Mining, manufacturing to anchor growth: P3

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July 22-28 2021 ESTABLISHED 1969 @ FingazLive www.fingaz.co.zw Facebook: The Financial Gazette Z$350

ZSE Report THE bourse had a positive session Wednes- day that saw most indices regaining ground after three sessions of registering losses. The Mining Index however declined by 100,52 points following losses in Bindura. Turnover was at $80,2 million from a total quantity of 7,5 m shares amid decent trade Silver values in DZL and Delta. Top gainers were Star Africa, Axia and ART. Currencies (Bloomberg) % change ◀ USD:ZAR 14,6533 0,35 EUR:USD 1,1775 0,05 ◀ ◀ GBP:USD 1,3628 0,52 ◀ USD: JPY 110,0700 0,20 Stock Markets ◀ ZSE All Share 6,529,36 0,64 ◀ Top 10 3,408,93 0,21 ◀ JSE 66,378.80 1,00 ◀ lining FTSE 100 6,995.37 1,66 ◀ Dow 34,511.99 1,62

Commodities Gold 1,805,56 0,27 ◀ ◀ Platinum 1,078,03 0,81 ◀ Brent Oil 70,11 1,10 Grains (Grain SA) ◀ White Maize ZAR 3,312 55,00 ◀ Soya ZAR 7,726 36,00 ◀ Wheat ZAR 5,360 39,00 to SA Gvt projects 5pct growth for 2022 ZIMBABWE’s economy is pro- jected to grow by 5,4 percent in 2022, anchored on growth in mining and manufacturing, the government has said. “In 2022, the government will prioritise to sustain macroeco- nomic stability, to create a con- chaosPaul Nyakazeya the horrific human and infrastructure cost ducive environment for business Group Digital Editor of the violent protests — the worst spate investment and to improve the of chaos experienced by Pretoria since living standards of the majori- HERE could be a silver lining to apartheid ended in 1994. ty,” Information minister Monica the devastating riots which recent- Speaking to The Financial Gazette this Mutsvangwa said this week. ly pummelled South Africa (SA) if week, business leaders and economists Stable electricity generation T is also expected to power indus- this spurs the local manufacturing sector said while Zimbabwe would likely expe- and chips away at Zimbabwe’s high de- rience disruptions to key supplies, at least trial output and boost economic Zimre Holdings Limited (ZHL) group chief executive, Stanley performance. This year's eco- pendence on the neighbouring country, in the short-term, the South African may- Kudenga, says the regional capitalisation plan is being done in phases, nomic forecast of 7 percent is set experts say. hem also presented local industry with an with the first phase requiring between US$7 million to US$10 million. on account of a good agriculture This comes as SA, the regional eco- opportunity to increase production to meet The diversified financial services and insurance group aims to invest season, which recorded above av- nomic powerhouse and Zimbabwe’s big- the country’s needs. US$15 million into its regional operations in the next 18 months. erage maize and tobacco output. gest trading partner, continues to reel from To Page 2 See interview on Page 26 See also Page 3 Page 2 | July 22-28 2021 The Financial Gazette National News Silver lining to SA chaos From Page 1 “SA is Zimbabwe’s biggest trading part- “workers there need the jobs and wages, “SA is the biggest economy in the region The president of the Confederation of ner and that means raw materials, spares, and so most of them will be keen to get back and the second biggest in Africa. Its role in Zimbabwe Industries (CZI), Henry Ruz- equipment, machinery, accessories and gro- to work,” he said. the African economy is dependent on confi- vidzo, was among those who called for ceries, among other things, may be in short This comes as SA freighters have warned dence and the ability of its citizens to trade enhanced local production to increase the supply in the next few days, considering of the country losing to other gateways such freely. SA is of critical importance to the availability of domestic goods on the mar- that SA’s major highways linking to Durban as walvis Bay in Namibia and Beira in Mo- region and what is going on there has pro- ket. Port were blockaded for some time. zambique. found implications for many. “Logistic challenges are likely to result “It (this recent anarchy) can be positive “what has happened in SA in this last “For Zimbabwe, the majority of our for- following the disruptions. This will result in the sense that this will be an opportuni- week has also impacted hugely on other eign trade is done through SA ports and any in higher costs of exporting and increased ty for Zimbabwean consumers to start landlocked countries in the Sadc disruptions will have profound implications working capital requirements. embracing locally-produced region which rely heavily for us. even the movement of our high val- “An estimated 50 percent of the local products and enhance an on SA for imports of fuel, ue platinum products to SA are under threat industry's raw materials come from South appetite for Zimbabwean groceries, pharmaceuti- and so are our cashflows. This is very seri- Africa. The hope is thus, that the unrest has products and services. cals, mining equipment, ous,” he said. been stabilised and that supply lines will not “Therefore, this could vehicle spares, tyres and Victor Bhoroma, an economic analyst, be further disrupted. propel the ‘Buy Zimba- much more. last week also said Zimbabwe’s trade with “However, the events exposed the vul- bwe’ campaign to anoth- “Those countries that SA was likely to suffer significantly, while nerability of the region and points to the er level and ultimately have used SA as a transit there was also a risk of raw material short- urgent need for greater emphasis on devel- increase local production, route for exports through ages locally going forward. oping internal capacity to provide raw mate- which we have been clam- the port of Durban will “The violent protests will seriously im- rials for industry,” Ruzvidzo said. ouring for, for a long time,” now turn to alternate routes pact Zimbabwe's trade with SA valued at Shipping and Forwarding Agents Associ- the CCZ said. for exports, such as walvis over US$340 million a month. ation of Zimbabwe (SFAAZ) chief execu- However, Zimbabwe Henry Ruzvidzo Bay, Beira and Dar es Sa- The burning of property, especially haul- tive Joseph Musariri also told The Financial National Chamber of Com- laam,” the chief executive age trucks, warehouses and gun violence Gazette that local industries needed to ramp merce (ZNCC) chief exec- of the Federation of east will disturb the flow of raw materials to up production in the aftermath of SA’s ugly utive, Chris Mugaga, said the recent riots and Southern African Road Transport Asso- various countries in the Sadc region and be- riots. were actually likely to affect local compa- ciation, Mike Fitzmaurice, said. yond. “The movement of … goods has been nies’ production performances. This also comes after experts told The “The port of Durban is the gateway to disrupted. what can be done is not immedi- “The trade between the two countries Financial Gazette last week that the star- trade for most Sadc countries. export move- ate, but we must gradually move away from has been heavily interrupted and the move- tling mayhem which had been witnessed in ment will be slowed down by the violence over-reliance on South Africa. ment of goods to inland Zimbabwe will be SA was ominous for all neighbouring coun- and unrest depending on how long the pro- “we need to take full advantage of the disrupted — hence companies’ operations tries because when “Pretoria sneezes, Hara- tests last. African Continental Free Trade Area (Af- will be affected and this may result in some re and Sadc invariably catch a cold.” "This will lead to temporary shortages of CFTA) and local production must be ramped shortages,” he said. The violent protests shuttered business- raw materials and other commodities,” he up to avoid shortages when commodities Veteran economist, John Robertson, said es and disrupted transport networks in the said. are imported,” he said. the expected disruptions in supply chains country’s two richest provinces, Gauteng The SA riots came in the wake of the re- On its part, the Consumer Council of were likely to be minimal and would not and kwaZulu-Natal, with essential services cent shock jailing of the country’s former Zimbabwe (CCZ) said while the recent last for a long time. like banking operations, healthcare and president Jacob Zuma. anarchy in SA had had a negative impact “Raw materials supplied from South Af- power maintenance negatively impacted. Authorities in Pretoria have so far an- on the country’s imports, it also provided rican factories will probably be affected by economist eddie Cross said then that the nounced that at least 215 people had died a “silver lining” for local companies to in- delays at Beitbridge, rather than at the fac- situation in Zimbabwe’s southern border during the ugly disturbances. crease production. tories. needed to be taken very seriously. [email protected]

week of deadly riots in South Africa could cost the country What the South African about R50 billion ($3,4 billion) in SA economy set to take A Property Owners lost output, while 150 000 jobs have been placed at risk, the country's Presidency Association also said: said, citing estimates from the South Af- R50 billion hit from riots rican Property Owners Association. n The looters targeted 150 000 About 200 malls were targeted and informal traders. some 3 000 shops were looted during the n In total 40 000 businesses protests, while 200 banks and post of- fices were vandalised, acting minister in have been affected by the protests. the Presidency khumbudzo Ntshavheni n About 1 400 automatic bank told reporters in Pretoria, the capital, on teller machines were damaged. Tuesday. n Some 100 malls were burnt The protests were triggered by the July 7 jailing of former South African Presi- or significantly damaged by fire. dent Jacob Zuma, and quickly generated n Stock worth about R1,5 bil- into a free-for-all in the kwaZulu-Natal lion was lost in the eastern city of and Gauteng provinces in which at least Durban alone. 215 people died. No unrest has been reported since n 11 warehouses and 8 facto- Monday, and most malls have reopened, ries were extensively damaged. Ntshavheni said. In a meeting with more than 90 chief executives and industry leaders on Tues- day, President Cyril Ramaphosa con- turing capacity of vital goods as quickly ceded that his administration was inade- as possible and put in place contingen- quately prepared to deal with the scale of cy measures where facilities have been the unrest and the security forces didn’t badly damaged or stocks looted or de- respond quickly enough. stroyed,” Ramaphosa said in his open- Most of the 25 000 soldiers that had ing remarks that were distributed by his been instructed to assist the police main- office. tain stability had been deployed, he said. “we need to ensure that medicines “we need to take every available step are available, health facilities are func- to ensure the return our ports and rail tioning, and the Covid-19 testing and lines to full operation, restore manufac- vaccination sites are fully operational.” — Moneyweb The Financial Gazette July 22-28 2021 | Page 3 National News Mining, manufacturing to anchor 2022 growth

