the golden leaf on the first day, a 98 percent decrease from the 165 000kg delivered in the same period last year. Zimbabwe has been facing worsening foreign currency shortages over the past few years and this has crippled imports of key supplies such as fuel, medicines and raw materials for companies. The tobacco marketing season opened on a low note last week, with farmers delivering 3 886 kgs of the golden leaf on the first day, a John Robertson, a respected economist, believes 98 percent drop from the 165 000kg delivered in the same period last year. that the foreign currency generated from tobacco sales will not ease the foreign currency shortages as the country’s import bill was too high. “Our current shortage of money is largely because we have to import a very high proportion of a lot of goods,” he told The Financial Gazette. “We will stabilise our whole financial situation when we rebuild the production and employment levels that were destroyed by government policy decisions. We must start by rebuilding the foundations: trust, respect for property rights, balanced budgets, good investment conditions, good labour laws and accountability.” Apart from the confusion being experienced at the tobacco auction floors, Robertson said the sector could be affected by anti-smoking movements, which are gathering momentum, and health risks becoming more widely recognised. Zimbabwe expects to produce 220 million kgs this year, down from 252 million kgs last year due to adverse weather conditions. Economist Brains Muchemwa said while the tobacco selling season will inject significant amounts of foreign currency estimated above US$800 million, the fact that the private sector and government have huge foreign debts and lines of credit that need to be serviced means that the pressure on the depreciating exchange rate remains huge. “Equally, the fact that tobacco farmers will be paid, at the prevailing exchange rate, in our local RTGS$ that will most likely be printed, means that the economy will get a fresh injection of about $2,3 billion. Such a huge injection of domestic liquidity, at about 22 percent of the stock of broad money supply existing today, will definitely usher in new equilibrium pricing levels in the economy, and the exchange rate should depreciate further to reflect the same,” he said. Agronomist Peter Gambara said the prices being offered to tobacco farmers were very low and the fact that the central bank is offering to pay tobacco farmers in local currency has worsened the situation. “That breeds problems because the banks can say, they do not have the US dollars. Besides, we deal with some small scale farmers and the whole process will become too complicated for them to comprehend. “Farmers should simply be allowed to draw their US dollars at the bank after a sale. The confusion about that arrangement could be causing the low deliveries at the floors. Farmers may still be consulting among themselves and, besides a normal person will always take a wait-and-see attitude,” he told The Fi- nancial Gazette. The opening price of $4,50 per kg for 2019 was very low, affecting farmers’ confidence. The average price on the first and second day was $1,83 per kg and $1,46 per kg, respectively, lower than the $2,22 per kg recorded last year during the same period. “RBZ governor John Mangudya has always argued that as a country our exports are low, now the tobacco farmers have managed to increase production and sur- passed the 236 million kg record set by the previous white commercial farmers, thereby boosting foreign currency earnings, and yet here he wants to dribble farmers of that foreign currency, it's nonsensical,” Gambara said. Tobacco merchants also suspended purchases of the crop last week, demanding an exemption from paying the two percent tax on intermediate transactions. After calculating costs of the tax, some farmers stated that it amounted to eight percent as transactions alone from the auction floor to the buying of inputs was eroding the growers’ capacity to produce. However, government has since assured the growers that they will be paid 50 percent in US dollars and 50 percent RTGS dollars and has granted tobacco buyers and sellers immunity from the two percent tax. [email protected] Page 6 | March 28- April 3 2019 The Financial Gazette

National News Power constraints hamper SADC region energy trade Nelson Gahadza Meanwhile, Mudyiwa said regional power Business Reporter utilities should collectively address the issue of rainfall in the Zambezi basin so that electricity OVERNMENT says electricity transmis- supply returns to normalcy in the region. sion constrains continue to affect elec- She said current installed capacity in SAAP Gtricity trading within the Southern Africa region amounts to 68 869 megawatts (MW). Out Development Community (SADC), resulting in of this, about 55 181MW is operating against de- power deficiencies among member states. mand and reserve of 57 335MW, leaving an oper- The region slipped into a power deficit a de- ational deficit of 2 154 MW. cade ago partly due to its old plants failing to The deputy minister added that new pow- match expanding populations and economies, er generation installed capacity amounting to 4 forcing several countries to scramble to build ad- 175MW was commissioned in 2018 of which 25 ditional generation capacity. percent was from renewable energy. Deputy Energy minister Magna Mudyiwa “We take cognisance of various efforts be- said although regional power supply has im- ing put by member states that will result in 21 proved, with excess power now being generated, 349MW of new generation capacity being com- inadequate transmission infrastructure and lack missioned in the period 2018 to 2022. of funds are causing electricity deficits in some Magna Mudyiwa “Despite the developments, the region contin- countries. ues to operate on supply power deficit,” she said. “We are concerned by the slow pace of ex- in 2018-2019, compared to 2017-2018,” she said. According to the African Development Bank ecution of transmission projects and as a result, The Zimbabwe Electricity and Transmission (AfDB), Zimbabwe requires $1,2 billion to fi- transmission constrains continue to affect elec- Distribution Company (ZETDC) recently indi- nance new power projects and repair ageing in- tricity trading within the SADC members,” she cated that it was losing at least $9 million annual- frastructure. told delegates attending a Southern African Pow- ly through an acute shortage of transformers. Several of the country’s thermal power sta- er Pool (SAAP) meeting last week. In Zimbabwe, transformer vandalism is ram- tions have passed their lifetime of 25 years, while Mudyiwa noted that as at January 2019, a to- pant, and replace them is long due to lack of for- poor maintenance has left them dilapidated. tal of 13 100 gigawatt hours (GWh) could not be eign currency. Zimbabwe’s power stations include Kariba traded on the competitive market due to transmis- Zesa Enterprises (ZENT), which is responsi- South Hydro-Power Station, Hwange Thermal sion constraints. ble for manufacturing transformers, is currently Power Station, Harare Thermal Power Station, “However, we are happy that there were less facing critical foreign currency challenges, im- Munyati Thermal Station and Bulawayo Thermal transmission constraints on the electricity market pacting ability to supply on time. Power Station. [email protected] Economists split on Moody’s SA assessment OUTH Africa may just be able to cling onto weigh on public finances, dimming hopes that the International. Investec Bank estimates outflows of the stable outlook of its sole investment-grade country will hold on to the stable assessment from $8 billion to $10 billion. Srating this week, helping it stay clear of a Moody’s. Moody’s will probably give South Africa “the forced selloff of billions of rand of its debt. “I’m actually surprised that they’ve spared us benefit of the doubt” after Finance Minister Tito Economists are divided on what Moody’s In- this long,” said Lullu Krugel, the chief economist Mboweni said the country’s strict conditional sup- vestors Service will do when it potentially makes at PwC. “My call is that it is time. If I were them, I port for Eskom won’t involve putting the compa- an announcement on South Africa’s credit assess- would pull the trigger” on the rating, she said. ny’s debt onto the sovereign balance sheet, said ment Friday. A cut wouldn’t be “the end of the world” be- Inan Demir, Nomura’s head of Europe, Middle Half the participants in a Bloomberg survey cause that’s already priced into assets, and while East and Africa economics. expect it to maintain a stable outlook on its local- new debt would be more expensive, local equity The state in February committed to providing and foreign-currency debt, with the remainder pre- markets could become even more attractive, Kru- the utility R69 billion over three years as it struggles dicting a reduction to negative. Many of those who gel said. to emerge from years of mismanagement, allega- foresee no change say there may be a move after While Moody’s is scheduled to decide on South tions of corruption and ballooning debt caused by the May 8 general election. Africa’s assessment this week, it may end up only cost overruns at two large new plants. The deepest power cuts in more than a decade issuing a research report without a ratings action, or The ratings company could reduce its forecast by cash-strapped, state-owned Eskom are hurting nothing at all. A reduction in the outlook tends to for economic growth and raise its expectations efforts by the continent’s most-industrialised econ- precede a cut in the actual rating. A junk assessment for the fiscal deficit, but will likely see Eskom as omy to recover from last year’s recession. would see the country fall out of investment-grade a short-run shock rather than a crisis with long-run The budget deficit will probably widen to the debt gauges including Citigroup’s World Govern- implications, therefore maintaining the stable out- worst in 10 years as declining tax revenue and ment Bond Index. That would result in “forced outlook, said Peter Attard Montalto, the head of capi- bailouts for under-performing government firms flows” of about $1,1 billion, according to Nomura tal-markets research at Intellidex.– Bloomberg

O cial Media Partner The Financial Gazette March 28-April 3 2019 | Page 7 National News Cotton farmers demand more forex Paul Nyakazeya currency retention is still at 30 percent while tobac- counting their losses due to the prolonged dry spell porting farmers by issuing free cotton season, fer- Online Editor co’s retention percent was recently reviewed. We that the country has faced in the 2018-2019 rainy tiliser and chemicals. both (cotton and tobacco farmers) contribute to the season, which drastically affected the crop, hence Nancy Zitsanza, Agriculture Marketing Au- IMBABWEAN cotton farmers are up in arms country’s gross domestic product and should not be output is expected to decline this year. thority’s acting chief executive, is on record saying against the government and are demanding ignored,” he said. Zimbabwe’s cotton output in the 2018 market- there was a huge demand for Zimbabwe’s cotton, Zto be paid at least 50 percent of their sales in “We wrote to the Reserve Bank last week, it is the ing season rose by 76 percent year-on-year to 130 which she said was ranked third in the world. United States dollars. second letter to them this month. We are looking for- 000 tonnes, from 70 000 tonnes in 2017 owing to “Zimbabwe cotton is the third best cotton in the This comes as the Reserve Bank of Zimbabwe ward to a response from them this week and hope- increased government support to farmers. At peak in world according to the international market ratings. early this month increased foreign currency retention fully an engagement. The gold industry was given an 2013, Zimbabwe produced 352 000 tonnes. Our cotton is now highly regarded in terms of qual- thresholds for tobacco farmers to 50 percent from the audience and we also expect the same.” Government’s Presidential Free Cotton Inputs ity. It is also on demand and there has been under- previous 30 percent. Cotton, which is the biggest foreign curren- Scheme has, however, helped the vulnerable mar- production of cotton in the country,” she said. Stewart Mubonderi, the Cotton Producers and cy-earning crop after tobacco, is produced by more ginalised farmers who have been suffering from the [email protected] Marketers Association (CPMA) chairperson, said than 300 000 farmers and nearly 900 000 people rely high cost of inputs and low producer prices. farmers should be treated equally by the government. on the crop in Zimbabwe. Private companies such as Zimbabwe Cotton “We are worried that cotton farmers’ foreign Mubonderi said this year many farmers could be Consortium have also played a critical role in sup- Gwayi-Shangani dam 36pc complete

Paul Nyakazeya tion excavations are complete and so far 16 300 m³ of In the 2019 National Budget, the project was allo- Online Editor concrete has been laid against a total of 250 000 m.³ cated US$35 million against a requirement of US$73 The dam wall is at an average of three metres above million. ONSTRUCTION of the Gwayi-Shangani the original river-bed level and on completion, it will Haritatoes said the dam has a net capacity of 634 Dam in Matabeleland North is expected to be 72 metres higher,” he said. 270 000 m³, which is 1,8 times the total net capacity of Cbe completed by December this year despite “All works at the dam wall were temporarily the five existing dams supplying Bulawayo. work done being at 36 percent, a government minis- suspended in November 2018 as per construction It has a four percent yield of 160 600 000 m³, ter has said. schedule to allow the passage of 2018/2019 floods which is 3,3 times the total four percent yield of the The Gwayi-Shangani Dam, which will become over the concrete. The river is expected to dry soon existing dams supplying Bulawayo currently. the country’s third largest inland water body when in April and works will resume immediately.” “It is envisaged that the water will be conveyed complete after Tokwe-Mukosi and Lake Mutirikwi, China International Water and Electric Corpora- from the dam to Bulawayo City by a pipeline with a is expected to have a capacity of 635 million cu- tion is the contractor in partnership with the Zimba- series of booster pump stations along the pipeline,” he bic metres and enhance irrigation in Matabeleland bwe National Water Authority (ZINWA). The total said. Vangelis Haritatos North. cost of the project, viewed as the panacea for water Haritatos said it was also proposed that the dam Vangelis Haritatos, the deputy Agriculture minis- challenges in Bulawayo and the Matabeleland re- yield will be eventually augmented by water pumped reservoirs will be constructed. ter said work on the dam wall was temporarily sus- gion, is US$122 million. from the Zambezi river through a separate pipeline to “The Gwayi-Shangani scheme and the Zambezi pended to allow the passage of the 2018/2019 floods Haritatos noted that government has a target to Bulawayo. River scheme combined are called the National Ma- over the placed concrete. complete the dam by December 2019 but foreign The two pipelines will meet at Kennedy and fol- tabeleland Zambezi Water Project (NMZWP). The “The Gwayi/Shangani Dam is under construction currency is required to import some essential materi- low the railway line for 122 km up to Cowdry Park in Gwayi-Shangani dam is therefore, a component of the and it is currently at 36 percent completion. Founda- als and equipment. Bulawayo where a water treatment plant and storage NMZWP,” Haritatos said. [email protected] Page 8 | March 28-April 3 2019 The Financial Gazette Leader Page

News Worth Knowing ED’s ‘bling travel’ rubbishes austerity

VEN though President Emmerson Mnangagwa’s recent trips might have been “underwritten by friends and his EArabic well-wishers”, the frequent junkets have become a major source of worry and concern from a timing, perception, sensitivity and austerity point of views. This is more so when the nation is grappling with the epic Cy- clone Idai catastrophe and other ills. While the need for Mnangagwa’s safety and international-relations travel cannot be understated, we feel “the cost of diplomacy and security” MUST never come at this boorish display or perception of extravagance, and its damaging effects on Finance minister Mthuli Ncube’s “austerity mantra”. For a man who swept to power in November 2017 on the promise HEAVY DUTY: A giant crane at the construction site of the Mining Industry Pension Fund head office in Avon- of modesty and discipline, can anyone justify these “bling jaunts”, dale, Harare. According to the 2019 Global Market Insights Inc report, tower crane market revenue is expected especially at a time when folks are still reeling from Idai-induced to grow from US$3 billion in 2018 to US$5,5 billion by 2025. Global crane shipments are anticipated to grow losses of life, infrastructure and other things in Chimanimani, and 9 percent from 2019 to 2025. Growing infrastructure and construction activities and the resultant utilisation of equipment for lifting heavy loads are accelerating the crane market growth. Picture by Freedom Mashava Chipinge? And assuming it is true that some of Mnangagwa’s “sponsors” splurged $200 000-plus in real money for the latest trips to Bul- awayo, and South Africa (SA), how many victims of the disaster would he have helped if he had elected to channel that money to- Deal with climate change wards foodstuffs, medical drugs and shelter for the displaced? To put it into perspective, conglomerate Innscor Africa ― along HE cyclone that hit south km long and 40 km wide. Every- Perhaps this is another sign, if we with many others ― has sent out eight truckloads of goodies worth eastern Africa last weekend thing in its path was drowned. A vis- needed one, that climate change is $250 000 to $300 000 of local money, and meaning the Zanu PF Twas unprecedented. It came itor who was forced to walk 25 km a reality. We were warned ― areas leader’s supporters would have acquired necessities worth four across the coast with winds gusting to safety talks of hundreds of bodies of the world would be drier, others times given or using an exchange rate of one American to four up to 250 kilometres an hour and on exposed mud banks and floating experience more rainfall, severe RTGS dollars. dumped 1 000 millimetres of rain on down the swollen rivers. weather incidents would be more Crucially, what sort of perception was Mnangagwa building central Mozambique and the Eastern In Zimbabwe, every district frequent. Just look at the news ev- around the issues of sensitivity and frugality by embarking on Highlands of Zimbabwe. Associated south of the city of Mutare expe- ery day, is this not the new reality? It these jaunts at a time the nation was in mourning over the Eastern with this was a sea surge that hit the rienced rainfall from 600 ml to 1 means that this is not just our prob- low lying coastal areas with a feroc- 200 ml over two days. Every bridge lem but everybody's problem and Highlands disasters, and the economy is broke? ity we have not experienced before. was destroyed, roads washed away it requires the kind of consensual, In so doing, doesn’t he risk projecting his predecessor Robert Behaving a bit like a Tsunami ― up and buildings destroyed ― people national response that we have seen Mugabe ― an ineffectual and doddering man of very average in- to six metres in height on top of the washed away by the flood were in this small country in the past 10 telligence ― as a saint? normal high tide. swept many kilometres downstream days. And as we grapple with all these issues, we not only urge the The result: a wave of water from until they drowned, were taken by No country is an island, no coun- 76-year-old leader to have a rethink of his jet-setting life, but con- the sea that smashed its way inland crocodiles or found refuge in trees. try can “go it alone”. For issues like sider the implications of his behaviour on such policies or plans as and crushed fuel tanks like empty Many were washed 200 km into this we need a global response and Ncube’s austerity gospel (because perception is powerful)! coke cans. Ninety per cent of the Mozambique and may never be on a scale not seen before in history. Just as the French government of Francois Hollande sold its houses in the City of Beira ― home found. It was the worst weather re- It's not time to hesitate or postulate wine stocks of 300 000 Euro to raise public funds in May 2013, to 500 000 people, were damaged. lated disaster in African history and false dispositions about the science The cyclone moved swiftly inland I think the final death toll will never or the facts. It is time for action. Mnangagwa’s administration “must be seen as walking the talk on at 10 km an hour and then hovered be known, but it will run to thou- We know what the problem practising real spending cuts, fiscal prudence and other reforms over the mountains that form the sands. is and it’s mainly in the rich com- beyond the five percent pay cut!” border between Mozambique and Here in Zimbabwe, our govern- munities of the north who enjoy a Zimbabwe. ment was slow off the mark, not ap- consumptive standard of living that No sooner had the people along preciating the extent of the problem humanity could not have imagined Southern Africa’s Leading Business and Financial Newspaper the coast started to recover from the or its severity. But within 24 hours 200 years ago. But it means we are Established 1969 impact of the sea surge, the flood the minister of Finance released $50 living beyond the capacity of our Publisher: Modus Media waters from the interior arrived, million to relief agencies and the world and what its limited resourc- rivers overflowed their banks and army was deployed with helicop- es can sustain. Do we tell the rest EDITORIAL MARKETING ters. But it was the church where of humanity “tough luck”, that you Editor-In-Chief & Chief Operating Ofcer General Manager - Marketing thousands of square kilometres were Christopher Goko: gok .zw .zw the reaction was more immediate live in a tough place, we are OK! Brand Executive - Advertising and massive. Calls came in from And please do not toss a few coins Deputy Editor Open Forum Edwin Vengesa: evengesa@ngaz.co.zw the affected areas telling of the scale in the collection plate at “donor con- .zw ferences” or in response to appeals Senior Sales Executives of the disaster and the needs. The Managing Editor Christobel Washaya: cwashay .zw with community started mobilising and for help in a crisis like ours that will .zw the reaction by ordinary people and soon be forgotten. We need real ac- Senior Assistant Editor .zw Eddie Cross business was overwhelming. tion and time is running out. Chris Gumunyu: chris@ngaz.co.zw Sales Representatives - Harare The same story was repeated in We need a global energy strategy, we need to accelerate research into News Editor .zw every town and city across the coun- John K .zw Frank Nyandoro: fny .zw swamped. try. Doctors volunteered and an ap- alternative, low carbon technolo- Edreck: emudzinganyama@ngaz.co.zw Two main rivers were affected peal went out for a mobile operating gies, we need to hasten the demise Markets Editor Sales Representative - Bulawayo Ndakaziv .zw ― the Save and the Pungwe. The theatre ― it was manufactured over- of the internal combustion engine. Clever Pedzisai: [email protected] former seldom floods like this ― it night and two units were sent up on We need to plant trees and curb the Companies Editor Brand Executive - Events is normally a placid stream between a flat bed with all services built in, growth of deserts. We need to live Shame Makoshori: smak .zw Kerina Chizemo: kchizemo@ngaz.co.zw high banks and largely open sand. the following day. more simply and to act in our own Online Editor Brand Executive - Subscriptions The latter floods every year and Remember this response was in spheres of influence by doing the Paul Nyakazeya: pnyakazey .zw Tatenda Taka: ttaka@ngaz.co.zw covers a wide swathe of land on the the midst of a period of our history things we all can to halt our head- Subscriptions Representatives Features Editor vast coastal plains behind the Port of where incomes are being severely long rush to destruction. The Bible Ronald Madiviko: rmadivik .zw .zw Beira. constrained by an economic cri- calls for mankind to take responsi- Elizabeth Nyamaruze: eny .zw Because of this, the rail and road sis caused by the need to clean up bility for this small planet hung in Production Supervisor Chief Executive Ofcer systems that feed Beira and form our act after the coup that got rid of space by a creator God. It is every- Kudzai Rushambwa: krushambwa@ngaz.co.zw .zw the main arteries of trade are built Robert Mugabe in November 2017. body's responsibility. We need to up high above the flood plain ― the Our people are struggling with high address the underlying problems ― Bulawayo Editorial, Advertising & Circulation 1st Floor, Princess Court, railway line on hard rock brought inflation and a decline in disposable not put salve on the outcomes of our 2nd Floor, Green Bridge South, Eastgate Complex, Corner Forth Street/9th Avenue, in from Zimbabwe by the engineers incomes. We are also experiencing a delinquency. P. O. Box CY 376, CAUSEWAY, Harare, Zimbabwe Bulawayo. who built the line at the turn of the severe drought with water shortages But until that time, it is up to all Tel: +263-242-781 572 Tel: (029)75873/75270 Website: www Distributed by: ANZ 20th Century. and crop failures looming in most of us to love our neighbours in what- This year the huge deluge caused of the country. The effect of the ever way is needed. In this respect I VOLUNTARY MEDIA COUNCIL OF ZIMBABWE by the cyclone brought down floods cyclone hardly reached the capital am so proud of our community here, e Financial Gazette newspaper subscribes to a Code of Conduct that promotes truthful, accurate, fair and balanced news reporting. If we do not meet these standards, register your complaints with the Voluntary Media Council of on a massive scale and the areas in- and left the rest of the country under the way they responded to the needs Zimbabwe at: undated by the rivers bursting their dry hot conditions. The community of others. If we work together there No 34 Colenbrander Rd, Milton Park, Harare. Telephone: 04-778096 / 778006 24 Hr Complaints line: 0772 125 659 Email: [email protected] or [email protected] Twitter: @vmcz http://www.vmcz.co.zw | Facebook page: vmcz banks covered huge areas. On the response represents real sacrificial is nothing we cannot achieve and no Zimbabwe Save, a lake formed that is over 125 giving by our people. obstacles we cannot overcome. March 28-April 3 2019 Page 9 Companies&Markets The Financial Gazette DAIRIBORD OFFLOADS MALAWI UNIT - P11 USD/BWP Sugar (USD/lb) Cotton (USD/lb) Nickel (USD/t) Palladium(USD/oz) DAIRIBORD Holdings (Dairibord) says it was forced to let go of its Malawi unit by the adverse economic situation in Zimbabwe after it failed to leverage its “clean” balance sheet 0,25% 0,33% 0,01% 0,10% 0,28% to rescue the ailing subsidiary. 10,7371 12,18 73,50 13 380,08 1 520,33 Listed firms defy odds Record robust performance Cash in on panic buying

