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NSSA DATABASE IN SHAMBLES: Page 2 $12 News Worth Knowing Foreign buys dominate ZSE: Page 6 August 8-14 2019 ESTABLISHED 1969 @ FingazLive www.fi ngaz.co.zw Facebook: The Financial Gazette ZSE Report The All Share Index lost 0,98 percent on Wednesday to close at 181,72 points. Econet lost $0,1358 to set- Dreadful tle at $1,4000, while Innscor was down $0,0596 to close at $2,1256, and Meikles traded $0,0480 lower at $1,2520. The Industrial Index was down one percent to close at 606,20 points, while the Top 10 Index lost 1,4 percent to close at 168,90 points. The Minings Index was fl at at 244,6 recession points. Currencies (Bloomberg) % change ◀ USD:ZAR 15,0953 1,11 ◀ EUR:USD 1,1217 0,16 GBP:USD 1,2144 0,22 ◀ USD: JPY 105,7600 0,67 ◀ Stock Markets 181,72 0,98 ZSE (All Share) ◀ ZSE (Minings) 244,60 0,00 12,249,00 0,95 numbers JSE ◀ FTSE 100 7 171,36 0,04 1,56 Dow 26 029,52 Commodities ◀ Gold 1 497,98 1,60 Platinum 852,44 0,03 ◀ ◀◀ Brent Oil 57,45 2,53 ◀ Grains ( ) Grain SA ◀ White Maize ZAR 2 374,56 1.20 predicted ◀ Soya ZAR 4 649,79 0.5 1.3 Kuda Chideme “It was just an exercise of re-adjusting fi gures and Wheat ZAR 2 655,14 ◀ Special Projects Editor there were miscalculations. Most of the adjustments have also been overtaken by infl ation ... he also un- Nedbank issues IMBABWE’S stuttering economy could con- derstated the impact of the drought,” he said. tract by as much as seven percent this year, Crucially, Hawkins said, the best solution to Zim- strong warning amid the country’s rising infl ation and wors- Z babwe’s deepening economic problems was a resolu- NEDBANK group chief executive Mike ening power, fuel and foreign currency shortages, tion of the country’s political crisis. Brown has issued a strong warning to the experts warn. “It is high time that we accept that the problem is South African government stating that the This comes as under pressure Finance minister not entirely economic. It requires a political solution country is fast running out of both time Mthuli Ncube has fi nally conceded, in his mid-term of some sort, which will start off with reforms on the and money, and urgently needs structural supplementary budget last week, that the local econ- political front. reforms to stem economic and fi scal de- terioration. omy is now in recession. “Once we have that political accommodation, the He sounded the warning on Tuesday “I would say we are looking at a contraction of economic programme will take shape,” he said. after the lender released its results for as much as seven percent. The outlook is going to be John Robertson, another economist, also said the the six months to end June, reporting a more of three-digit infl ation and an exchange rate of country’s relentless power cuts would deal a major CIMAS Medical Aid Society chief executive Vulindlela 2,6 percent growth in headline earnings between 13 and 14 (against the US dollar),” econo- blow to Zimbabwe’s dying economy. Ndlovu says his company has plans to invest signifi cant- to R6,9 billion. ly in new health facilities across the country as part of “While there were some positive mist Tony Hawkins said. “If the power cuts are not addressed, then the developments post the elections in May, Commenting on Ncube’s mid-term supplemen- economy’s contraction is going to be severe,” he strategies to provide members with integrated health- care solutions. The group is among the top fi ve health progress on structural reforms and policy tary budget, he also told The Financial Gazette this said. remained far too slow,” he said. – Busi- week that “there was nothing much” in it. To Page 2 insurers in Zimbabwe. Picture by Freedom Mashava ness Report Page 2 | August 8-14 2019 The Financial Gazette National News Dreadful recession numbers predicted From Page 1 “The situation is getting worse ... and the be- ginning of the year was also not that good. I can say we are looking at a contraction in the NSSA data region of six percent,” he added. Jee-A Van der Linde, an economic expert with regional think-tank NKC African Eco- nomics, weighed in, saying there was “no in shambles: doubt” that Zimbabwe’s economy would con- tract beyond projections in 2019. “From our perspective, there is a good chance that the economy could contract by perhaps a bit more. In May, we projected an Audit report economic contraction of 3,7 percent for 2019. “That has changed now,” he said, adding Kuda Chideme that the next few months would be “crucial” Special Projects Editor for the country. Van der Linde also said while Ncube’s “op- HE National Social Security Authority's timism and determination to get the economy (Nssa) database is in a “shambolic state” back on track does not go