Nelson Gahadza once poorly regarded Zim dollar has been rela- Staff Writer tively stable against the greenback over the past year, on the back of a raft of measures introduced HE government says mining and manufac- by authorities, including the launch of the foreign turing will anchor economic growth next currency auction system. Tyear, with its main priority on sustaining The forex auction system has been credited macroeconomic stability to create a lucrative en- with stopping a precipitous decline in the value vironment for business to thrive. of the once wobbly local unit — which has seen This is according to a budget strategy paper the prices of basic goods and services stabilising, tabled by Finance minister Mthuli Ncube in Cab- and the once rampant black market being kept in inet on Tuesday. check. This comes as the manufacturing sector is on a As a result of all this, business has com- recovery path — with capacity utilisation expect- mended the government for its recent cock- ed to reach 56 percent from 45 percent — amid tail of measures that have put the economy attempts by the authorities to create a US$12 bil- on a growth path — including the unveiling of lion mining economy by 2023. the foreign currency auction system, which Speaking during the weekly post-Cabinet has improved access to hard currencies. Capacity utilisation is projected to increase, as authorities target a meeting briefing this week, Information minister [email protected] US$12 billion mining economy by 2023. Monica Mutsvangwa said the economy would re- main on an upward trajectory, driven by the min- ing and manufacturing sectors respectively. “The 2022 Budget Strategy Paper is part of the annual budget preparatory process issued in order for stakeholders to understand macro-fiscal issues that will guide prioritisation of budget allo- cations,” Mutsvangwa said. She said the projected economic growth fo- cus in 2022 would be anchored on growth in the mining, manufacturing and electricity generation sectors. Priority areas included inclusive growth and macro-economic stability, developing and sup- porting productive value chains, optimising value in the natural resources, infrastructure, informa- tion communication technologies and the digital economy. Other priorities are social protection, human capital development and well-being, effective institution building and governance and engage- ment and re-engagement and debt restructuring. In other projections, Mutsvangwa said govern- ment revenue was expected to improve from 16,4 percent at $390,8 billion of the Gross Domestic Product (GDP) in 2021 to 17,8 percent at $533,2 billion in 2022, while expenditure will increase to 19,4 percent to $579,1 billion of the GDP from the 18,2 percent at $421,6 billion in 2021. According to Mutsvangwa, the 2022 national budget would also aim to improve the living stan- dards of the majority. Cabinet also adopted the 2021 Mid-Year Fis- cal Policy and Economic Review and Balance of Payment Developments, the State of the Financial Sector and Outlook, which was presented by the finance minister. Mutsvangwa said the 2021 Mid-Year Fiscal Policy will be presented next Thursday. This comes amid encouraging signs of economic re- covery in the last 12 months. The central bank and the government expect annual inflation to drop below 10 percent by De- cember 2021. All this comes as industry remains bullish that the country’s improving economy will continue on an upward trajectory during the second quarter of this year. In its latest economic quarterly bulletin, the Confederation of Zimbabwe Industries (CZI), said it also expected capacity utilisation to in- crease. “Business is bullish on the prospects of the economy in the second quarter, with the country’s expanding coronavirus vaccination programme an added contributory factor to the growing con- fidence. “Business is bullish .., but remains alive to the risks that may unsettle the stability at the back of which the current recovery is premised. “The challenges may provide a lifeline to un- desirable arbitrage opportunities in the economy, which can undermine the gains achieved so far,” the CZI said. The CZI report also comes at a time when the Page 4 | July 22-28 2021 The Financial Gazette National News Govt to rope in private capital to bolster agric Farai Mabeza “The financing of the summer cropping fertilisers, seed, fuel and agrochemicals and and tobacco,” she said. Staff Writer and livestock programme will be through the consistent supply of key utilities such as pow- The 2021-2022 season will also witness public and private sector as well as er, fuel and water to farmers. the operationalisation of the Rural Presidential HE government says it will open up development partners. There will be continuous Horticulture Plan which will target priority more space to private capital as it bids “…The National Crop support of the targeted farm- fruit trees, namely: passion fruit (granadilla), Tto build on the momentum from the Production Plan for the ers with irrigation and pecan nuts, apple, guava, mango, lemon, avo- 2020/21 agriculture season and register an- 2021-2022 season also mechanisation services cado and macadamia. other surplus in the coming summer cropping includes proposals to improve efficiencies Each targeted household will be given 10 period. on private sector-led and climate proofing, trees of each fruit variety, depending on suit- This comes after Zimbabwe produced programmes, catego- according to Mutsvan- ability of the fruit tree to the agro-ecological more than 3 million tonnes of cereals during rised into potato value gwa. regions and potential income to be generated. the 2020/21 season, giving a surplus of 828 chain financing and Capacitating the “The first phase running to December 2021 000 tonnes. private sector com- extension and advisory has a target of 500 000 seedlings,” the Infor- Information minister Monica Mutsvang- modity value chain service delivery system mation minister said. wa told the media after this week’s Cabinet financing or contract to enhance responsive- “In addition, a total of 35 000 gardens will meeting that the government’s strategic objec- farming,” she added. ness to farmers’ needs; be established, and each will be equipped with tive for the 2021/22 season is to sustainably The government will and strengthening gov- a solar borehole, cattle water trough and an increase crop production and productivity to finance the Presidential Crop ernment-wide coordination, ablution facility. Each garden will cater for a meet and surpass national requirements for and Livestock Input Schemes monitoring and evaluation will village, school or youth ward centre”. both human consumption and industrial use. through the Treasury Monica Mutsvangwa also be integral to the The Agriculture Recovery Plan (2020- “This will be achieved through the imple- and provide default strategy. 2023) was developed to engender the en- mentation of the agriculture recovery plan an- guarantee for pro- “The strategy will visaged agricultural transformation agenda chored on, inter-alia, ... access to appropriate grammes funded through Agricultural Fi- result in more area being put to crop produc- aimed at food security, import substitution, di- finance for inputs and working capital involv- nance Corporation and CBZ Bank. tion as evidenced by the proposed increase of versified exports, value addition, employment, ing the private and public financial services Mutsvangwa said the government would the hectarage of the following crops: maize; and improved incomes and standards of liv- sectors,” Mutsvangwa said. also ensure timely provision of inputs such as sorghum; pearl millet; finger millet; soya bean ing. [email protected] Zimre to raise funds Covid-19 restrictions hit AG operations for highway project Emmerson Njanjamangezi outbreak of Covid-19. Despite the coronavirus pandemic dis- Nelson Gahadza Deputy News Editor Due to the spike in Covid 19 cases in the ruptions, Chiri was optimistic that her office Staff Writer country, the auditor-general said the bulk of will be able to complete the 2020 audit re- UDITOR-GENERAL (AG) Mil- audits for the 2020 financial year as well as port. IMRE Holdings (Zimre) says it has dred Chiri says the resurgent spike Fund Accounts audit will be done virtually. “We are now in the process of going dig- been mandated by the government to in Covid 19 cases has hamstrung her “Audits by their very own nature are sup- ital. We have started acquiring tools of trade Zconduct a feasibility study and raise A capital for the Beitbridge-Bulawayo-Victoria office’s operations. posed to be an interface as we ask questions to be able to carry on our mandate. For most of the year, government depart- to accountants and whomever we may direct “The ministry of Finance has asked us Falls highway project. ments operated at 40 percent staffing levels different cases for clarity's sake. to submit a list of tools that we need to use This comes as the insurance group has ex- in line with level four lockdown measures “But as the cases continue to spike, we with the view of procuring it for us to be panded its focus to wealth creation through its instituted by authorities to contain the dead- are now relying more on virtual audits. We able to carry out our mandate. investment unit — Zimre Capital. ly respiratory disease. have around 20 office orderlies who have “It’s still a process. We want to be able to “Already Zimre Capital has taken the step Chiri told the Parliamentary committee tested positive and this has caused a bit of a fully digitise such that we are on top of the towards impact projects and now has a man- on Public Accounts Monday that the mea- scare for the office. game to carry out our mandate. date on the Beitbridge-Bulawayo-Vic Falls sures will further restrict audit coverage to “Despite that, you know the government "We should be able to connect to gov- highway as part of a concession of financial government ministries and state enterprise has directed office manning to be reduced ernment ministries and parastatals financial advisors which will be responsible for raising head offices and leave out outpost visits en- to 40 percent. We have also reduced office applications,” Chiri added. capital for the project,” chief executive Stan- tirely for the 2020 audit report. manning to that threshold though we are an In her recent state enterprises and para- ley Kudenga told The Financial Gazette last For the recently issued 2019 report, the essential service. statals report for the financial year ended week. AG was only able to visit 138 (0,05 percent) “This is mainly because if you visit any December 31, 2019, Chiri said most of the He said the group has already secured stations compared to 549 (14 percent) in the government ministry or state enterprise, parastatals face extreme cases of weak cor- US$3 million to conduct the feasibility study. previous financial year, mainly due to the in- most employees are working from home porate governance, resulting in huge finan- “It is going to be a concession and the study adequacy of financial resources, fuel and the and there isn’t much that you can do.” cial losses. [email protected] is going to tell us whether we are doing duali- sation or widening of the road. Therefore, the study will give us an idea of what we need to raise.” The Beitbridge-Victoria Falls highway joins Zimbabwe’s borders with neighbours Afdis sales improve on better market access Zambia and South Africa. The highway also links Zimbabwe to the Trans-African High- Adelaide Moyo from trading enabled the company way, which runs from Cairo to Gaborone Features Editor to meet its current obligations, Af- through to Pretoria, Kimberly. dis said. Zimbabwe is among countries in the Com- PIRITS maker and distribu- “Consistency in government mon market for Eastern and Southern Africa tor, African Distillers (Afdis) policies plays a pivotal role in that have established dedicated road funds Sregistered a 56 percent in- the performance of the economy. and road development agencies to undertake crease in volumes during the first Management will continue to fo- maintenance, and development of roads for quarter ended June 30, 2021 than cus on market share growth, prof- both the regional and national road networks. prior quarter, owing to improved itability, innovation, and cost man- The country’s road network, which was access to the market. agement to enhance shareholder previously considered among the best in Af- In a trading update, Afdis said value,” Afdis said. rica, has suffered over a decade of neglect due the environment for the quarter Afdis recently said it is plan- to economic problems. under review was relatively stable. ning to invest in the local produc- Under the National Development Strategy The firm said revenue for the tion of some imported products to 1 (NDS1), the government committed to in- first quarter increased by 38 - per cut its import bill. frastructure development, supported by the Afdis manufactures, distributes and markets branded spirits, cent in inflation adjusted terms, In a statement accompanying private sector. ciders and wines. whilst in historic terms it grew by the company’s results for the nine The NDS1 is a five-year economic man- 228 percent. brown spirits. Wines and ready to drink months to March 31, 2021, board agement master plan through to the year 2025, “Revenue growth was due to The company recently (RTD) volumes grew 113 percent chairman Pearson Gowero said with focus on building, expanding and restor- firm demand for the company’s launched a new product, Gold and 116 percent respectively, rid- localising production is among ing infrastructure. products which resulted in higher Blend Number 9, and Afdis said ing on improved availability in the Afdis’ immediate priorities as it Under the strategy, the government is tar- volumes,” Afdis said. its widespread market acceptance quarter. looks to increase revenues, limit geting to increase the number of kilometres of The company manufactures, contributed to spirits volume The firm said the good agri- costs and improve production ef- road network converted to meet Southern Af- distributes and markets branded growth. culture season as well as the par- ficiencies. rica Transport and Communications Commis- spirits, ciders and wines for the “The business, however, con- tial easing of Covid-19 lockdown “This will ensure improved sion standards from five percent to 10 percent Zimbabwe market and for export. tinued to witness an influx of restrictions improved consumer business profitability and reduced by 2025 and to increase the number of kilome- Afdis’ spirits volume grew by cheap and illicit spirits in small spend and the general business op- foreign currency requirements,” tres of road network in good condition from 14 17 percent over prior year, benefit- packs from several producers in erating conditions. The availabili- Gowero said. 702km to 24 500km by 2025. ing from the good performance of the market,” Afdis said. ty of foreign currency generated [email protected] See also Page 26 [email protected] The Financial Gazette July 22-28 2021 | Page 5 National News New insurance law seeks to protect clients Farai Mabeza sions of section 5 of the Insurance and Pensions with the commission during each quarter year. the settlement of claims and unjustified repudi- Staff Writer Commission (Issuance of General Guidelines According to Ipec, examples of unfair prac- ation of claims are among the practices deemed and Standards) Regulations, 2020 published tices for short-term policies include unjustified by the regulator as unfair. NSURANCE and pension companies face in Statutory Instrument 69 of 2020, where an delays in settling valid claims; failure to pay in- Funeral policies that refuse to pay or pay closure if they fall foul of a new industry insurance or pension service provider fails to terest when such delays occur; and financial in- very little cash in lieu of service, contrary to framework meant to protect customers and comply with the provisions of this framework,” stitutions and hire purchase shops directing all what is provided for in the Insurance Act; de- end unfair practices. Ipec said. business to an associated insurance company. sign and sell inappropriate products and ser- IAccording to the industry regulator, the In- “Insurance and pension service providers Misleading marketing material such as vices, for instance funeral policies that do not surance and Pensions Commission (Ipec), firms shall furnish the commission with a typology promising to settle claims within 24 hours mature; or unilaterally increase contract terms, which receive more than 50 valid complaints report of the complaints received during each where there are no structures to ensure such especially for maturing policies without policy- from customers would be shut down under the quarter, as part of their quarterly returns. a turnaround time are also considered unfair holders’ consent, among other practices, will be Treating Customers Fairly Framework, which “Where an insurance or pension service practices, together with use of unqualified penalised. took effect on June 1. provider has more than 50 valid complaints and unlicensed personnel such as bank staff, Late payment of pension benefits; forced This came amid concerns that some insur- against it, during the quarter, the commission churches or community groups to sell insurance commutations particularly during the hyper- ance and pension companies were short-chang- may revoke the insurance or pension service products and services. inflation era; paying benefits that do not meet ing clients and declining to address their con- provider’s registration, in terms of the Insur- “They are (unqualified and unlicensed per- members’ reasonable expectations; writing off cerns. ance Act… or the Pension and Provident Funds sonnel) unable to explain the full characteris- of contributions arrears by some sponsoring The commission, it said, shall monitor and Act… as the case may be,” the commission tics of products, which may result in customers employers and or fund administrators without test all insurance and pension service providers’ added. making ill-informed decisions,” Ipec said. engaging scheme members and accruing little culture, strategies and behaviour in the treat- Ipec would publish in its quarterly and an- For life insurance policies, the design and to no interest on outstanding contributions are ment of their clients. nual reports the names of entities that have 20 sale of inappropriate products and services; included on the list for the pensions sector. “The commission shall invoke the provi- or more valid complaints against them lodged high penalties for policy terminations; delay in [email protected] Basel to inform Zim crypto-regulation Adelaide Moyo Features Editor

HE Reserve Bank of Zimbabwe (RBZ) says the country's crypto-assets regulation and supervision Tmechanism, which is yet to be finalised, will be in- formed by guidance from the Basel Committee on Bank- ing Supervision (Basel). The apex bank does not allow official trading in digital assets through the banking system, as it believes exposure may have “negative spill-over effects and impact on fi- nancial stability.” RBZ’s head of communications, Khumbulani Shirichena, said the apex bank took the approach to test and design an appropriate regulatory framework for vir- tual assets with other financial regulators in the country. “We will, therefore, continue to monitor and assess implications of financial technologies including virtual currencies like cryptocurrencies on the financial system. Furthermore, our responses will be guided in due course by the outcomes of a consultative paper on prudential treatment of crypto assets exposure being prepared by the Basel Committee,” Shirichena said. Basel, which is the primary global standard setter for the prudential regulation of banks ― has said cryptocur- rencies should come with the toughest bank capital rules to avoid putting the wider financial system at risk should their value suddenly collapse. Shirichena said the apex bank remains cautious on cryptocurrencies, adding that “the challenges posed by Fintech innovations, which include risks of cyber-attacks, money laundering and threats to data privacy are a real concern. “We are working with other regulators, not only to foster responsible Fintech innovation, but also to ensure adequate regulation in line with international practices. Through such stakeholder consultations and sharing of experiences with other countries, we are making good progress in coming up with a framework that suits and works for Zimbabwe,” he said. Last week, Cabinet approved additional principles for the anti-money laundering and proceeds of crime law to counter the risk of money laundering and terrorist financ- ing stemming from virtual assets. Information minister Monica Mutsvangwa, told a post Cabinet briefing that the Money Laundering and Proceeds of Crime Act and Securities and Exchanges Act will be amended to reflect the changes. “Cabinet reports that the Money Laundering and Pro- ceeds of Crime Act will be amended to provide for identi- fication and assessment of money laundering and terrorist financing risks that may arise in relation to virtual assets, acts and the activities,” Mutsvangwa said. She said the Act will be amended to ensure that sanc- tions are also applicable to virtual asset service providers, their directors and senior management. Global regulators have warned that the “growth of crypto-assets and related services has the potential to raise financial stability concerns and increase risks faced by banks”. Governments around the world, including India and China, have started to heavily regulate, or even outlaw, the use of cryptocurrency. [email protected] Page 6 | July 22-28 2021 The Financial Gazette National News Firm diamond prices bump ZCDC income

Adelaide Moyo government had an interest through Features Editor Zimbabwe Mining Development Cor- poration (ZMDC) such as DMC and TATE-OWNED diamond min- Marange. er, Zimbabwe Consolidated Di- “ZCDC has created a provision for Samond Corporation (ZCDC), all the doubtful debts owed by related says firm prices during the first half parties, while a comprehensive lega- of the year, averaging US$85,60 per cy debt management is being worked carat against an expected price of on, through the Ministry of Mines,” US$68.30, drove the company’s prof- ZCDC said. itability. The company also said it had en- The firm recorded a profit of gaged an independent professional US$26,3 million during the half year firm to do a business valuation of its against a target of US$18,6 million. investment in DTZ-Ozgeo whose “We managed to achieve sales of results will be used to determine the 756 518 carats during the half year appropriate value of the company’s against a budget of 1,1 million carats investment. but our full year target is three million “This transaction had the effect carats so we are on track to achieve of giving ZCDC access to the mine that” ZCDC management told a Port- and the use of DTZ Portal and assets folio Committee on Mines this week. which included diamond processing Sales of diamonds during the half and sorting plants and earth moving year raked in US$64,7 million, against vehicles. Currently, ZCDC is utilising a target of US$78,6 million. these plants on exploratory work at The firm said it achieved US$20,6 Portal E,” ZCDC said. production cost per carat during the Regarding the loopholes noted by half year against a target of US$29,7 the auditor-general on diamond stocks per carat due to various optimisation reconciliation by ZCDC, the manage- initiatives. ment attributed these to delays in the Responding to issues raised in “operationalisation of sales and distri- the 2019 auditor-general’s report, bution module in the SAP system”. ZCDC said its failure to account for “ZCDC has since engaged anoth- related party debts and investments er local SAP support agent and the was mainly a result of legacy debts sales and distribution module is now it inherited from previous diamond running and up to date. This module mining companies. The diamond is linked to the inventory module in miner was established as a merger SAP. ZCDC and Minerals Marketing of DTZ-Ozgeo, Marange Resources, Corporation of Zimbabwe (MMCZ) Kusena Diamonds, Diamond Mining are now doing weekly, monthly, quar- Company (DMC) and Gye Nyame, terly reconciliations as well as af- when Anjin and several other miners ter-sales reconciliations of diamond were de-licensed by the government. stocks,” ZCDC said. “Consolidation of mining conces- To curb leakages, ZCDC said it had sions in Chiadzwa resulted in some commissioned a security optimising financial obligations being transferred exercise to enhance security across its onto the ZCDC balance sheet from entire diamond value chain. former mining companies in which [email protected]

Padenga sheds 47pct in early VFEX trades Omega Ukama The VFEX was launched last Oc- Companies and Markets Editor tober, with authorities hoping it would shore-up foreign capital inflows fol- ADENGA Holdings (Padenga) lowing years of massive investor lost 47 percent in early trades flight. Pon the Victoria Falls Stock Ex- “... hopefully by September we will change (VFEX), to close Tuesday at have a third counter. So, we are mak- US$0,19. ing progress and more counters will Shares of the crocodile skins pro- join,” Finance minister Mthuli Ncube cessor started trading on the recently said during a recent interface with the launched exchange last Monday at insurance and pensions industry. US$0,36 after it migrated from the The minister did not reveal the ZWL$-denominated Zimbabwe Stock identity of the company expected to Exchange, a move management hopes list next, but exchange principals have will improve the company’s ability to said they are negotiating with “sever- raise capital in foreign currency. al” entities that have shown interest. “The VFEX will allow Padenga to In May, the Treasury unveiled raise capital… from a wider and deep- measures that include an incremental er potential market, to expand existing exports scheme allowing entities list- business… establish new businesses. ed on the VFEX to retain 100 percent "It will also fund acquisitions… of their proceeds in foreign currency, and its gold mining subsidiary Dal- on volumes above their monthly av- laglio Investments,” Padenga said in erage. a circular to shareholders pre-migra- The measures are meant to attract tion. listings on the exchange, among other The company grew by supplying objectives. crocodile skins to luxury brands in The country had previously re- Europe, but mining now accounts for stricted retention of export earnings in 57 percent of its revenue. foreign currency to 60 percent, with Meanwhile, SeedCo International, the balance paid in local currency at the only other listing on VFEX, was the official exchange rate. unchanged during the period under The VFEX says it is also planning review, closing at US$0,25. to introduce a low capital board to en- Interest in the VFEX seems to be courage listings. growing as the US$-denominated Current rules stipulate a minimum market is anticipating a third listing in subscribed capital of US$3 million. September. [email protected] The Financial Gazette July 22-28 2021 | Page 7 National News Zida partners Singapore firm Freedom Mashava and In a statement during a virtual the ministry of Foreign Affairs of over 60 statutory boards to customise Emmerson Njanjamangezi signing ceremony with SCE in Ha- Singapore to respond effectively to solutions for its foreign partners. Staff Writers rare yesterday, Zida chief executive the many foreign requests, and to tap The objective of the Zida-CSE Douglas Munatsi said Zimbabwe has into Singapore’s development expe- cooperation would be to help Zim- IMBABWE Investment De- a lot to learn from Singapore in terms rience. babwe to apply some of the lessons velopment Agency (Zida) of investment promotion. The primary role of SCE is to learned to reconceive better arrange- Zhas partnered Singapore Co- “Singapore has huge experience serve as the focal point of access for ments for the existing investment operation Enterprise (SCE) for the in investment promotion, economic foreign parties interested in adapting promotion, economic zone develop- cross pollination of ideas to develop zones development and manage- Singapore’s public sector expertise ment and operations work. special economic zones, and other ment, which has evolved over the for their own development journey. Speaking at the signing ceremony, investment promotion initiatives. years. In this regard, SCE aims to be the AF Power country head, Jonathan The deal was brokered by AF “We are in the process of devel- Douglas Munatsi key vehicle for exporting Singapore’s Chalk, said he hopes the initiative Power, a global independent power oping our own economic zones and I public sector expertise and to ensure will further help to re-establish and producer, currently constructing a 50 think we have lots to learn from SCE. kind of investment into the spaces," that requests for the country's pub- develop partnerships between Zim- MW solar power plant in Bulawayo "The development of any success- Munatsi said. lic sector expertise are met with the babwe and Singapore. set for completion in the second ful SEZ is dependent on good plan- SCE is an agency formed by the highest standards. SCE works close- [email protected] quarter of 2022. ning and ability to obtain the right ministry of Trade and Industry and ly with Singapore’s 15 ministries and See also Page 8 Zim still finalising AfCFTA tariff offer Emmerson Njanjamangezi Deputy News Editor