Adelaide Moyo continue growing in lower risks markets. Business Reporter Zimbabwe Stock Exchange-listed brick maker Willdale announced its profits in the five months IMBABWE Stock Exchange-listed compa- to February 2019 were ahead of target despite the nies recorded robust performances during current economic crisis. Zthe six months ended December 31, 2018, Nyasha Matonda, the company’s chief exec- despite economic challenges that beseeched the utive, told shareholders that sales volumes in the country during the second half of last year. five-month period were 22 percent and 18 percent The southern African country experienced below prior year and budget largely as a result of acute foreign currency shortages, a multi-tier pric- mismatch between disposable incomes and pre- ing system, diminished disposable incomes and vailing prices. a high inflation rate which peaked after October “However, despite the dip in volumes, our prof- when Finance minister Mthuli Ncube introduced it is way ahead of target due to cost containment a two percent tax. and pricing. Our cost of sales went up by just under The insistence by the central bank that the bond 10 percent while general price increases have been note was equivalent to the greenback also wors- more than 50 percent,” he said. ened the operating environment. Innscor reported a 167 percent increase in profit Market watchers who spoke to The Financial for the six months ended December 31, 2018 to Gazette said many companies recorded profits to $64,011 million compared to a $23,963 million re- price increases and panic buying from consumers. corded in prior period. “It’s unsurprising because they were a lot of The listed diversified concern recorded a 61 arbitrages that were taken by the consumers and percent increase in revenue to $489,893 million which were pushing up the demand for consump- for the period under review driven largely by dou- tive goods,” said Persistence Gwanyanya, a finan- Many listed many companies recorded profits. ble-digit volume growth across all categories. cial expert. “Group’s well-priced raw materials pipeline, “It reflects that Zimbabwe is a consumptive profit to $16,514 million during the half year end- group sustained growth in profitability by record- distortions in margins arising from stock replace- economy. Despite challenges, you find that Zim- ed December 31, 2018 compared to $7,990 mil- ing an operating profit of $22,368 million, repre- ment policies, an improved sales mix, continual- babweans are on the spending side and remember lion achieved in prior period attributed to increased senting a 68 percent growth on the comparative ly improving factory efficiencies, volume-driven the six months to December 2018 is a period which customer counts. period,” he said. conversion and distribution efficiencies, and the was characterised by panic buying thus explaining The firm said the microeconomic challenges Caledonia Mining’s Blanket gold mine, in lag in inflation on operating expenditure, translat- profits for consumer goods related firms,” he add- in the country led to consumer uncertainty and Gwanda, delivered a robust performance for the ed to improved margins and a satisfactory growth ed. spending pressure whilst increasing the cost of do- fourth quarter and the year ended December 31, in operating profit over the comparative period,” However, Enock Rukarwa, a research analyst ing business. 2018, despite the challenges in the country, chief he said. at FBC Securities Research, said the performance Addington Chinake, Simbisa’s chairman, said executive Steve Curtis said. Natfoods posted a profit after tax of $16,8 mil- was on the back of an increase in prices in general. the group’s response has been to focus on disci- “Notwithstanding these challenges, the finan- lion, which was 78 percent above the same period “All these issues relate to the current inflation plined cost of sales management and controlled cial performance of the company remained robust. last year. developments. With prices on the high, companies price adjustments necessary to maintain margins. Net profit attributable to shareholders for the year The group’s volumes grew by 18,4 percent over are bound to make profit. Most of these companies Axia Corporation Limited (Axia) recorded a 62 increased from $9,4 million to $10,8 million. Cash the prior period, driven mainly by stockfeeds “as recorded increased revenues and as you know rev- percent increase in profit to $16,431 million during generated by operations before working capital the poultry sector recovered from the Avian Influ- enue determines total profit after subtracting total the six months ended December 31, 2018 from was $25,8 million for the year, compared with enza outbreak” and maize “on the back of a poor- costs. When you look at costs, those structures in- $10,088 million achieved in comparable period. $26,8 million in 2017,” he said. er local maize harvest and the fact that household clude staff costs, which have been stagnant despite Luke Ngwerume, the listed specialty retail and CABS recorded a loan book growth in the 12 maize retentions were reduced on account of the increases in revenue. So companies still make prof- distribution group’s chairman, said inflationary months period to December, despite a challenging attractive GMB price.” its because some costs are not deducted,” he said. pressures continued across the board with respect economic climate in the country. The period under review was characterised by He noted that Simbisa Brands (Simbisa) re- to both stock inputs and operating expenditure, In its financials for the year ended Decem- a significant increase in inflation with CPI gaining viewed prices to mirror what was happening in the particularly in the latter part of the financial period ber 2018, Old Mutual Limited said the growth in 39,2 percentage points from 2,9 percent in June to general economy, resulting in improved profits. under review. CABS’s loan book was as a result of an increase 42,1 percent in December. Simbisa recorded a 108 percent increase in “Despite the inflationary pressures on costs, the in new business and personal loans as the business [email protected] Page 10 | March 28-April 3 2019 The Financial Gazette Advertorial

Battling bilharzia, the silent scourge

Dr Takaitei Kanongara caused by S. haematobi- is held permanently in a Clinical signs and symp- from vessels leads to the other tests that can be areas of endemicity, con- um. the others S. japon- groove in the front of the toms blood in the stools. performed for detection of tact is often unavoidable, chiStoSoMiASiS icum or S. mekongi and male’s body. once eggs Reactions occur to schis- • Enlargement of the liv- disease are the following: e.g. farmers in irrigated is the second most S. intercalatum. in Zim- are produced, the cycle tosome eggs that are not er or spleen. • Antibody test to check agricultural areas, fisher- Swidespread human babwe the urinary specie starts again. in intestinal passed out in the urine or • Vomiting blood. for signs of infection men or difficult to prevent parasitic disease ranking is more prevalent than the schistosomiasis the worms stools but become lodged • Portal hypertension • Biopsy of tissue (playing children). second to malaria in terms intestinal species. attach themselves to the in body tissues. the symp- and liver failure. • complete blood count • improved detection and of its socioeconomic and Life cycle and transmis- blood vessels that line toms are related to the Diagnosis (CBC) to check for signs treatment of sick people is public health importance sion the intestines; in urinary number and location of With modern techniques of anaemia key as source control. in tropical and subtrop- • on reaching water, the schistosomiasis, they live the eggs. detecting schistosome • Eosinophil count to improvement of sani- ical areas. it is also the tary facilities for safe and eggs excreted by an in- in the blood vessels of the • Abdominal pain eggs under the micro- measure the number of most prevalent of the fected person hatch to acceptable disposal of hu- waterborne diseases and release a tiny parasite (a man excreta. one of the greatest risks miracidium) that swims • Provision of safe drink- to health in rural areas of actively through the wa- ing-water. developing countries. in ter by means of fine hairs • health education for 1996 schistosomiasis was (cilia) covering its body. communities to under- reported to be endemic in the miracidium survives stand and participate in 74 tropical countries, and for about 8–12 hours, the proper use and con- over 200 million people during which time it must tinuous maintenance of living in rural and agricul- find and penetrate the soft sanitary and water supply tural areas were estimated body of a suitable fresh- facilities. to be infected. Between water snail in order to de- • Since the 1960s, nu- 500 and 600 million peo- velop further. once inside merous regional efforts ple were considered at the snail, the miracidium at schistosomiasis control risk of becoming infected. reproduces many times have been implemented to As a mainly rural, often asexually until thousands varying degrees of success in Zimbabwe. one focal occupa- “The of new forms (cercariae) tional break out of the snail into programme in the hippo dis- fork-tailed the water. Depending on Valley Sugar Estates was ease, cercariae can the species of snail and particularly effective, schis- parasite, and on environ- combining chemical snail toso- live for up mental conditions, this control using niclosamide mi- to 48 hours phase of development along with biological con- asis may take 3 weeks in hot trol using ducks as snail prin- outside the areas, and 4–7 weeks or predators and annual tar- cipally snail...” longer elsewhere. the geted chemotherapy. Mol- affects fork-tailed cercariae can luscicides derived from people live for up to 48 hours out- plant sources such as Phy- who are unable to avoid side the snail. Within that tollacca dodecandra and contact with water, either time they must penetrate Jatropha curcas have been because of their profes- the skin of a human being shown to be extremely po- sion (agriculture, fishing) in order to continue their tent, however attempts to or because of a lack of a life cycle. implement them in Zim- reliable source of safe wa- As the cercaria penetrates babwe, as part of control ter for drinking, washing the skin, it loses its tail. programs, have proven and bathing. Within 48 hours it pene- difficult. Attempts at bio- Due to a low level of re- trates the skin completely logical control with ducks sistance and intensive wa- to reach the blood vessels. (as mentioned above), ter contact when playing this process sometimes fish (cichlid species, - Sar and swimming, children causes itching, but most gochromis codringtonii), aged between 10 and 15 people do not notice it. and competitor snails (Bu- linus tropicus) were also years are the most vulner- Within seven weeks the pursued in several focal able and the prevalence young parasite matures control programs conduct- is invariably higher in into an adult male or fe- boys than in girls. Due to ed over various short-term male worm. Eggs are time frames between the increased rural to urban produced only by mated bladder. only about half • Anaemia – tiredness certain white blood cells population movements and headache scope has become simple • Kidney function tests 1970s and early 2000s in females. Male and fe- of the eggs leave the body and inexpensive spread the disease has rein the faeces (intestinal • Fever, chills and mus- • Liver function tests Zimbabwe male adult worms remain A sample of urine for uri- • sulted in the prevalence of schistosomiasis) or urine cle aches Treatment National programmes joined together for life, nary tract infection and to control schistosomiasis schistosomiasis in periur- a period of less than five (urinary schistosomiasis); • Lymph node enlarge- • All people are suscepti- ban areas. stool for intestinal infec- have recently been im- years on average but 20 the rest remain embedded ment tion is ble to infection. Major forms of schisto- • malnutrition and learn- • children have a higher plemented in Zimbabwe. years has been record- in the body where they all “One fo- in 2012 the government somes ing disabilities in children rate of reinfection after ed. the slenderer female cause damage to organs. launched a mass drug ad- Five species • cal programme treatment than adults. in urinary schistosomi- ministration (MDA) proof the trema- asis the eggs cause dam- in the Hippo Val- • immunization is of tode parasite gram with praziquantel, age to the urinary tract and ley Sugar Estates great research interest but targeting school children are respon- blood appears in the urine. the probability of success sible for the for treatment of schistoso- • Urination becomes was particularly is remote. miasis alongside treatment major forms • three safe, effective of human painful and there is pro- effective, combin- for intestinal helminthes. gressive damage to the drugs that can be taken schistosomia- ing chemical snail the author of this article sis. however, bladder, ureters and kid- orally are Praziquantel, was involved extensively the common- neys. control using oxamniquine and metri- in the implementation of ly seen ones • Bladder cancer is com- fonate. MDA programme during mon in advanced cases. niclosamide...” Prevention and control his tenure as District Med- are intestinal that schistosomia- • intestinal schistosomi- • Avoiding contact with ical Officer of Beitbridge a trained unsafe water. district and is available to sis caused by asis develops more slowly microscopist needs to • For people living in share experiences. Schistosoma with progressive enlarge- identi- mansoni and ment of the liver, spleen fy the Reference urinary (or and damage to the intes- para- https://schisto.stanford.edu/pdf/Zimbabwe.pdf vesical) schis- tine. sites. https://agrilifecdn.tamu.edu/fisheries/files/2013/10/Freshwater-Snails.pdf tosomiasis, • Repeated bleeding The Financial Gazette March 28-April 3 2019 | Page 11 Companies & Markets Dairibord offloads Malawi unit

Omega Ukama Business Reporter AIRIBORD Holdings (Dairibord) says it Econet shares was forced to let go of its Malawi unit Dby the adverse economic situation in Zimbabwe after it failed to leverage its “clean” balance sheet to rescue the ailing subsidiary. ‘undervalued’ The Zimbabwe Stock Exchange-listed milk processor announced last week that it Omega Ukama while Cassava closed at RTGS$1,11. was offloading Dairibord Malawi following Business Reporter Akribos says it has a target price of consistent weak performance of the business, $2,09 for Econet. adding that the exit process is anticipated in the conet Wireless Zimbabwe Following the demerger, which second quarter of 2019. (Econet)’s shares are current- Econet says is meant to unlock share- Antony Mandiwanza, Dairibord’s chief Ely undervalued resulting in low holder value, Cassava now houses Eco- executive, said the group had to let go of the trading activities, said capital markets Cash, Econet Insurance, Econet Life Malawi business even though there was a evaluator Akribos Research Services and Steward Bank while Econet’s busi- business case for capitalising it. (Akribos). ness model has pivoted to telecommuni- “There was a compelling business case, the This comes as Cassava Smartech cations and media. market is there and the supply of raw milk is Zimbabwe (Cassava), which demerged “From a buyer’s point of view, the there,” Mandiwanza told an analyst briefing last from the telecommunications giant growth story of Cassava has generated week. in December 2018, is experiencing interested with Ecocash, which is now “But we were not able to capacitate it by increased trade activity on the local the market leader in the mobile money way of investment because of challenges stock exchange and its shares have for space, registering a 215 percent year on in Zimbabwe, where we reside as a holding the most part outperformed shares of year growth in transaction values during company. That was our biggest problem and as Econet in terms of turnover. the first half of 2019 while the digital a result the company continued to experience The listed financial technology firm’s bank Steward achieved 103 percent difficulties,” he said. shares worth RTGS$1 billion have trad- growth in net income resulting in triple Mandiwanza said the group considered Antony Mandiwanza ed hands during the five trading sessions digit topline growth,” Nyaungwa said. to March 20, compared to about $600 Cassava’s financial statements for the various options before folding. because it means we are in a position to leverage the balance “One was to attract potential investors 000 value traded in Econet during the year ended February, 2018, which were sheet to pursue any opportunities that may arise in the same period. extracted from the group’s results, show through an equity arrangement but that was not market,” she said. successful. Banks were quite willing to support Fungai Nyaungwa, a senior associ- that the technology segment’s profits In its unaudited results for the year ended December ate at Akribos, said traders’ reluctance made up 53 percent of the Econet’s re- the capitalisation project but they needed the 31, 2018 that were published last week, the group says the security of the holding company which we to sell ‘undervalued’ Econet stock had ported $132 million profit after tax. Malawi subsidiary, which has now been classified as held caused the imbalance. “While we anticipate a slowdown in were not able to do because of our own local for sale and accounted for as a discontinued operation, circumstances precluding us from doing so. So “While there is currently selling the growth of Cassava, the company’s posted a loss after tax of $0,7 million in 2018, an increase of pressure in both counters, from a selling prospects remain positive,” Nyaungwa the final decision was that we cannot continue to 17 percent on the prior year loss “due to continued working incur losses and eat into the shareholders value,” perspective, we believe that the fact that added. capital constraints”. Econet is currently undervalued means Meanwhile, Econet, which now has he said. Overall, the group reported a profit after tax of $6,48 Mandiwanza said the group’s failure to put that patient investors are not willing to a market value of RTGS$3 billion, has million, which represents a considerable increase from a offload at current levels,” she told The regained its position as the highest cap- up security for funding was because of country profit of $1,95 that was realised in the previous comparable specific systemic challenges and no fault of its Financial Gazette in emailed responses. italised counter on the local bourse after period. “On the other hand, Cassava, for Cassava had temporarily assumed that own as it has a “clean” balance sheet. Volumes sold from continuing operations increased by Weighing in, Mercy Ndoro, the group finance which we have a RTGS$1,20 target position amid the hype of its initial list- three percent “largely driven by liquid milks which benefited price, has been trading more as inves- ing. With a market value of RTGS$2,88 director confirmed that the group had capacity to from increased raw milk intake”. source funding. tors take profit since the listing, hoping billion, Cassava is now the third most Revenue grew by 28 percent to $126,4 million “driven to snap it up at cheaper levels.” capitalised counter on the market, after “Our balance sheet is very clean at the by volume growth and selling price adjustments”. moment and we are happy with that position By the end of Thursday last week, Delta, RTGS$2,92 billion. news- [email protected] Econet stock was trading at RTGS$1,20 [email protected] Page 12 | March 28-April 3 2019 The Financial Gazette Companies & Markets Uber could announce $3 billion deal BER Technologies Inc is set to offer over $3 billion to buy Dubai- based rival Careem Networks FZ, two sources familiar with the deal Utold Reuters. Uber’s offer could be unveiled during the early part of this week, a third Naspers plans to source added. Uber will pay $1,4 billion in cash and $1,7 billion in convertible notes, which will be convertible into Uber shares at a price equal to $55 per share, separate tech unit Bloomberg had earlier reported, citing a term-sheet. Careem declined comment while Uber did not immediately respond to a request from Reuters to comment. in Dutch listing Uber has been preparing for an initial public offering, and its bankers have indicated that it could be valued at as much as $120 billion. The US-based global logistics and transportation company has been ASPERS plans to carve out its internet busi- seeking new avenues of growth even as it faces severe competition in its nesses, including a $133 billion stake in Chi- core business of ride hailing from rivals like Lyft Inc. Nna’s Tencent Holdings that has long exceeded The IPOs of Lyft and Uber represent a watershed for Silicon Valley’s the South African technology investor’s own market technology unicorns, which for years have snubbed the stock market in fa- value. vor of raising capital privately, with investors happy to back their frothy Naspers chose Euronext Amsterdam to list a busi- valuations. ness that includes its 31 percent holding in Tencent, as Reporting by Saeed Azhar and Hadeel Al Sayegh in Dubai and Mekhla well as investments in Russian internet platform Mail. Raina in Bengaluru; additional reporting by Alexander Cornwell in Dubai; Ru, German food delivery business Delivery Hero and Editing by Leslie Adler and Lisa Shumaker. — Reuters Indian e-commerce startup Swiggy. The listing, meant to attract international investors, is part of Chief Executive Officer Bob Van Dijk’s effort to reduce the gap between the Cape Town-based company’s market value of about R1,41 trillion and its Ten- cent stake. Naspers has been considering listings other than its primary one in Johannesburg, which some investors have encouraged. Naspers, Africa’s largest company, accounts for about 25 percent of the Johannesburg Stock Exchange’s weighting, and has seen its value ebb and flow with the holding limits of South African institutional investors and emerging market sentiment. “When the transaction is complete about a quarter of the Naspers market value will have moved from the JSE,” Van Dijk said in a phone interview. Naspers dropped 0,15 percent as of 12:30 in Johan- nesburg. Shares of Tencent were down 3 percent. The listing is a “judicious move to a larger pool of capital,” John Davies, an analyst at Bloomberg Intelli- gence, wrote in a note. Naspers still needs to demonstrate a track record of investment success, Davies said. Naspers will still control the new internet unit, called NewCo until it gets a name, by owning a 75 percent stake, with the rest a free float, the company said in a statement. Naspers got its start just over a century ago as a newspaper publisher focused on providing the first Afrikaans-language press. The company has since evolved into one of the world’s biggest tech investors. Its executives are based largely in the Netherlands and travel extensively, as they seek to replicate the Tencent bet. Van Dijk said he chose Amsterdam partly because it’s a “great place to attract talent.” The listing requirements are very similar to the JSE and the company can keep the same management and board. Its tech unit will be the largest internet investment company on the Eu- ronext and the third-largest overall, he said. Van Dijk this month spun out the company’s pay- TV company MultiChoice, to focus Naspers entirely on consumer internet businesses. — Bloomberg Rolls-Royce savors blowout demand for SUV

OLLS-ROYCE Motor Cars is having a hard time meeting demand for its Cullinan sport util- Rity vehicle, as the high-end British automaker’s biggest-ever model has proved popular with its ul- tra-rich clientele. Production of the SUV, which starts at $325,000 before customization — and almost all Rolls-Royce customers go for bespoke additions — is booked solid until the fourth quarter of 2019, Chief Executive Offi- cer Torsten Mueller-Oetvoes said. “It’s exceeding our expectations,” Mueller-Oetvoes said Tuesday in an interview at the Geneva Internation- al Motor Show. “We have customers that aren’t patient and want their car tomorrow, so we’re doing the occa- sional Saturday shift to meet demand.” Rolls-Royce, owned by Munich-based premium-au- to maker BMW AG, aimed the Cullinan squarely at the SUV-loving American market when it was launched in September. The model is also finding a lot of fans in Russia and Canada, two markets that weren’t as big for the U.K. company before, Mueller-Oetvoes said. “The all-wheel drive is attractive for those markets,” he said. — Bloomberg The Financial Gazette March 28-April 3 2019 | Page 13 Companies & Markets ARDA ventures into milling Ndakaziva Majaka Markets Editor “As part of our strategy, we are stepping up now diversifying into export-earners with firm sights on production of plantation crops. We have been heavily shipping to the European Union. HE Agricultural and Rural Development Authority involved in short term crops but our thrust now is to In Chipinge, ARDA has been improving output of (ARDA) says it will kick off its Matobo Milling project open land for plantations. These are export oriented macadamia nuts and sourcing long-term financing, with in the second half of the year as it intensifies a country- projects and we have since identified partners for some its Nyanga plantations, the parastatal is also looking for T of the projects that we are already implementing,” he long-term money to venture into potato seed production. wide expansion drive at its 21 plantations. Basil Nyabadza, the authority’s chairperson, said the mill said. Meanwhile, Finance minister Mthuli Ncube last was now erect with electrical works still pending. ARDA – which recently entered into a partnership year announced ARDA was anticipated to proceed on “We have started with ARDA Antelope in Matopo district, with a private investor in Chipinge to rehabilitate 2 500 its current trajectory with identified strategic partners Matebeleland South, to say let’s grow maize and process that hectares of macadamia plants – has been in a retooling following announcement of state-owned enterprise maize on site and send mealie-meal to Bulawayo. Milling will drive, actively looking for partnerships to improve reforms, which will see government partially privatising start in the last half,” he said. output. Until recently, ARDA’s main plantation crop and listing certain parastatals on the local bourse. Nyabadza was optimistic the plant would be operational Basil Nyabadza was sugarcane, but the government-owned enterprise is [email protected] by August, highlighting ARDA was moving to open a mill in each province in the near future. “I believe the electrical work is underway now so certainly I believe that possibly in July, August we should open the mill for processing and we are also looking at opening a mill in each province in Zimbabwe,” he said. This comes as the ARDA boss last month said the authority’s expansion was also going to focus on macadamia, avocado, pecan nut and fruit trees production earmarked for export. “We are doing our best to save the economy from funds arising from the huge import bill and we hope the plantations will also play an important role in that aspect and facilitate economic growth in the near future. Foreign currency repatriation Bill on the cards Paul Nyakazeya Online Editor