unnoticed, unfortu- T after the compulsory pensions fund “hired nately, he has been handed a poisoned chal- an IT partner, whose system was not good enough ice following years of economic mismanage- for its business”, a forensic audit by BDO Zim- ment”. babwe (BDO) has revealed. “The economy is misfiring. A fiscal stim- Mthuli Ncube Chris Mugaga With Twenty Third Century Systems (TTCS) ulus is required, but the government simply having been contracted to upgrade its computer does not have the money. has been re-introduced, but the greenback is amid much optimism, Ncube insisted that systems for $10 million in 2013, stress tests on “Moreover, adverse weather conditions still preferred. Zimbabwe’s sickly economy would not slide the Germany-backed SAP enterprise planning have exacerbated the situation and placed “People across the board want certainty, into a recession. software exposed quite a number of irregularities undue pressure on the agricultural and power but as long as foreign investors remain un- This was despite the International Mone- and risks, which include millions of payments generation sectors,” he said. convinced, Zimbabwe will not see the foreign tary Fund (IMF) and the World Bank having “to secondary beneficiaries without primary con- “Zimbabwe needs to see money flow into investment inflows needed to jump-start the warned that this was inevitable — with the tributions” and chronic weaknesses in the Bene- the country, but before that happens, investors IMF projecting that the economy would con- fit Payment Systems. would want to see a more stable economic en- “While Ncube’s optimism and deter- tract by as much as 5,2 percent. mination to get the economy back “Payroll processing involved manual inter- vironment. Ncube’s admission last week that Zimba- vention outside the SAP system. The manual in- “The authorities are aware of this, hence on track does not go unnoticed, un- bwe’s economy would contract comes as the tervention was prone to manipulation and there- country is experiencing 18-hour power out- the announcement that the Indigenisation and fortunately, he has been handed a fore was condemned by the auditors,” the BDO ages, amid sharp increases in power and fuel Economic Empowerment Act will be repealed. poisoned chalice following years of report said. prices, of up to 300 percent and 500 percent ‘The mining sector is the one clear channel economic mismanagement. The econ- Close to a million database entries did not respectively. through which the country can get its econo- omy is misfiring. A fiscal stimulus is have contributors’ monthly salaries. Salaries are It also comes after Zimbabwe’s year-on- my up and running again,” Van de Linde said required, but the government simply used to calculate pension. further. year official inflation spiked to a staggering does not have the money.” A total 880 000 database entries did not have “At this point, I would say risk perceptions 175 percent last month, from 96 percent in employee numbers, which is a perquisite when are arguably the foremost driver of inflation June. applying for and claiming pension. expectations in the economy. Jee-A Van der Linde In the meantime, Ncube has stopped the A total of 79 000 entries did not have national “The Zimbabwean consumer is highly economy,” he said. publication of year-on-year inflation statistics, identity numbers while 35 000 did not have so- skeptical over government policy, and for On his part, Chris Mugaga — the Zimba- arguing unconvincingly that these do not give good reason, and trying to instill confidence bwe National Chamber of Commerce (ZNCC) a correct position of the economy — after the cial security numbers. through regulation and restrictions has histor- chief executive — said tourism was the only country dumped the use of the US dollar as a “The system did not produce a clean and ically not proven very successful,” the NKC industry where growth was expected. base currency, opting for the Zimbabwe dollar. complete payroll during the period it was being researcher added. “We were banking on mining and agricul- But the country’s re-introduced local cur- tested. It also allowed duplicate records, which Van de Linde also said of equally grave ture but because of the drought and commod- rency is currently on the back foot against the would then compromise the integrity and accura- concern was the country’s “currency crisis”. ity prices coming under pressure there is no greenback on both the official interbank and cy of the database,” it said. “The authorities must somehow find a fea- doubt that we are going into recession,” he parallel markets — trading at US$1:Z$9,5 and As controversies continued to dog the way in sible solution for the currency crisis in order said.