IMBABWE is still fine-tuning its tariff offer framework for member states of the African ZContinent Free Trade Area (AfCFTA). This is despite the fact that Zimbabwe ratified the treaty in May 2019, becoming one of the earli- est countries to embrace the deal as the government continues to search for new entry opportunities for local companies into the lucrative African market outside of its traditional trading areas. The AfCFTA agreement came into effect on Jan- uary 1, 2021. A total of 54 of Africa's 55 countries have agreed, in principle, to participate in the agreement, and 41 have submitted their tariff offers. Only Eritrea remains as the sole outsider to date. For trade to happen under AfCFTA, in addition to ratification, a country needs to make a tariff offer to its partners. The process includes stakeholder en- gagement within government and the private sector. “Internal processes are still ongoing with other ministries and the private sector and once they are finalised a final tariff offer will be tabled before member states,” Industry and Commerce permanent secretary Mavis Sibanda told The Financial Gazette this week. Though there has been a lot of buzz around Af- CFTA, only 34 countries have officially signed it and only a few have ratified it to date. In principle, a total of 15 countries need to ratify the agreement to enable its full enforcement on the continent. If successfully implemented, AfCFTA will be the largest free trade area agreement in the world. The continental free trade area offers huge op- portunities to grow intra trade between African countries, particularly after the devastating impact of Covid-19 on trade in most regions. Africa’s intra-continental trade currently sits around the 17 percent mark. The United Nations has predicted that, on the back of the successful imple- mentation of AfCFTA, that figure could rise to as much as 53 percent. In contrast, the proportion of trade in Europe that takes place intra-continentally is around 60 percent. Among a host of other positive impacts of Af- CFTA, the free trade arrangement will likely be a significant catalyst of trade between African coun- tries, while at the same time creating opportunity for participating countries to retain much of their forex flows within the continent. According to the IMF, every week in sub-Sa- haran Africa, the region’s economies export about US$6,5 billion of merchandise, but only about one- fifth is destined for other countries in the region. [email protected] Page 8 | July 22-28 2021 The Financial Gazette Leader Page

News Worth Knowing Private capital will spur agric output THE government’s plan to open up more space for private capital in agriculture and build on the momentum from the 2020/21 season is right on the money. Agriculture contributes 18 percent of the country’s Gross Domestic Product, 40 percent of national export earnings and 60 percent of raw materials to the industrial Zida chief executive Douglas Munatsi flanked by AF Power country head, Jonathan Chalk and Zida CFO Duduzile Shin- sector. ya, follow proceedings during a virtual MoU signing ceremony with Singapore Cooperation Enterprise (SCE) in Harare yesterday. SCE is Singapore's investment promotion body championing enterprise development and supporting the When agriculture performs poorly, the whole economy growth of the Asian country as a hub for global trading and startups. suffers. With predicted growth of 5,4 percent in 2022, the im- portance of the sector to those prospects cannot be over emphasised. Lots of IMF programmes are As it opens up the sector to private capital, the govern- ment can replicate the tobacco funding mechanism, which has rejuvenated production for the crop. never completed, here's why But unlike in tobacco farming, the model will be funded he International Monetary data for all 763 IMF programmes ing market economies showed that using local capital. Fund (IMF) gives loans to between 1980 and 2015. Our aim a permanent interruption increased The government says it will provide a default guaran- Tcountries in economic trou- was to test if the number of con- the cost of borrowing by govern- tee for programmes funded through the Agriculture Fi- ble. In exchange, countries must ditions was related to programme ments by about 3 percent. nance Corporation and CBZ Bank. The CBZ Agro Yield implement a programme of painful interruption. We found that each Programme interruptions lead programme has produced significant returns for the bank policy reforms. Countries rarely additional condition increases the to adverse financial market reac- complete these programmes. likelihood of a programme inter- tions. When investors lose con- and should be extended to other private capital sources. We set out to uncover why. ruption by at least 1,1 percent — a fidence in a country’s ability to The insurance and pensions industry holds funds which IMF programmes usually last moderate effect given the average undertake market-liberalising re- can be funnelled to the sector and boost production. one to three years. Countries must failure rate of 58,6 percent, but form, they require higher interest However, there is a need to weed out arbitrage oppor- meet policy conditions in regular programmes typically include 22 rates on their loans. Borrowing tunities and side marketing to ensure that the sector be- reviews — typically every three such conditions, which boosts the countries that failed to implement comes a safe investment zone. to six months — to gain access failure probability accordingly. IMF programmes therefore faced to tranches of funding. Failure Conditions to privatise state- the risk of more volatile capital It is also critical to ensure that bona fide farmers access to implement them interrupts the owned enterprises, liberalise prices flows and higher refinancing costs. the contract farming opportunities. programme. Of 763 programmes and overhaul the public sector were Ultimately, higher financing costs The African Continent Free Trade Area (AfCFTA) pres- between 1980 and 2015, 512 were especially prone to cause imple- made them even more dependent ents an elastic demand for Zimbabwe’s fresh produce, of- interrupted, of which 291 did not mentation failure. This is because on the Fund, entrapping them in a fering bright prospects for return on investment. resume — as our data from the these conditions mobilise domes- cycle of dependency. Irrigation development will allow crop production all IMF Monitor Database shows. tic opposition that can thwart pro- What to do about it This is a very high failure rate gramme implementation. Our findings have important year round. given that the IMF enters into ev- Our explanation for our find- implications for theories of com- The right funding can allow us to cut the import bill ery agreement on the basis that it ings was that over-ambitious pro- pliance as well as for policymak- on cereals and fresh produce, while expanding our export wants to see it completed. gramme designs were the result ing in international organisations. base at the same time. We argue that reform pro- of intra-organisational bargaining Given the detrimental effects of Thus, the government's strategic objective for the grammes may be unimplementable within the IMF bureaucracy. While IMF programme interruptions for by design. We show that they sim- an area department within the IMF developing countries, it is puzzling 2021/22 season to sustainably increase crop production ply entail too many policy condi- drafted the initial reform pro- that the reform of IMF condition- and productivity, anchored on private capital investments tions. even reform-minded gov- gramme, functional departments ality is lagging. The IMF has often is welcome, but can and should be refined and developed. ernments struggle to implement used their amendment power to blamed weak capacity and lack them. Our research also investi- include policy conditions that they of “political will” for poor imple- gated financial market responses cared about, without due consider- mentation. This predominant view to programme interruptions. We ation of local circumstances, which was challenged by horst Köhler, found that programme failure has led to overambitious programmes. a former IMF managing director,

EDITORIAL MARKETING serious repercussions for econom- who launched a “streamlining ini- ic development. Failure sends a tiative”. Its goal was to reduce the Associate Editor Advertising Manager Open Forum Chris Gumunyu: [email protected] Edwin Vengesa: [email protected] negative signal to markets, caus- number of conditions. ing them to lose confidence in the But the number of conditions News Editor Brand Executive Sales & Advertising with Shingirai Chirikuutsi: [email protected] Kudakwashe Chideme: [email protected] ability of governments to stabilise remained high. This is partly be- Senior Sales Consultant the economy and undertake re- Bernhard Reinsberg cause of the rigid process by which Deputy News Editor Susan Mapininga: [email protected] Emmerson Njanjamangezi: [email protected] forms. The result very often is a & Thomas Stubbs new IMF programmes come Senior Sales Executives rise in inflation and increases in about. When a country requests a Companies Editor Christobel Washaya: [email protected] Omega Ukama: [email protected] Christinah Machaka: [email protected] capital flight that deprive countries programme, the draft agreement of much-needed capital for invest- We are not the first to voice such must be approved by all nine of Group Digital Editor Sales Representatives - Harare Paul Nyakazeya: [email protected] Precious Mazhambe: [email protected] ment in public goods and services. concerns about the complexity of the IMF’s sector departments. This Edreck: [email protected] Behind the failure rate the IMF’s programmes. The fund’s empowers departments to include Chief Sub Editor Sales Representative - Bulawayo Tawanda Chiwara: [email protected] Some scholars have blamed the own Independent evaluation Of- their “pet issues”, which results in Clever Pedzisai: [email protected] failure rate on a lack of motivation fice noted in relation to the 1994 overambitious programmes. Features & Surveys Editor Brand Executive - Events by borrowing governments. Fac- programme of the Philippines: An implication of our find- Adelaide Moyo: [email protected] Kerina Chizemo: [email protected] ing pressures from special inter- The IMF was simultaneously ings is a need for greater leader- Staff Writers Brand Executive - Subscriptions Nelson Gahadza: [email protected] Tatenda Taka: [email protected] est groups, such as labour unions pushing for reforms to the oil pric- ship to ensure policy coherence Farai Mabeza: [email protected] and business groups, governments ing system and to tax policy, each in IMF programmes. This is even Subscriptions Representatives Senior Photographer Ronald Madiviko: [email protected] often backpedal from previous of which required congressional more important right now with Freedom Mashava: [email protected] Elizabeth Nyamaruze: [email protected] commitments. In addition, schol- approval … In the view of some a record-high number of 80 new Editor-In-Chief ars have found that countries that staff, this may have been overam- IMF lending arrangements due to Production Supervisor Guthrie Munyuki: [email protected] Kudzai Rushambwa: [email protected] are friends with powerful donors bitious, exceeding the capacity of the Covid-19 crisis in developing Managing Director Christopher Goko: [email protected] like the US also experience more the political system to digest sever- countries. Under the dual Covid-19 implementation failure. They re- al major reforms at the same time. health and economic crises, these ceive favourable treatment, such The dependency trap programmes run the risk of having as regaining access to IMF loans Our research also investigat- too many conditions. This may much faster than other countries, ed financial market responses to drive countries into financial disas- creating a moral hazard problem. programme interruptions. Using ter … and back to the IMF again. In other words, encouraging bad annual data for all developing n Reinsberg is an Interna- VOLUNTARY MEDIA COUNCIL OF ZIMBABWE behaviour. countries, we found that investors tional Relations lecturer at Uni- 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 Zimbabwe at: We looked at whether the pro- rate a country lower when it had a versity of Glasgow and Stubbs No 34 Colenbrander Rd, Milton Park, Harare. Telephone: 04-778096 / 778006 24 Hr Complaints line: 0772 125 659 grammes themselves were in fact permanent interruption of an IMF is an International Relations se- Email: [email protected] or [email protected] Twitter: @vmcz http://www.vmcz.co.zw | Facebook page: vmcz Zimbabwe unimplementable. To do this we programme. nior lecturer at Royal Holloway collected detailed compliance Monthly data from 30 emerg- University of London. The Financial Gazette July 22-28 2021 | Page 9 News Pfizer/BioNTech strike Covid-19 manufacturing deal with Biovac

FIZER Inc and BioNTech SE Wednesday said they had struck a deal for South Africa’s Bio- Pvac Institute to process and distribute over 100 million doses a year of their Covid-19 vaccine for the African Union beginning in 2022. Technical transfer, on-site development and equip- ment installation activities will begin immediately, they said. Biovac, a public-private partnership focused on vaccine production, will receive Covid-19 vaccine drug substance made in plants in Europe, and will begin so-called fill-finish operations, the last stage of drug manufacturing and packaging, in 2022. Pfizer announced the partnership ahead of a speech by chief executive Albert Bourla at a World Trade Or- ganisation (WTO) summit. WTO members have been in talks for months on waiving drug firms’ intellectual property (IP) rights for Covid-19 vaccines. Most developing countries support the waiver but several wealthy countries remain strongly opposed, saying it will deter research that allowed Covid-19 vaccines to be produced so quickly. In his prepared remarks, Bourla made a plea for the group to maintain the current IP rules. “Weakening IP rules will only discourage the type of unprecedented innovation which brought vaccines forward in record time and make it harder for compa- nies to collaborate going forward,” Bourla said. Last month, the World Health Organisation said it was setting up a hub, or training facility, in South Afri- ca to give companies there the know-how and licenses to produce Covid-19 vaccines. Biovac was one of the initial participants in the hub. Biovac has partnered with Pfizer since 2015 to manufacture and distribute its Prevenar 13 pneumonia vaccine. — Moneyweb EU plans to make Bitcoin transfers more traceable

ROPOSED changes to European Union (EU) law would force companies that transfer Bit- Pcoin or other crypto-assets to collect details on the recipient and sender. The proposals would make crypto-assets more traceable, the EU Commission said, and would help stop money-laundering and the financing of terrorism. The new rules would also prohibit providing anon- ymous crypto-asset wallets. The proposals could take two years to become law. The Commission argued that crypto-asset transfers should be subject to the same anti-money-laundering rules as wire transfers. "Given that virtual assets transfers are subject to similar money-laundering and terrorist-financing risks as wire funds transfers... it therefore appears logical to use the same legislative instrument to address these common issues," the commission wrote. While some crypto-asset service providers are al- ready covered by anti-money-laundering rules, the new proposals would "extend these rules to the entire crypto-sector, obliging all service providers to con- duct due diligence on their customers," the commis- sion explained. Under the proposals, a company transferring cryp- to-assets for a customer would be obliged to include their name, address, date of birth and account number, and the name of the recipient. David Gerard, author of Attack of the 50 Foot Blockchain, told the BBC: "This is just applying exist- ing rules to crypto. This has been coming since 2019." He said that although these were European propos- als their impact would reach much further. "If you want to make real money, you have to fol- low the rules of real money," he said. – bbc.com Page 10 | July 22-28 2021 The Financial Gazette News Zimra bids to plug tax evasion

Emmerson Njanjamangezi Deputy News Editor

HE Zimbabwe Revenue Authority (Zimra) is carrying out risk-based Taudits with assistance from tax inspectors, as well as intensifying intelli- gence gathering on business activities to plug revenue leakages. In a statement accompanying the tax collector’s second quarter performance this week, Zimra vice board chairperson, Josephine Matambo, said there was a de- liberate effort to implement various reve- nue enhancement measures. “…we are embarking on a foreign cur- rency voluntary disclosure compliance project. The project’s focus is to encour- age taxpayers to voluntarily disclose their foreign currency activities and remit to Zimra what is due to it. This project will ensure continued voluntary compliance by taxpayers who are trading in foreign currency. “We are also carrying out risk-based Zimra is intensifying intelligence gathering on business activities, as part of audits with the assistance of Tax Inspec- efforts to plug revenue leakages. tors Without Borders (TIWB) experts. Zimra was engaging with other security growth in nominal terms as Zimra paid The audits are mainly focusing on cases agents on border patrols and roadblocks. out refunds of $2.29 billion during the with high revenue potential,” Matambo She said efforts were also underway to quarter under review. said. coordinate fully with other border author- Cumulatively, net revenue collections Apart from intensified intelligence ities from countries with which Zimba- for the first half of 2021 amounted to gathering, Matambo said the authority bwe shares borders. $195 billion after deducting refunds of continues to implement its debt recovery For the period under review, Zimra’s $4,64 billion to achieve an 8,16 percent strategy including effective follow up on net revenue collections surpassed the tar- surplus above target. outstanding taxes. geted $94 billion by 16 percent to $109 In comparison with the same period in “Dedicated teams to follow up on debt billion while net revenue grew by 202 2020 where a total of $20 billion was col- were created within the Debt Manage- percent in inflation adjusted terms com- lected, nominal net revenue collections ment Unit,” Matambo added. pared to the same period in 2020. grew by 430 percent. To curb smuggling, Matambo said All revenue heads registered positive [email protected]