NVESTMENT-STARVED Zimbabwe is crafting a new law aimed at making it easier for foreign investors to re- Ipatriate their profits from the southern African country, The Financial Gazette can reveal. This comes as scores of foreign firms — including BAT, PPC, Lafarge and numerous airlines — are struggling to repatriate millions from Zimbabwe. Justice minister Ziyambi Ziyambi said government was in the process of drafting a law that would safeguard foreign investors’ investments in the country. The law is also expected to create an environment that would increase foreign investors’ appetite to invest in Zimbabwe. “Government is in the process of coming up with a Bill called the Zimbabwe Investments Development Agency Bill where issues such as capital that would have been invested in Zimbabwe is explained, (and) how they are going to be allowed to repatriate that money,” he said. “The Bill was gazetted and is going to be brought before this House. We will have a time to debate the clauses relating to the provisions that deal with the issue of investor freedom to be able to repatriate their investments.” Zimbabwe continues to suffer from investor mistrust and capital flight, as analysts cite lingering currency risks, policy inconsistencies, high inflation and socio-economic instabili- ty and repatriation of profit as the major reason. Last month, the central bank introduced a raft of measures including liberalising the foreign currency market in an effort to increase investor participation in the country. This was after scores of companies such as Lafarge, British American Tobacco, Nampak and PPC as well as foreign airlines, which have struggled to repatriate money and dividends from Zimbabwe, have indicated their intention to reduce capital expenditure in the country. According to an exchange control circular released recently, the Reserve Bank of Zimbabwe said commercial banks must prioritise 15 percent of all foreign currency payments toward disinvestment by portfolio investors on the Zimbabwe Stock Exchange. Market experts, however, believe that foreign investors are likely to lose a large chunk of their money in Zimbabwe due to exchange losses following the floating of the local currency. According to the central bank’s latest directive to banks, proceeds from the sale of shares done before 20 February, can now be processed through the interbank market, the official market for foreign currency trading. According to the instruction, those that seek to repatriate the full value of their investments, should first register such balances with their administering Authorised Dealers as part of the legacy debt and foreign liabilities, after which they will expunge their debts through the interbank market. Authorised Dealers are also advised that new portfolio investment inflows received after 20 February 2019, should be liquidated at the prevailing market exchange rate to enable the purchase of the shares in RTGS dollars. The central bank noted that, thereafter, proceeds from sale of such shares will be sourced from the interbank market at the prevailing exchange rate. [email protected] Page 14 | March 28-April 3 2019 The Financial Gazette Motoring Mercedes C180 AMG Line

black surfacing (alternatives are offered) nor of the free-standing info- Still a star contender in the junior executive class tainment unit which also offers option- al sat nav functionality courtesy of an SD card. To me, integration of the info screen is so much neater and obviously avoids the “add-on” look of a TOP GEAR with free-standing unit. I must also record Richard Wiley my displeasure that M-B insists on using what it calls “Artico man-made EMPUS fugit, as they say in leather” as a standard seat covering. I the classics, and it sure does. reiterate that leather is a natural prod- A hardly-believable four years uct, so by defi nition, there cannot be T a man-made version. In essence, this and nine months have fl ashed by since I attended the launch of the W205 Artico material is the modern equiv- series C-Class. Now it has under- alent of what was called M-B Tex. gone a facelift and I’ve at last got to There’s nothing wrong with the qual- re-acquaint myself with an example ity, mind you — it’s just the nomen- in C180 guise, complete with AMG clature which I feel is employed to accoutrements. mislead the uninformed into thinking At the aforementioned launch, a they have the real thing — natural W205 project head told us that Mer- cow’s leather — which is available as cedes identifi ed a need to reduce mass a costly option. and improve agility, responsiveness Whatever, the seat coverings are and operational effi ciencies while rais- quite beautifully-tailored and the ing quality perceptions and passenger multi-adjustable front pews are su- comfort levels. perbly comfortable, being supportive Certainly, on that launch I recall and endowed with a softer upper pad- being suitably impressed but has the ding than M-B once employed. passage of time blunted the appeal of The back seat offers more knee Merc’s junior exec saloon that South room than meets the eye and provides Africans have taken to in their droves? occupants with a relaxed angle of re- Well, let’s start with a subjective cline, but I found the seat cushions to matter, that of styling. This model’s be a little short under the thigh and the predecessor featured chiselled lines headroom to be no more than passable. and a lightness of execution that al- The absence of a folding centre arm- most, but not quite, succeeded in pre- rest is an extraordinary omission in a senting a sporting face. Its successor, This angle clearly shows the “cabin-rearwards” stance car of this type. So too the lack of a by contrast, took on elements of the spare wheel in the otherwise capacious mighty S-Class with an altogether (480 litres) and carpeted boot which more rounded look marked out by hides a useful 66-litre fuel tank. strong longitudinal feature lines and a A close inspection of the interior rather hefty bum which, for sure, di- trim reveals that the complete door vided (no pun intended) opinion. cards are of the soft-touch variety and It’s not wholly my cup of tea and that high-quality fl ock lines the cubby few I ask will admit to liking it. One and the central lidded armrest while colleague very accurately described rubber inlays sit in the door recepta- the rear end as resembling molten cles. The only hard plastics are to be chocolate but whatever your tastes, found at foot level where they are out the overall package with its cab- sight. in-rearwards profi le, certainly imparts In terms of kit, all the usual bits, an executive feel which I guess is in addition to the AMG-specifi c styl- something that underpins most cars ing tweaks and “diamond grille,” are with a star. on board, meaning that cruise control, For sure, the East London plant central locking, electric windows, does a very good job with the external LED lamps, keyless start and air con fi nish as tight panel gaps and glossy are standard but please consult your paintwork affi rm. Likewise, the interi- dealer about specifi cs. For example, or of the W205, which took on a much nav in RSA is extra but Bluetooth, more cocoon-like feel and a generally Android Auto and Apple Car Play are softer ambience than the rather sterile both in-situ within the upgraded in- executions of yore, is also nicely-con- fotainment unit that sports excellent structed and happily devoid of the graphics, speedy responses and plenty slightest creak or rattle. of ports. More of the detail will follow in a As ever with a Merc, safety is well moment, so for now let me identify the catered for and aside from a fl eet of air test unit as a C180 AMG Line mod- bags, you’ll fi nd Active Brake Assist el. Sadly, that number continues the which fi rst saw the light of day in the misleading trend of recent years as the range-topping S-Class, but you will 115kW/250Nm lump under the bonnet have to pay extra for park distance is actually a turbo’d 1.6 four-cylinder. control and camera, sunroof, keyless That doesn’t make the engine bad S-Class-like rear-end styling is divisive on this smaller model entry and folding mirrors, for example. though – it provides zesty thrust and These collectively add signifi cantly very respectable low-end pull as that of this model, I used Comfort mode for thusiastic cornering induces a measure those low revs translate into thirst of to the base price which suggests that torque peak is on hand from just 1 the most part. The steering too is mod- of lean with a touch of initial under- around 7.5l/100km. potential buyers are well-advised to 200rpm. In conjunction with a nota- ulated, but whatever mode is selected, steer but sticking to a chosen line is It would be fair to say that if the get a fi x on the fi nal damage which bly smooth if marginally lazy 9-speed low-speed assistance is nicely-judged ever-so-easy. external changes and the tweaks ap- may start to look rather fearsome for a auto box, that engine allows for very as is responsiveness at speed, albeit Ride comfort and easy-driving plicable to this AMG Line iteration car with a 1.6 litre engine. low revs to be maintained on the open that the helm takes on a mildly artifi - characteristics are the essence of this (please visit a Merc website for all the Almost inevitably, the test unit road, all to the benefi t of refi nement cial (rubbery) feel either side of centre. Merc which rewards beyond mechan- detail) are relatively hard to spot, then was a well-specced example (lacking which is aided by excellent wind noise The brakes, as you’d expect of a Merc, ical feedback thanks to a bank vault- the upgrading of the interior is more just leather and the digital instrument suppression but tainted a tad by tyre feel immensely powerful but do re- like aura that enhances the sensory obvious, and for the most part, decid- display) which I guess can infl uence roar on coarse surfaces. quire careful modulation at low speeds feel. edly pleasing. perceptions, but putting these issues It’s only when revs are taken above as the boost levels are a smidgin on the I have to admit to thoroughly enjoy- The original design elements re- aside, this Merc C-Class with its AMG the 4 000rpm mark that aural evidence aggressive side in my book. ing that feeling of splendid isolation main intact which is a good thing as titivations — personally, I’d be happi- of mechanical strain takes over, but M-B at one time fell in love with on the cruise in particular, but there this cabin represented a sea-change for er to see that badge attached solely to even with a load on board, there’s promoting agility as a C-Class benefi t again, I’m knocking on a bit now, so Mercedes in terms of style of execu- performance derivatives — is a most rarely any need to employ such en- but that doesn’t mean its disposition is maybe the 225 km/h top end and the tion. satisfying proposition. It presents a gine speeds. Happily too, the driver is as sporty as say that of 3-Series. It’s not 0-100 time of 8.3s take on slightly less The new steering wheel is a delight fi ne blend of comfortable driving char- presented with full control of the auto that type of car, being more of a comfy importance. with its metal spokes and multi-func- acteristics with a nicely-appointed, box thanks to the use of paddle shifters cruiser, talking of which, the suspen- For the record, fuel consumption tionality and the main instrument practical cabin and decent equipment which induce an immediate response. sion provides a soothingly-cushioned varied signifi cantly according to use. cluster (also available in digital form) levels. And happy to report, that in- Talking of responses, the test unit ride and excellent rebound control not- As ever, typical shopping runs of less is a model of stylish clarity. Indeed, defi nable Mercedes-Benz bank-vault featured easily-accessible multiple withstanding the fi tment of low-profi le than 3km on a cold engine took their the overall dashboard design is most feel is still present within a package driving modes ranging from Eco to tyres which wrap somewhat uninspir- toll with fi gures around 13l/100km be- eye-pleasing, albeit that I am not a that somehow manages to feel more Sport Plus but given the relaxed nature ing fi ve-spoke AMG alloy wheels. En- ing common but out on the open road, great fan of the expanses of piano cosseting than before. The Financial Gazette March 28-April 3 2019 | Page S1 PETROTRADE ISO 9001:2015 CELEBRATION FEATURE

Petrotrade ISO 9001:2015 certified TATE owned petroleum distributor, Petro- remain competitive and stay in business due to in- trade received the ISO 9001-2015 Quality creased global competition. SManagement System Certificate from the Quality management is crucial for the suc- Standards Association of Zimbabwe. cess of every organisation, which is why many Petrotrade received the certification at a glitter- organisations engage in the process of continual ing event held in Harare recently. improvement to secure their future. Paying atten- The certificate underlines the determination tion to quality management has proven to lead to and commitment of management and staff to con- successful and competitive organisations, which tinue providing high quality customer service and are capable of offering superior products and ser- it also underscores Petrotrade’s unwavering com- vices. mitment to implement internationally recognised The adoption of an effective quality manage- business management System practices as a vehi- ment process within an organisation will have cle to deliver on its mandate sustainably. benefits in a number of areas, which include; Petrotrade, a unit of State owned National Oil improved organisational effectiveness and effi- and Infrastructure Company (NOIC), is respon- ciency, improved understanding of the business sible for marketing and distributing petroleum as gained through risk identification and analysis, products in Zimbabwe. operational resilience which results from imple- The firm was founded in 2011 following the menting risk reduction, increased customer and restructuring of the then National Oil Company of employee satisfaction, as well as enhanced con- Zimbabwe (Noczim). The restructuring exercise tinuous improvement. created two separate entities — the National Oil Petrotrade acting chief executive Godfrey Company of Zimbabwe (NOIC) and Petrotrade. Ncube said that Petrotrade the ISO 9001:2015 ISO 9001:2015 specifies requirements for a certification his company has just achieved will quality management system when an organisation enhance the state-owned petroleum dealer’s ca- needs to demonstrate its ability to consistently pacity to become the preferred supplier of petro- provide products and services that meet customer leum products in the country and in the region. and applicable statutory and regulatory require- Petrotrade (Private) Limited is a private comments, and aims to enhance customer satisfaction Petrotrade acting chief executive Godfrey Ncube addressing guests. pany, duly incorporated and registered in Zim- through the effective application of the system, in- babwe in terms of the Companies Act (Chapter cluding processes for improvement of the system applicable statutory and regulatory requirements. organisations have benefited from its practices. 24:03). It is wholly owned by the Government of and the assurance of conformity to customer and Quality has become a global priority as many Commitment to quality is related to the intent to Zimbabwe. To Page S2 Page S2 | March 28-April 3 2019 PETROTRADE ISO 9001:2015 CERTIFICATION SPECIAL FEATURE The Financial Gazette Petrotrade ISO 9001:2015 certified From Page S1 The world body gave all organisations “The fact that we certified as one of the internation- “Although still very young, Petrotrade is moving be- The certificate underlines the determi- implementing the ISO 9001:2008 to transi- al compliant companies is encouraging a sit gives us the tween fourth and fifth position on the market share ladder nation and commitment of management tion to the new standard. In response, upon confidence of knowing that we are on the right track,” he but we aim to continually grow to become the preferred and staff to continue providing high quali- being certified, under the old standard in said. supplier of petroleum products in the country and the re- ty customer service. December 2016, Petrotrade immediately “Being certified by SAZ is confirmation that we are gion. In December 2016, Petrotrade received set out to transition to the new standard. not walking in the dark. Our operations and systems are “Our thrust is to build and acquire more service sta- the ISO 9001:2008 however, the Interna- “We then needed to upgrade our system up to standard as expected on the international space.” tions as well as growing our network through local part- tional Organisation of Standardisation re- to comply with ISO 9001:2015. In a way The current standard demands a high degree of lead- nerships. leased a new version of the ISO 9001 stan- we found ourselves cornered with no oth- ership commitment and is underpinned by risk based “We are in the process of acquiring a strategic partner, dard in September 2015, when Petrotrade er option to engage in another journey for thinking approach and the need to identify opportunities an initiative totally supported by our shareholder, the gov- was in the process of getting certified on ISO 9001:2015. It was a worthwhile jour- in the organisational context in order to improve service ernment. Such a partner is expected to strengthen Petro- the previous standard. ney and we really cherish the opportunity. delivery to clients. trade’s position in the industry,” he said. To Page S3

Cnr 1st Street & Jason Moyo Avenue, Fourth Floor, Suite No. 13 Batanai Gardens, Harare Cell: 0734468784 / 0778769437, E-mail: [email protected]

The Specialists • Environmental and Social Impact Assessment Studies Petrotrade • Environmental Audits and Due Dilligence Reports Mhanda- • Local Environmental Action Plans (LEAPs) mambwe Ser- vice Station EIA study

Congratulates Petrotrade Kadoma Ser- vice Station EIA study

For being ISO 9000 Compliant Petrotrade Norton Ser- vice Station Envinet Environmental Planners EIA study Your Partners in Sustainable Development Petrotrade management with the Deputy Minister of Energy and Power Development, Magna Mudyiwa seated and the SAZ director general Dr Eve Gadzikwa (right). A historic moment A great achievement

National Oil Infrastructure Company of Zimbabwe (Pvt) Ltd. (NOIC) congratulate Petro- Trade Zimbabwe on the occasion of their ISO 9001:2015 certification.

Noczim House 4th Floor 100 Leopold Takawira Street. P.O. Box CY 223, Causeway Harare, Zimbabwe. Tel: +263 -242-748518/21/22. Email: [email protected] www.noic.co.zw The Financial Gazette PETROTRADE ISO 9001:2015 CERTIFICATION SPECIAL FEATURE March 28-April 3 2019 | Page S3

Rural Electrification Fund

6Th FlOOR, MEgAWATT hOuSE, 44 SAMORA MAChEl AvEnuE, hARARE, ZIMBABWE

The Rural Electrification Fund (REF) Board Chairman, Mr W.A Chiwewe, the Board, Management and Staff congratulate Petro-Trade Zimbabwe on the occasion of their ISO 9001:2015 certification.

Petrotrade CEO Godfrey Ncube (left)and the Deputy Minister of Energy and Power Development, Magna Mudyiwa (centre) receiving the certificate from SAZ director general Dr Eve Gadzikwa (right).

This is a historic moment and a great achievement by Petro-Trade Zimbabwe which deserves special Petrotrade ISO recognition from REF. We wish the company to continue providing adequate 9001:2015 and affordable fuel for the nation. Congratulations! certified Makorokoto! Amhlophe! From Page S2 The move falls under government’s plans to restructure State-owned enterprises, within which 41 entities are lined-up for privatisation, departmentalisation and list- Rural Electrification Fund ing on the Zimbabwe Stock Exchange. The International Organisation for Standardisation is an independent, non-gov- ernmental international organisation with a membership of 163 national standards Magetsi Kumusha/Amagetsi Ekhaya bodies. ISO 9001:2015 specifies requirements for a quality management system where an organisation has to demonstrate its ability to consistently provide product that meets customer and applicable statutory and regulatory requirements. It also aims to enhance customer satisfaction through the effective application of the system, including processes for continual improvement of the system and the assurance of conformity to customer and applicable statutory and regulatory requirements. “We have an ISO certificate to protect and not even the risk of a difficult operating environment should take away the certification from us. After all the difficult operating environment is just littered with the risks as well as business opportunities, hence our duty is to ensure availability of our products. “Although still very young, Petrotrade is moving between fourth and fifth position on the market share ladder but we aim to continually grow to become the preferred supplier of petroleum products in the country and the region,” he said. Also addressing guests, Deputy Minister of Energy and Power Development, Magna Mudyiwa said Petrotrade plays a significant role in the distribution of fuel all over the country. The company is currently playing a significant role in the distribution of fuel in the country not just in the big cities, small towns and at growth points. Petrotrade is one of the very few oil companies that have set up service stations and have presence in the remote areas of the country which previously had no service stations. “Petrotrade is one of the very few oil companies that have setup service stations and has presence in the remote areas of the country which previously had no service stations. The presence of Petrotrade in these areas therefore improves the access to fuel to all,” Mudyiwa said. This is in line with the Ministry’s vision of achieving universal access to sustainable and modern energy in Zimbabwe by 2030. “I am confident that being ISO 9001:2015 certified Petrotrade will be in a better position to achieve their mandate and continue along the path of improving service delivery to the nation and increase their market share.” Government expects Petrotrade to continue to expand and increase its presence in the market. “I am aware that since 2011, you have been expanding your retail network through the construction of new service stations, purchasing of sites as well as entering into partnerships with other stakeholders in the fuel distribution network.” Following the unbundling of the National Oil Company of Zimbabwe in 2011, Petrotrade was mandated by government to participate in the marketing and trading of petroleum products. In 2011, Petrotrade had seven company owned sites and has increased to 16 in 2018. “This number will increase further as you already have four sites at different stages of construction. You also have partnership arrangements with dealers and the Ministry hopes that your entire channel partners will also operate according to the standards as demanded by the quality management system ISO 9001:2015. “Government continues to urge service station operators to maintain high standards at their sites to ensure safety of customers and Petrotrade as a government company should be seen to be leading by example,” she said. “Petrotrade is fully aware of government’s expectations with regards to service delivery and infrastructural standards at all their sites. As the shareholder we are pleased that Petrotrade is passionate about benchmarking its business process and services to international standards. Your quest for service excellence as demonstrated by the quality management certification propels Petrotrade to remain one of the profitable government owned companies in Zimbabwe,” Mudyiwa said. Page S4 | March 28-April 3 2019 PETROTRADE ISO 9001:2015 CERTIFICATION SPECIAL FEATURE The Financial Gazette Govt congratulates Petrotrade

TEPS taken by Petrotrade to achieve ISO 9001: to appreciate all the efforts that Petrotrade has and is put- 2015 are in line with government’s 2030 vision of ting in place towards building its brand and benchmark Sachieving universal access to sustainable and mod- itself in this competitive environment by upgrading to ern energy in Zimbabwe, Energy and Power Develop- ISO 9001:2015, Petrotrade has not only gained an inter- ment deputy minister Magna Mudyiwa said. national emblem of recognition but has demonstrated its “I am confident that being ISO 9001:2015 certified determination to keep abreast with the global trends in Petrotrade will be in a better position to achieve their quality management. mandate and continue along the path of improving ser- “The fuel trading market has many players with some vice delivery to the nation and increase their market of whom are international players with better technology share,” Mudyiwa said. and better industry experience. It is therefore necessary The Quality Management System ISO 9001:2015 has for Petrotrade to continuously analyse the context of the more emphasis on the risk based thinking that assist or- organisation and adapt to changing environment without ganisation of being mindful of the issues and threats they delay. face in meeting the requirements of their stakeholders “Petrotrade cannot afford to slack with regards to ISO certification provides for continued improve- meeting customer needs given the strong competition in ment by taking on board feedback and suggestions from the fuel trading market,”Mudyiwa said. stakeholders and customers which are critical in achiev- Standards of Association of Zimbabwe director gen- ing organisational excellence. eral Eve Gadzikwa said the ISO Quality Management “The petroleum industry is a very competitive sector Standard was[]7p]p accepted worldwide as the standard with oil companies that have been established in the in- that defines quality. dustry for a long time before Petrotrade and I would like Energy and Power Development Deputy Minister Magna Mudyiwa. “Certification to ISO 9001:2015 awarded to Petro- trade for the Quality Management System independently assures conformity to globally accepted best practices in quality management hence the certificate awarded to Petrotrade is internationally recognised,” Gadzikwa said. SAZ is competent to being a certifier to these international standards. “Implementing ISO 9001:2015 Quality Management System should continue benefitting Petrotrade through increased effectiveness and efficiency, and cost reduction. It also shows your commitment to increased performance, employee and customer satisfaction and continued improvement.” “There are numerous operational efficiencies and business gains to be realised by impending this standard and these include risk management, the system also talks about realising the context of your organisation, system also emphasise on leadership, as well as efficient utilisation of resources and also demonstrated organisational commitment to quality issues, ability to satisfy customer needs and also the system helps to improve the quality of your goods and services. “It also helps you to drive growth in a systematic manner while at the same time cutting back on costs and increasing profits. It also gives your business a competitive edge. After all is said and done this system provides convenience, reliability to your customers and efficient delivery of the product to your customers,” Gadzikwa added.

SAZ director general Dr Eve Gadzikwa.

Energy and Power Development secretary Gloria Magombo congratulating Petrotrade. The Financial Gazette PETROTRADE ISO 9001:2015 CERTIFICATION SPECIAL FEATURE March 28-April 3 2019 | Page S5 Petrotrade service station construction on track

TATE-owned petroleum firm, Petrotrade (Private) are at different levels of comple- Limited’s service station construction project is tion. The one in Mabvuku is at al- Sfacing a number of challenges due to the current most 80 percent completion, while random price increases in the market. the others are at 30 to 45 percent The company last year had set aside $15 million for completion,” he said. the construction of 10 service stations across the country Petrotrade has a distribution over the next two years. network of over 80 service sta- “We are in the process of finishing those service tions, including dealer sites and stations but we faced some challenges when the prices coupon redemption sites across of construction material went up so you can appreciate the country. that that at the moment there is not much activity going Petrotrade, a unit of State on. If you visit our sites you will find that there are few owned National Oil and Infra- contractors because they are sorting things out with the structure Company (NOIC), is Procurement Regulatory Authority of Zimbabwe on the responsible for marketing and price adjustments,” Godfrey Ncube Petrotrade acting distributing petroleum products in chief executive said. Zimbabwe. Based on last year’s estimates before the October “The projects are on track yes price increases, service station construction costs were but not in terms of time but they estimated at $1,5 million to set up. are on track.” “We had targeted to build four service stations per Zimbabwe has been facing year, but what we have done now is that we are finishing crippling fuel shortages since last one in Mabvuku and one in Warren Park Harare, one in year because of the shortages of Bindura and one in Masvingo. The four service stations Petrotrade is opening up new service stations. foreign currency. Petrotrade objectives

•Marketing and distribution of petroleum products that include diesel, petrol, paraffin and Jet A1. •To facilitate government involvement in the oil industry. Vision The preferred supplier of quality petroleum products in the region. Mission To supply quality petroleum products to clients through competitive prices and efficiency in a safe, fair and sustainable manner. Values •Professionalism •Excellence •Integrity •Dedication •Teamwork • Innovativeness Company history Petrotrade (Private) Limited is a private company, wholly owned by the Government of Zimbabwe. It is a successor Company to the former National Oil Company of Zimbabwe (Noczim). In December 2010, the Government of Zimbabwe, the shareholder of Noczim, through the Ministry of Energy and Power Development, took a decision to restructure Noczim by unbundling it into two companies namely: Petrotrade is a trading company responsible for downstream activities, including the selling of petroleum products and lubricants through bulk sales and Service stations. National Oil Infrastructure Company of Zimbabwe (NOICZ) is a logistics and infrastructure company.

The Petrotrade team after receiving the ISO 9001:2015 certificate. Page S6 | March 28-April 3 2019 PETROTRADE ISO 9001:2015 CERTIFICATION SPECIAL FEATURE The Financial Gazette Petrotrade ISO 9001:2015 certification in pics The Financial Gazette March 28-April 3 2019 | Page S7

CELL INSURANCE GCR CREDIT RATING Cell Insurance gets BBB+ rating

Cell Insurance CEO Isheunesu Makuzwa.

ELL Insurance Company Limited (Cell Insur- ance) has received an initial BBB+ rating from Cthe Global Credit Ratings (GCR). The rating reflects Cell Insurance’s strong balance sheet as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. “This has been supported by capital injections over the past three years, coupled with well contained credit and market risk exposures. Given efforts to safeguard capital through enhanced earnings generation, combined with existing buffers, risk adjusted capitalisation is expected to trend within a very strong range over the rating horizon,” GCR said. The international rating agency accorded the credit rating ― valid until December 2019 ― based on robust risk adjusted capitalisation, which is considered a key rating input, as reflected by the international solvency margin of 151 percent in the 2017 financial year, 131 percent in 2016 and 39 percent in 2015. Cell Insurance’s competitive positioning is intermediate, with the insurer accounting for seven percent of the short term insurance industry gross premiums in 2017. Cell Insurance is the industry leader in the provision of alternative risk transfer solutions. The company is ranked fourth in Zimbabwe by capitalisation according to the latest IPEC report and is the only licensed Cell Captive provider in the country. The company is highly experienced in the insurance of mining and engineering risks and insures some of the mega risk portfolios in the country. The company has a robust Enterprise Risk Management program that assists organisation to identify and com- prehensively manage the risks inherent in their orga- nizations. Cell Insurance was founded in 2004 and celebrates its 15th anniversary this year. GCR noted that the specialised nature of Cell In- surance’s business model and captive revenue from shareholders with critical mass in the power industry provides revenue stability, which underpins market share resilience. “Going forward, the insurer’s competitive posi- To Page S9 Page S8 | March 28-April 3 2019 CELL INSURANCE GLOBAL CREDIT RATING SPECIAL FEATURE The Financial Gazette

WAICA Re Zimbabwe

The Board of Directors, Management and Staff of WAICA Re Zimbabwe wishes to congratulate

on achieving a BBB+ Rating.