Pan-African re-insurer's ‘Tax deferments for Zim bet pays off EST African reinsurance giant, Waica Rein- struggling firms’ surance (Waica) says its Zimbabwe business Wgrew by 138 percent in 2020, resulting in a proportionate growth in the unit’s contribution to group Emmerson Njanjamangezi which falls under Lending and Eq- gross written premium (GWP) to eight percent. Deputy News Editor uity was hamstrung by lack of funds The group, which reported a GWP of US$102,6 mil- last year. lion for the year, acquired a local reinsurance company — HE government is offering tax “We had planned to use US$240 Colonnade Re — through a US$5,5 million investment in deferments and duty rebate to million for our re-industrialisation 2018, with the business being subsequently re-branded to support struggling companies plan for the year. We would use WaicaRe Zimbabwe. T Besides Zimbabwe, Waica also has operations in Gha- hit hard by the coronavirus pandem- US$60 million each quarter but no ic. funds were released by the Treasury na, Nigeria, Ivory Coast, Tunisia and Kenya. Local firms were already reeling in the first quarter. We only received In its recently published annual report, the group noted under operational pressures arising US$60 million in Q2. that the Middle East market led GWP growth momentum with 157 percent, followed by Tunisia, which now serves from limited access to fresh capital “Even up to the end of the year, the whole of northern Africa, with 153 percent. long before the pandemic broke out. we haven’t received any funding. “Zimbabwe had a robust growth of 138 percent fol- “The ministry is providing an This has really affected our re-in- lowed by Kenya with 103 percent, Asia with 99 percent, enabling environment by assist- dustrialisation strategy and we have the Gambia 90 percent,” the company said. ing companies to access funding since engaged the Treasury over that It added that the rest of Africa grew by 41 percent, through IDC, providing support let- matter.” while Francophone West Africa grew by 28 percent. ters towards accessing fiscal incen- The Zimbabwe National Cham- “Only Liberia had a negative growth of three percent,” tives such as rebate of duty, VAT de- ber of Commerce (ZNCC) has over the group noted. ferments, among others,” Permanent the years been advocating for the use In terms of GPW for the year, the group’s dominant secretary in the Industry and Com- of tax holidays and rebates as stimu- market Nigeria contributed 31 percent of total GWP merce ministry, Mavis Sibanda, told lus packages for industry. However, whilst Ghana brought in 16 percent. The Financial Gazette this week. the cumbersome and costly approval “Altogether, Anglophone West Africa, which is our Earlier this year, the Industry procedures for rebates make it near home market, continues to be our backbone by contribut- ministry’s head of quality, Mildred impossible for businesses to benefit ing 49 percent of our total GWP, with Francophone West Machiri, told a parliamentary com- from available tax incentives. Africa contributing 10 percent, Tunisia 11 percent, whilst mittee on Industry and Commerce “In some cases, Zimra refuses the rest of Africa, Middle East and Asia brought in seven percent, five percent and four percent respectively. that the ministry had only managed to offer rebates to companies that "Our subsidiaries in Zimbabwe and Kenya contrib- to resuscitate seven companies in would have received approvals from uted eight percent and seven percent respectively,” the 2020 out of a targeted 11 due to line ministries and there is need for a group noted. Covid-19 disruptions and lack of one-stop-shop for rebate processing. The group said its improved underwriting result was funds. “Delays at border posts, per- underpinned by an increase in business volumes and a “Companies revival is a process mit processing, among many oth- growth in claims reserve. which takes a lot of time. We have er non-tariff barriers are increas- Net claims increased by 63 percent to $30,5 started, but it needs a lot of time. ing the cost of doing business.” million in 2020 from $18,7 million in 2019. The companies’ revival action plan, [email protected] — Staff Writer July 22-28 2021 Page 11 The Financial Gazette Companies&Markets BRIEFS ZSE speeds up direct payments Discretionary HE Zimbabwe Stock Exchange (ZSE) this week in- troduced a new feature for its direct access service Tto speed-up payment processing for sellers. In a statement Monday, chief executive Justin Bgoni said with the new feature ― ZSE Direct Instant ― pro- ceeds from a sell order will be credited to the investor’s stocks top ZSE wallet rather than being transferred to their bank account. “… sale proceeds will be credited to your ZSE Direct Omega Ukama wallet on the same trading day… now you do not have to Companies and Markets Editor wait for the settlement cycle of trade-date plus three days to receive your sell proceeds,” he said. ONSUMER discretionary ZSE Direct was introduced last September to allow in- stocks were the best performing vestors direct access to the market without manual inter- Ccluster on the Zimbabwe Stock vention by brokers. – Staff Writer Exchange (ZSE) during the second quarter of 2021, with aggregate returns Woolworths’ online sales spike of 60 percent, compared to 38 percent for the All-Share Index. PANDEMIC-LED boom in online shopping in The bunch is made up of companies South Africa has seen Woolworths report a 118 that provide non-essential services and Apercent increase in online food sales in the 52- products such as Edgars, Truworths and week period to June 27, 2021. Simbisa Brands. “Online sales grew by 117,9 percent over the current During the period, the sector became year, contributing 2,3 percent to our South African food the major cluster on the exchange, clos- sales. This was further supported by the expanded click- ing with a capitalisation weight of 17,8 and-collect offering and the roll-out of our on-demand de- percent after surpassing technology ― livery service, Woolies Dash,” the retailer said in a trading 15 percent. statement Monday. Within the consumer discretionary Online sales in the Woolworths Fashion, Beauty and group, Dairibord Holdings, Delta and Home business also grew spectacularly ― up by 114,4 Afdis were the best performing count- percent year on year ― as consumers shunned physical ers, registering returns of 116 percent, stores in favour of online shopping. – moneyweb 57 and 56 percent, respectively. The gains were on the back of the Apple pushes back office return sector’s rebound during the fi rst half ger, the business will be constrained as tion to divest. of the year on account of a rebound in measures to contain the virus affected On the other hand, Delta and Econet PPLE is pushing back its return to offi ce dead- demand within the economy amid the restaurants and other consumer facing have traditionally been amongst the line by at least a month to October at the earliest, ZWL$’s stabilisation, and the opening operations.” most traded securities on the local responding to a resurgence of Covid-19 variants up of the economy due to the loosening Meanwhile, turnover on the ex- bourse. A across many countries, people familiar with the matter of Covid-19 restrictions. change amounted to $11,5 billion rep- Analysts say there remains a pos- said. Restrictions have, however, been re- resenting 20 percent compared to the sibility of continued growth for the The iPhone maker becomes one of the fi rst US tech introduced to curb resurgent infections. previous quarter. exchange due to triggers from money giants to delay plans for a return to normality as Covid-19 “Discretionary spending will di- The growth in the value of trades was supply growth and, or positive fi rm per- persists around the world and cases involving a highly minish as people struggle to afford underpinned by trades in FBC Holdings formance “as the asset prices for certain transmissible variant increase. essentials due to shrinking disposable ($2,72 billion), First Mutual Holdings listed companies on the ZSE still remain Apple will give its employees at least a month’s warn- income,” Fincent Securities said in a ($1,48 billion), Delta ($1,46 billion) and below their intrinsic value”. ing before mandating a return to offi ces, the people said, recent note. Econet ($1,04 billion). “It has to be mentioned that greater asking not to be identifi ed discussing internal policy. “Innscor has good business in bor- The relatively high value traded for prudence on company selection is now Chief executive offi cer Tim Cook said in June that em- derline areas which can be both discre- FBC was buoyed by the exit of one of warranted as some companies are trad- ployees should begin returning to offi ces in early Septem- tionary and essential. Demand for fast the bank’s technical partners, while ac- ing above their fair valuations,” First ber for at least three days a week. foods has remained high for Simbisa tivity in FMH was underpinned by in- Mutual Wealth said in a recent note. In an internal memo, Cook cited the availability of but as long as Covid-19 worries lin- vestor interest following NSSA’s inten- newsdesk@fi ngaz.co.zw vaccinations and declining infection rates. – Bloomberg Page 12 | July 22-28 2021 The Financial Gazette Companies & Markets Ariston in positive outlook Adelaide Moyo The company said revenue remains predomi- Features Editor nantly in foreign currency. “Whilst the group sells its export crops ex-farm RISTON Holdings (Ariston) is optimistic gate, reduced availability of containers for out- that its operations will not be disrupted ward storage and logistics channels being affected Amuch by continuing Covid-19 restrictions, by Covid-19 has resulted in a slower movement of and expects to sell all its stocks by year-end. goods from the farms.” The agro-industrial company, however, said the All of Ariston’s estates remained operational sale of stone fruit was negatively affected by lock- during the lockdown as the group’s operations are down measures during the quarter ended June 30, classified as essential services. 2021, resulting in a disproportionately larger vol- Tea production at 2 500 tonnes slightly increased ume being sold to processors at discounted prices. Ariston's tea sales increased to 2 200 tonnes from 1 700 tonnes. during the period under review, from 2 400 tonnes The company said while the return of level four recorded in the prior period, due to good weather lockdown is expected to continue to put some pres- the group commences its prepara- be an area of focus,” Ariston said in a conditions experienced in the current period. sure on low disposable incomes, it does not expect tions for the next summer season. All trading update. Tea sales registered an increase to 2 200 the effect to be significant on its operations “as this factories go into shutdown for repairs Ariston’s revenue for the nine tonnes during the period from 1 700 tonnes is the tail end of the season”. and maintenance while lands and or- months ended June 30, 2021 in- recorded in the prior quarter, mainly driv- “The group is confident that all stocks still on chards are prepared for the next sea- creased by three percent compared to en by an increase in local market demand. hand will be sold by year end. In this new quarter son. Cost containment continues to the prior period. [email protected] Cambria refocuses Adelaide Moyo Features Editor

AMBRIA Africa (Cambria) says its sub- sidiary, Millchem, has exited the industrial Cchemicals sector and focused on producing hand sanitisers and disinfectants. Cambria, a Zimbabwe-focused investment company, has in the past downsized its local oper- ations to contain costs due to the harsh economic environment. Millchem is producing antiseptics in a joint venture with the Merken Group, a personal health- care company based in Zimbabwe, Cambria said in a statement accompanying its results for the six months ended February 28, 2021. The group said its revenue continued to drop as a result of discontinuing Millchem's industrial sales, to $526 000 from $1,31 million in the prior comparative period. Profit, however, increased by 164 percent on the back of asset sales and above break-even opera- tions to $95 000 compared to $36 000 during the same period in 2020. Group finance costs dropped by 63 percent to $13 000 in during the half year under review com- pared to $35 000 in the prior period as the group's outstanding debt nears zero. Payserv Africa improved consolidated prof- it after tax earnings by 157 percent to $136 000 during the half year from $53 000 on the back of improved performance by Autopay and Tradanet. Tradanet continued to provide loan manage- ment services to CABS, the country's largest build- ing society. With the delta variant of the Covid-19 having forced a renewed lockdown in Zimbabwe, chief executive Samir Shasha said Cambria did not ex- pect this to negatively impact its operations in the short term. “The lockdown may also spur sales of sanitiser products by our joint venture partner, Merken,” he said. Cambria cash net of liabilities outside Zim- babwe totalled $1,3 million as at May 31, 2021, while a further US$50 000 was held in cash and US dollar denominated accounts in Zimbabwe. The company said it intends to negotiate with the Reserve Bank of Zimbabwe relating to blocked funds of US$1,39 million. [email protected] The Financial Gazette July 22-28 2021 | Page 13 Companies & Markets Delta banks on Covid-19 vaccination Farai Mabeza across the region, said business in ery across all beverage categories off Staff Writer Zimbabwe is also expected to bene- a low prior year base. fit from improved agricultural output “The historical cost figures re- ELTA Corporation (Del- and better access to foreign currency. flect lower and less frequent price ta), says it is optimistic that “The company expects a return to increases in line with a more stable DZimbabwe will soon relax reduced lockdown regulations and exchange rate and lower inflation in Covid-19 restrictions, resulting in improved business activity as the Zimbabwe,” Delta said. a rebound to business activity, on country increases the vaccination The company reported that it had account of the significant progress rollout programme. benefited from improved access to made in the rollout of vaccines in the “Further to this, it is hoped that foreign currency through domestic country. the monetary authorities implement nostro sales, but said this was dis- With a million people already in- their stated intentions for the auction rupted somewhat due to the unin- oculated, Zimbabwe is scaling up its exchange rate to reflect macro-eco- tended consequences of the policy vaccination programme as it aims to nomic developments following Zimbabwe aims to inoculate at least 10 million citizens. change under Statutory Instrument inoculate at least 10 million citizens. pronouncements made in the recent 127 of 2021. As of last week, the country had monetary policy,” the beverages the region have tightened restrictions by 114 percent during the quarter in There are also cost disparities received 4,2 million doses, with an- maker said in a trading update for the in response to resurgent waves of inflation adjusted terms and by 391 arising from the wide exchange rate other 1,5 million expected soon. quarter ended June 30, 2021. coronavirus infections. percent in historical cost terms. margins, Delta noted. Delta, which has operations This comes as authorities within Meanwhile, Delta’s revenue grew “This reflects the volume recov- [email protected] Tongaat expects firm demand

Adelaide Moyo Features Editor

IPPO Valley Estates’ parent, Tongaat Hulett (Tongaat), anticipates demand for sugar to Hremain firm in the Zimbabwe market, under- pinned by continued economic recovery. The regional sugar producer said raw sugar pro- duction for the 2021/22 season was forecast to in- crease to 431 000 tonnes in Zimbabwe, but remain below historical levels as cane yields begin to recover post-drought. “Export volumes are expected to normalise after higher-than-average exports during 2021,” Tongaat said in a statement accompanying its results for the year ended March 31, 2021. The company said capital expenditure is focussed on cane root replant programmes to improve cane yields in the future years. The JSE-listed group said its local operations gen- erated revenue in line with the prior year at R6,16 million during the year ended March 31, 2021, down seven percent on the prior year, and an adjusted oper- ating income of R2,12 million. “Our Zimbabwean operations are significant and continue performing well despite ongoing hyperinfla- tion effects,” Tongaat said. Sugar production declined by seven percent to 408 000 tonnes during the year under review, from 441 000 tonnes recorded in the prior period. Tongaat said production was affected by unsea- sonal rainfall during harvesting, which impacted cane quality and ended the season early, resulting in 555 hectares of sugarcane being carried over for harvest in the 2021/22 production season. “Sugarcane yields declined due to low water avail- ability and electricity interruptions, which limited ir- rigation during the crop’s peak growing season. Ex- cellent rains this year have ensured water security for irrigation for at least three seasons,” Tongaat said. Ethanol production increased by 10 percent to 31 million litres during the year under review, benefitting from increased molasses throughput imported from Mozambique and Zambia to maximise available ca- pacity. Local sugar sales volumes of 325 000 tonnes were in line with the previous year, as supply and pricing into the market were responsibly managed to prevent arbitrage into surrounding regional markets. The company said demand in the local market re- mained firm despite low disposable incomes. [email protected] Page 14 | July 22-28 2021 The Financial Gazette Companies & Markets Cottco targets 76pct increase in deliveries

Farai Mabeza its lint,” Cottco said. Staff Writer Cottco believes its cost containment activities and improved operational efficiencies should en- HE Cotton Company of Zimbabwe (Cottco) sure that the company does not incur a loss for the says it expects to buy 68 000 tonnes more financial year ended March 31, 2022. cotton from farmers this year compared to Side marketing continues to be a challenge for T the company although it has in recent years main- the previous season, on the back of improved rain- fall and availability of inputs. tained a market share of 90 percent. In a trading update for the first quarter ended The government recently promulgated Statutory June 30, 2021, the company said it was targeting Instrument (SI) 96 of 2021 to control the marketing an intake of 150 000 metric tonnes compared to the of selected key crops including cotton, and Cottco expects the SI to further curb the illegal sales. 82 479 metric tonnes received last year, an increase Cottco is targeting to buy 150 000 metric tonnes of cotton this year. of 76 percent. Meanwhile, the government has committed to “Rainfall in the current agronomic season im- intake target, while ginning had also of around US$0,88 per pound due clear the 2020 outstanding subsidy balances for proved and was more widely distributed than in the commenced. to increased demand and low world farmers who grew cotton under the Presidential past season. Delivery of inputs to farmers also im- Cottco also expects a boost from stocks. Input Scheme. proved for the season under review,” Cottco said. lint prices, which had dropped last “The order book is full for both “These balances arose as a support price to As of June 30, 2021 the company had received year to a low of US$0,56 per pound, lint and ginned seed and the company farmers to encourage increased cotton production,” 56 700 metric tonnes, representing 38 percent of its but have firmed this year to levels is forecasting to export 76 percent of Cottco explained. [email protected] ZSE extends lead over

ZIMBABWE regional markets MINISTRY OF TRANSPORT AND INFRASTRUCTURAL DEVELOPMENT Omega Ukama Companies and Markets Editor

HE Zimbabwe Stock Exchange (ZSE) extend- ed its lead over regional markets with gains of T38 percent during the second quarter of 2021, 18 percentage points ahead of the second best — the CONDOLENCES Ghana Stock Exchange (GSE). The ZSE gained 148 percent during the first half, THE LATE CDE EDZAI CHIMONYO compared to the GSE’s returns of 36 percent, and third placed Lusaka Stock Exchange’s 19 percent. It comes as Zimbabwe’s inflation has remained high, driving demand for "real assets" such as prop- erty and stocks. After wild swings during the first half of 2020, the ZWL$ has been stable for close to a year on account of the Reserve Bank of Zimbabwe’s monetary target- ing framework, and the success of its weekly foreign currency auctions. This has seen inflation coming down from 837 percent last July to 106 percent last month. Still, only Sudan has worse figures on the continent at 195 per- cent. Analysts, however, expect the ZSE’s bull runs to be less pronounced in real terms for the balance of the year as its capitalisation is now ahead of historical averages. “Notwithstanding the generally improved funda- mental performance of listed companies as indicated from the first cycle of published results in 2021, we believe that a number of ZSE listed companies, par- ticularly in the small and medium cap segment, may now be overvalued,” First Mutual Wealth said in a recent note. Still, the firm believes the market remains an infla- tion hedge offering better value retention and growth prospects than cash and other near cash assets cur- The Minister, (MP), Deputy Minister, rently. Hon Felix Tapiwa Mhona Hon Michael “Annual inflation has come down significantly in Madiro (MP), Permanent Secretary, Eng T K Chinyanga and the entire staff 2021 but it still remains high, thus investor preference in the Ministry of Transport and Infrastructural Development join His Excellen- remains skewed in the equity asset class for medium to long term investment tenures. cy, the President of the Republic of Zimbabwe, Cde Emmerson Dambudzo “The continued positive performance of the ZSE Mnangagwa, the entire nation and the Chimonyo family in mourning the un- will depend on the stability of the exchange rate on the one hand and whether or not companies continue timely passing on of Cde Edzai Chimonyo. to improve their operations going forward,” FMW The nation has been robbed of an icon of liberation struggle who dedicated his said, adding that major risks to these factors are poli- cy inconsistency “through abrupt policy changes that life to the emancipation and empowerment of his people. His contribution to the affect the relative stability currently prevailing as well history of our nation and continent will never be forgotten. as Covid-19’s impact on the business environment as national lockdowns are imposed or worse yet, if a full out health crisis occurs”. The firm warned that investors would have to be May Your Dear Soul Rest in Eternal Peace. selective in their choice of investments on the ZSE going forward. [email protected] The Financial Gazette July 22-28 2021 | Page 15 Column Unpacking basic banking concepts (II)

Tillas Gopoza of inflation on the public. CPI measures economy, including commodities such as Core inflation changes in prices, paid by consumers for a food and energy prices (e.g., oil and gas), On the other hand, core inflation HIS article is a continuation of last week’s basket of goods like WPI, but in this case (non-food-manufacturing or underlying in- instalment which seeks to define and explain using retail goods, instead of wholesale flation) is calculated from a consumer price Tsome key terminologies often used by mone- goods. index minus the volatile food and energy tary and fiscal authorities. It is important to note that these goods/ components. Various indicators are used to measure the eco- commodities can be classified as primary Headline inflation may not present an nomic and financial sector performance of an econ- goods (food, non-food, minerals, fuel, and accurate picture of an economy's inflation- omy and understanding these key indicators is of power) and manufactured goods, and then ary trend since sector-specific inflationary paramount importance to the public. their weighted average can then be taken to spikes are unlikely to persist. Today’s article will focus on one of the most used measure CPI. ● Gopoza is an economist. He writes in indicators of economic and financial performance Headline inflation his capacity as the chief economist for which is inflation. The RBZ always reports headline infla- the Bankers Association of Zimbabwe. Inflation tion and core inflation. Headline inflation which tend to be much more volatile and He can be contacted at [email protected]. In the field of economics, inflation is defined as a is a measure of the total inflation within an prone to inflationary spikes. zw general increase in the price level of goods and ser- vices in an economy over a period. The general increase or rise in prices results in each unit of currency buying fewer goods and ser- vices and therefore, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of ac- count within the economy. On the other hand, we have what is called de- flation, which is the opposite of inflation, which is defined as a sustained decrease in the general price level of goods and services. Measuring inflation The common measure of inflation is the inflation rate, which is the annualised percentage change in a general price index. Price indices are used to measure the relative price changes of goods and services in a region (general- ly a country) during a specific period (e.g., financial year, or quarter, or month) and we do have a variety of the price indices which will later be explained in this article. Using the price indices, we measure how much the price of goods and services have increased (in- flation) or decreased (deflation) from a fixed normal year, known as the base year, and with respect to this base year, a calculation is made on how much in- crease or decrease in prices happened in this current year. Generally, the price indices are used to measure the cost of living in order to determine salaries or wages necessary to maintain a constant standard of living. Price indices Goods and services are provided to the consumer by the producer and such the various price indices are calculated depending on the various stages/lev- els i.e. either at producer level (PPI), wholesale level (WPI), and retail/consumer level (at the retail mar- ket, from where consumers buy) – CPI. Producer Price Index (PPI) A producer price index (PPI) is a price index that measures the average changes in prices received by domestic producers for their output. PPI is used to track pure price changes at the producer level for goods as well as services. Wholesale Price Index (WPI) WPI is used to track the prices of goods at the wholesale stage (i.e., goods sold in bulk, rather than retailed), and traded between organisations, before being forwarded to consumers. It is impossible to calculate price changes of all the goods traded in an economy, and therefore it is logical to take a sample set, or 'basket of goods to measure the inflation of a few important goods/com- modities to determine the price changes in relation to a base year. WPI indicator tracks the price movement of each commodity individually, and then determine through the averaging principle employing techniques or methods such as the Laspeyres formula, Ten-day Price Index, etc. Consumer Price Index (CPI) While WPI is calculated in the wholesale stage, CPI is determined at the retail stage, where consum- ers are directly involved. Hence, the CPI method better measures the effect Page 16 | July 22-28 2021 The Financial Gazette Column Role of the board amidst a pandemic t Is without doubt that the Covid-19 pan- ronment. In addressing these challenges, the move with agility in the "new normal." of employees, customers and suppliers must be the top demic has turned the world upside down board should do the following: Additionally, directors must be cognisant priority for every board. the board must monitor man- Iand disrupted all areas of human life, in- a Counter volatility with vision – the of the fact that decisions made during the agement’s efforts to support containment of Covid-19 cluding businesses. Due to the unprecedent- board must accept and embrace change by pandemic must be guided by different prin- e.g. ensuring that employees in the workplace wear ed business disruption, the role of the board developing a clear, shared vision of the fu- ciples to those utilised before the pandemic. masks at all times, having employees report to work of directors in every company has changed ture. Specifically, boards need to exhibit excep- on alternate days to reduce the numbers and to ensure dramatically. a Counter uncer- tional leadership skills social distancing in the workplace, ensuring that em- During these peculiar times, robust corpo- tainty with understand- and decision-making ployees have hand sanitisers and are protected when rate governance is more important than ever. ing – the board must abilities guided by prin- travelling to and from work. this should be on the this article considers how Covid-19 has take time to understand ciples of preservation agenda of every board meeting and must be empha- shifted the role of boards, as well as details the "new normal" and of lives and jobs, while sised and communicated internally within the organ- practical steps to be taken by boards during develop new ways of ensuring continuity of isation as well as outside to other stakeholders. Clear this pandemic, to serve the company compe- thinking and responding the business and profit communication to all stakeholders will address any Beatrice Moyo, Chido Mafongoya tently and resourcefully. the pandemic has to uncertainty. making through use of ambiguity in a Vuca environment. It is advisable for and Kelvin Sabao ushered in a volatile, uncertain, complex and a Counter complex- innovative methods. In boards to develop or revise their crisis management ambiguous (Vuca) environment. Vuca is a ity with clarity – the addition to the foregoing, measures and develop new policies for workplace term coined by the Us army in the 1990s to board must communicate clearly with all the board should: safety and efficient operations. describe a Post-Cold War world. the same stakeholders and clearly express the direction 1. Prioritise health and safety of em- 2. Finance the business. term has also been adopted in the business the company is taking. ployees, customers and suppliers the pandemic has had a negative impact on most world. the board has a vital role to play in a Counter ambiguity with agility – the the Covid-19 pandemic has claimed mil- business operations and this has resulted in many be- addressing the challenges of a Vuca envi- board should be able to adapt swiftly and lions of lives, therefore the health and safety ing unable to operate. the board must thus, ensure that they assess and evaluate the financial resources of the company to ensure that they have short- and long-term financial measures to curb the impacts on the financ- es of the business. Boards may consider seeking ad- ditional financing and restructuring existing debt to accommodate loss of income during this period; this can be done by either equity injection or new debt being provided. Boards ought to be creative at this time and engage experts to provide bespoke financing solutions to alleviate the financial pressure invariably faced by many businesses during this time. Companies may consider sale of debt claims and income streams to raise much needed finance; alternatively, sale and lease backs to raise short term finance. For companies in financial distress, the boards ought to consider com- mencing corporate rescue proceedings as a way to re- suscitate the ailing companies. 3. Effectively communicate. With the dawn of “working from home”, an ef- fective communication strategy with employees, cus- tomers, vendors and the entire supply chain is crucial. the role of the board during this and any crises is to be available and up to date on the status of all the issues affecting the company. the board must also be well- versed with the constantly changing legal requirements pertaining to lockdowns and curfews. While survival is on the forefront of businesses agenda, during this period, the board must also consider and plan for re- sumption of business activities as the lockdowns ease and communicate such plans internally to all material stakeholders. It is imperative for board members to in- dependently be up to date on key topics so that they can bring additional insight to management's discus- sion of problems and solutions. to ensure that com- munication lines are open and efficient, boards should establish a Covid-19 crisis committee tasked with ur- gent daily decisions arising from or caused by the pan- demic. succinct framework for this committee should be drawn up giving the committee leeway in decision making and programme implementation. 4. Evaluating the business itself. the board should, together with management, re- view the operations of the business and the principal risks to the organisation and assess and monitor man- agement’s efforts to identify, prioritise and manage them. Directors should consider whether business continuity plans are in place. the board also needs to be honest about the financial viability of the company. the board, in performing its duties, must be cognisant of their statutory duties including but not limited to, the duty of care to act in good faith and in the companies’ best interest; the duty to not carry on company busi- ness recklessly or with gross negligence and the duty of loyalty and to communicate with management on material issues affecting the company. 5. Long-term strategy- business post-Covid the pandemic will eventually come to an end and businesses will revert to their full capacity as before. It is thus, important for boards to consider how to best position the organisation for success after the pandem- ic through adoption of appropriate business strategies. the board also needs to ensure that decisions made to address the short-term needs do not come at the ex- pense of the organisation’s relationships with its stake- holders. n Moyo, Mafongoya and Sabao are registered legal practitioners. They have co-authored a hand- book entitled The Directors’ Handbook in Zimbabwe and are so also the co-founders and legal bloggers of ‘Lex Amicus’. (https://lexamicuszw.wordpress. com/). They write here in their personal capacities. For more information, please contact us on [email protected] The Financial Gazette July 22-28 2021 | Page S1

HE Zimbabwe Nation- al Chamber of Commerce T (ZNCC) has re-elected Ti- nashe Manzungu as president, as- Manzungu retains suming the position for the next calendar year. The Gweru-based businessman and property developer retained his post following a virtual elec- tive congress hosted by the busi- ZNCC presidency ness member organisation recent- ly. He will be deputised by Ha- rare businessman Mike Kamun- geremu, who replaced Bulawayo businessman Golden Muoni. Also elected were Josephine Takundwa (Mashonaland region), Itai Zaba representing the Mid- lands and Chalton Chimbira, rep- resenting Manicaland province. Elections for the Matabeleland region chapter will be held in due course. Tinashe Manzungu, ZNCC president Mike Kamungeremu, ZNCC deputy president Page S2 | July 22-28 2021 ZNCC 2021 PRESIDIUM SPECIAL FEATURE The Financial Gazette ZNCC leadership profiles

ANZUNgU is a busi- ness magnate who has M pioneered TM group into a diversified investment port- folio. The group’s name is derived from his initials. He is a celebrat- ed Zimbabwe-born businessman who founded TM group from humble beginnings. He is a multilingual business mogul with extensive profession- al and entrepreneurial experience who has established various busi- nesses in Zimbabwe. Having invested close to a de- cade in real estate, health insur- ance and financial services in Zimbabwe, he is a major share- holder and board chair in private limited companies, which include Dr Tinashe Manzungu, president Zimbuild and Zimbabwe general Medical Aid Health Fund. to sit on the following boards: He has seats on other boards in- • Zimbabwe National Chamber cluding that of the Midlands State of Commerce (ZNCC) president University and Zimbabwe Prisons • Midlands State University and Correctional Services. (MSU) council member He is a holder of a Doctorate • Zimbabwe Building Contrac- in Business Leadership (DBL) tors Association (ZBCA) junior from the International Women’s vice president University (IWU), a Masters of • ZIMCARE TRUST (commit- Science in Business Leadership tee member) (MBL) from the International • Crime Consultative Commit- Women’s University (IWU). tee (CCC )committee member Manzungu also holds an Hon- • Association of Health Care ours Degree in geography and Funders of Zimbabwe (AHFOZ) Environmental Science (HongES) member from the Midlands State Universi- • Zimbabwe Association of Mi- ty (MSU) and a Master of Busi- crofinance Institution (ZAMFI) ness Administration (MANCOS- member SA UNIVERSITY) SA Candidate. • Global Appeal for Accelerat- His substantial experience ed Youth Empowerment and De- and expertise continue to be rec- velopment (gAAYED) founding ognised as he has been appointed appellant

AMUNgEREMU is the managing director of Ten- K do Electronics Pvt Ltd and current board chairman of Ramola Security Pvt Ltd. Before becoming the ZNCC VP for Mashonaland, he was the Ha- rare branch chairperson and ZNCC National Finance Committee chairperson for two years. He was recently elected into the Zimsec and ZimTrade boards. Mike is a qualified Chartered Management Accountant (CIMA) Mike Kamungeremu, and a Chartered global Manage- deputy president ment Accountant (CgMA) with a track record in private sector Financial Management, Strategic is a member of the Institute of Risk Management, Corporate gover- Management South Africa, and the nance, Taxation, Turnaround Strat- Institute of Directors of Zimba- egies and Administration. bwe. He holds a Bachelor of Accoun- In recognition of his achieve- tancy Honours Degree from the ments with Tendo Electronics, he University of Zimbabwe, a Di- was awarded the ZNCC Harare ploma in Financial Management Businessman of the year 2014 and (ACCA-UK), a Master’s Degree in Megafest Top 20 Businessmen Business Administration (UZ) and 2015. To S3 The Financial Gazette ZNCC 2021 PRESIDIUM SPECIAL FEATURE July 22-28 2021 | Page S3 ZNCC leadership profiles TAI is the chief executive and founder of Golden Josephine Takundwa vice president Mashonaland Waves Enterprises (Private) Limited, which is a region ifoundry and engineering company that produces castings for the mining, construction, farming and gen- akUndwa is a dynamic entrepreneur who has eral industrial sectors, and fabrication of smelting equip- been in the ICT and power protection industry ment and other steel structures in Zimbabwe. since 1997. he is an industrial metallurgist, entrepreneur and T She is the founder and managing director of Earth- businessman with a passion for the development of the link Technologies, a company that specialises in surge local foundry industry, including value addition of base protection, lightning protection, power back-ups, volt- minerals in Zimbabwe. itai has been active in the resus- age regulation and ICT hardware. Earthlink has a spe- citation of the Zimbabwe institute of Foundries, where cial interest in servicing the telecommunications sector he is the recent past President. providing mainly surge protection for aC dC, and rF/ in this position he has been lobbying for the need to Fibre. ban export of scarce raw materials such as scrap metal, in favour of local beneficiation. He has worked in the Currently, it is venturing into alternative energy solu- local foundry industry for the past 31 years during which tions for lighting targeted at the rural community of he gained extensive experience and skills in all aspects Zimbabwe. She is also the founding director of Southern of business management and leadership in this sector. africa Centre for Entrepreneurship, an entrepreneurship in addition to industrial metallurgy, he holds profes- development organisation focusing primarily on soft sional qualifications that include: Executive Diploma skills complemented by the technical skills. in Business Leadership (ZOU); Certificate in Quality Assurance (City & Guilds of London Institute); and a pending Master’s in Business Administration (MBA). he is also the President of the mCm Group Fund Trust, a local charity organisation that has been paying off the tuition of underprivileged children, among other community projects, in mhangura since 2015.

Itai Zaba vice president Midlands region

himbira joined the hospitality industry in 2008 after graduating from the University of CZimbabwe in 2007, with an honors in business Studies. he is an experienced general manager with a demon- strated history of working in the hospitality industry. he is skilled in front office, accounting and finance, engi- neering, owner and stakeholder management, catering, OnQ, budgeting, food and beverage, and hotel manage- ment. he is a strong sales professional who graduated from University of Zimbabwe and is a chartered hotel Gm with the american hotel and Lodging institute. has been a GM since Nov 2012. Great Zim (five months), Holiday Inn Beitbridge (two years), Troutbeck Resort (four years) and currently Holiday Inn Mutare. Chimbira has run nine of the group's prime prop- erties. he is Gedes Young host of the year 2015 and megafest most Promising Young Executive of the Year (Manicaland) 2019. He has also been Manicaland chairman for the hospitality association of Zimbabwe (HAZ) and currently ZNCC president for Manicaland.

Chalton Chimbira, vice president Manicaland region Page S4 | July 22-28 2021 ZNCC 2021 PRESIDIUM SPECIAL FEATURE The Financial Gazette ‘We need economic recovery packages’

HE Zimbabwe Nation- al Chamber of Commerce T(ZNCC) has re-elected Tinashe Manzungu, pictured, as the president. We caught up with Manzungu as he articulates his vision for the offi ce. Be- low are excerpts from the interview.