WAICA Re Zimbabwe remain committed to partnering with “Cell Insurance” as they continue to service the market, rest assured that they will be... …surely reinsured.

1st Floor, Block 3, Celestial Park, Borrowdale Tel +263 (242) 755400/751700/753176 The Financial Gazette CELL INSURANCE GLOBAL CREDIT RATING SPECIAL FEATURE March 28-April 3 2019 | Page S9 Cell Insurance gets BBB+ rating From Page S7 Positive rating movement could develop it now becomes more important to keep up native risk financing options which are more tioning may improve to a moderately strong level, from a sustained improvement in earnings with the pace of the insurance industry re- flexible and cost effective than conventional should premium growth accelerate in line with medi- capacity while maintaining strong credit quirements and evolving customer demands. insurance options,” Cell Insurance said. um term strategic objectives,” GCR said. protection metrics. Conversely, downward “As risks have become more and more Cell Captives are a valuable risk manage- The insurance firm's earnings capacity is viewed to rating action could follow a weakening in complex, there has been increasing demand ment tool that allows insured clients to trans- be intermediate, subdued by protracted underwriting earnings relative to expectations, while sus- for risk financing solutions that cover these fer the economic benefits of their risk and deficits over the historical period. tained deterioration in liquidity and capi- risks in a cost effective manner. A business investments into a facility called a “cell”. Robust risk adjusted capitalisation is considered talisation could also lead to negative rating should have the freedom to choose the insur- Through this, Cell Insurance’s unique struc- a key rating input, as reflected by the international action. ance option that is suitable for their company tures allow clients an equity participation in solvency margin of 151 percent at FY17 (FY16: 131 Cell Insurance offers a diverse range of and this insurance freedom is provided for in that cell which is governed contractually by percent; FY15: 39 percent). This has been supported short term insurance and other risk financing the Cell Captives option. a shareholding agreement. by capital injections over the past three years, coupled solutions targeted at corporate enterprises, “Traditional insurance normally offers The structure is similar to that of a “hon- with well contained credit and market risk exposures. small to medium enterprises and individual general insurance covers, which protect you eycomb” with separate classes of shares Given efforts to safeguard capital through enhanced needs. The company’s philosophy is deep- in the event of injuries, assets damage or fi- which individually comprise a business cell. earnings generation, combined with existing buffers, ly rooted in providing comprehensive risk nancial losses incurred during your business- Each cell is represented by a separate class risk adjusted capitalisation is expected to trend within management solutions. es operation in exchange for a certain pre- of ordinary shares with specified dividend a very strong range over the rating horizon. As part of providing innovative solutions mium. As risk management standards have rights which are limited to that cell. Clients Cell is the sixth largest insurer in the market, sup- to its customers, Cell Insurance, last year improved in the workplace and efficiencies subscribe for these shares and as cell own- ported by its market leading position in insuring risks launched the Cell Captives Solutions. As have increased, the possibilities of certain ers, they are afforded the risk financing and in the mining sector. Furthermore, the specialised na- technology, innovation and higher custom- risks occurring has gone down and organi- conventional insurance capabilities just like ture of its business model and captive revenue from er expectations redefine the market place; sations have been left with a need for alter- those enjoyed by a licensed insurer. shareholders with critical mass in the power industry provides revenue stability, which underpins market share resilience. “Going forward, the insurer’s competitive positioning may improve to a moderately strong level, should premium growth accelerate in line with medium term strategic objectives. “However, cognisance is taken of the improvement in the underwriting margin in FY17 (13 percent; five year average: -18 percent), which could be sustained by an increase in the net commission income ratio (10M F18: 16 percent; FY17: six percent). “Further earnings support is expected to arise from very conservative maximum deductibles per risk and event on the reinsurance programme, thus limiting the net impact of high severity losses dominating the book. In this regard, management’s ability to sustain the turnaround in underwriting performance represents a key rating consideration over the rating horizon,” GCR said. Cell Insurance's liquidity is viewed to be strong, with the majority of invested funds held in liquid investments. Accordingly, cash and equivalents covered net technical provisions by 4,7x in 2017, while claims cash coverage equated to 76 months compared to 37 months in 2016. Liquidity metrics are likely to remain within a strong range, supported by ample headroom and the possible improvement in operational cash flows over the outlook horizon. “Earnings diversification is intermediate; with a well spread business mix offset by inherent client concentration. The business mix is fairly diverse, with three lines of business contributing in excess of 10 percent to total gross written premium in 2017. How- ever, few shareholders and select big clients account for the majority of the business, albeit with risk to revenue mitigated by their systematic importance. Given these structural limitations, earnings diversification is expected to remain within an intermediate range over the outlook horizon,” GCR added. The credit rating is the opinion of an independent agency regarding the financial strength of the insurance company. Insurance company credit ratings are important a lot of people and businesses depend on insurance companies to pay claims when they suffer an insured loss. Insured risks are those that would cause a large financial loss if not insured. However insurance companies can only pay if they have money. Like other businesses insurance companies can become insolvent. Additionally people and businesses depend on insurance companies to pay for legal services, such as defending against lawsuits. Few people can afford the costs of today’s litigations. Without money for defence, they could be held unjustly liable for an occurrence. To prevent these tragedies, people and businesses purchase insurance. Credit ratings like the GCR Credit rating seek to prevent insurance company insolvency by issuing insurer financial strength ratings that are freely and readily available to the public for inspection. “The credit rating is important to Cell Insurance because it is a positive indicator of the health of the company, done by an independent analyst. Cell In- surance conforms to the highest standards of quality management in all its operation and the rating is a testament to that fact. This also assists in building investor confidence as well as that of our current and prospective customers,” Cell Insurance said. GCR views country risk factors to be elevated, and a systemic rating consideration applicable to insurers. Operational challenges are likely to persist over the rating horizon, given the uncertain socio-political outlook, severe liquidity constraints, reduction in banking sector stability and weak macroeconomic funda- mentals. The Financial Gazette CELL INSURANCE GLOBAL CREDIT RATING SPECIAL FEATURE March 28-April 3 2019 | Page S10 Ushering a new era of risk financing ISKS are naturally unavoidable more flexible and cost effective than will always be adequate cover for the in any type of business opera- conventional insurance options. risks. tions. The financial consequenc- What are Cell Captives? Key benefits of Cell Captives are: R es of risk occurring can however, have Cell Captives are a valuable risk l They assist in reduction of the

the impact of wiping out the entire as- management tool that allows insured cost of conventional insurance. sets of a business, which is why most clients to transfer the economic bene- l They allow companies to retain

businesses opt to take out insurance fits of their risk and investments into risk and share in the profit potential of

covers. As technology, innovation and a facility called a “cell”. Through this, an integrated risk management pro- Insurance Broking | Risk Advisory Services higher customer expectations redefine Cell Insurance’s unique structures al- gram. the market place, it becomes more im- low clients an equity participation in l The investments of premium and GLENRAND MIB ZIMBABWE (Pvt) Ltd portant to keep up with the pace of the that cell, which is governed contractu- capital accrue to the cell and increases industry insurance requirements and ally by a shareholding agreement. The risk carrying capacity. evolving customer demands. structure is similar to that of a “honey- l They provide access to direct in- Cell Insurance offers a diverse comb” with separate classes of shares surance and reinsurance markets local- Management and Staff would like to range of short term insurance and oth- which individually comprise a business ly and globally. er risk financing solutions targeted at cell. Each cell is represented by a sepa- l They are flexible to structure corporate enterprises, small to medium rate class of ordinary shares with spec- customised insurance programmes for congratulate Cell Insurance on being enterprises and individual needs. The ified dividend rights which are limited specific clients. company’s philosophy is deeply rooted to that cell. Clients subscribe for these l Actuarial input provides correct in providing comprehensive risk man- shares and as cell owners, they are af- cell retentions and solvency levels. awarded the BBB+ Rating by GCR agement solutions. As a result, Cell In- forded the risk financing and conven- Contingency policies surance has launched the Cell Captives tional insurance capabilities just like A contingent policy is a conven- product in line with risk management those enjoyed by a licensed insurer. tional policy that provides insurance For all your business combined insurance trends happening in the local and inter- As a valuable risk management protection on a conventional basis with cover, farmers comprehensive insurance, national market place. tool, Cell Captives provide a useful added benefits of allowing the insured As risks have become more and vehicle for ordinary companies to un- client to participate in sharing of un- motor vehicle insurance, home more complex, there has been increas- derwrite their own insurance risks lim- derwriting profits and implementation ing demand for risk financing solutions ited to the solvency of their cell. With of sound risk management policies. comprehensive cover and travel insurance, that cover these risks in a cost effective this, cell owners enjoy a greater degree They provide the primary layers of an manner. A business should have the of control on how their insurance pro- insurance programme or cover risks freedom to choose the insurance option gramme is managed and can customise not insurable. Contingent policies can Contact our experienced team for that is suitable for their company and the risk financing programme to their be issued as a stand-alone policy or this insurance freedom is provided for needs. Unlike in the conventional mar- as a part of a risk arrangement where “Service Beyond Expectation” on in the Cell Captives option. Tradition- ket, risk benefits and profits of the cell reinsurance is structured above the al insurance normally offers general accrue to the cell owner and not insur- layers provided by contingency policy. 08677004896, 08677004911, 0242 778851/4/6/7, insurance covers, which protect you er. Typical risks which are insured in At renewal or cancellation of policy, a in the event of injuries, assets damage cells include excess buy down layers, performance bonus is declared based 0292 888204/5, 880272 or financial losses incurred during your risks which are not insurable conven- on claims experience. With the inten- businesses operation in exchange for a tionally or risk which is uneconomic tion of creating insurance capacity certain premium. As risk management to insure in conventional market due over many years, contingency policies standards have improved in the work- to high premium levels and good loss enable clients to negotiate better insur- Glenrand M·I·B Zimbabwe place and efficiencies have increased, ratios. Cell Captives also allow clients ance rates in the market. EXTRAORDINARY PEOPLE I EXTRA ORDINARY RESULTS the possibilities of certain risks occur- to access the conventional insurance Key benefits ring has gone down and organisations and reinsurance markets directly and l A valuable tailored tool for risk 17425 Flanagan Crescent, Hillside, Harare or 5 Aida Court, Windsor Park, Famona, Bulawayo have been left with a need for alterna- cost-effectively to cover the excess and management and controlling the cli- tive risk financing options which are catastrophe exposures such that there To Page S13

Congratulations to Cell Insurance on their achievement.

APPROVED AUTOBODY SPEED SHOP FOR We wish them many more successes in the future.

Swiss Motors (Pvt) Ltd. Tel: +263 04 751385/6/59 • Cell: +263 772 300 633 • Fax: +263 04 754390 • Email: [email protected] Panel Beaters & Spray Painters - For all makes of vehicles and trucks Swiss Motors is equipped with the latest panel beating and spray painting technology to ensure the highest of quality and workmanship. The Financial Gazette CELL INSURANCE GLOBAL CREDIT RATING SPECIAL FEATURE Page S11 | March 28-April 3 2019 Key benefits of a GCR rating

HE role of a rating agency is to independently reduced funding costs. and types of debt. The objective is to the company’s performance. GCR has a pro-active differentiate credit quality across all industry Furthermore, the extensive distri- achieve a reasonable judgement on monitoring approach and its stated policy is to for- Tsectors and investment instruments, with the bution of the detailed rating report can credit risk, not through a set formula, mally review all ratings “as often as is necessary” but purpose of providing investors with a basis to guide prove to be a highly effective comple- but rather through careful analysis of at least once a year. appropriate investment and pricing decisions. ment to an organisation’s own investor the critical strategic issues affecting in- In the event of a material development, be it com- Global Credit Rating Co. (GCR) is the leading relations activities. dividual organisations. pany specific (such as acquisitions/divestitures, a rating agency in Africa, with particular expertise in Finally, quite apart from the rating, GCR’s main emphasis is to under- major deviation from historical/forecast earnings claims paying ability ratings. the process provides a useful manage- stand the fundamental strategic factors trends, or an adverse development impacting on as- Overall, GCR accounts for approximately 81 per- ment tool insofar as it provides man- associated with each individual organ- set/earnings quality) or industry related (such as a cent of all claims paying ability ratings accorded on agement with the benefit of a knowl- isation and the industry in which it op- liquidity crunch or other systemic shock), then GCR the African continent and boasts a ratings coverage edgeable, independent, third party erates, to evaluate the quality of man- will immediately place the rating on “Rating Watch” ratio of up to 95 percent in certain markets. opinion on the organisation and its op- agement, and to identify critical risks and review the ramifications with management. Accordingly, a formal rating provides an indepen- erations (including the results of an ex- to future cash generation. GCR undertakes to subscribers that within a maxi- dent and internationally recognised measurement of tensive “benchmarking” process across Our emphasis is on determining mum of 180 days of having placed a rating on Rating an organisation’s financial strength. a wide range of financial, operational how these strategic aspects will affect Watch, it will either provide an update to the market A favourable rating can immediately result in an and control variables. the predictability of cash generation or will have completed a full review and published increased pool of investors, can facilitate direct ac- The rating process is structured to and the organisation’s capacity to re- the outcome of its review. cess to capital markets and can ultimately result in create an accurate, consistent frame- spond to uncertainty. Note that it is GCR’s policy not to change or with- reduced funding costs. work for evaluating and ranking risk Once a rating has been publicly re- draw a rating without first according the client the Furthermore, the extensive distribution of the de- across various companies, industries leased, GCR will continuously monitor opportunity to respond. tailed rating report can prove to be a highly effective complement to an organisation’s own investor relations activities. This is particularly true in emerging markets were international coverage of companies may be limited or non-existent, enabling rated entities to take full advantage of the strong investor interest in emerging markets from across the globe. Finally, quite apart from the rating, the process provides a useful management tool insofar as it provides management with the benefit of a knowledge- able, independent, third party opinion on the organisation and its operations (including the results of an extensive “benchmarking” process across a wide range of financial, operational and control variables). The core advantages of a GCR rating is based on the principals of “analytical excellence”, market penetration and distribution, while specific benefits include: The largest rating team in Africa, and on the ground presence in all key markets. l Senior management team boasts over 80 year’s cumulative ratings experience. l International methodologies adapted for local circumstances. l Highly competitive pricing. l Proven ratings accuracy and analytical excellence. l Market leadership in Africa. l Extensive coverage in leading local and international financial publications (note that GCR’s ratings are also available on all Bloomberg’s terminals worldwide). l The largest investor subscriber base in Africa. The benefits of a rating are becoming more evident as capital markets across the African continent develop, and bond issuances increase, with increasing calls being made for these transactions to be rated. GCR’s credit ratings provide a forward looking opinion on either 1) the relative ability of an entity to meet its financial obligations as they fall due (issuer credit rating) or 2) the creditworthiness of an obligor with respect to a specific financial obligation, class of financial obligations or a specific financial program (issue/instrument credit ratings). GCR’s credit ratings are designed primarily to provide relative rankings relating to overall creditworthiness. The ratings are not measures of absolute default probability. Creditworthiness encompasses the likelihood of default, and talks to the ability and willingness of an issuer to meet its financial obligations in full and on time. GCR accords both long term and short term credit ratings. Short term credit ratings are generally assigned to obligations considered short term in the relevant market, typically with an original maturity of no more than 365 days. Accordingly, long term credit ratings relate to financial commitments with maturities of longer than 12 months. GCR accords both national and International scale ratings and clearly specifies which is being rated on the front page of each rating report. Additionally, national scale ratings are denoted by a special identifier for the country concerned. The rating methodologies and rating scales utilised in the accordance of both types of ratings are very similar, but the key difference is that one scale measures the capacity to meet obligations relative to a global peer group, while the other measures capacity to meet obligations relative to the lowest credit risk within a country. An explanation of the different types of ratings accorded can be found on GCR’s website. Why obtain a rating A favourable rating can immediately result in an increased pool of investors, can facilitate direct access to capital markets and can ultimately result in Page S12 | March 28-April 3 2019 CELL INSURANCE GLOBAL CREDIT RATING SPECIAL FEATURE The Financial Gazette Innovative insurance solutions for every individual client need HE Cell Insurance product Houseowners insurance theft of swimming pool and borehole pumps, as well range is diverse and unique in A person’s house is most often than as electric gate motors. If a house is damaged and T meeting individual client needs not their most important and valuable is uninhabitable, the policy provides for alternative from every sector of the economy and asset, which is why it needs to be in- accommodation and loss of rentals while repairs are from every location in Zimbabwe. sured with Honeygold Homesure. This underway. Legal liability to others arising out of The products have the widest cov- is a policy that covers domestic build- owning your property is also covered in the policy. erage at very reasonable premiums, ings, which include the main dwelling Honeygold Homesure also covers accidental loss- which has made Cell Insurance Zimba- house, outbuildings, cottages, garages, es or damage to household contents. This includes bwe’s insurer of choice. Cell Insurance swimming pools and all pumps against all household furniture, goods, clothing and person- offers the following personal insurance accidental damage. al effects of every description of the insured, or for packages; Honeygold Homesure, Hon- Damage can be caused by fire, which you are responsible for, or belonging to any eygold Motorsure, Personal accident, storm, wind, water, bursting of pipes member of your family normally residing with you. The Wallet Doctor hospital cash plan and geysers as well as impact by ani- Furniture also includes contents in garages and out- and Honeygold Travsure International mals and vehicles. buildings excluding motor vehicles. The policy also Travel insurance. Insurance cover also extends to covers accidental damage by fire, lightning, storm, impact as well as break-in and theft. The policy extends to cover compensation of insured’s spouses for death and injury from a claim occurrence as well as property of domestic workers. Always keep a list of your property per each room and the updated replacement cost which is filed in your insurance file Personal accident and family benefactor This is a very important cover which results in the payment of cash benefit to a policy holder in cases of bodily injury caused by external violent and visible means or their remaining dependents in the event of accidental death. In the event of such death, the deceased family will benefit up to the death limit stated in the policy. Such benefits become handy as they can help with funeral expenses in case of death or other expenses for remaining beneficiaries as well as provide medical expense relief where one is temporarily or permanently disabled. Motor insurance Motor is undoubtedly the most common personal insurance and with Honeygold Motorsure Compre- hensive cover, one can protect their vehicle against accidental loss or damage to their own vehicle as well as liability to third parties for property damage, death and injuries. The Third Party Only option covers the insured’s legal liabilities only in respect of bodily injury or death to other persons and damage to their property but doesn’t cover damage to their vehicle. Full Third Party Fire & Theft Option on the other hand provides the policy holder with legal liabilities cover for injury, death and property damages to other persons as well as damage to their own car for theft and fire incidences only. The cherry on top is that Honeygold Motorsure has a Bee-Rescue option which gives the insured 24-hour roadside assistance for incidences that include flat battery, tyre fix, emergency fuel delivery, keys retrieval, vehicle valuation and assisted driver on a Basic Package within 60km radius and Supreme Package within a 120km radius. Hospital cash plan The Wallet Doctor is an insurance package that has been specifically designed for those who find themselves hospitalised for one reason or another. Unlike conventional medical aid, which covers specific medical procedures and medication, The Wallet Doctor will give a cash payout calculated daily to the insured person for every day spent in hospital once one is hospitalised for more than 48 hours. Daily cash payout starts from $220 paid daily and up to an aggregate limit of $13,200 annually, including cover for pre-existing conditions and ailments (including dreaded diseases) with cover acceptance requiring no medical examination. Cover commences after a proposal form has been completed and approved and the premium has been paid, and is subject to applicable waiting periods in the policy. Money paid by the policy can be used for medical aid shortfalls, over the counter medication or as the insured pleases. It provides cash relief for the policy holder post-hospitalisation. Travel insurance Honeygold Travsure is your travel companion wherever you go in the world. You should not board a plane without Honeygold Travsure as it gives you international emergency assistance supported by MAPFRE Assistancia Spain for emergency medical evacuation, medical expenses, refund for trip cancel- lations and interruptions. Cover also includes funeral repatriation expenses, accidental death, injury or disablement benefit as well as lost luggage expenses amongst a horde of other benefits. The Financial Gazette CELL INSURANCE GLOBAL CREDIT RATING SPECIAL FEATURE March 28-April 3 2019 | Page S13 Ushering new era of risk financing

From Page S10 Cell Insurance’s Cell Captive structures ent’s risks, losses and exposures. offer underwriting managers a business part- l Facilitates sharing of underwriting nership in which they benefit from access to profits. Cell Insurance’s licence and benefit from: l A flexible arrangement that facilitates lA facility that supports Cell Captive various combinations of structures, premi- philosophy in a secure ring-fenced, inde- ums, cover, insurance and reinsurance ca- pendent environment with access to under- pacity. writing profits and investment income, plus l Reduces exposures of price volatilities normal administration and management ex- in the conventional insurance market. penses. l Creates insurance capacity and re- lA flexible business partnership across serves to absorb risk retention for difficult to levels including risk retention insure and expensive risks in the convention- lTechnical capabilities and support that al market. includes actuarial services l Cost of risk is stabilised over time and The classes of insurance suitable for this determined with precise certainty. solution include the following: l Actuarial input is used to determine lSelected commercial and personal lines suitable limits and reinsurance levels. products Branded Insurance – Volume and affinity lNiche uniform insurance related prod- business solutions ucts By partnering with Cell Insurance, we lRisk class specific or multiple class offer our clients an opportunity to sell cus- products tomised, branded short-term insurance prod- Mining rehabilitation guarantees ucts to their customers through Cell Captives Legislation in Zimbabwe requires all hence earning additional revenue. With our mining operations in the country to provide assistance, clients get a competitive edge by for environmental rehabilitation both during developing branded mass market insurance the life of the mine and at closure. This has solutions that are tailored for their custom- been achieved by most mines through bal- ers. Cell Insurance gives the strategic and ance sheet provisions, which do not make the technical support in developing these prod- funds immediately available to the full extent ucts and assists in managing the processes of liability when needed. Cell Insurance pro- through claims reviews, analysis of under- vides mines with the required guarantee to writing results, which enables participation the government, which finances the rehabili- in enhanced revenue stream emanating from tation work in full from inception of the pol- profitable underwriting results. These prod- icy. The guarantee provided is able to match ucts are ideal for affinity groups, employers the environmental liability against company and organisations that provide high volume assets throughout the lifespan of the mine. branded insurance products to their custom- Key benefits include: ers, members and employees. lA guarantee with adequate cove pro- Products suitable for this solution in- vided immediately from policy inception clude: lMulti-year insurance product with ade- lCellphone insurance quate cover all the time lExtended warranty cover lNo risk of perpetual over-funding lLegal insurance lPremiums committed on an annual ba- lElectronic equipment and gadgets cov- sis er lFlexible creation of insurance reserves lMotor insurance (motorcar, motorcy- for future rehabilitation cle, caravan, trailer, LDV) Cell Insurance continues to innovate and lCredit protection insurance strive to produce innovative and unique solu- lPersonal liability cover tions that will have a direct positive impact lCar hire insurance on your business performance. lExcess waivers For more information on our risk financ- lPermanent disability covers ing solutions and other insurance products Underwriting management agencies kindly our visit website www.cellinsurance. (UMA) co.zw Page S14 | March 28-April 3 2019 SPECIAL FEATURE The Financial Gazette Total awards entrepreneurs

OTAL Zimbabwe recently held the 2018/19 Total Start Upper omy, incorporating multiple pillars of social impact investments. Challenge Awards. Entrepreneur Saddam Mapundu, whose proj- “Total believes in diversity and inclusivity and this is reflected by the Tect is on providing rural dwellers and those who are not on the varied projects submitted into the Start Upper challenge: from educa- traditional power grid with an affordable method to recharge their mo- tion, maternal health, science, traffic management, energy solutions and bile phones, won first prize. financial inclusion,” he said. Mapundu, a Zvishavane-based entrepreneur walked away with Farai Musendo came second with his Diesel from Waste Plastic US$17 500 for his Choto Virtual Energy project, which facilitates trad- project. ing of electricity primarily for charging mobile phones via rental of He said he is turning Harare’s plastic waste into diesel in a pioneer- power banks. ing project. Mapundu said Choto interfaces with the users on a mobile applica- The second runner-up was Gift Gana, with his project, Dr CADx, a tion where users subscribe to participate on a monthly basis. computer aided diagnostic system that aims to help the medical indus- “In most cases people without access to electricity in their homes try understand medical images more accurately and assist doctors in pay more than the average person to charge their mobile phones. This understanding patients’ medical history system will lower that cost at the same time making it convenient for Bescond said the initiative, pioneered by the Total Group globally, them to charge as well,” he said. ploughs back into the countries the company serves by identifying ideas “Choto will increase access to beneficial mobile services like mobile Saddam Mapundu, winner of the Total Zimbabwe Start Upper from youths which can be shaped and incubated for wider positive and banking and internet access by keeping the very phones used to access Challenge of the Year, receiving his award from Total Zimbabwe long lasting change in local communities. these platforms charged on a regular basis. It will also increase uptake managing director Ronan Bescond. The Start Upper Challenge is in its second edition in Zimbabwe af- of solar by more rural folk as it serves as a payback scheme for solar 400 applications were received as Total seeks to empower and promote ter the hugely successful debut of the competition 2015/16. system owners when they are able to sell some of their excess power to local youths to participate meaningfully in mainstream economic activ- Bescond said beyond Zimbabwe’s borders, Total has conducted the the community.” ities and become agents for social change. Starter Upper Challenge in 55 countries in Africa, Asia Middle East and Ronan Bescond, Total Zimbabwe managing director, said a total of He said entrants came from diverse areas of the Zimbabwean econ- North and South America.