Q. Congratulations on your re-election as President, can you briefl y tell us about yourself? A. I am a versatile individual who is highly-attuned to make a difference in society. I am a holder of a Doctorate in Business Leadership. I have served in the Chamber as chairman Gwe- ru Branch in 2016, Vice President for Midlands for two terms that is 2017 and 2018. In 2019, I was elected deputy over the past quarter, most of our mem- national president before becoming the bers are in a transition phase to suit the president from 2020.Thank you for con- new normal. Some have embraced the gratulating me. opportunities that the crisis has present- Q. What does this re-election mean ed, particularly those in ICT. to you? The pandemic has disrupted supply A. It is a refl ection of the confi dence chains but in general there is a good that the Chamber has in me and I shall adjustment from business as statistics do my best to justify the trust that has show that the industry capacity utilisa- been bestowed upon me. As the preem- tion has boosted. inent voice of business, we are going to Q. What are the major challenges represent, support, and guide so that we confronting business this year? develop the national economy that cre- A. The economic activity has been ates the business environment favour- restricted with industries deemed able for the economy to thrive. non-essential closing down, the most Q. What will be your major focus affected being the informal sector which as ZNCC President? constitutes about 60 percent of the GDP A. The main focus will be on em- size. powering the private sector through Two-fold disruptions on supply and capacitation, engagement, skills en- demand, shortages of imported raw ma- hancement, incubation programmes terials supply chain, reduction in both and business linkages so that they can local and foreign investments all has scale up their business for radical eco- strained business with capacity utilisa- nomic transformation. I’m a youthful tion performing at 58 percent meaning President passionate about enterprise a potential loss of $400 million in rev- development and so I am excited for the enue. Covid-19 has impacted on em- opportunity to help serve the business ployment with the most affected sectors community. being tourism and arts. Q. How do you hope to achieve Q. What can the government do to these goals? help business under circumstances? A. I will advocate an empowerment A. There is a private sector funding model that focuses on partnering with gap and this gap needs to be fi lled up in strategic partners and giving opportu- order to enable industry to undergo the nities. One of our proud advantages restructuring and transformation nec- as a chamber is the allegiance to local essary to thrive in the new normal post regional and international associations Covid-19 environment. which places us on a better place when The value addition and benefi ciation it comes to trade and economic develop- of local produce is key as outlined in ment agenda. the National Development Strategy 1 During my fi rst term as the Presi- (NDS1). Agriculture and mining sectors dent, I am proud that we have already need support for the turnaround of the partnered with various institutions that economy. include UNDP, Liquid Telecoms, Zim- Q. In terms of retooling for in- babwe Stock Exchange (ZSE), Indian dustry, what can be done to address Economic Trade Organisation, Algerian funding constraints? What are some Chamber of Commerce, Canada Africa of the funding options for business? Chamber of Business to mention just A. The Economic Recovery Packag- but a few. With the new term I am confi - es should be introduced aimed at revital- dent that more partnerships are coming ising the economy and providing relief on board and insulate businesses and industries Q. How has the Covid-19 pandem- from shocks caused by the economic ic changed the way businesses oper- slowdown caused by the Covid. ate? Has the industry adjusted to the Development Finance Institutions new normal? should be established with a revolving A. The Covid-19 pandemic outbreak fund facility that as other benefi ciaries has led to an unprecedented disruption repay; the reserve being built becomes of commerce in most industry sectors available to others. There was no anticipation on business Q. Your outlook for the rest of the and even governments of fi rst world year? economies. Business should adjust to A. Amid the ravaging effects of the business as usual when business is un- Covid-19 pandemic, the Zimbabwean usual. economy has demonstrated remarkable This has created a huge dent in our resilience with institutions like Bretton economy which requires resilience from Woods revising the growth upwards. businesses. However, the signifi cant threat to Many of them are not linked to or sustained economic recovery remains integrated in the supply chains of major the uncertainty caused by Covid-19 private sector businesses. pandemic and its associated restrictions. From a research we have conducted The Financial Gazette ZNCC 2021 PReSIDIUM SPeCIAL FeATURe July 22-28 2021 | Page S5 ZNCC mid-term budget submissions 2021 he Zimbabwe Na- The Chamber contin- fuel import duty to about with the government is not tional Chamber of ues to propose that no debt US$0,20. Zimbabwe now offering enough comfort to TCommerce (ZNCC) should ever be procured has the most expensive banks to lend to the private says the operating envi- without the involvement fuel in Sadc and it does not sector ronment continues to be of the Parliament of Zim- do the country any favours Infrastructure devel- weighed by the impact of babwe. This will serve as a on AfCFTA or export com- opment the Covid-19 pandemic. confidence-building mea- petitiveness. Taxes and Overall support under Finance minister, Mthu- sure. duties on fuel now consti- the 2021 Infrastructure li Ncube will present his There is need for a debt tute US$0,50 on every litre Investment Programme 2021 Mid-Year Fiscal Pol- breakdown as a transpar- sold, which is too high amounting to $139,8 bil- icy and economic Review ency measure, there is debt Transparency on lion (is a positive), howev- next week. distress. It appears gov- Agriculture commodities er there is need to strength- The Chamber made the ernment is understating its payments en PPP’s and more private following submissions for debt and recommend that There is need to detail sector participation in in- the 2021 Mid-Term Bud- Parliamentarians should how government is going frastructure development get Review. ZNCC said for a debt breakdown be- to finance the buying of projects. enhanced priori- its fiscal submissions are fore approving the budget. maize and other agricul- tisation of projects is also intertwined with monetary The US$5 billion owed ture commodities consid- important given that they submissions given that by RBZ and the US$3,5 ering the bumper harvest are key when it comes to some of the market devel- billion for farmers were for the current season. the ease of doing business. opments are as a result of not included in the US$8,1 Mid-term budget should De-dollarisation monetary interventions. billion outline financing initia- framework Public debt Exchange rate Mthuli Ncube tives that are in place While the 2021 Budget No debt should ever be exchange rate move- $18 billion stimulus was silent on the de-dol- procured without the in- ment is a concern; there is promote a currency slip. ers, who have not had a package larisation framework, we volvement of the Parlia- a strong market perception There is need to handle the salary adjustment. This Our members did not expect the mid-term bud- ment of Zimbabwe. There that the exchange rate is spread between the auction will help increase dispos- have access to the $18 bil- get review to provide clar- is a need for a Debt Re- moving from a managed rate and the alternative able income lion stimulus package. The ity on the de-dollarisation payment Plan, especially exchange rate to a fixed market rate as a matter of Fuel import duty credit guarantee arrange- framework outstanding offshore debt exchange rate. The spread urgency There is need to scrap ment with the government Subsidies assumed by RBZ from between the auction rate Tax-free threshold the Road haulage fuel im- is not offering enough It is commendable that various local producers, and the alternative rate is There is need for in- port duty of US$0,05/litre comfort to banks to lend to these were budgeted for in which is affecting raw quite disturbing crease of the tax free so as to reduce the cost of the private sector. the 2021 budget. There is material imports and new The dragged nature of threshold from $10 000- fuel in the economy and There is need to set a need to stick to what has lines of credit, more-so the auction exchange rate $20 000 to lift the burden allow importation of fuel fund for drawdown by been budgeted for. Subsi- how local debt will be set- is promoting arbitrage on civil servants and other by licensed petroleum re- businesses — the cred- dies should be targeted and tled over time. and, in the process, it will low income bracket earn- tailers, while also reducing it guarantee arrangement To S6 Page S6 | July 22-28 2021 ZNCC 2021 PRESIDIUM SPECIAL FEATURE The Financial Gazette ZNCC’s mid-term budget submissions 2021 From S5 other revenue gains to award The low morale in the civil on processing of export permits and of entry in line with changing global should only be limited to vul- civil servants a living wage in service is affecting service de- licenses required by businesses to trends and business needs. nerable households. line with the actual cost of liv- livery in education, health and operate in the economy. There is need to digitise all Zim- Civil service remuneration ing (informed by market rates government departments as a Tripartite Negotiating Forum ra operations at the boarders, Zimra There is now an urgent need and prices of food, transport and whole. It is also breeding ram- There is need for the implemen- should move to paperless opera- to utilise the budget surplus and rentals). pant corruption in the economy tation of the proposed operationali- tions. sation of the TNF through setting up There is also snail pace progress of an independent Secretariat head- in implementing One-Stop border ed by an executive director as well posts across the entry points with as instituting the necessary statutory the Beitbridge Border supposed to instruments, with necessary operat- be the second to implement after ing procedures to guide the TNF as Chirundu. Modernising infrastruc- was stipulated in the 2021 National ture will be key and will help ad- Budget. dress the impact of the Kazungula Currency project on Beitbridge. There is need to promote the dual Corruption currency model currently existing, Chamber acknowledges that fight US dollar and the Zimbabwe dol- against corruption scourge for the lar, with much focus on reviving the next five years will be guided by the Zimbabwe dollar. This can only be National Anti-Corruption Strategy attained through structural reforms as was stipulated in the 2021 Na- economy wide and not only focusing tional Budget. The Chamber recom- on the forex auction market. Broader mends that appointments at ZACC reforms are needed to address cur- should not be done through one ap- rency and exchange rate issues. pointing authority — this will help There is artificial demand for the on independency. Z$ where people prefer not to spend/ Parliament should play a role in buy using the US$, and this does not the appointments of commission- reflect distortions in the exchange ers at ZACC, this will contribute to rate market. its effectiveness. We estimate that Industry 4.0 almost 20 percent of the National Government should set up and Budget is lost through corruption; fund a department on Industry 4.0 this continues to weigh on the ease which should be under the ministry of doing business. There is need to of Industry and Commerce. There change laws and give prosecuting is need to promote Education 5.0 to powers to ZACC and to strengthen complement digitisation. Higher al- its independence. locations in ICT are needed for the Industrial Development Corpo- foundation for automation. Legis- ration (IDC) restructuring lation around digitisation is lagging IDC should be restructured to behind so there is need for review/ make it a development finance insti- expediting. tution which supports Industry than Border management for it to remain an investment vehi- While 2021 budget set aside re- cle as it is now. sources amounting to $1,5 billion There is need to capacitate IDC towards upgrading of facilities at more than commercial banks to ports of entry; there is need for al- make it a development finance insti- location of funds towards improving tution which supports Industry than efficiency for boarder systems — for it to remain an investment vehi- modernise the infrastructure at ports cle as it is now. Mining sector We acknowledge the standardi- sation of the corporate tax/review of the tax rate on income accruing from mining operations from 25 per- cent to 24 percent with effect from January 1, 2021. There is need to conclude on the Extractive Indus- tries Transparency Initiative EITI and Mines & Minerals Act. ZIDA There must be an arrangement where the institutional framework is a joint venture between government and the private sector; which means the secondment of board members must be derived from both private sector and the government with gov- ernment only appointing 50 percent of the board membership. There is need to speed up the ZIDA initiative to fully undertake its mandate so that there is value. Energy There is need to accelerate the deployment of solar. Its equipment should be imported freely. Solar should be used as an alternative for rural areas electrification rather than putting them on the grid. There is need for broad incentivisation of so- lar with a view of offloading from the main grid. Solar should be used as an alter- native for rural areas electrification rather than putting them on the grid. The Financial Gazette ZNCC 2021 PRESIDIUM SPECIAL FEATURE July 22-28 2021 | Page S7 ZNCC’s state of industry report Christopher Mugaga goods competing with local- single ZNCC member was ex- one for the Chamber as it was ZNCC Chief Executive ly manufactured products, posed for abusing forex from involved in several initiatives. and unfavourable legislation the auction continues to send The institution rebranded, IPPING tea in the cor- which negatively impact prof- the right signals that we are a coming up with a new logo ner of a chic café at Sam itability. As the Chamber of law-abiding business member whilst retaining the corporate SLevy Village in Borrow- Commerce, we have consis- organisation whose commit- colours that define who we dale, the leafy suburb north of tently lobbied for a predictable ment to nation-building re- are. A training school was also Harare, Thembani Mugadza business environment. mains unquestionable. launched and has already be- seems like another yuppie on The catatonic uncertain- Equally on the policy gun making strides, with sol- his lunch break. With a dis- ty posed by policy flip flops front, we urge authorities to id partnerships having been arming smile, he chats about remains the biggest "tax" to religiously and timeously re- forged. his job as an insurance agent. our prospects, worse than the lease monthly data, notably We managed to engage Before long, however, the fiscal tax or even sanctions monetary variables. The knee- institutions such as UNDP, 38-year-old warns that the imposed upon our nation. jerk approach to data release Zimbabwe Stock Exchange government may impose a We can no longer afford hard creates mistrust between the and Procurement Authori- total lockdown as Covid-19 lockdowns regardless of the private sector and the govern- ty of Zimbabwe, with many cases continue surging. third wave, which we expect ment, worse still at this stage training programs and part- The clock is ticking for to last until the last quarter of when the alternative market ners lined up on this exciting Thembani as he has to rush this year. The solution lies in rate continues behaving stub- journey. An exciting product back to the office and attend adhering to Covid-19 regula- bornly. is also on the offing. As the an urgent meeting on ways tions and achieving national We recently witnessed the Chamber of Commerce, we to implement new Covid 19 herd immunity of at least 45 dearth of Reserve Bank of are to launch the inaugural regulations at his workplace. percent, not the largely touted The recent SI 127 of 2021 but rather a price discovery Zimbabwe monthly data since State of Industry and Com- This literary defines how 60 percent. The argument is remains an eyesore to our vi- platform, an auction that is December 2020, with the Feb- merce Survey Report. an average day has been for that over 40 percent of Zim- sion for a liberalised economy. progressive and aims to ulti- ruary 2021 data released four It shall be our flagship business in the period 2020 to babwe’s population is under We shall continue engaging mately scrap the priority list, months later, in June. What product for reference in pol- 2021. The novel coronavirus 15 years, making 45 percent the government for its total not to consolidate it. These are is unattractive about the trend icy advocacy. As the name continued ravaging both lives vaccination rate an impressive repeal, knowing fully well the clear policy recommendations is the massive 490 percent implies, the survey shall be and livelihoods, with the Zim- number by our standards. The unintended consequences this we shall continue presenting growth in money supply, with the premier source of up-to- babwe National Chamber of Chamber of Commerce con- piece of legislation will pose to the authorities as we march reserve money rising 139 per- date information on industry Commerce survey conducted tinues advocating for a free as it attempts to amend the towards a business-friendly cent. performance, the number of last year estimating job losses market economy, where the parent or enabling act, that environment. This literary means the companies operating in the for the 2020 calendar year at government’s hand is limited is, the Exchange Control Act. We are grateful to our printing press is still on, tak- country, company closures 25 percent. and where markets are not The solution lies in promoting membership for taking heed of ing advantage of cheap forex and business confidence levels The industry continues perceived as failing, every a forex auction system that our advice not to overcharge given the stationary exchange within the economy. to face a myriad challenges time pressures simmering promotes competitive bid- their products and shun abus- rate. The release of the first issue ranging from forex shortages, from prices or exchange rate ding, an auction that is not a ing forex accessed through At a strategic level, the is scheduled for the last quar- hard lockdowns, smuggling are experienced. forex rationing mechanism the auction. The fact that not a reporting period was a busy ter of the year. AfCTA: Business focuses on capacity building

HE Zimbabwe Nation- ZNCC chief executive, Chris al Chamber of Commerce Mugaga, added that the business T(ZNCC) says it is focusing lobby group would continue to ad- on building local business’ capacity vocate for a free market economy. to exploit opportunities under the “The chamber of commerce con- recently launched African Conti- tinues advocating for a free market nental Free Trade Area (AfCFTA). economy, where the government’s The business-member organi- hand is limited and where markets sation and the United Nations De- are not perceived as failing, every velopment Programme (UNDP), time pressures simmering from together with the United Nations prices or exchange rate are experi- Economic Commission for Africa enced,” Mugaga said. (UNECA) and other partners ― in- Mugaga said ZNCC would this cluding ZimTrade and the Competi- year launch its inaugural state of in- tion and Tariff Commission (CTC) dustry and commerce report. — launched an AfCFTA training “An exciting product is also on programme for businesses in Zim- the offing. As the chamber of com- babwe training programme last merce, we are to launch the inaugu- month. ral State of Industry and Commerce AfCFTA — the world’s largest Survey Report. free-trade area ― started trading on “It shall be our flagship product January 1, 2021, creating a market for reference in policy advocacy. As of 1,2 billion people and the eighth the name implies, the survey shall economic bloc in the world with a be the premier source of up-to-date $3-trillion combined GDP, that is information on industry perfor- expected to more than double by mance, the number of companies 2050. operating in the country, company “…with the launch of trade on closures and business confidence the AfCFTA… It is the chamber’s levels within the economy. goal that members take advantage "The release of the first issue is of the benefits arising from the scheduled for the last quarter of the AfCFTA. In this regard, capaci- year,” Mugaga said. ty building initiatives such as the “The industry continues to face ZNCC/UNDP training sessions on myriad of challenges ranging from ‘Unpacking the AfCFTA for Zim- forex shortages, hard lockdowns, babwean Business’ shall remain a smuggled goods competing with priority,” ZNCC president Tinashe locally manufactured products, Manzungu said in the chamber’s and unfavourable legislation which annual report for 2020. negatively impact profitability. Page S8 | July 22-28 2021 The Financial Gazette