S investment in infrastructure structure development entities to development continues to ex- choose, negotiate and administer con- Apand in Africa, so is the use Future of infrastructure looks FIDIC struction contracts. Its drivers are the of FIDIC contracts. The International will follow suit. This is a step in the of FIDIC contracts in strategic sectors sociation of Consulting Engineers dynamic duo of Michelle Munyan- Federation of Consulting Engineers right direction that will create a degree spanning from infrastructure, mining (ZACE) brought the first ever-FID- duki, with legal training background, (FIDIC) develops standard form con- of certainty in the development of to energy, it is imperative that all con- IC training to Zimbabwe. Delegates and Gorden Mutungwazi, who has a tracts based on thousands of success- construction law jurisprudence. struction projects professionals such from the National Oil Infrastructure project management background. In ful projects around the world. Certainty of what one may ask. as engineers, quantity surveyors, proj- Company, the National Railways of addition to the team is Kevin Spence, The World Bank set a precedent by Well, certainty of the rights and du- ect managers, lawyers, financiers, etc., Zimbabwe, Mota-Engil, NanChang a FIDIC trainer who is also a regis- its recent incorporation of the FIDIC ties of parties in a contract that result that have to deal with the administra- Engineering, Agri-cane, just to men- tered professional engineer, mediator, 2017 editions of the Rainbow suite in better administration of contracts. tion of FIDIC contracts are trained to tion a few, attended and left with much adjudicator and arbitrator with over 40 of contracts as their standard bidding That is one of the main benefits of increase their competency. Ultimately, needed knowledge to aid their daily years' experience in the construction documents. This essentially means FIDIC contracts. Poor administration when professionals know what is ex- interaction with FIDIC contracts. This industry. that all projects funded by the World of contracts is a major cause of dis- pected of them they are more confi- year, Vavaki will be conducting anoth- For more information on Vavaki Bank will require the use of FIDIC pute, which costs both construction dent to execute their roles and ensure er FIDIC Module 1 training in July. Consultants and FIDIC use in Zimba- contracts. companies and their clients millions profitability in projects. Vavaki Consultants is a contract bwe, please visit www.vavakiconsul- Due to this development, it is ex- of dollars in legal fees. In 2018, Vavaki Consultants in advisory and project management tants.com or contact michelle@vava- pected that other funding institutions Given the global trend towards use partnership with the Zimbabwe As- practice established to advise infra- kiconsultants.com The Financial Gazette March 28-April 3 2019 | Page S15 National News Integrate artisanal mining in industry Selina Zhuwarara

HE period between August T2018 and Febru- ary 2019 saw a number of tragic fatalities in the artisanal mining sector in Zimbabwe. Twelve illegal miners perished in a disused mine shaft at Eldorado mine in August 2018 in Chinhoyi when a rock collapsed and crushed them. Some of their remains could not be retrieved because the shaft was structurally unsound and posed a risk to rescue personnel. In January 2019, two more artisanal miners lost their lives at the same mine after they breached the areas that had been condoned off by authorities and gained access to the shafts again. On February 16, 2019, 24 artisanal miners drowned in mine shafts at Cricket Mine in Battlefields, Mashonaland West, after a heavy storm. Fatalities are not uncommon with artisanal mining due to hazardous working conditions. A similar incident occurred in South Africa in Mpumalanga at Gloria mine on February 6, where 22 illegal miners who are believed to be Lesotho nationals perished in a mine shaft after a gas explosion occurred while they were underground. Artisanal mining continues to claim the lives, health and safety of many young men and women around the world daily. We commonly know them as makorokoza, magweja, zama zamas as recognised in South Africa or the trade of “galamsey” in Ghana. It is an occupation that is constituted of millions of young men and women across the globe Fatalities are not uncommon with artisanal mining due to hazardous working conditions who try to earn a living through small illegal min- mines in terms of deliveries to the national gold productivity issues that plague artisanal miners, how the poor and under resourced can also play a ing operations. It is a common phenomenon in min- buying body, Fidelity Refiners. It is commonplace there is need to deliberately create support struc- part in the industry sustainably and safely. It is time eral-rich countries, especially developing countries that part of this gold also came from artisanal and tures that enable them to improve their conditions to offer a safe and viable platform for the integra- and is illegal because none of its participants have unlicensed miners because their product always of operation. This phase of formalisation requires tion of artisanal miners into the industry. rights or licences to undertake mining or engage in finds its way into the formal supply chain. There- ingenuity and capital. Equipment can be salvaged Early civilisations around the world were built the trade of minerals in their respective countries. fore, it is important to also recognise and acknowl- from both public and private enterprises for this on the backbone of artisan enterprises, especially While it is illegal, it is clear that it is part and edge this group for its contribution to the national purpose. Many useful materials lie in mining en- in the mining sector. In Zimbabwe the early Muta- parcel of our economies, communities and the min- fiscus and minerals reserve pool by creating condi- tities’ scrapyards that can be donated, rehabilitat- pa and Great Zimbabwe states leveraged artisanal ing industry. It is a sector that continues to grow in tions that enable them to undertake responsible and ed and re-purposed for artisanal miners to access. mining efforts to develop a mature economic sys- numbers, scope and extent yearly. As it entrenches sustainable mining. Where equipment needs to be purchased, this can tem built on the trade and use of copper, gold and itself in our lives, it cannot continue to be ignored or What needs to be done? The first step is to find be funded by apportioning part of tax revenues iron. What the early civilisations did successfully sidelined because its vices have far reaching impli- a way to formalise the sector. This can be done by from the mining industry towards the incubation was to organise supply chains from small mining cations to the sanctity of life, the environment and introducing a special type of licence or registration and development of support structures for artisanal enterprises, which then fed and nourished the polit- proliferation of illicit economic activities such as system unique to artisanal miners. The registration miners. ical and economic systems of that day. They man- externalisation of mineral wealth, funding conflict process should be free in order to enable miners to All sourced equipment can be pooled and ac- aged to achieve considerable economic develop- and money laundering. It is time that a definitive come forward. Registration can be structured to cessed by miners through support centres along ment on which the foundations of the modern states position is adopted to formally integrate this grow- culminate in the allocation of a personal identifi- the lines of Shamva Mining Centre between 1989 were built. ing and thriving sector into the mining industry fold cation code for each individual, which is linked to and 1998. In 2018, government sought to re-ignite However, as the political and economic systems and begin to regulate and support it under guided their personal information. This code can thereafter this business model through the establishment of of the state modernised, they sidelined artisanal structures. be utilised to track each individual’s progression in gold buying and selling centres. The concept can enterprises and focused on mainstream economic The first step in trying to understand thepo- terms of areas of operation and product submitted be opened up to all mineral groups that artisanal models that concentrated on large scale production tential of the sector is to shed light on its ability to for sale to government and remittance of money. miners currently participate in. These centres can and higher returns to the state. The modern state tackle poverty and development in the livelihoods Such a system would also create an invaluable data offer diversified services ranging from safety and went as far as shutting out small individual min- of those who undertake it and the communities base from which numerous aspects of the sector can health training, technical and equipment support, ers through the introduction of prohibitive licens- that it occurs in. Studies in Burkina Faso by a in- be analysed. selling points and knowledge centres. Government ing and taxation requirements, which immediately stitute called Globedev have shown that artisanal Currently the main deterrent for participants of could also look into partnering with private entities alienated artisanal miners. By doing so states and mining plays a part in improving the livelihoods artisanal mining to regulation is lack of resources, and organisations to enable sustainability of the governments have also shut out the considerable of people who engage in it because it provides a fear of taxation, lack of direct access to formal sup- concept. potential of artisanal mining to eradicate poverty, regular source of income that supports households ply chain and regulatory fees. In order to address Artisanal mining needs to be taken out of propel development and ignite the diversification of and extended family, thus increasing the economic these inhibitors, gov- the shadows of the rural economies. consumption spend of households. ernment needs to craft Artisanal mining needs to be taken out of mining sector and The Indian diamond polishing and cutting in- Increased consumption is linked to increased legislation, policies and embraced for its im- dustry in Surat is a good example of the successful access to goods and services and consequently the shadows of the mining sector and em- institutional capacity “braced for its immense potential. In order mense potential. In integration of small and artisanal skills into the larg- improved standards of living. The study goes on to introduce licensing order to obtain buy in er minerals market. It allowed for the integration of to draw parallels with the impact of large-scale that is free and acces- to obtain buy in from artisanal miners to make from artisanal miners small individual enterprises to become part and mining projects in that while returns are high- sible and a taxation the crossover from illegal mining to formal to make the crossover parcel of the larger diamond cutting and polishing er with commercial mining, the benefit to -com and regulation system mining, government must create an environ- from illegal mining industry. Around 2012, joint efforts of the Surat Di- munities surrounding mining projects is not as that is considerate and ment where these miners can see and attest to to formal mining, amond Association, the Gems and Jewelry Export direct because proceeds are first collected as - tax commensurate with the the advantages and benefits of partnering and government must cre- Promotion Council, the Indian Diamond Institute es by government and then eventually expect- objectives of support- cooperating with authorities. The culture will ate an environment and the Indian District Rural Development Agency ed to trickle down to communities as initiatives ing broad based devel- not immediately cease but once a sustainable where these miners saw tribal women being trained in diamond cutting funded from the national budget. Sometimes opment. It is inevitable and viable option has been tabled, young men can see and attest to and polishing. After training, the new artisans get these revenues do not find their way back -as di that tradeoffs need to be and women who embark in artisanal mining the advantages and assistance to establish small cutting and polishing rect initiatives for communities in mining areas. made. can make a choice.” benefits of partner- companies. Corporate social responsibility initiatives from Once the issue of ing and cooperating This initiative feeds into the national develop- mining companies also try to create direct benefits legitimacy is addressed with authorities. The ment programmes seeking to create sustainable where donations fund and support income generat- the second critical step is to organise and sanitise culture will not immediately cease but once a sus- livelihoods for rural areas. As a result, many vil- ing projects. their areas of operation. This includes shutting tainable and viable option has been tabled, young lages and tribal areas such as Mandvi, Vankal and However, the sustainability of such initiatives down operations in environmentally unsuitable ar- men and women who embark in artisanal mining Dang have been noted to have flourishing small relies on the financial capacity and wellbeing of the eas, improving on cordoning off disused and closed can make a choice. Criminalising artisanal mining diamond cutting and polishing enterprises, some of mining entity, which is inconstant. Thus, the reme- mine shafts and areas that should not be mined on. is justified when there is a viable option on the ta- which are run by women and which feed into the dy to uplifting the livelihoods of communities and The process also includes allocating and availing ble for those who want to engage in mining at an main diamond industry. individuals in mining environments is to support productive claims for them to work on. This effort individual or small-scale level to do it legitimately. This example shows that successful integration their local enterprises and create an enabling envi- requires a robust and coordinated effort from the If such a choice does not exist, then enforcing the can be achieved. Large scale mining as we know it ronment for them to grow. One such effort is sup- Ministry of Mines and Environmental Manage- criminalisation of artisanal mining becomes diffi- today was born from artisanal mining. A conscious porting artisanal mining. If this sector is formalised ment Agency to identify and sanitise existing work cult because the act is not prompted by criminality effort needs to be made to harness the potential that and reinforced through regulation and technical sites and to also avail more claims that artisanal but is derived from a need to find a means of sur- this sector holds in bringing mineral wealth to the assistance, it can have a significant impact on im- miners can legitimately access. vival. doorstep of communities and families. We need to proving the livelihood of communities and families Once access to claims has been organised, the In developing countries this need is real and recognise that even in its rudimentary form, artis- and tackling unemployment, poverty and crime. availability and access to technical assistance, im- many embark on illegal mining activities because anal mining has the greatest potential of achieving National statistics showed that in 2018, small scale proved technology and equipment should be ad- they are limited job options. It is time the mining sustainable development and eradication of poverty miners in Zimbabwe outperformed large scale dressed. In order to improve the health, safety and sector embraces inclusiveness when it comes to in developing countries. Page S16 | March 28-April 3 2019 SPECIAL FEATURE The Financial Gazette Inside Aliko Dangote’s world ...born rich but self-made billionaire

HE best way to appreciate the scale of Aliko Dangote’s empire is to hitch a ride on one of Buffett’s next deal will This private jets. A half-hour after his Bombar- dier Challenger 605 takes off from Lagos Airport, it descends into a seemingly desolate area of Kogi be his most important State in central Nigeria, dusty fields and clusters of trees stretching to the horizon. Suddenly a tangle of VERYBODY wishes they knew what War- exhaust stacks, silos, and kilns pierces the sky to the ren Buffett will acquire next. Buffett wishes left of the aircraft as Dangote Cement Plc’s Obajana Ehe knew, too. plant comes into view. It’s already the biggest in Af- For the 88-year-old chairman and CEO of Berk- rica, churning out enough sacks of cement to fill 1 shire Hathaway, the next purchase won’t be just an- 000 trucks a day. A fifth production line now under other deal amid decades of doing them. It could be construction will make it one of the world’s largest. Buffett’s final “elephant-sized” acquisition and one The cement plant and its two sister factories in that leaves a lasting imprint on Berkshire. Nigeria have long been the bedrock of Dangote’s The billionaire wrote in his annual letter to fortune, Africa’s biggest. But Dangote’s future — shareholders in February that just the thought of and, as he likes to say, that of the entire continent’s doing another megadeal “is what causes my heart economy — lies to the south on the Nigerian coast. and Charlie’s to beat faster.” About 40 miles east of Lagos, on more than 6 700 (“Charlie”, of course, refers to his 95-year-old acres of former swampland bound by a lagoon and business partner, Charlie Munger.) the Atlantic Ocean, contractors are putting the fin- Berkshire’s last megadeal was the $37bn pur- ishing touches on a fertilizer plant valued at $5 bil- chase of Precision Castparts, which closed in Feb- lion. Next to it, construction of a vast oil refinery ruary 2016. The world’s most renowned dealmaker — a $12 billion project — is under way. has struggled to find another suitable big target, If all goes according to plan, the complex will even though with more than $100bn of cash at immortalize the 61-year-old Nigerian businessman his disposal one would think possibilities abound. as Africa’s most prominent industrialist, vaulting Buffett won’t want to leave his successor — who Dangote Industries’ annual revenue from $4 billion already has such big shoes to fill — the added chal- to about $30 billion, roughly 8 percent of Nigeria’s lenge of figuring out what to do with such an un- Aliko Dangote disembarking from his private jet. gross domestic product. Oil industry experts such productive level of cash, so my guess is Berkshire as London-based CITAC have questioned the proj- will strike soon. ect’s timeline, citing logistical and financial chal- average while slashing prices in neighboring mar- previously worked at oil services company Saipem. With crystal balls in short supply to predict lenges. But Dangote insists the refinery, which will kets to crush rivals. A World Bank report published Talk to ordinary Nigerians and plenty crack Berkshire’s next move, it helps to go back to the be Africa’s largest, is on track. in 2016 found that African cement prices averaged smiles at the mention of Dangote, who’s featured basics. Recall how Berkshire’s past acquisitions “By 2020 I will finally dispatch oil,” he says $9,57 per 50-kilogram bag, compared with $3,38 in internet memes, while a recent single by Nige- share two main qualities: 1) They usually fit certain during a January interview at his Lagos home. globally. Dangote’s cement business has also been rian singer Teni plays on his wealth. It’s the kind financial criteria, and 2) the businesses were — Despite controlling the world’s 10th-largest oil accused of exploiting a government-run investment of name recognition any politician would envy. Re- how do I put this — just oh, so very Buffett. There reserves, Nigeria has only four aging, inefficient promotion program to secure generous tax breaks. sults from Nigeria’s February 23 general election, was the railroad, the batteries, industrial parts, truck state-owned refineries, leaving it almost wholly Dangote shrugs off such criticism, while preach- which was marred by delays, technical glitches, and stops, utilities, and so on. reliant on imports for its fuel needs. Dangote says ing the gospel of markets as the best way to narrow violence that killed at least 39 people, saw President Lately, investor speculation has centered on his massive refinery could end that dependency the divide between the haves and have-nots. “China Muhammadu Buhari beat his main challenger, Ati- airlines, according to a Bloomberg News story last and lift electricity generation in a nation plagued in 30 years has taken almost 500 million people out ku Abubakar. week. That’s because Buffett — at one time totally by blackouts: “It will change the entire economy of of poverty,” he says. But Dangote, who’s long avoided playing politi- averse to the industry — has taken quite a liking Nigeria.” Soft-spoken and unfailingly polite, he offers up cal favorites and deflected questions on the election to it again. Since late 2016, Berkshire has been the The fertilizer plant, which Dangote says will his chair in meetings to guests and serves food for throughout the campaign, says he’s not interested biggest shareholder of Delta Air Lines. It’s also come online in a few months, will be capable of others during a lunch in an office conference room. in governing. “If I exit from business and go into the second-largest holder of Southwest Airlines, producing up to 2.8 million metric tons of urea a But the courteous chief executive officer is also a politics, nobody can actually sit in Dangote Group United Continental Holdings and American Air- year. “It’s probably the largest-volume urea plant hard-driving manager. “ ‘Not possible’ aren’t words and take the kind of risk that I can, because I’m the lines Group. All together, those stakes are worth ever executed at one time,” says Alistair Wallace, he understands,” says Giuseppe Surace, chief oper- owner,” he says. “My real job is to see how do I $9 billion, almost 5 percent of Berkshire’s equity head of fertiliser research at Argus Media in Lon- ating officer of the refinery project, as our convoy of transform Nigeria and Africa and to take this kind portfolio. don. Nigeria’s natural gas prices are the lowest in Toyota Land Cruisers sets off on a four-hour tour of of risk.” According to my tracker of potential Berkshire the world, meaning Dangote’s fertiliser will likely the site. “In his own way, he is very tough.” While Dangote has confined his business activ- takeover candidates, both Delta and Southwest be profitable even in the competitive export market. Nigeria’s $376 billion economy is, by some ities to Africa so far, he expects to expand beyond technically do meet Buffett’s criteria for takeover “It will generate hard currency and bring in dollars. measures, Africa’s largest, but the operational chal- his home continent after revenue tops $30 billion. targets. He looks for consistently profitable busi- It will be a good look for the administration and for lenges for companies are also outsize. The World There’s not “capacity to be able to invest that kind nesses with high returns on equity. (As an aside, Dangote,” Wallace says. Bank assigns the country a lowly score of 53 on of money just in Africa,” he says. that this now describes the airline industry shows Born into a wealthy Muslim family of traders in ease of doing business (Kenya gets a 70, and South Signs of his burgeoning fortune abound. His how consolidation has reduced competition to the the north, Dangote incorporated his own business Africa a 66). Besides an overabundance of red namesake foundation spends as much as $100 mil- detriment of travelers, as my colleague Joe Nocera selling cement at 21. He shifted to manufactur- tape and weak protections for investors, the coun- lion a year on projects such as hospitals and mal- wrote last week.) Buffett also prefers businesses ing the building material in the 1990s, convinced try is perceived to be more corrupt than many of nutrition, according to its CEO Zouera Youssou- with little to no debt and relatively cheap share his homeland, the world’s seventh-most-populous its neighbors. Nigeria’s chronic logistical logjams, fou. Dangote’s offices feature photos of him with prices. country, could meet its own demand for staples. infrastructure failings, and political risk are why CI- Bill Gates and Barack Obama, and he says he’s in But would Buffett really buy an airline? I’m Dangote factories churning out sugar, flour, and TAC says Dangote’s 2020 timeline for the refinery the process of setting up a family office that will not so sure. By owning stakes in all the biggest salt followed. A vertical integration push gave rise may not be feasible. have outposts in London and New York. Carlyle US carriers, Buffett seems to be making a bet on to other businesses, including oil, property manage- Even the so-called smart money has stumbled Group’s David Rubenstein is helping set it up and the industry rather than looking to acquire a single ment, packaging, and port operations. here. Five years after pledging to invest $5 billion the unit will invest alongside the private equity firm, one — would he exit the other stakes to do so? It Four publicly traded companies under the Dan- in infrastructure alongside Dangote, Blackstone Dangote said. Rubenstein, who hosts a show on also just feels like the idea is missing that Buffett gote Industries umbrella account for about a third Group LP is in the process of exiting an African Bloomberg Television, declined to comment. flavour. (To be fair, some of Berkshire’s recent of the value of the Nigerian stock exchange. While subsidiary called Black Rhino Group because of a “It’s very much on paper now,” Dangote says. stock-market choices — such as buying Red Hat shares of Dangote Cement tumbled 26 percent in dearth of suitable opportunities, a person familiar He could even acquire that archetypal billionaire Inc. and a large, short-lived position in Oracle — the past year amid a sell-off in emerging markets, with the matter has said. KKR & Co. disbanded its trinket: a professional sports team. were out of the box by Buffett standards.) the fertiliser plant has helped boost Dangote’s net Africa deal team in 2017. An Arsenal fan, Dangote says he’s prepared to There are a number of companies that have all worth to $17 billion, according to the Bloomberg Dangote, for his part, has decades of experi- stomach the multi-billion-dollar price tag the En- the hallmarks of a Buffett target, beyond just their Billionaires Index. (No value is attributed to the ence negotiating Africa’s pitfalls. Yet even by the glish soccer club would command once the refinery financial metrics — brands with durability that refinery in Bloomberg’s analysis because it’s still continent’s standards, the refinery project could be is finished. remain part of America’s economic pulse. They under construction.) characterized as a heavy lift. Dangote Industries “I will go aggressively after Arsenal,” he says. include companies such as machinery manufac- In many ways, Dangote’s ascension recalls that bought the plot for $100 million at the end of 2013, For now, though, his focus is on the vast project turer Caterpillar, adhesives maker 3M, tractor sup- of Gilded Age tycoons such as Andrew Carnegie but it ultimately took almost three years — and taking shape on the Atlantic coast. plier Deere & Co. and home-improvement retailer and Cornelius Vanderbilt, who accumulated great many truckloads of sand — to prepare the swampy The last time I see Dangote, it’s past midnight at Home Depot, to name a few. Here’s a list of some fortunes as they created industries. While the emer- ground for construction. The company erected a his Lagos home. He’s sitting at the head of the din- select names from my financial screening (I’ve left gence of a new generation of business titans that jetty and widened and reinforced roads to accom- ing room table, near a barely touched bowl of fish out the really outlandish ones that filter through, al- includes Amazon.com’s Jeff Bezos and Facebook’s modate shipments of cranes and other equipment. stew and a chunky Casio calculator. He turns his though some of these may still be too large for even Mark Zuckerberg has drawn attention to rising Dangote’s existing empire gives him advantag- head, with closely cropped hair flecked with gray, Buffett’s appetite). income inequality in the US and elsewhere, Dan- es. The new refinery is a big customer of Dangote toward the accounts in front of him. At 88, Buffett himself may not be slowing down gote’s net worth is particularly disproportionate to Cement, and the roads to and from the surrounding He’s absorbed. Seconds tick by in silence, then yet — in fact, he told me last fall that he’s busier the lot of ordinary Nigerians, almost half of whom quarries are clogged with his trucks. Also, his tim- minutes. Finally he’s satisfied. He signs off and — than ever. But the cadence of M&A at Berkshire live in extreme poverty. ing was fortuitous. The project geared up during a ever the host — patiently fields a few more ques- has been disrupted due to a combination of richly Critics have attacked him for holding much recession, giving him more bargaining power over tions before seeing me and his other guests out be- valued targets and increased competition for the of his wealth offshore and say he’s a shrewd mo- contractors keen to land work. Plus its location in- fore heading to bed. best ones. Berkshire’s deal for Texas utility Oncor nopolist who has plied his political connections to side a free-trade zone means the complex should be Waiting for my ride, I turn back and see Dan- fell apart in 2017. That was after Kraft Heinz Co. secure an advantage over competitors. They claim better insulated from the Nigerian political scene, gote, the $17 billion man, climbing the stairs. was rebuffed by Unilever, another megadeal Berk- his market-dominating cement company squeezes according to Dangote’s lieutenants. He’s back on the phone, still working. shire was going to help bankroll. — Bloomberg local consumers with prices three times the global “We’re an island,” says Surace, an Italian who — Bloomberg The Financial Gazette March 28-April 3 2019 | Page 15 Column Employment conditions survey

E RECENTLY undertook a survey to assess mitigatory interventions. When we asked see an increase in retrenchments this year their income from work, 57 percent said the issues that are currently affecting “What stresses them the most?”, most as employers try to right size and manage yes and 43 percent said no. W Zimbabwean employees and how they participants (48 percent) said high prices of costs. Employment confidence is not likely to are responding. A total of 651 individuals of varied commodities, 19 percent said poor working Most of participants (57 percent) are increase until there is tangible evidence that age groups, education levels, gender, employment conditions, 13 percent said high school not confident at all about the economy the economy is creating new jobs. These positions and economic sectors participated in the fees for the children, 11 percent said fuel improving in the short term. When asked results are reflective of what we are seeing survey. The issues assessed ranged from perceptions shortages, 7 percent said bad manager and about the biggest problem facing their in the broader economy. Resuscitating the of the economy and how changes happening in 2 percent said hunger. The issues affecting organisation, 63 percent of the participants economy will require all stakeholders ― the economy are affecting their livelihoods; to employees clearly seem to be both internal said harsh economic environment, 26 government, employers and employees to challenges facing their employers and how confident (within the control of companies) and percent said poor management and 11 work together. employees are in getting employment opportunities external. percent said lack of resources. Most of To receive the full Employment Conditions in other organisations. A total 35 percent of participants in this the participants (52 percent) said if the Survey Report, contact me on: Phone Employees’ perceptions matter because they survey are confident about finding another economic conditions fail to improve in the 481946-48/481950/2900276/2900966; shape behaviour, job, 25 percent are somehow confident, 24 short term, they would look at going to the mobile 077 2356 361 or email: mnguwi@ which in turn percent are very confident and 15 percent diaspora, 28 percent said they would stay in ipcconsultants.com or visit our website at affects productivity are not confident about finding another Zimbabwe no matter the conditions and 12 www.ipcconsultants.com and performance. job. These results suggest that employees percent said they would start looking for a  Nguwi is an occupational I believe that a are generally optimist about their ability new job locally. psychologist and managing consultant number of issues to get employment elsewhere. This is When asked if they are doing other with Industrial Psychology Consultants. that are affecting interesting. I am anticipating they we may business besides their job to supplement He writes in his personal capacity. employers and employees can be addressed through HR Perspective dialogue. A good with starting point for Memory Nguwi employers and employees (through their unions) is to NEWSWorthKnowing study this survey report to appreciate the concerns “ ” of employees. Most of the participants in this survey (59 percent) said their jobs are stressful, 26 percent said their jobs are not stressful and 15 percent said their jobs are extremely stressful. I am particularly worried about how many employers take for granted employee wellbeing issues. It is not enough to brush off employee stress levels and say “it is because of the economy.” There is a new chef in town, serving you with all The reported prevalence of psychological distress in the western world is 15-25 percent in the community the news worth knowing straight to your phone Most of participants and 25-45 percent (57 percent) are not in general practice “conﬁ dent at all about (Verhaak, 1995). The prevalence of distress DAILY!! the economy improving in Zimbabwe is in the short term. When significantly higher. asked about the biggest In a research we problem facing their or- conducted in 2016 on ganisation, 63 percent occupational stress we of the participants said noted that 72,3 percent harsh economic environ- of the Zimbabwean ment, 26 percent said workforce is in poor management and distress (strongly 11 percent said lack of re- elevated) and 27,7 sources. Most of the par- percent are under the ticipants (52 percent) said moderately elevated if the economic conditions category. fail to improve in the Many employees are working despite short term, they would being extremely look at going to the dias- stressed. Employers, pora, 28 percent said they employees and would stay in Zimbabwe government should no matter the conditions all have interest and 12 percent said they in assessing the Business warms up to wouls start looking for a root cause andMnangagwa’s promises new job locally.” implementing

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www.ﬁngaz.co.zw booking@ﬁngaz.co.zw The Financial Gazette @FingazLive 2nd Floor, Green Bridge South, Eastgate Complex, Harare, Zimbabwe. Tel: +263 (242) 781571-8 Page 16 | March 28-April 3 2019 The Financial Gazette Column Transfer pricing ravaging african economies

UE to globalisation, many developing systems among other reasons, within and between enterprises profi ts which would, but for those conditions, have accrued countries have increased the opening of African governments have under common ownership or to one of the enterprises, but, by reason of those conditions, Dborders for business with international not been prepared enough to control. It involves a set of have not so accrued, may be included in the profi ts of that companies. Such cross-border business has helped repel the BEPS activities of substantive and administrative enterprise and taxed accordingly”. signifi cantly in economic development, while multinational enterprises, more regulatory requirements imposed Over the past years, some companies, including also growing immensely in intra-group business evidently these governments by governments on certain large digital economy companies, have exploited the transactions due to large amounts of foreign direct continue to lose a great deal of taxpayers. Due to the potential complexities of transfer pricing to lessen their tax burdens investment. their revenues through transfer for cross-border controlled by shifting profi ts. These practices result in revenue losses Meanwhile, there has been an exponential pricing mismatching. transactions to distort taxable for tax authorities. This has of late triggered comprehensive growth in tax issues that have been arising The Illicit Financial Flows income, tax authorities in many overhauls in transfer pricing legislations among developing from profi t shifting by multinational enterprises report by Global Financial countries can adjust intra-group countries, Zimbabwe included. (MNEs) from high tax jurisdictions to tax havens Integrity estimated that Africa Tax Matters transfer prices that differ from OECD transfer pricing guidelines to avoid or minimise tax payment. This presents lost an estimated US$1,8 trillion with what would have been charged Intra-group mispricing is one of the issues identifi ed a signifi cant risk on tax revenues for a number of between 1980 and 2008 while Marvellous Tapera by unrelated enterprises dealing at when the OECD released its base erosion and profi t shifting developing countries as they are restricted from an estimated US$50 billion to arm’s length. (BEPS) action plan in 2013 to ensure that profi ts are taxed collecting tax on profi ts earned in their countries. US$80 billion is lost annually According to the Organisation where economic activities are carried out and value is Gaps and mismatches in international tax rules through illicit fi nancial fl ows. The illicit fi nancial for Economic Co-operation and Development created. Compliance is an area of magnitude and importance can allow the shifting of profi ts to no or low- fl ows include, among other things, abusive (OECD), the arm’s length principle provides in transfer pricing, which obliges the taxpayer to keep tax locations where the business has little or no transfer pricing by MNEs. that “where conditions are made or imposed documented evidence on related-party transactions and to economic activity. These activities are referred to What is transfer pricing? between the two enterprises in their commercial submit such documentation upon request. as base erosion and profi t shifting (BEPS). Transfer pricing is a fi eld of taxation that refers or fi nancial relations, which differ from those Appropriately documenting intercompany transactions to Because of poor technology and weak to the rules and methods for pricing transactions made between independent enterprises, then any comply with rules and legislation is imperative in managing tax risk. Most African countries have no offi cial guidance regarding the frequency and process of preparing transfer pricing documentation. The statistics of the OECD on the implementation of the three-tier documentation approach stipulated in BEPS Action 13 (Local fi le, Master fi le and Country by Country Reporting) illustrates that Africa has the least number of countries, which have adopted this approach so far. Although a large number of developing countries have adopted and enforced transfer pricing rules, there are consistency challenges. For example rules regarding: transfer pricing methods to be used, legal requirement to prepare documentation as well as documentation submission deadlines all differ by country. Such variations make transfer pricing prone to disputes and audits. The establishment of global transfer pricing standards and methods could be one way of minimising the mismatches that develop across different jurisdictions. Additionally, adherence to the OECD Guidelines would enable international consistency, thereby creating a worldwide structure and promoting international trade. The majority of African countries have developed TP regulations that are in line with the OECD. The OECD developed its OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations in 2010 in order to harmonise international transfer pricing policies and practices. Moreover, the OECD created the OECD Development Centre and OECD’s Task Force on Tax and Development with the main aim to support developing countries on transfer pricing matters. In addition, the UN complemented the OECD guidelines by issuing their UN Transfer Pricing Manual in 2011, which provides transfer pricing guidance to developing countries. The African Tax Administration Forum (ATAF) is also among the predominant organisations working towards addressing the practical challenges hindering the process of transfer pricing development in Africa. Although several other international organisations have taken action to address the issues of BEPS, many developing countries lack the administrative and technical resources needed to enforce proposed recommendations. Additionally, there are several other issues hindering the process of transfer pricing development for a number of countries in Africa. Some of the issues include but are not limited to:  Differences in TP policies and knowledge of tax authorities.  Lack of extensive regulations regarding transfer pricing e.g. Zimbabwe added a 35th Schedule as a guidance for transfer pricing in the Income Tax Act in 2016.  Insuffi cient funds for investment in technology and personnel.  Tax policies that are specifi c to particular industries e.g. mining.  Diffi culties in accessing information required for comparability. The incapacity by African countries to deal with transfer pricing issues has left them at the mercy of MNCs who manipulate and rip them through their sophisticated ownership and operating schemes. Despite the transfer pricing challenges faced by developing countries, it should be noted that there is remarkable progress in the implementation of transfer pricing rules and regulations in Zimbabwe. However, the Zimbabwean scenario is even more complicated and deterrent to foreign direct investment due to potential double dipping transfer pricing legislation because of the existence of the original anti-tax avoidance rules, which have not been repealed. Meanwhile, Matrix Tax School in conjunction with Tax Matrix will be holding this year’s Tax Conference in Victoria Falls from May 22 to 25, 2019 where Impact of Transfer Pricing on African Economies will be among the topics discussed in addition to BEPS issues, illicit fi nancial fl ows, cryptocurrencies etc.  This article was been co-written by Tapera, the founder of Tax Matrix (Private) Limited and Heather Marwei, a transfer pricing expert at WTS Global, Germany. They write in their personal capacities. The Financial Gazette March 28-April 3 2019 | Page 17 Column Foremost fiduciary duties of directors N THIS piece the word director includes trustee, creation capacity of the company. l It had a two-tier board system with the governing body members, senior leaders in the pub- For the past one year there has been public- supervisory board consisting of national lumi- Ilic service and non-profit organisations (NPOs). ity of a huge corporate scandal of a JSE-listed naries of the corporate world, most of whom The obligations of company directors are stipulated conglomerate with multi-billion dollar turn- were an old school tie network. in the Companies Act while for those in the public sector over. Executives embarked on a spree of do- l The operating board that ran the business are in the Public Enterprises Management Act and other mestic and international acquisitions to grow was dominated by a rock star chief executive public policies pertaining to specific organisations. the conglomerate. This changed the business who led an inner circle of executives. The The common thread is to have a prescribed weight model overnight from a furniture manufactur- board could not oversee his activities and thus of fiduciary duties for all those in senior positions of er to an international retailer. A rock star chief went unbridled. authority which directs the affairs of an institution. “Fi- executive led an inner circle of outriders to do l The two-tier board structure gave room duciary” denotes that which has to do with monetary this but overlooked proper due diligence un- for governance gaps which were seized for ne- value accounting. While the board collectively has over Executives Only Corner dertakings. Consequently some of the acquisi- farious activities by the CEO. five-fold responsibilities and functions, fiduciary duties with tions were sub-optimal and overpriced with no Overall, the two boards must shoulder the are specific to each individual director and they form the Shepherd Shonhiwa substantive underlying assets. blame for grossly failing all stakeholders in basis for litigation if breached. Under forensic scrutiny, it emerged that the core fiduciary duties of care, skill and dili- Fiduciary duty of care: Each director of an organi- corporate squander and misrepresentation gence as well as acting in good faith to govern sation has a duty to exercise the degree of care, skill and management information to enable proper and similar to Enron had been perpetrated, result- in the best interests of the company. No doubt diligence that would be exercised by a reasonably dili- objective assessment. ing in billions of investors’ money, including that history will judge them harshly for such gent individual. Such a person should have the general If a director does not internalise these two public pension funds, being lost. Questions are abrogation of fiduciary duties. knowledge, skill and experience that may reasonably fundamental duties they will always be prone being asked about the governance of the con- l Shonhiwa is a chartered director (SA) be expected of an individ- to committing conflict of interests, exposing glomerate and the following glaring anomalies and has authored books on leadership. He Each director of an ual carrying out the same the company to risk and undermine the value emerge: writes in his personal capacity. organisation has a functions as are carried “duty to exercise the out by a director in rela- degree of care, skill and tion to the company (King III code of governance). diligence that would be While experience is cu- exercised by a reason- mulative learning from ably diligent individual. relevant directorship ex- Such a person should posure, general knowledge have the general knowl- and skill are end results edge, skill and experi- of structured training and ence that may reason- learning by the incumbent ably be expected of an director. Put differently, a individual carrying out director must have the skill the same functions as and knowledge required to are carried out by a di- discharge the duties of the rector in relation to the position. company” Fiduciary duty of good faith: This pre- scribes that each director has a duty to act in good faith and in a manner that the director reasonably believes to be in the best interests of the organisation. The best interests of the organisation in common law is interpreted to equate to the best interests of the body of shareholders and other key stakeholders. It does not mean the interests of a chosen few or management alone. Hence it’s vital for a director to exercise objective judgement on the affairs of the company independently of management but with such valid SA footwear industry seeks to make dent in Ghanaian market N A bid to attract more foreign direct investment, about 30 South African business people will be trav- Ielling to Ghana this week in search of trade and investment opportunities. The trip is an Outward Trade and Investment Mission arranged by the Department of Trade and Industry. It is funded through the department's export marketing and investment assistance scheme. The scheme is meant to develop export markets for South African products and services, and to drive foreign direct investment flows to the country. One of the business representatives who will be part of the mission is vice chairperson of the South African Footwear and Leathers Export Council, Tavonga Gon- yora. The council, which represents 200 footwear and leather manufacturers in South Africa, serves to expose its members to different markets in the world to increase exports of footwear products. “Our objective for travelling to Ghana is to get as many of our members as possible to partner with the local Ghanaian people who can distribute the South Af- rican-made footwear products in Ghana,” Gonyora said. According to Gonyora, Ghana's footwear and leather manufacturing base is not as “big and strong” as it is in South Africa. “There is potential for various cross linkages that can be created through partnerships and direct exports, as well as opportunities to share skills and expertise all of which can enable the South African companies to contribute in the growth of the Ghanaian footwear and leather manufacturing industry.” The council partners with entities such as Trade and Investment KwaZulu-Natal and Productivity South Af- rica, to help develop local footwear entrepreneurs in their “export readiness and preparedness”. The council also partners with various international fashion houses to educate designers on new trends, so that they can be internationally competitive, Gonyora said. The mission to Ghana, is an example of the ways the council identifies various markets to which members can export. -Fin24 Page 18 | March 28-April 3 2019 The Financial Gazette Column JSC raises corporate governance bar of judicial officers is F there is any one constitutional commis- group thrives on innovation This could not be imagined a in place and it helps Court rooms have sion that deserves accolades, it is the Ju- and sheer hard work and has few years ago, that just by the to foster discipline been revamped, cre- Idicial Services Commission (JSC). All not been parroting the usu- click of a button in the comfort and perfect discharge “ating a pleasant im- respect is due to this government entity for, al excuse so loved by other of your office, a litigant could be of duty for the benefit age that gives dignity and against all odds, it has raised the standards of government departments able to monitor and get regular of the justice craving respect to our judicial sys- corporate governance and performance, there- that the country is under updates on the status of his or public. tem. It has not just been by standing out against all other similar organ- sanctions. her matter. The JSC is provid- isations. Court rooms have been Some court rooms that had an ordinary upgrade but ed for under Chapter one that matches stan- Readers should not feel jealous when I revamped, creating a pleas- last tasted a coat of paint during 8 of the Constitution seem to praise-sing about this organisation but ant image that gives dignity the colonial era have been re- as read together with dards elsewhere in de- I believe to all those who have been observing and respect to our judicial painted. Additional court rooms the Judicial Services veloped countries. The how this organisation is run, the evidence is system. It has not just been have been opened in addition to Act (Chapter 7:18). furniture is exquisite and clearly visible. Praise must always be given an ordinary upgrade but new court buildings being pur- The commission is usually made up of the where it is due, for doing so works to motivate one that matches standards Legal Matters chased and renovated. made up of the chief trademark Lupane teak, those who have been working so tirelessly to elsewhere in developed with Talking of new court rooms, justice, the depu- thereby symbolizing du- make sure that the Zimbabwean public gets countries. The furniture is VOTE MUZA the Mutare High Court building ty chief justice, the rability, force and infinite- world class justice. exquisite and usually made is a marvel to see, a masterpiece judge president of the ness. This obviously does Notable among the key achievements of up of the trademark Lupane teak, thereby sym- of internal architecture and civil engineering. High Court, a judge, the Judicial Services Commission is the clos- bolizing durability, force and infiniteness. This One wonders why those doing architecture not come cheap and those the attorney-gener- in charge of the commis- ing up of the huge manpower gap that existed obviously does not come cheap and those in reviews have not extended an award for the al, the chief magis- in so far as judicial officers were concerned. charge of the commission must have a secret outstanding piece of workmanship manifest on trate, the chairperson sion must have a secret on Unlike 10 years ago, when the High Court on how they manage to come up with the re- this superstructure. The building is awe inspir- of the Civil Service how they manage to come experienced a huge backlog of cases due to sources to undertake these massive developing and leaves one doubting upon venturing Commission, three up with the resources to manpower shortages, this backlog has drasti- ments. into it whether one is really in Zimbabwe. legal practitioners, undertake these massive cally been reduced to the point of being almost The buildings are user friendly and are This is not to suggest an inferiority com- a legal academic, developments. The build-a non-existent. marked with prominent electronic billboard plex but just serves to illustrate how beautiful qualified accountant ings are user friendly and Similarly, Magistrates Courts used to be notices and/or beautiful sign boards that any this modern building is in its outlook and inter- and a human resource are marked with promi- shambolic and notorious not just for the huge average visitor can easily follow. Court rolls nal design and furnishings. expert. nent electronic billboard backlog but for poor justice delivery general- are flashed on these electronic billboards, sav- Corruption has not been tolerated by the Thumbs up to the ly. Criminal matters were continuously post- ing lawyers and other court users the trouble JSC and sniffing around for miscreants has notices and/or beautiful men and women who sign boards that any av- poned, thereby turning most of the courts into of running around enquiring with the clerk of been one a key focus. The result has been a preside over this com- remand courts. This was shoddy justice deliv- court’s office. much cleaner service than it was before the ad- mission! Thumbs up erage visitor can easily ery that the public did not deserve. We should not forget to compliment them vent of the revolution that remains unfolding also to the secretariat follow. Court rolls are These challenges were prevalent across the for a very vibrant website that is regularly up- in this organisation. and the entire staff flashed on these elec- board and did not spare the Labour Court and dated and is rich with exciting content. Users Although a few rotten apples remain con- compliment of this in- tronic billboards, saving the Supreme Court as well. of the High Court, the Labour Court, the Su- cealed indulging in acts of corruption that un- stitution! lawyers and other court This time around, a dedicated team of exec- preme Court and the Constitutional Court may dermine the good standing of this organisation, l Muza, a Hara- users the trouble of run- utives leading the Judicial Services Commis- also inspect weekly court rolls on the website. the message has always been sent out loud and re-based legal prac- ning around enquiring sion secretariat has proved that with hard work It is also now possible to track your case and clear that our court rooms must be epitomes titioner, writes in his and focus, and against all odds, government the various stages at which it may be, electron- of morality. Grievances are properly handled. with the clerk of court’s personal capacity. office.” commissions can also be run efficiently. This ically. A statutory instrument providing for ethics [email protected] The Financial Gazette March 28-April 3 2019 | Page 19 Companies & Markets Headache for reporting firms Omega Ukama in emailed responses to The Financial Gazette. gled to establish a sustainable currency regime. Business Reporter In anticipation of the guidance from the PAAB, listed In 2009, Zimbabwe adopted a multi-currency system companies had delayed publishing audited results while to replace the Zimbabwean dollar. Consequently, most HE Public Accountants and Auditors Board (PAAB) the Zimbabwe Stock Exchange extended the current re- entities adopted the US dollar as the functional and pre- says the recently gazetted Statutory Instrument 33 porting period by a month. sentation currency. Tof 2019, which set an exchange rate of 1:1 between Following the guidance, companies are expected to As a result of continued economic challenges that re- RTGS$ and US dollars, conflicts with Zimbabwe’s prescribed continue using the United States dollar as a presentation sulted in, among other things, foreign currency shortag- reporting standards. currency. The PAAB, however, recommends certain ad- es, Zimbabwe subsequently witnessed significant mon- The law, which was gazetted on February 22, 2019 spec- ditional financial statement disclosures, with the inten- etary and exchange control policy changes in 2016 and ified, among other things, that for accounting and other pur- tion of assisting preparers to present information that en- increasingly through to 2019, with the recent ring-fenc- poses, all assets and liabilities that were immediately before hances the understandability of the financial statements. ing of Nostro FCAs and RTGS$ accounts as well as the the effective date valued in US dollars “shall on and after the The PAAB says the guidance was necessitated by introduction of the interbank market. effective date be deemed to be valued in RTGS dollars at a rate Tapiwa Chizana recent monetary changes in the country, which has strug- [email protected] of one-to-one to the US dollars”. In its much anticipated financial reporting and auditing guidance on currency considerations, which it published last week, the PAAB pointed out that the law may “present challenges in terms of compliance with International Financial Re- porting Standards (IFRSs)”. “The standards require the use of a spot rate in accounting for transactions but during the 2018 financial year, some entities may have experienced premiums and discounts on the official foreign exchange rate of 1:1 between the RTGS balances, bond notes and the US dollar,” the board said. Tapiwa Chizana, the Institute of Chartered Accountants of Zimbabwe (ICAZ) president, said the conflict will affect each company differently, depending on the nature of its business and its various circumstances. “The PAAB’s guidance has simply formally and publicly highlighted the challenges companies will face in trying to comply with both SI 33 of 2019 and IFRSs, neither of which REGIONAL, TOWN AND COUNTRY PLANNING ACT were authored by PAAB. In response, we as ICAZ are in the CHAPTER 29:12 REVISED EDITION 1996 process of hosting various workshops across the country, in an ENFORCEMENT ORDER SECTION 32 effort to support the preparers of financial statements,” he said CSD processes These orders relate to all residential properties in $386m trades Greater Harare for illegal developments. To the owners, occupiers and users of such stands/properties.