Econet Wireless wins Top Companies award

IMBABWE Stock Exchange sored by financial services giant, Old Mutual Accepting the award, Econet chief exec- the support you have continued to give us over the years. (ZSE)-listed mobile network operator, Zimbabwe. utive Douglas Mboweni said the technology Even as we go into the future, we have no doubt that we ZEconet Wireless, was crowned the best Leading beverages manufacturer, Delta firm received the award with gratitude. will continue to walk together. As an organisation we will performing company on the local bourse for the Corporation, was the first runner-up, while fast “I am so grateful to our customers, because continue to dig new ground to be innovative in terms of second year running at the Financial Gazette’s foods giant Simbisa Brands was crowned sec- without our customers our business will not be coming up with solutions that will appeal to our custom- Top Companies Survey 2021 awards spon- ond runner-up. in existence. To our customers, thank you for ers as we go into the future,” Mboweni said. “In challenging times such as these, we have the coro- navirus around us not only here in Zimbabwe but it is a worldwide phenomenon. But we also have economic challenges that we have to deal with. All these factors present tough operating challenges for the business. So how are we making it and navigating such a terrain. As Econet we have perfected the art of execution and will continue to focus on it,” he said. Pan African banking group Ecobank was crowned the best bank during the period under review. Stanbic Bank was the first runner-up. The award is given to the most outstanding bank for the year based on both quantitative and qualitative attributes of each bank reviewed. Doves Morgan won the best life assurer while Clarion Insurance was crowned the best short-term insurer. CBZ Holdings was recognised in the best tangible investor returns category. The award recognises the com- pany that would have delivered the best tangible gains to investors during the period under review. Diversified conglomerate Padenga Holdings Limited walked away with the Special Mention Award, which recognises outstanding achievement or contribution to a current topical issue. Padenga for the second year running also won ESG award which recognises a company that upholds good environmental, social and governance principles and op- erates an ecologically friendly business model that pro- motes the efficient and sustainable use of resources, con- ducts value adding social development programmes in the community and for employee wellness and promotes ethical governance practices by the board of directors, ex- ecutive management, employees and interacts with exter- nal stakeholders. Delta Corporation for the second year running walked away with the Disclosure and Investor Relations Award of the Year. The award rewards companies that are vig- ilant and make full disclosure of information about their business, satisfy the requirements by regulators, stock exchange disclosure rules as well as disclose information in a timely manner and simplified financial language. Inn- scor Africa was the first runner-up. A panel of judges and analysts, independent of both The Financial Gazette and Old Mutual, come up with the judging criteria and categories for the top awards. Judges chairperson Simbiso Musa said the 2020/21 financial review process marked the second consecutive year of Zimbabwean based companies operating in a hyperinflationary environment and where the Covid-19 pandemic effects continue to be topical and largely influ- ential to business model dynamics. The awards were held under the theme: ‘From Surviv- ing to Thriving: Reimaging Business after the Pandemic.’ “As a country we no longer need to just talk about sur- viving but thrive to reach new heights notwithstanding all this chaos…We urge all firms to benchmark their perfor- mance to the set criteria of the awards,” she said. “The period was characterised by late publication of results, an issue we believe our accountant by now should nip in the bud. Going forward publication deadline exten- sions should not be acceptable anymore as timeliness is a very important factor in financial analysis,” Musa said. The awards were launched in 1980 and have proved invaluable in promoting transparency, good corporate governance, ethical conduit and corporate social respon- sibility. — Staff Writer. The Financial Gazette TOP COMPANIES 2021 SPECIAL FEATURE July 22-28 2021 | Page S9 Zim businesses adjust to new normal

IMBABWEAN businesses and for many it was just another symbolised by our national flag, respond to the changes in their en- have made significant prog- event to steer the ship through. the land, agriculture, tourism, the vironment. Zress in instituting needed The threads that have defined mineral wealth in the ground, our “Agility defines who falls and reforms to survive, increase profit survival of successful business in history as a nation in overcoming who survives in troubled waters and lure more foreign investment Zimbabwe are agility and resil- adversity, our human capital and such as 2020. As Old Mutual, oth- as the country’s economic growth ience,” said Macmillan, who was ingenuity…Beneficiation and val- er than slamming the brakes in outlook is showing positive signs. guest of honour. ue addition of minerals will create the face of Covid-19 headwinds, Speaking at the 2021 Top “The backdrop of this survey is more jobs and support exports,” we downshifted in order to listen Companies Survey awards hosted a lot brighter than last year when said Macmillan. to customers, track the market, by The Financial Gazette in part- the world was in the early stages Speaking at the same event, Old conserve resources, and regroup nership with blue-chip financial of fighting a rapidly growing glob- Mutual Zimbabwe chief executive to enhance our ability to change service group Old Mutual, In- al pandemic. Government, busi- Sam Matsekete, said in the face of direction in a nimbler and smarter victus Energy managing director ness and citizens were battling to the third wave of the pandemic, way,” she said. Scott Macmillan said adjusting understand what the future would nothing was constant in life but She said this gave the group the to the new normal had created unfold and what the depth and du- change and to adapt to models that impetus to roll with the changes many obstacles but at the same ration of the crisis would be,” he allows businesses to survive. that the crisis presented to launch time presented new opportunities said. “…Threats to endeavours of new, safer and ergonomic prod- to reshape business practices and He said for Zimbabwe to thrive Sam Matsekete business are more real and more ucts which have resonated well culture. in the post Covid-19 pandemic pronounced under the condi- with their existing customers and “The world and Zimbabwe is world there was a need to build ex- building a belief that the problems tions such as those induced by critically, attracted the attention of beginning to emerge from lock- isting competitive advantages and that we face are always transient Covid-19, but change is indeed a new, younger clientele. downs, economies are gradually national wealth and continue with and if you can weather the storm constant and we cannot escape it. “We have continued to act in opening up and business is now the necessary structural reforms to you will come to the other side. In a way, crises are an adrenalin the best interests of society as a looking into the future,” he said at address the ease of doing business The adversity that is being faced for innovation, more and more we whole by putting our employees, the awards held virtually under the and boost competitiveness. and overcome by business has cre- need to make decisions faster un- our customers and the communi- theme: ‘From Surviving to Thriv- “Being agile in a dynamic ated a mindset that any challenge der conditions that are extremely ties in which we operate first. As a ing: Re-imagining business after business environment has been can be solved with an innovative volatile, uncertain and often with responsible corporate citizen, Old the pandemic.’ essential to overcome multiple approach and a relentless drive to less information. The choices are Mutual believes that “Crisis be- “For businesses, when Covid crises that have played out in the survive and succeed. These two also not getting any easier, this gets opportunity”. was spreading, survival was es- country, including periods of eco- trains engrained in Zimbabwean demands that our minds embrace “The company will continue to sential but not guaranteed. Look- nomic and political instability and business set companies to survive change,” he said. put its best foot forward to be cre- ing at the impact of the pandemic, the devastating hyperinflationary the Covid-19 pandemic,” Macmil- Old Mutual Zimbabwe’s head ative and to find novel solutions to through a Zimbabwean lense, our period. This required an adaptable lan said. of group marketing and innova- customer problems. We will con- business leaders were placed bet- approach and strategy in the face “As an individual, without tion, Lillian Mubaiwa, said agility tinue to reimagine the way we run ter than most to deal with a crisis of an ever changing economic and mental and physical health you was key to success as it allowed our business to deliver in-person like Covid-19. The business envi- regulatory environment. are a liability to your business… businesses to quickly respond to experiences online and engage ronment in the country has been “Resilience was forged through Our competitive advantages (as the sudden and constant changes customers in new ways,” Mubai- challenging over the past 25 years surviving multiple crises and Zimbabweans) lies in what is of customers' needs as they also wa said. — Staff Writer Page S10 | July 22-28 2021 TOP COMPANIES 2021 SPECIAL FEATURE The Financial Gazette Top Companies Survey 2021 judges’ report

Simbiso Musa The period under review was still characterised by late publication of results, an issue we believe by HE 2020/2021 financial review now our accountants should have nipped in the bud. process marked the second consec- Going forward publication deadline extensions Tutive year of Zimbabwean-based should not be acceptable anymore as timeliness is a companies operating in a hyperinflation- very important factor in financial analysis. ary environment. Additionally, with the advent of hyperinflation It also marked another year in which accounting, disclosures and investor relations be- Covid-19 pandemic effects continued to come very important as investors need to be kept be topical and largely influential to busi- abreast of the different implications brought about ness model dynamics. by the accounting methods, spanning from adjust- Prosper Matiashe In light of our usual normal being dom- Simbiso Musa Batanai Matsika ment factors, monetary gains or losses and fair val- inated by these vagaries which seem to be uation model for 2020 in order to adjust to el with the aim of increasing its relevance ue adjustments. here to stay, our theme for this year was the highly inflationary environment, this to the obtaining environment and placed A lot of management discretion is involved in termed: “From surviving to thriving: Re- year the model was again put to the test more focus on yield, pure business perfor- some of these decisions and it's of paramount im- imagining business after the pandemic”. and it showed its resilience, robustness mance and asset quality. portance to communicate the decisions to stake- As a country we no longer need to talk and functionality. In addition, we introduced qualitative holders as much as possible. about just surviving, we need to thrive in Continuous improvement is our key factors for our banking sector model to Resultantly this year, we introduced the Disclo- the midst of all this chaos. competitive advantage and this year it saw enhance the quality and objectivity of our sure and Investor Relations 1st runner up award Having developed an entirely new eval- us recalibrating the insurance sector mod- results. largely to acknowledge the level of improvement we have witnessed with regards to efforts being made to uphold high standards of disclosures and investor relations. Noticeably, Covid-19 has affected the tradition- al way of engaging specifically for annual general meetings and analyst briefings and agile companies have not reneged their responsibilities, but have in- stead geared up and taken advantage of digital plat- forms to continue dispensing their duties to share- holders and stakeholders at large. Our main model and the banking sector model were premised on the combination of 70 percent contribution from quantitative factors and 30 per- cent contribution from qualitative factors. The quantitative factors are based on ratios ex- pounding on financial health, efficiency, size and earnings quality. From the qualitative aspect the model evaluated disclosure and investor relations, environmental, social and governance factors, corporate gover- nance and leadership aspects. Overall a top company should exhibit a balance between financial performance and non-financial performance. Still lagging is the insurance sector, the model is premised on 100 percent contribution of quantita- tive performance largely due to the source of infor- mation being the Insurance and Pension Commis- sion (Ipec) submissions. We further encourage the regulator to probe submission in the form of non-fi- nancial metrics possibly through annual reports. The quantitative and qualitative factors are pre- mised on the following guiding principles: The recognition of: •consistent financial performance; •sustainability of business model •strategic leadership and adaptive culture •healthy financial position; and •superior tangible total returns to investors or shareholders; and The promotion of: •good corporate governance practices, including providing adequate disclosures, transparency and accessibility to investors and analysts; •environmental awareness and sustainable busi- ness practices; and •corporate social responsibility. We maintained a robust scorecard of quantitative metrics which covered the following: •earnings performance - including assessment of growth and quality of earnings •size - including levels of market capitalisation, net asset value and total assets •financial health - liquidity, solvency, profitabili- ty and operating efficiency and •investor returns - including issues of share li- quidity, share price growth and payment of divi- dends to shareholders. To evaluate and ascertain the level of consisten- cy the overall result was a combination of 30 per- cent performance from 2019 and 70 percent contri- bution from 2020 performance. To Page S11 The Financial Gazette TOP COMPANIES 2021 SPECIAL FEATURE July 22-28 2021 | Page S11 Top Companies Survey 2021 judges’ report

From Page S10 The judges convey their warm congratula- This year’s awards recognised winners in the follow- tions to the winning companies in the various ing categories; award categories. We also urge other compa- ▪Top Listed Company – recognises the top company nies to benchmark themselves against the set listed on the Zimbabwe Stock Exchange excluding banks criteria and strive to be winners next year. We and insurance companies. remain grateful to the sponsors, Old Mutual ▪Top Banking Institution – recognises the top bank and The Financial Gazette for their continued licensed by the Reserve Bank of Zimbabwe, excluding support of this initiative. As usual, Old Mutu- micro-finance institutions, whether deposit-taking or not. al was excluded from participation by virtue ▪Top Insurer (long-term) – recognises the top life in- Takudzwa Sherekete of being a sponsor in these awards, in order to surance company licensed by the Insurance and Pensions Evonia Muzondo Simbarashe Mangwendeza preserve the independence and integrity of the Commission of Zimbabwe. our theme, ac- the assessments but the major awards. ▪Top Insurer (short-term) – recognises the top casualty knowledging a company which acted swiftly constraint remains availability of information. Judges insurance company licensed by the Insurance and Pen- not to succumb to the effects of the obtaining The low hanging fruits remain the Government Simbiso Musa (Chairperson), Simbarashe sions Commission of Zimbabwe. environment and shifted their business mod- institutions which already have a mandate to Mangwendeza, Evonia Muzondo, Tinashe ▪Best Disclosure And Investor Relations – recognis- el. Going forward there is a concerted desire publish their results. Consistency is going to be Yafele, Prosper Matiashe, Takudzwa Shere- es a listed company that goes out of its way to provide amongst the judges to expand the universe for key to start building a complete universe. kete, Batanai Matsika and Manatsa Tagwireyi. as much information as possible to the investing public, through detailed and informative annual reports, investor relations website, analyst briefings, etc. ▪Best Tangible Investor Returns – recognises a com- pany that managed to reward its shareholders the most during the past year through dividends and capital gains (that are supported by volumes of trades). ▪Best ESG Practices – recognises a company that up- holds the sustainability and ethical impact of their busi- ness model to the operating environment ▪Special Mention – this year it recognises a company that was visionary and agile in quickly modifying the business model to suit the obtaining environment. As per tradition, the judges maintained a Special Mention Award that goes to a discipline which was not captured by the model but in that current year was very significant and topical to warrant acknowledgment large- ly because of contribution towards creation of shareholder value. This year our special mention award is in line with Top Companies 2021winners Top Listed Company Winner Econet Wireless 1st runner-up Delta Corporation 2nd runner-up Simbisa Brands

Top Banking Institution Winner Ecobank 1st runner-up Stanbic

Life Assurer Doves Morgan

Top Insurer (Long term) Clarion Insurance

Top Insurer (Short term) Sanctuary

Environmental, Social and Governance (ESG) Award Padenga Holdings

Best Tangible Investor Returns Award CBZ Holdings

Special Mention Award Padenga Holdings

Disclosure And Investor Relations Award Winner Delta Corporation 1st runner-up Innscor Africa Page S12 | July 22-28 2021 TOP COMPANIES 2021 SPECIAL FEATURE The Financial Gazette Delta: The company of good cheer!