Part 1: Enforcement Order Section 32: Whereas it appears to the City Council of Harare, being the Local Planning Authority that in two months development or use of land is being or has been carried out on the said stands/properties in Greater Harare in contravention of the Act. Nelson Gahadza Business Reporter Unauthorised erection and use of illegal structures – namely illegally outbuildings, wooden and metal shanties mostly used for human habitation purposes and other illegal businesses. HE Central Securities Depository (CSD) says it processed Zimbabwe Stock Exchange (ZSE) And whereas it appears expedient to the Local Planning Authority and having regard to the provision of the said Town Planning Act for trades worth $386 million from a total 4,503 T the areas zoned residential wherein the erection and use of illegal structures without approved plans is PROHIBITED, to save on you as trades in the first two months of this year. Campbell Musiwa, the Chengetedzai Depository the owners, occupiers and users of the said stands, an Order in pursuance of Section 32 of the Regional, Town and Country Planning Act Company (CDC) chief executive, said his company re- (Chapter 29:12) Revised Edition 1996. ceived and processed 2, 309 trades on the local bourse in February alone. Therefore take note that in terms of the said Section 32 you are hereby ordered to cease using the illegal structures OR immediately apply “As a result, the ZSE market turnover increased by for regularization in terms of the Act. Demolish all illegal structures erected without approved plans on the said stands/properties as more 168 percent to $296 million in February compared to particularly stated hereto and remove the debris, bricks, materials and rubbish arising from the demolition of these illegal structures. $110 million in January,” he said. Musiwa said the increase was driven by large block This Order will come into operation on 29 April 2019 unless in terms of Section 38 of the Act, an Appeal is lodged with the Administrative trades in a transaction that involved Econet Wireless Court within one month from publication or until such time as the appeal is finally determined or iswithdrawn . Whether or not an appeal is Zimbabwe and Cassava Smartech Limited worth $222,4 lodged against the Enforcement Order by any person the City Council of Harare may in terms of Section 34 of the Act, at any time before million that was executed on February 19, 2019. it comes into operation serve a PROHIBITION ORDER prohibiting the continuation of all or any of the operation or uses specified in the According to the CSD report, cumulative trades from 2014 are now at 65,078 and worth $4,4 billion. The year Enforcement Order. 2018 recorded the highest value of trades at $1,9 billion largely as a result of increased activity on the lo- The attention of the persons served with this notice is drawn to Sections 33 and 37 of the Act which provide respectively that this cal bourse as investors hedged their investments against enforcement Order shall have effect against subsequent development on the land concerned and that if any steps required by such Order stocks. (demolition of all illegal structures) other than discontinuance of any use, have not been taken within the period stated therein, the Local For 2017, the market value reached $1,4 billion due Planning Authority may authorize its employee or agent to enter the property and take the necessary action and recover the costs reasonably to a bull run that characterised the market in that year. incurred thereby from the owner of the land and penalties (including the restoration of the land at the expense of the owner for a fine up to However, 2014 remains the year with the lowest trade’s five thousand dollars ($5 000) or two years imprisonment for non-compliance with the provision of this NOTICE. value after ending at $71 million. Musiwa said the ZSE equities market capitalisation It is hereby certified that we, the undersigned have served Notice of which this is a true copy owners, occupiers or user of affected for February reached $19,8 million, a decrease of 5,74 properties/stands in the Greater Harare herein by causing such notice to be published in the Newspaper circulating in the areas. Such percent from January’s $20,9 million. publication is deemed to constitute service of the Enforcement Order on the person concerned in terms of Section 32(b) of the Regional, “The market value of securities placed on the CSD Town and Country Planning Act (Chapter 29:12) Revised Edition 1996. also decreased by 2,98 percent from $9,2 billion in Jan- uary to $8,9 million in February,” he said. He added that dematerialised securities accounted for Part 2: Prohibition Order Section 34 whereas the City Council of Harare as the Local Planning Authority having regard to the Enforcement 45 percent of the ZSE market capitalisation for February. Order in PART 1 hereof issued against certain owners, occupiers or users of residential stands in Greater Harare consider that the misuse Musiwa said the CDC processed 999 securities de- to character created thereby constitutes serious contravention of the provisions of the Act for the areas as stated in the said PART 1 and pository in February, bringing the cumulative number seriously injure the amenities of the area by creating and maintaining unsightly objectionable and undesirable health conditions in the processed since going live to 80,418. locality. “The average dematerialisation penetration ratio across all counters closed at 44 percent,” he said. Pro- Therefore take note, the said owners, occupiers, users that in terms of Section 34 you are ordered discontinuance forthwith the use of illegal plastics Limited, Art Corporation and Masimba Hold- structures on the stands, demolish the illegal structures and remove all rubbish arising from the demolition of these illegal structures. ings are the three top dematerialised counters at 96 percent. According to Musiwa, the total number of CSD ac- This Order comes into operation with immediate effect on the date of publication. counts as at February stood at 26,845 after 171 new accounts were opened during the month. Overall, the report shows that local investors domi- nate the CSD accounts that were opened, accounting for 94 percent. Musiwa said the number of listed securities that are on the CSD remain unchanged at 61 equities and two debt instruments. [email protected] Page 20 | March 28-April 3 2019 The Financial Gazette Companies & Markets Show faith in African currencies Okey Umeano “other” currencies banks that hold their the downside risk. accounted for a currency could dump To further manage the risk, the rules for inclu- Y HOLDING part of their foreign exchange meagre 2,5 percent it in the event of mission in the basket should target behaviour required reserves in African currencies, African coun- of the world’s total management. of participating tries could boost trade within the continent. allocated reserves. How much of currencies, with B Trade agreements I believe the time has come for African nations Countries typi- each currency to targets for mon- to start holding African currencies in their reserves. cally hold non-re- hold could be left to ey supply, infla- are not a silver bul- Foreign reserves are assets controlled by a coun- serve currencies the central banks to tion and currency “let. African nations try’s monetary authorities for exchange rate man- for trade and other decide, based on the management. also need to show faith in agement, meeting balance of payments financing practical purposes. volume of trade be- Such rules each other. ” needs, and other uses. For many countries, they are For instance, if many residents of a country make tween individual countries. An orderly way to go would help make used to send a signal ― to reassure trade partners the annual pilgrimage to Mecca, the central bank about it might be to construct a basket of member governments and and investors about the country’s ability to meet its may hold Saudi riyals for their use even though the countries’ currencies weighted according to GDP central banks responsible and accountable, and obligations to them ― as well as acting as a store of riyal is not a reserve currency. and trade flows. Participating central banks could rein in reckless monetary policies, as not meeting wealth for nations. Last year, 44 of the African Union’s 55 mem- then undertake to hold no less than five percent of the guidelines would mean being booted out of the The major reserve currencies are primarily the ber states signed yet another trade deal, setting up their reserves in this basket. The basket could take programme. US dollar and euro, although sterling, the yen, the the Continental Free Trade Area (CFTA). If central into account all the usual issues of trade, convert- On its own, signing agreements for trade and Swiss franc, the Canadian and Australian dollar, banks in Africa started holding each other’s curren- ibility, size of the economy, macroeconomic fac- cooperation is not a silver bullet. African nations and renminbi also figure. cies in their reserves, it would oil the CFTA wheels tors, etc, to find the sweet spot of an acceptable mix. also need to show faith in each other, and start get- International Monetary Fund data on the com- and demonstrate members’ confidence in each oth- For reserve managers hesitant about holding vola- ting intra-African trade moving. position of foreign exchange reserves has a catch- er’s economies. It would also make governments tile emerging market currencies, the diversification l Umeano is head of risk management at all category called “others”; in Q3 2018, these more accountable, as they would know that central effects of the currency basket would greatly reduce Nigeria’s Securities and Exchange Commission. Chinese imports drive Kenyan fishermen out of business S THE frozen fish defrosts under the hot Kenyan sun, fishmonger Mechak Juma prefers not to tell his cus- Atomers that it has come all the way from China. Business is booming for the traders at the largest fish market in the city of Kisumu, on the eastern shores of Lake Vic- toria, Africa's largest lake but very little of that money now goes to the local fishermen. As fish stocks in Lake Victoria have plunged over the past two decades, and prices have risen sharply as a result, cheap farmed Chinese imports are increasingly filling the gap. “People don't want to buy Chinese fish because they don't trust the (farmed) production process, but we don't have much of a choice," says Mechak, standing next to a big basket of whole Chinese tilapia fish. The trampled cardboard boxes used to ship the frozen fish 8,000 km are stashed away in a corner, and the fish itself is more than two years old. It will expire in less than a month, according to the dates on the boxes. “People prefer to buy local fish, but we earn nothing on local fish now,” says the 29-year-old. Fish catches from Lake Victoria have plummeted by more than half in the past two decades, due to overfishing and pollution. Vast stretches of water hyacinths, an invasive weed, along the shorelines, have also caused severe problems for the country's fishermen. The thick, interwoven carpet of the plants means smaller boats struggle to get out to clear water. Chinese companies and their Kenyan partners seized the opportunity, and are now said to be exporting more than $17 million of fish to Kenya annually, more than double the amount three years ago. It was an easy gap for the Chinese to fill, because the freshwater fish that they farm on a vast scale ― tilapia ― is from the same broad species that Kenyans mostly catch in Lake Victoria. So for Kenyan consumers the fish look and taste similar. The Chinese fish is cheaper, selling for as little as $1,70 per kg, compared with about $5 for the local catch. For Kenyan fisherman Frederike Otieno, it is a hopeless situation. “While we spend many nights on the lake and lose a lot of money on fuel, we have to compete with this cheap Chinese fish that floods the market,” says the 36-year-old. A fisherman for 10 years, Otieno says he used to earn about 3,000 Kenyan shillings ($30) per day, but this has now fallen to little more than 400 shillings. In November last year, the Kenyan government moved to try to protect the Lake Victoria fishing industry by imposing an import ban on foreign tilapia. But the restrictions were lifted in January after China's ambassador to Kenya, Li Xuhang, referred to the ban as a “trade war”. It was also reported that China had threatened to freeze funding for a new railway line connecting Kenya with Ugan- da, Rwanda and South Sudan. However, the official explanation from Kenya's Department for Fisheries was that “a huge shipment of (Chinese) fish was held up at the port of Mombasa, negatively impacting local supplies”. The biggest importer of Chinese fish is a company called East African Sea Food. Its director, John Musafari, says while the Chinese tilapia is of high quality, the low prices are possible because the fish is fed on rice bran, which is cheap and plentiful. Bran is the hard outer layer of each rice grain, which is removed in China before the rice is sold. Mr Musafari adds that fish farming has not taken off in Kenya because fish feed “is extremely expensive” in the country, due to it currently being made from maize, which is also the country's staple food. - BBC The Financial Gazette March 28-April 3 2019 | Page 21 National News Zim begins licensing for cannabis

Omega Ukama Business Reporter

HE Zimbabwean government has started licensing players in the com- Tmercial cannabis business after it gave permits to prospectors, The Financial Gazette has learnt. Although the southern African nation legalised the cultivation of cannabis for medicinal and scientific purposes last year, no entity had been licensed yet. An executive from one of the prospect- ing entities, who this week spoke to this publication, confirmed the development. “Precision Cannabis Therapuetics — Zimbabwe (PCTZ) responded to an invitation by the government of Zimbabwe for investors into the cannabis business,” said Nathan Emery, the founder and chief operations officer at PCTZ. “For now we are preoccupied with com- pleting the requisite processes,” he said. Lesotho was the first African coun- PCTZ says it aims to be the innovator in try to grant a license for the cultivation the cannabis terpene market, “from contract of cannabis for medical and scientific growing for specific clients at the most com- purposes. petitive wholesale price point to true innovation in the extraction of terpenes”. Zorodzai Maroveke, the Zimbabwe In- Maroveke said the regulatory frame- dustrial Hemp Trust chief executive, and a work is however somewhat “ambiguous”. keen lobbyist for the commercialisation of “We fear that the implementation maybe cannabis in the country said invitation let- exclusionary,” she said. ters were released to many groups “almost Emery was however full of praises for on the same day” earlier this month. She the regulatory framework. said the letter indicated that they had been “We have no issues with any set parame- approved to make a payment of $46 000, ters. The government has done a great job in upon which the company would be licensed. developing the regulations,” he said. According to reports in local media last The global legal marijuana market is ex- Diana Musara Tendai Mafunda month, government had been processing pected to reach $146,4 billion by the end of applications to produce cannabis from as 2025, according to a recent report by Grand many as 37 entities. View Research. It is not yet clear if any company has Growing adoption of marijuana in sev- been licensed. eral medical applications such as cancer, Efforts to obtain a comment from the mental disorders, chronic pain and others is Health ministry were fruitless as questions expected to propel revenue growth in near sent to the permanent secretary had not been future. Wade Cooper responded to at the time of going to print. Lesotho was the first country in Africa to Paula Quinsee The legislation for commercial cannabis grant a license for the cultivation of canna- in Zimbabwe allows for the regulated pro- bis for medical and scientific purposes and duction of goods including fresh and dried last year made its first export of the crop to marijuana, cannabis oil, live plants, and Canada. TECHNOLOGY DRIVEN HUMAN CAPITAL SOLUTIONS seeds. After the action by Lesotho encouraged FOR THE 4TH INDUSTRIAL REVOLUTION Mandated cultivation and processing investment from international corporations standards are higher than those enacted by eager to take advantage of the country’s The 4th Industrial Revolution is here changing business models in all industries, cannabis opportunities, several other Afri- other governments. resulting in major disruptions to labour markets. New categories of jobs will emerge, The legislation permits licensed produc- can nations including Ghana, South Africa, partly or wholly displacing others resulting in a demand for new skill-sets in both old and ers to mail medicinal cannabis to authorised Swaziland, and Zambia have initiated ef- patients, but a system to approve patients forts to legalise marijuana for medical pur- new occupations to transform how and where people work. has not yet been established. poses. [email protected] So how do individuals and organisations ensure they remain relevant to thrive in the workplace of the future?

Organisations will require robust, innovative end to end HR solutions that are Mozambique to recover technology driven comprising: job profiling and evaluation, job grading, behavioural assessments, 360 degree and cultural assessments, career guidance, leadership economically development including on-line finance training for non-finance managers.

Join us to hear more about these changes and solutions to help both individuals and despite cyclone — IMF organisations remain relevant in the job landscape of the future.

ESPITE the likely adverse macro- early to precisely assess the impact of the economic effects of Cyclone Idai, cyclone and reconstruction costs, these Conference Details: DMozambique expects a recovery in would be very significant. Date: 2 April 2019 | Venue: The Rainbow Towers, Harare economic activity over the medium-term, “The international community will have Investment: Early bird $300.00 RTGS (by 30 Mar 2019) | Standard $350 RTGS boosted by gas production, the International to continue playing a vital role in assisting Monetary Fund has said. Mozambique,” it said. Discount for group bookings | NB: Fees exclude accommodation costs. Estimates show that more than 700 “In this context, the IMF will consider To book: Landline: +263 242 480 844 or email [email protected] people have been killed and hundreds are the authorities’ request for emergency finan- missing after the cyclone wreaked havoc in cial assistance under the IMF Rapid Credit Miriam: +263 77 240 2379 / Tendai: +263 77 215 3871 / Angie: +263 77 642 5228 Mozambique, Zimbabwe and Malawi. Facility.” The United Nations says it has affected It said there would be more significant almost three million people, of whom nearly expansion in economic expansion for the 500,000 have been driven from their homes. southern African country with the start of In a statement issued after a visit by a liquefied natural gas production expected in staff team, the IMF said while it was still 2023. — ANA Page 22 | March 28-April 3 2019 The Financial Gazette Advertorial The Financial Gazette March 28-April 3 2019 | Page 23 National News Zim should adopt own currency: SA

Ndakaziva Majaka he said. Markets Editor This comes as Foreign Affairs minister Sibusiso Moyo recently said a weaker OUTH Africa (SA)’s Trade min- Zimbabwe was a threat to SA’s economy. ister Rob Davies says Zimbabwe “A prosperous Zimbabwe makes for Sshould adopt its own fiat currency a prosperous SA and vice-versa,” he told as a way of addressing the country’s eco- delegates at the third session of the Zim- nomic crisis. babwe-South Africa Bi-National Com- This comes as Harare, which has not mission. had a currency of its own for the past 10 Davies — who was in Zimbabwe re- years and has been primarily using the cently as part of a delegation led by Ra- United States dollar, recently redenomi- maphosa to discuss trade ties — said SA nated bond notes and electronic balances did not have money to help Zimbabwe into Real Time Gross Settlement (RTGS) clear it’s over US$1 billion arrears to dollars. multilateral lenders. “If you are tied to the currency of the “I don’t think this is a question of strongest economy in the world, you’re somebody bailing out somebody with not going to be competitive on anything. large sums of money. We don’t have So, it’s obviously important that they large sums of money, but I think we can (Zimbabwe government) do introduce a try to assist them in their engagements currency,” Davies said in a recent inter- with the Paris Club including countries view. like Russia, Britain and France, which is “There are many issues about certain- a creditor, and also with international fi- ty. Something I shared with them is that nancial institutions,” he said. investors respond when you can intro- Trade between the two countries is duce certainty — if you keep chopping skewed in favour of SA, which export- and changing, you are going to get less ed goods worth more than $2,2 billion of a positive reaction.” to Zimbabwe in 2018 while Harare’s ex- Davies also indicated that SA will not ports to the neighbouring country stood unveil an economic bailout to its largest at a paltry $400 million, according to trading partner, but can only help Zimba- official data. bwe to renegotiate its external debt with Earlier this year, SA Finance minis- multi-lateral lenders. ter Tito Mboweni said the two countries “I think that point is pretty well estab- were discussing the possibility of South lished, that if our neighbour has a melt- Africa extending an existing credit facil- down — or even short of a meltdown, if ity of just short of R100 million which it has a worse performance in its econo- Zimbabwe had with the SA Reserve my than now — we can expect that large Bank. numbers of people from Zimbabwe will Mboweni said that Zimbabwe had find their way into SA. provided collateral for this loan in the “Another implication is a loss of mar- form of its holding of SA Land Bank kets — all kinds of things that we do not bills. He said the extension of this facili- want to see. We have to find ways that we ty depended on Zimbabwe being able to can work to assist Zimbabweans as they provide further collateral, insisting Zim- are now trying to take decisions which babwe had always repaid its loans under are going to turn their economy around. this facility in the past. And we need to find ways to help them,” [email protected] ‘Govt to prioritise infrastructure development’

Freedom Mashava ficiency and productivity,” Mnangagwa Staff Reporter said. Mnangagwa said the project — funded RESIDENT Emmerson Mnangag- through the China Exim Bank — is ex- wa says his government will focus pected to significantly reduce data tariffs Pon infrastructure development to by as much as 40 percent in the near fu- stimulate economic growth. ture. This comes as infrastructure develop- “This project is undoubtedly set to ment has been identified as a key driver have a far-reaching impact towards the of progress across the African continent attainment of our national vision as it re- and a critical enabler for productivity and lates to ICT, where we envisage having sustainable economic growth. Internet access at village level by 2030,” “Our infrastructure has for too long he said. lagged behind, but we are determined to “By embracing technology and con- catch up with those that have progressed nectivity, we are embracing the future, ahead of us,” Mnangagwa said while and giving our people the best opportu- commissioning a US$23,6 million TelOne nities to thrive in the modern economy,” national backbone fibre link in Beitbridge. Mnangagwa said. He noted that such investment has a The establishment of the fibre link transformative impact in the country’s connects Zimbabwe with neighbouring quest for economic growth, modernisa- countries such as South Africa, Mozam- tion and industrialisation of the economy. bique, Botswana and Zambia. “It will further improve economic ef- [email protected] Page 24 | March 28-April 3 2019 The Financial Gazette National News Omega Ukama March 2019,” the company Business Reporter said in a statement on Monday. The company had been PPAREL retailer Ed- Inflation suppresses Edgars’ volumes operating the brands under a gars Stores (Edgars) franchise agreement, in which Asays its sales volumes during the period under review The company posted a prof- Zimbabwe. shareholders in an extraordinary the company has successfully it paid annual franchise fees during the 52 weeks ended which, “through the efforts of it after tax of $8,5 million repre- The listed apparel retailer general meeting in January. achieved all conditions prec- calculated as a percentage of its January 6, 2019 suffered due to our sourcing teams, was largely senting a 114 percent increase had earlier announced that the “The directors are pleased edent and that the transaction revenue. price increases driven by rising successful”. from the previous comparable deal had been approved by to advise shareholders that was implemented on Friday 22 [email protected] inflation. “Despite these endeavours, period. Sibanda said this was Monetary and fiscal re- local production was somewhat “due to increased margins in the forms implemented last year, erratic due to the inability of last quarter” which improved to which included the ring-fencing our suppliers to source inputs. 46 percent form 43 percent. of Nostro FCAs and RTGS$ Imported product lines which Sibanda said efforts are un- accounts as well as the intro- could not be sourced locally derway to reinstate operations in duction of a two percent tax on such as cosmetics, shoes and the two Kadoma stores, which electronic fund transfers, have lingerie, were more severely premises that were destroyed by incited inflation to a post dollar- affected,” he said. fire in November. isation high of 59,4 percent for The listed fashion retailer’s Meanwhile, Edgars says it February from 5,4 percent in revenue grew by 22 percent on has finalised its acquisition of September last year. last year to $78,1 million while intellectual property (IP) rights Themba Sibanda, Edgars’ chairman said yesterday mark- up action to protect stock-outs was necessitated in October when fears of a return to hyper- inflation left customers franti- cally seeking value. “Our prices did not go up by as much as some but still had the effect of dampening demand and reducing volumes. Edgars and Jet chain unit sales for the last quarter declined by 37 percent and 33 percent, respectively. “Being our strongest quarter, including the festive season, this had a negative impact on Edgars’ sales volumes have suffered due to price annual volumes,” he said. increases. Sibanda said foreign currency shortages necessitated an retail unit sales declined by 11,4 to Jet and Edgars trademarks import substitution programme percent for the year. and brands for the territory of 70 die from work-related accidents Ndakaziva Majaka a speech read on her behalf by Labour min- Markets Editor istry permanent secretary Judith Kateera at a National Social Security Authority engineers ABOUR minister Sekai Nzenza says workshop in the capital. government has adopted a new scien- Based on the International Labour Or- Ltific approach to reduce work-related ganisation’s estimates, 2,78 million workers accidents after 70 people died at the work- die every year from work-related injuries place in 2018, compared to 65 in 2017. and diseases while an additional 160 million Official figures also show that work-relat- workers suffer from work-related diseases as ed accidents increased 19 percent to 5 965 last 313 million workers suffer from non-fatal in- year, with most of the mishaps occurring in juries per year. mining, agriculture, forestry, manufacturing, In economic terms, the ILO estimates transport and storage as well as basis metal that almost four percent of the world’s annual and fabricated metal production sectors. GDP is lost as a consequence of work-related “However, Zimbabwe has adopted the injuries and diseases. Vision Zero strategy, an initiative of the As at September 2018, at least 51 Zimba- Group of Seven countries, aimed at prevent- bwean workers had lost their lives in the line ing work-related deaths, injuries and diseas- of duty as 3 841 work related injuries were es in sectors operating in or aspiring to join recorded. global supply chains (GSCs),” Nzenza said in [email protected]

For the week endingending 2713 March 20192019 The Financial Gazette March 28-April 3 2019 | Page 25 National News 2019 OPEN CALL FOR PROPOSALS FOR PROTOYPE DESIGN AND DEVELOPMENT AND COMMERCIALISATION OF RESEARCH RESULTS IN NATIONAL RESEARCH PRIORITIES: 30 MAY 2019

1.0 Background iv. Communicating results and funding decisions to applicants by 30 July 2019. Pharmaceutical firms are struggling to meet the The Research Council of Zimbabwe (RCZ) is seeking v. demand for drugs. proposals to enable technology innovators and entrepreneurs All proposals will be received and processed in confidence pursue promising scientifically proven concepts, validate proof and with complete acknowledgement of intellectual of concept (POC) and commercialisation. RCZ is supporting property rights of the proponents. ZimPharm the Nation’s holistic and strategic transformation (Vision 2030) vi. RCZ’s decision is final. anchored on the quest for modernisation and industrialisation. Therefore, focus is on heritage based science and technology requires innovations in order to turnaround the country’s socio- 7.0 How to Apply economic fortunes. The Government of Zimbabwe has i. supported R&D to the level of 0.3% of GDP. RCZ in particular, Applications must be submitted via email on has been capacitated to make this Call. [email protected] cc [email protected] US$300 000 ii. Approval from the host institution of affiliation is a prerequisite. Proposals without institutional approval will 2.0 The Call not be considered. to retool The Call is highly competitive, encouraging entrepreneurs to iii. Applicants should declare originality of their work and seek out research results with potential for commercialisation. sign off to confirm ownership. By funding establishment and validation of POC, RCZ wishes Adelaide Moyo to help innovators/researchers and entrepreneurs advance Eligibility: Zimbabwean Nationals as Lead Investigators. Business Reporter an idea to commercialisation/implementation in the form Execution of the Projects in terms of prototyping and commercialization should be conducted largely in Zimbabwe IMBABWE Pharmaceuticals (ZimPharm) says of technology or service licences or creation of start-up it is operating at 45 percent capacity due to aging companies or raising investments for the company. and the commercialization of the outputs should result in Zequipment, amid indications the firm requires Zimbabwe made goods and services. US$300 000 to retool. Tawengwa Mukuhlani, ZimPharm’s managing di- 3.0 Objectives rector, said the pharmaceutical company requires suit- The broad objective is to support innovations in National able equipment to increase production levels. Writing Guidelines: “The aim of every company is to produce at 100 priority areas for national competitive advantage. The specific percent capacity but at the moment we are looking at objectives are five-fold to: RCZ particularly encourages collaborative projects across institutions, disciplines and individuals from focus areas set in operational levels at around 45 percent. Our limitation i. Stimulate and support demand driven technological is twofold, we need more product lines and for us to the Specific Call for Proposals. The following should be taken innovation, prototyping and commercialisation. have more product lines we need the ideal equipment,” into consideration. he said. ii. Stimulate and support demand driven service innovation. i. Proposals should be well presented meeting known sci- “Secondly, with the equipment that we have, it has iii. its limitations for the product that we have. Once we Contribute to meeting the Nation’s impactful R&D entific and commercialisation potential criteria. requirements. have appropriate equipment we can add our product ii. The management structure should be well defined as line and we can increase our efficiencies and that will iv. Foster and encourage participation in innovation and well as a clear sustainability plan. naturally increase our production levels.” entrepreneurship by women, youth and persons from Mukuhlani added that the firm requires government iii. Applicants should “make the case”, i.e. to explain the informal sectors. support for the retooling. steps that led to the proposed research concept and fo- “We are in dire need of retooling of our equipment. v. Increase private-sector/industrial commercialisation of cus. We need substantial investment, the main challenge be- innovations derived from national R&D funding. ing access to foreign currency to get the equipment into iv. Demonstrate the strategic value of the Research to Zim- the country,” he said. babwe. This comes as most local drug manufacturing companies are currently operating below capacity and re- 4.0 Funding Information v. Demonstrate commercialisation potential and/or Re- quire approximately $45 million to retool. search capacity building. This has led to the country procuring most of their Funding of up-to $250 000 over a maximum period of 18 drugs externally with some pharmacies now charging vi. Budget should not be inflated and/or expenses should be their clients in foreign currency. months. adequately justified. Portifa Mwendera, Pharmaceutical Society of Zim- vii. All documents (application form, full research propos- babwe’s president, recently said 90 percent of all med- al, annexes, etc.) have to be submitted in both PDF ication in the country is imported. 5.0 Nature of Projects According to him, the remaining 10 percent of the and MS Word files to [email protected] and copied to medicines were being sourced locally but local manu- i. Projects that have a process/product innovation [email protected]. Proposals should not exceed 3000 facturers are also demanding hard currency saying they words, font size should be 12 Times New Roman. need it to buy inputs from outside the country. with significant socio-economic impact and ready for Mwendera said pharmaceuticals owe foreign suppli- prototyping or commercialisation. ers about $20 million for medicines that have already Submission Deadline: 30 May 2019 been delivered. ii. Projects with clear technology and/or commercialisation Figures show that the country’s pharmaceutical in- objectives. dustry, which is struggling to meet demand due to for- 8.0 Contact Information eign currency shortages, only received $1,5 million of iii. Projects of collaborative nature i.e. research institutions/ the $9,75 million required for the importation of drugs academia and business enterprise/entrepreneur/SME. • For additional information on the Call visit www.rcz.ac.zw in the last three months of December. Currently there are eight pharmaceutical companies • For any queries or additional information, contact RCZ: manufacturing human medicines in Zimbabwe, which Tel. 263-24-2304733, 2304787 cell 0712 954 330/2 include Zimpharm, CAPS, Datlabs, Graniteside Chem- 6.0 Processing of Proposals icals (GC), Gulf Drug Company, Pharmanova Zimba- i. Contact Persons bwe, Plus Five Pharmaceuticals and Varichem Pharma- The evaluation and selection of proposals will comprise ceuticals. verification of the proposal eligibility (guidelines available o Dr T. Marango –extension 119. Emmanuel Mujuru, the Pharmaceutical Manufac- on www.rcz.ac.zw). Email: [email protected] turers’ Association (PMA) chairman, said the country ii. Confidential peer review of the proposals by experts. is faced with a severe shortage of medicine across the Mrs P. Chikowore -extension 107. board, both in the private and public health markets, iii. Short listing of reviewed research proposals. o which has reached national health emergency status in Email: [email protected] the past months. [email protected] Page 26 | March 28-April 3 2019 The Financial Gazette National News CFI conducts off market transaction Nelson Gahadza group is now on an exciting growth Business Reporter trajectory,” he told shareholders while giving a trading update for the ROUBLED CFI Holdings five months to February 2019. (CFI) is embroiled in another “Expenses during the five months T scandal after it traded 1,8 period increased by 26 percent million shares in an off-market compared to same period prior transaction. year as the group tried to cushion The diversified conglomerate, employees through cost of living which was suspended from the adjustments,” he said. Zimbabwe Stock Exchange in Chibhanguza said the group January last year for failing to invested $1,2 million in distribution comply with regulatory obligations, trucks and branch managers vehicles is still reeling from various to assist in enhancing marketing and wrangles that range from fraud to operational efficiencies. mismanagement, resulting in British “Farm and City refurbished tycoon Nicholas Van Hoogstraten the Chinhoyi branch and started seizing control of CFI with 52 trading in December 2018,” he percent shareholding. said. He added that, for its farming Itai pasi, the acting CFI operations, Glenara established 107 chairperson, this week confirmed hectares of irrigated soya beans, 459 that a director Louis Hamilton hectares of dry land soya beans in had purchased 1,8 million shares addition to table potato production. SEEDCO managing director Denias Zaranyika, left, and FAO executive Matthew Abang cut a ribbon in an off-market transaction from “Glenara is now profitable on during the launch of new maize varieties in Shamva on Tuesday. NicozDiamond. the bank of the farm recapitalisation This was after Stalap, an undertaken in prior year,” he said, investment vehicle which houses adding that on the properties side, SeedCo introduces new maize hybrids shares held by Zimre Holdings, recoveries have progressed well National Social Security Authority on average and the group is now and NicozDiamond among others — seized with finalising layout plans, IMBABWE’S larg- and cob diseases response to different of climate change and ultimately to through its representative Addington regularisation and development est supplier of cer- agronomic practices and high yield- upscale productivity levels, liveli- Chinake — had indicated that it was preliminaries to give impetus to the Z tified maize seeds ing capabilities. hoods and food security,” Zaranyika not aware of the transaction. development stage of the project. SeedCo has introduced The SC 529 becomes the top yield- said. Meanwhile, Shingai The acting CFI boss further two new climate smart er in the 500 series maturity group Seed Co is also working on more varieties of maize seed with a high yield potential of 13 varieties that have the potential to Chibhanguza, CFI’s acting chief indicated that the fiscal and known as SC 529 and SC tonnes per hectare, while SC 649 is yield 20 tonnes per hectare. executive, said the group is now on monetary policy changes at the onset 649. the highest yielder in the 600 series “The launch of these two hybrids solid position to sustain a growth of the 2019 financial year resulted in The new varieties are group yielding 16 tonnes per hectare. is a precursor to more exciting efforts trajectory following years of loss- panic induced consumer demand as coming from a background The new breeds are meant to ad- arising from the huge investment that making. customers were in a rush to convert of an intense breeding ef- dress most farmers’ challenges relat- we made into research technologies “Given the reduced gearing, monetary balances to commodities fort focused on selecting ed to climate change. a few years ago. The investment is improved profitability and cash and goods. for heat, drought, foliar “The two climate smart, high yield- now paying dividends in the form of generation by the business, the [email protected] ing and stable hybrid maize varieties a healthy pipeline of upcoming and have already changed the lives of newer products that include SC419, some farmers in the past two to three SC555, SC541, SC653, SC657, seasons,” Denias Zaranyika SeedCo SC661, SC659 and SC729,” he said. managing director said at the Rattary Despite the availability of these Arnold Research Station field day. high yielding varieties, Zimbabwe’s From independent trials and national average yield still stands at demonstrations, the products have below one tonne per hectare. proven to be stable across seasons, “We obviously need to bridge the stable across agro-regions, as well gap between potential yield and ac- as yielding much more than current- tual farmer yields,” Zaranyika added. ly available products within their re- Seed Co is also working on other spective maturity groupings. vegetables, rice and small grains vari- “These two new block busters will eties. — Staff Reporter allow farmers to adapt to the effects [email protected] Life & ArtsNews Worth Knowing

March 28-April 3 2019 Page 27 Explore traditional food at Panafrika

UCKED away in a secluded came white sadza, made from finely love, from George Michael, Elvis close off Mazowe Street is ground maize meal, sadza rezviyo Presley and others. TSapes Trust, a regional think (rapoko), sadza remhunga (millet) Music always triggers emotional tank where conferences take place and sadza remapfunde (sorghum). responses, and it seemed too early and ideas on matters African are I tasted matumbu for the first in the day for this kind of distrac- exchanged. time, and found it full of flavour tion. But Alex’s voice and delivery Green lawns, trees, and flower- and well-cooked. Many people were so perfect, that by the time he ing shrubs surround the conference avoid eating offal of any kind, be- sang Robbie William’s 2002 song, I centre, a book shop, a library and ing put of by the different textures just wanna feel real love, we were PanAfrika, a restaurant serving and appearance of an animal’s in- all enthralled. daily specials, a weekend braai, testines and internal organs. Many regulars at PanAfrika will and family lunch on Sundays, with But be assured that many dish- be familiar with the regular meet- swimming for children. es made from offal are delicious, ings on regional matters and the A buffet serving traditional an excellent source of high quality political and economic discussions foods ($30) is a regular feature on a protein, and frequently feature on taking place at Sapes Trust. Friday, the day I chose to visit. fine dining menus. Political activist and controver- The clientele (mostly male), The perfect foil to a traditional sial commentator Ibbo Mandaza is in spite of the heat, were formally stew, and the outstanding dish on the executive chairman of this pop- dressed, but the atmosphere was my plate, was rice steamed with ular organisation. If you’re interest- welcoming and laid back. We sat at crunchy peanut butter. ed in Deborah Bronnert’s (former a table on the verandah, overlook- In addition to the beans and British Ambassador to Zimbabwe) ing a swimming pool, and before covo, I would have liked to see take on The Future of Anglo-Zim- long a friendly waitress brought us some black jack or pumpkin leaves, babwe Relations, or would like to a starter of boiled ground nuts and and definitely some braised or read an analysis of China-Zimba- crisp-fried kapenta. roasted pumpkin. George and I bwe relations by Heather Chingono Apart from being a healthy both chose a Pepsi to drink with our (lecturer in Political Studies, UZ), snack that regulates blood sugar, meal, other soft drink choices being visit the Sapes library. lowers cholesterol and fights de- limited to Mirinda Orange and Sev- Be sure to attend the book launch pression, boiled groundnuts are also en-Up. at Sapes on Thursday 28 March, 11 delicious. I could have satisfied my Wine lovers can choose from an am to 1 pm, for Democracy Works hunger with the starter alone. extensive list of good quality red, — Turning Politics to Africa’s Ad- At 12.30 pm sharp, the lids on white and rose wines, either by the vantage, a ‘democratic playbook’ the bain maries were lifted, dis- bottle or by the glass. by no fewer than four distinguished playing steaming road runner stew, Musical entertainment, even at authors, including Tendai Biti. goat meat, knuckle bones, mazon- lunch time, is becoming a regu- Chew the cud afterwards at PanAf- dos, maguru nematumbu and roast lar feature of eating out in Harare. rika over a few beers, or stay on for chicken. While our buffet was being served, lunch. In addition to sugar beans sim- songstress Collina Mvududu and The special of the day on Thurs- mered in onion, garlic and tomato, entertainer Alex Fairlie, who was days is okra soup served with fufu and crunchy green covo, were white once a member of the 5-Star Boy (cassava). rice, and rice with peanut butter. Band, took turns in singing a selec- Comments to: cmalakoff@gmail. Piping hot from the kitchen tion of bluesy songs about thwarted com Traditional buffet at PanAfrika Restaurant Refurbished Halfway House opening soon ALFWAY House, which is lo- “We will completely redo the cated in Headlands along the menus and offer simple and fresh HHarare-Mutare highway, is ex- home grown produce. We have already pected to open its doors to the public ordered fresh cutlery and cookery to next month after undergoing a refur- ensure an unforgettable experience to bishment exercise. our clients,” he said. Denys Chapman, a new manager at Before Halfway House was run the restaurant, said plans are underway down in 2013, the place was a hive of to restore Halfway House to its former activity with travelers and also provid- glory. ed overnight accommodation and wine “We have already completed paint- bar for merrymakers. There was also a ing the building under the first phase curio shop attached to the restaurant. of renovations and we’ll then upgrade Chapman, who will be running the the fruit and vegetable section, bakery place together with his wife Tracy, and takeaway. We are planning to use said he has a few ideas he wants to im- income we would have generated from plement to ensure the joint is popular this section to implement phase two,” again. he said. “We are still toying around with the Halfway House is a convenient idea of making this place an overnight stopover when travelling on the Ha- stop for cross-border heavy vehicles as rare-Mutare highway. The place is not well as opening a gymnasium on those noisy or congested like the other small buildings where curios used to be sold. town stops and it is ideal for a tea or But Rome was not build in one day, coffee break and the ablution facilities we’ll implement the changes as we go are clean. Halfway House is located in Headlands along the Harare-Mutare highway. along,” he said. Motorists can refuel at the neigh- The firm also has plans to open a bouring service station and cross over sandwiches, rolls and cakes. The con- days we will be offering more or less the phase two renovation exercise, supermarket at the adjacent fuel sta- to get some snacks, fresh farm produce venient shop also used to have fruits, the same products at affordable pric- the company is looking for additional tion to serve the motoring public as or meat. nuts, crisps, candy and biltong, which es. We’ll also be selling diapers and funds to upgrade the existing wine bar, well as the surrounding community. At its peak, the restaurant used are perfect when on the road. other toiletries to those on the road,” where hot meals would be offered after —Staff Reporter to provide fresh chips, hamburgers, “When we reopen by Easter holi- Chapman said. He added that under 6.00pm daily. [email protected] PLANS to classify female athletes by their testoster- one levels “contravene international human rights” the United Nations Human Rights Council said yesterday. Olympic 800m champion Caster Semenya, 28, News Worth Knowing is challenging the International Association of Athlet- ics Federations over its bid to restrict levels of testos- Sport terone in female runners. Page 28 March 28-April 3 2019 SPORT SHORTS Stars Zimbabwe lost Montenegro face racism charge UEFA on Wednesday charged Montenegro with racist behaviour following the abuse suffered by England play- Paul Nyakazeya ers in their Euro 2020 qualifier in Podgorica on Monday. Online Editor England won 5-1 but the match was overshadowed by racist chanting from some home fans directed at sev- HETHER it is cricket, rugby, golf, eral England players, including Danny Rose. soccer or any other sport, match- Uefa said “disciplinary proceedings” had been es featuring national teams always opened against Montenegro with one charge for “racist W behaviour”. bring people together. As they dance and rejoice at stadiums, hud- The case will be dealt with by European football’s dle around the television or listen to live radio governing body on 16 May. broadcasts, families, friends and relatives are Montenegro coach Ljubisa Tumbakovic said he did brought together and passionately cheer their not “hear or notice any” racist abuse. team on, hoping for a victory that has the pow- But England manager Gareth Southgate, speaking to er to galvanise a nation. BBC Radio 5 Live said he “definitely heard the racist As they proudly sing the national anthem abuse of Rose”. — bbc.com while looking at the flag, the players — adorned in the national colours of the country — become the focal point of the supporters. Schumacher to test with Ferrari They carry the hopes of their nation and MICK Schumacher, son of seven-times world champion major tournaments often bring out a sense of Michael, will test with Ferrari and Alfa Romeo in Bah- patriotism not only for them, but their legion rain next week, the Formula One teams announced on of supporters. Tuesday. Ironically there are many players that have The German, who makes his Formula Two debut in opted not to play for their countries of birth. Bahrain this weekend with the Prema team, will test Fer- The country were they learnt the sport that has rari's F90 car at the Sakhir circuit on April 2 after the made them famous and earned them comfort- grand prix there. able lives. The 19-year-old, who won the European F3 title last The nation in which a player represents is year and is a member of Ferrari's young driver academy, often the subject of debate. Every player has will also test Alfa Romeo's new car on the Wednesday. a story to defend their decision if they de- babwe for Australia at the age of 18. Gary (41) He plays for Surrey in English domestic crick- “I am really looking forward to what I’m sure will be cide against playing for their country of birth. later moved to play rugby in Scotland. Iron- et and the Kings XI Punjab in the Indian Pre- a great experience,” he said. “But for the moment, I am The majority however opt for a country that ically he won his first Scotland cap against mier League. This season he is playing for the consciously putting all thoughts of the test to one side, strengthens their chances of winning inter- Australia at Murrayfield in 2004 Sydney Sixers in the Big Bash League. because I am also very much looking forward to com- national honours, give them exposure, and Dave Denton (29) also chose to play for There is also Dereck Chisora who is now peting in my first F2 race and would like to focus 100 increase their balance sheets or where sports Scotland ahead of Zimbabwe because his a British professional boxer. He has held mul- percent on the weekend to come.” – thesun.com associations have a record of being run profes- mother was born in Glasgow. Dave was born tiple regional heavyweight championships, sionally and bringing out the best in players. in Marondera and learned the sport that has including the European, British, Common- Zimbabwe is no exception. The country has made him a key player for Leicester Tigers in wealth, WBA International and WBO Interna- Novak Djokovic goes down again lost established players who were born, grew England's Premiership Rugby in Zimbabwe. tional titles, and challenged once for the WBC up and learnt the sport here before choosing to He plays in the back row and can also play in title in 2012. Chisora (35) moved to England WORLD number one Novak Djokovic blamed “wasted represent other countries for different reasons. the second row. He has previously played for with his family in 1999 when he was 16 years. opportunities” after being beaten by Roberto Bautista These include Brain Mujati, Tonderai Edinburgh Rugby in the Pro 12 and for Bath Zimbabwe also lost Dean Burmester who Agut in the Miami Open fourth round. Chavhanga and Tendai Mtawarira who wore and Worcester Warriors in England. is now an established South African profes- The Serb, who went out in the third round of Indian the South African rugby team — Springboks The Zimbabwe cricket team — the Chev- sional golfer. Burmester (29) was born and Wells last week, was beaten 1-6 7-5 6-3 by the Spaniard. jersey. rons lost Zimbabwean born cricketers who raised in Mutare but represents South Africa Djokovic, a six-time champion in Miami, also lost to Mujati (34) an established prop from Bu- learnt the sport in the country but chose to rep- in golf. He played on the Sunshine Tour where Bautista Agut at the Qatar Open in January. lawayo played for the Springboks. However, resent other nations. he has won seven times, including the 2015 British number one Kyle Edmund earlier reacted an- his test career was cut short when he was de- Zimbabwe lost cricketer Gary Simon Bal- Golden Pilsener Zimbabwe Open and the 2017 grily to noise from the crowd during his loss to Ameri- clared ineligible to play because he was not lance to England. Gary (29) — born in Harare Tshwane Open. His father Mark Greville Bur- can John Isner. legally a South African citizen. He opted to is a left-handed batsman and a leg break bowl- mester played international cricket for Zimba- Edmund was trailing 5-3 in the second-set tie-break join Northampton Saints to further pursue his er, who currently plays for Yorkshire County bwe in the 90s. when the point was stopped after he heard a shout of rugby career. Cricket Club and England. There are however players like Everton “out” from the crowd. He is still a Zimbabwean citizen. There is also Steven Elworthy, a former defender, Brendan Galloway who was born Umpire Carlos Bernardes ruled Edmund had lost the Chavhange (35) from Masvingo has also South African cricketer, who has fostered a ca- in Zimbabwe but left for England at a very point as a result, with the Briton saying: “They keep worn the green and gold jersey. reer in administration with Cricket South Af- young age and would definitely identify with shouting every point, I keep hearing it.” Mtawarira (33) is a household name in rica and the England and Wale cricket board. that country than Zimbabwe. Isner served an ace on the next point to wrap up a 7-6 South African rugby. The veteran prop has rep- The Bulawayo born cricketer now 54 years Galloway (23) has not played a single min- (7-5) 7-6 (7-3) win. — bbc.com resented the Sharks for over a decade, making played as a right arm fast-medium bowler ute of Premier League football for Everton this over 160 senior appearances in Super Rugby, The Chevrons also lost Shane Snater who season, spending the majority of the campaign and last year become the first ever Springboks is now a Dutch cricketer. He made his first- with the under-23s. Eight years for stabbing tennis star prop to earn 100 Test caps. class debut for the Netherlands against Af- The former England u21 international’s fu- The Zimbabwe rugby team — the Chee- ghanistan in the 2015–17 ICC Intercontinental ture at Goodison Park is uncertain due to none THE man who stabbed tennis champion Petra Kvitova tahs also lost Takudzwa Ngwenya to the Unit- Cup in July 2016. Shane (23), who still has a game time. in her home in the Czech Republic has been sentenced to ed State of America. Ngwenya (33) plays on lot of years ahead of him, made his List A de- There is also Lewin Nyatanga who was eight years in jail. the wing for the United States national rugby but for the Netherlands against Hong Kong in born to a Zimbabwean father and Welsh Radim Zondra, 33, went to her flat in 2016 saying he union team and San Diego Legion in Ma- the ICC World Cricket League Championship mother in Wales. Nyatanga (30) made 34 in- needed to inspect the boiler. He then grabbed Kvitova jor League Rugby. He made his mark in the in February 2017. ternational appearances for the Wales national from behind and held a knife to her throat. 2007 Rugby World Cup for America with tries Cricketers Tom and Samuel Curran who team. She suffered severe wounds to her left hand in the fight against South Africa and Samoa. play cricket in England could have played for He previously held the record for the to free herself but returned to tennis five months later. David Pocock (30) from Gweru is an es- Zimbabwe a sport they mastered at Hartman youngest player to represent Wales when he Appearing at a regional court in Brno, Zondra denied tablished openside flanker and vice-captain of House when they used to stay in Zimbabwe. made his international debut at the age of 17. all charges against him. the Brumbies in Australia. He has represented Their late father Kevin was a respected In February 2018, it was reported he retired Zondra, who is currently serving a prison sentence Australia — commonly known as the Walla- cricketer who represented Zimbabwe at the from soccer to focus on family life and is now for another crime, was convicted of serious battery and bies and has over 80 caps. 1983 and 1987 Cricket World Cup. Samuel a personal trainer. illegal entry into Kvitova's apartment. The 29-year-old The Cheetahs also lost Micheal Patrick Wil- (20) plays for Surrey and England. He is a He played for Sunderland, Derby County player, who is currently the world number two, told the liams (27) to England. He plays for Leicester left-handed batsman and left-arm medium-fast and Bristol City. court last month there was "blood all over the place" after Tigers as a lock but he can also play at flanker. bowler. The International Cricket Council There are other promising sports people ei- the December 2016 attack. The Bulawayo born star received his first named him as one of the five breakout stars in ther born in Zimbabwe or to Zimbabwean par- She added that she had offered Zondra money to call up to the senior England squad by coach men’s cricket in 2018. ents but based beyond our borders who are yet leave, eventually giving him 10,000 Czech crowns Eddie Jones on August 1, 2016. Tom (24) his elder brother has represented to decide which country they will represent. (£341; $440). The court has ordered him to pay this Scotland gained Scott Gary who left Zim- England in Tests and One Day Internationals. Only time will tell. [email protected] back.— mirror.co.uk