Evonia Muzondo cial responsibility, sustainability, corpo- the most capitalised stock on the ZSE erating environment characterised by restrictions rate governance and leadership. with a weighting of 12 percent. Market to social and economic activity occasioned by the E are celebrating Delta Corpo- Delta is a total beverages company capitalisation is around US$1bn at the of- Covid-19 pandemic, hyperinflation, and waning ration Limited (Delta) in this with products covering the entire market ficial USD exchange rate. disposable incomes. Wyear’s Top Companies survey from soft drinks – as the bottler of Coca The business model, like most brew- However, the Zimbabwe macro-economic envi- as it lifts the trophy for the first runner-up Cola – cordials, through its investments ers, is driven by a strong marketing spend ronment benefitted, from a stable foreign currency award in the listed space. To add to the in Schweppes Zimbabwe, spirits, wines and visibility, strategic pricing and pro- exchange rate and the use of foreign currency for cheer, the company also won the Best and ciders provided by associate, African motional activities aimed at growing and domestic transactions. Disclosure and Investor Relations award, Distillers Limited. defending volumes. Improved access to foreign currency resulted in which evaluates consistency, clarity, and In the beer space, Delta supplies the Delta also aims to remain the custom- stable pricing and consistent product supply due to candour in dealing with stakeholders. market with both traditional sorghum er’s choice whether customers are down better access to imported raw materials and spares. The winning formula for Delta despite beer under the Chibuku brand and lagers trading or up trading or switching from The South African market was negatively im- a difficult financial year is that of con- catering for the mainstreamå and premi- one product to another; hence it even pro- pacted by bans on the sale of or trading in alcoholic sistency, one of the Top Companies Sur- um segments. Markets are in Zimbabwe, vides bottled water, for those who opt not beverages while Zambia was adversely affected by vey’s key guiding principles; consistency Zambia and South Africa. The company to drink soft and/or alcoholic beverages. the depreciation of the kwacha, high inflation and in returns to shareholders; consistency in is the dominant player in all the market What are currently missing though; teas weakening economic fundamentals. the quality of earnings and consistency in segments in Zimbabwe. and coffees! Delta continued to post a strong operating per- financial health. Delta also managed to Delta is not only a pre-eminent con- Encouraging volume recovery formance propelled by volume recovery across score highly in qualitative aspects of so- sumer company in Zimbabwe but is also The year 2020 witnessed a difficult op- most product categories. Margins were under pressure, though, as the in- flation lag on operating expenditure narrowed and due to competitive pricing. Lager beer volumes grew by 20 percent for the nine months to 31 December 2020 attributed to a favourable pricing regime, consistent product sup- ply, benefiting from the injection of new returnable glass and fewer disruptions to production. Volume for sparkling beverages for the nine months ex- panded by 42 percent. This category was propelled by consistent sup- ply and competitive pricing, although the sales mix has shifted towards take-home packs in response to restrictions on gatherings. However, sorghum beer volume in Zimbabwe trailed prior year by 14 percent for the nine months due to limited market access, although this im- proved towards the end of the period. Nonetheless, Delta enjoys better margins on clear beer than in sorghum. In regional operations, volumes for Natbrew Zambia were up 5 percent for the nine months. The company was affected by the resurgence of illegal trading in bulk beer, which trades at a discount to packed product. United National Breweries was affected by very strict restrictions and bans on the sale and con- sumption of alcohol in South Africa. Associates, African Distillers Limited and Schweppes Hold- ings also witnessed encouraging volumes growth. All this resulted in an above-inflation 837 percent growth in revenues. The company continues to invest heavily in its brands Over the years the company continues to fo- cus on value creation by expanding its portfolio of businesses and diversifying its brewing base. This has been achieved through investment in its brands, plant capacity and skills development while remaining flexible to adapt to the changing economic landscape. Brands continue to be re- freshed through package renovations. The aim is to align customers and consumer preferences with their choice of brands, packs and consumption occasions or settings through seg- mented execution. As a result brands and packs are always relevant to the customer base. In light of the unstable inflation, and declining disposable incomes, the focus has also shifted to- ward cost competitiveness through driving a prof- itable mix and cost containment. Capital expenditure programmes have not only increased capacity but have improved production facilities and reduced costs. At the beginning of dollarisation (February 2009), Delta had 50 bev- erage brand/pack units and these have continued to increase as the company addresses the changes to the market. The strategic framework is also anchored on investing in market development and optimised route to market. There are on-going initiatives to improve service at the customer collection depots and scheduling of deliveries to customers and out- lets deliveries. The Financial Gazette TOP COMPANIES 2021 SPECIAL FEATURE July 22-28 2021 | Page S13 Ecobank: A bank for the times Batanai Matsika OMNILITE and OMNIPLUS. The bank (i) shareholder backing, (ii) management & Business (Global Finance); and also introduced additional product menus quality and (iii) disclosure. •Africa’s Best Bank for Corporate Re- HE bank provides retail, corporate and in- on these platforms to enable them process We note that the parent company, Eco- sponsibility (Euromoney) vestment banking services and is wholly multicurrency transactions in response to bank Group, also won numerous African The strong shareholder support also Towned by Ecobank Zimbabwe Holdings the currency dynamics. awards in 2020 including; ensures that Ecobank management up- Limited, which in turn is wholly owned by Eco- In our view, Ecobank’s key strengths •African Bank of the Year and Bank of holds high levels of corporate gover- bank Transnational Incorporated (ETI). It should include technology, digital platforms, in- the Year for affiliates in Gabon, The Gam- nance, transparency and disclosure. be noted that for the greater part of 2020, economic ternational trade payments and remittanc- bia, Guinea, Guinea-Bissau and Togo On the corporate social responsibility activity was negatively impacted by Covid-19 in- es. (The Banker); front, the bank remains very active and duced lockdowns. Capitalisation •Pan-African award for Financial In- has partnered with World Vision in terms For banks, this presented a major risk given that Ecobank ranks relatively well in terms clusion and Best Bank award for affili- of various response programmes in the most businesses that make up the clientele base of of its Tier 1 capital ratio. The total core ates in Burkina Faso, Cabo Verde, Chad, education sector targeted at marginal ar- financial institutions were adversely affected from capital for the bank as of December 31, Gabon, The Gambia, Guinea, Liberia and eas more prone to national disasters. a credit risk perspective. Further, volumes trans- 2020 stood at $4,3 billion (US$46,6 mil- Mali (EMEA Finance); In conclusion, we maintain a view acted came down significantly as most customers lion). The bank is therefore adequately •African Bank of the Year; and Innova- that the long-term growth opportunity were not able to operate normally due to the re- capitalised as it meets the minimum capi- tion in Financial Services Award (African for Ecobank lies in the implementation of strictions. tal requirement of US$30 million. Banker). the African Continental Free Trade Area This limited the potential for growth in fees and In terms of the qualitative aspects, •Most Innovative Bank in Africa; and given its strong position in terms of trade commissions. Nonetheless, the broader banking Ecobank has strong ratings in terms of Outstanding Crisis Leadership – Finance finance, payments and advisory services. sector has benefited from the general stability of prices experienced during Q4 2020. This was a result of the stability obtaining on the foreign ex- change market. Ecobank outperformed its compet- itors on different quantitative parameters detailed hereunder; Solid total deposits market share Based on our universe of banks, Ecobank had a total deposits market share of 15,5 percent. The bank has largely been focused on top tier corporate customers which means is has more scope to grow its depositor base. The Zimbabwean economy is expected to recover by 7,4 percent in 2021 (Minis- try of Finance Estimate). This growth should cul- minate in improved disposable incomes and should boost savings and transactional activity within the banking sector. Exceptional asset quality and high scope for further loan gearing Ecobank maintains high liquidity and conse- quently has a low loan-to-deposits ratio (LDR) of 23,92 percent and a high cash to total deposits ratio of 72 percent. As such, it has high potential for additional risk asset creation in the long term. We highlight that Ecobank’s target market poses a low risk to asset quality. The bank also has a strong risk management framework with a NPL ratio of 0,15 percent. It should be highlighted that its top tier corporate customers are typically multination- al corporations (MNCs), large regional and local corporates and state-owned enterprises. However, exposure to SMEs is rising in sig- nificance, which presents additional opportunities for loan growth over the medium term. A sectoral analysis of the loan book indicates 38,8 percent ex- posure in trade and services, 36,9 percent in light and heavy industry and 10,4 percent in agriculture. In our view, the fact that Ecobank is focused on top tier corporate customers means there is low down- side risk to its PAT growth. Strong returns compared to peers Ecobank remains in a strong position to gener- ate higher shareholder returns on the back of (i) strong revenue growth (ii) efficient operations, (iii) stronger margins due to lower funding and (iv) improved structured finance and retail business. The bank has also registered a significant growth in fees and commissions on the back of structured trade finance products and import letters of credit. On a comparative basis, the bank delivered a return on capital (ROC) of 62,16 percent against a peer average of 40,3 percent. The return on risk weighted assets was 19,3 per- cent compared to an average of 11,3 percent. Efficient operations Ecobank also outperformed its peers based on efficiencies. Cost management as reflected by the cost to income ratio (CIR) was 43,41 percent on a historical cost basis. The bank has invested in a robust core banking application upgrade and has launched new digital platforms and delivery channels that offer convenience and efficiency at a lower cost. The digital banking suite compris- es of the Ecobank Mobile App, Ecobank Online, Page S14 | July 22-28 2021 TOP COMPANIES 2021 SPECIAL FEATURE The Financial Gazette Reimagining business after the pandemic

Kuda Chideme The lockdowns might have been lifted their wounds. and business opened up (below full capac- On the local banking scene, we have already start- VER the past year and a half, the ity), but it is certainly going to take some ed to see the emergence of “digital-first” operating Covid-19 pandemic has turned our time for us to genuinely fathom the sheer models as lenders resize their branch networks. Ac- lives upside down. We have lost extent of damage the pandemic has caused. cording to CBZ chairman Marc Holtzman, “the move O to digitize ahead of the pandemic was very fruitful”. colleagues, friends and family. Our routines It has been a time of sheer uncertainty have been unsettled. Life is just no longer reminiscent of, if not worse than, the global For BancABC Covid-19 was the real Chief Digital what we were used to. On the business side financial crisis of 2008, yet the challenges Officer. of things, supply chains have been disrupt- of this period might also be the single larg- “The pandemic has also given us an opportunity ed and, in some instances, entire businesses est push for us to innovate and build stron- to introspect and confront the reality of a new normal have folded. ger resilient institutions. and our capabilities to adapt our business model to The carnage has been particularly gory The pandemic has forced consumer a new reality. We have used the crisis to accelerate in the tourism and hospitality sector, which, tastes to evolve and with them, so too do our digital transformation and adoption of the online according to the government, lost north- the channels of delivery. The competition working environment, product innovation and part- wards of 90 percent of potential revenues in has gotten more agile and data has emerged nership formation,” the bank’s managing director, 2020, as governments-imposed lockdowns as king. With all these changes taking place, Marc Holtzman Lance Mambonidyani said. So going forward it is evident that there is a need to and restricted travel. this demands of us to reimagine, at break- The future is digital shift approaches—for example, by putting increased In normal times, the tourism industry neck speed, our role in the new world. Busi- The future is digital and there is no way focus on digital service delivery channels. Expand generates at least US$1,25 billion making nesses and government institutions can act around that. Those that adopt digital tech- online presence and broaden digital offerings. it one of the country’s top foreign currency decisively to unlock the next stage of the nologies first will be ahead of the pack and Businesses must move fast to meet customers’ in- earners. country’s digital transformation. those that drag their feet will be left to lick creased appetite for digital offerings and at the same time look for ways to reduce cost and improve pro- ductivity—both during the downturn and in the re- covery. This drive towards digitisation by large corpora- tions will also present an opportunity for technology companies as demand for their services grows. Reimagining the role of government in a digital world Going forward, the government as a regulator and active consumer would have to play a more active role in fostering an enabling environment for rapid digitisation. So this means that other than ensuring that all key enablers are in place to support digital adoption, such as making sure that data is affordable, the government should bring the public sector into the digital age. The government can step up provision of digital services and information, and harness digital tools to collect, manage, and use data to inform decision mak- ing. They can also enable digitisation in society and the economy by using the crisis as a spur to accelerate the rollout of digital IDs, signatures, and registries. To support broader digitisation, major infrastruc- ture expansion will be required, including those in backbone networks and last-mile connectivity, as well as electricity supply. As Lacina Kone noted: “How digitised Africa is depends on how digitized our infrastructure is—it’s not rocket science.” It is estimated that governments, development finance institutions, companies, and investors will need to spend $100 billion on key ICT infrastructure by 2030 to achieve universal broadband access— including 250 000 new 4G base stations and 250 000km of fiber cable. As a country we need a workforce equipped for the post-Covid-19 “next normal,” in which digital skills will be at the core of many occupations. The government can ensure that training infrastructure is in place for both basic skills, like mobile transactions, and advanced ones, such as coding and graphic de- sign. Positioning for regional trade In the longer run, local companies must take ad- vantage of opportunities in intra-African trade and global supply-chain realignments spurred by the cri- sis. “This crisis has shown that globalization may have led us to over-rely on global supply chains. There will be a big re-think worldwide—not just be- cause of politics, but also because of countries' ability to meet their basic needs,” Ngozi Okonjo-Iweala, for- mer Finance Minister of Nigeria and one of the Afri- can Union’s Covid-19 Special Envoys, said recently. According to a McKinsey study, for every dollar of manufactured product, Africa imports approximately 40 cents in inputs from outside the continent—higher than most regions in the world. Over five years, a serious push to reduce reliance on global supply chains could add an initial $10–20 billion to the continent’s manufacturing output if 5 to 10 percent of imported intermediate goods can be produced within the region. As companies globally rethink their supply chains, opportunities for Zimbabwean firms to reposition themselves abound. To unlock these opportunities, governments and private-sector partners can focus on accelerating im- plementation of the African Continental Free Trade Area and improving the business environment. The Financial Gazette TOP COMPANIES 2021 SPECIAL FEATURE July 22-28 2021 | Page S15 Top Company award unpacked

Top Listed Company ing to a changing operating environment. HIS is the foremost top award of the Top Com- Disclosure And Investor Relations pany Survey and recognises this company as the Award Tbest performer amongst the key quantitative and This award acknowledges companies that qualitative aspects of the survey. foster comprehensive disclosures pertaining This award recognises the best performing com- to financials and operations as well as reason- pany listed on the Zimbabwe Stock Exchange (ZSE), able levels of engagement with all stakehold- excluding listed banks and those in the insurance sector ers particularly the investment community. which are considered separately. The award speaks to companies which The winner of this category is the company that has strive to maintain vigilance and conform to gone through the most rigor of analysis and has come facts whether they are advantageous or disad- up in the top tier amongst the Top Company’s Survey. vantageous to the company. The Survey observes profitability, earnings quality, Manatsa Tagwireyi Tinashe Yafele Companies that satisfy the requirements cash generation, efficiency and solvency amongst the year. the main model. by regulators, the stock exchange disclosure quantitative assessment and social responsibility, en- Special Mention Award It recognises outstanding achievement or rules and more, as well as Companies that vironmental, governance, leadership, disclosure and This award is based on the Judge’s deci- contribution to a current topical issue. This disclose information in a timely manner and investor relations amongst the qualitative assessment. sion to award a category that may not neces- year the awards recognised a company that simplified financial language following the Top Banking Institution sarily have been captured in the framework of displayed highest levels of agility in respond- occurrence of facts that require disclosure. The award is given to the most outstanding bank for the year based on both quantitative and qualitative attri- butes of each bank reviewed. From quantitative perspective we looked at how each bank performed based on core banking financial ratios. In terms of qualitative attributes, we looked at each bank’s governance structures, corporate social respon- sibility activities, leadership and strategy qualities. Top Insurer (Short-term) This award quantitatively recognises the best per- forming short-term insurer in the non-life space. Quan- titative data is qualified on the basis of IPEC returns submitted quarterly by licensed short term insurers. Our short term insurance model provides an analysis of composite measures broadly categorized into dimen- sions relating to each insurer’s, capital adequacy, oper- ating performance, liquidity, competitiveness and size. Top Insurer (Long term) This award recognizes the best performing Life As- surance Company as per IPEC submissions. Key quantitative performance measures are selected and grouped into five weighted categories relating to each Assurers capital adequacy, operating performance, liquidity, earnings quality and yield. The winner exhib- ited sturdy performance despite inflationary pressures in the 2 most recent financial years. Environmental Social and Governance Award The ESG award recognizes a company that upholds good Environmental, Social and Governance princi- ples. The company that operates an ecologically friend- ly business model which promotes the efficient and sustainable use of resources; conducts value adding so- cial development programs in the community and for employee wellness; and promotes ethical governance practices by the Board of Directors, executive man- agement, employees and in interactions with external stakeholders. Best Tangible Investor Returns Award This award recognises, quantitatively, the best per- forming company in terms of annual returns to inves- tors. In coming up with the winner, capital gains and divi- dend yield are aggregated together for a single compos- ite return for the year. Inflationary pressures that characterised the operat- ing environment, also spilled into the prices of listed shares. Caution was also placed in consideration of the li- quidity and availability of the shares. The ease of entry and exit which allows for the real- isation of gains and losses by an ordinary investor is a key parameter in determining the winner of the award. A minimum threshold of five percent of the issued shares in each respective company should have cumu- latively traded during the year. Further, the company’s shares should have traded in more than fifty percent of the available trading days during the year. The year on year price evaluation is conducted on an adjusted volume weighted average price to control for thin volume induced upswings and down swings. The award recognises the company that would have delivered the best tangible gains to investors during the Page S16 | July 22-28 2021 TOP COMPANIES 2021 SPECIAL FEATURE The Financial Gazette Simbisa’s show of strength Prosper Matiashe out the country and is available in almost ev- number of counters to 227 across Zimbabwe. Focus and proactive positioning for the ery town and city in Zimbabwe. In addition, Regional operations at a glance future VER the past two years, there have the company has regional presence operating •15 new counters were opened in the re- Through opening new counters, the com- been significant changes in the econ- in Kenya, Zambia, Ghana, Mauritius and gion pany continues to position itself for growth Oomy which have tested the resilience Namibia. Whilst the Zimbabwean opera- •Customer counts in the regional business and being ready for recovery post the pan- of companies and individuals. Hyperinflation tions have continued to grow and be resilient fell 19 percent from prior year, while average demic. It is important that companies don’t and currency devaluation have resulted in against economic challenges, the regional op- spend increased 644 percent in ZWL infla- lose sight of the long-term prospects. consumers witnessing a drop in disposable erations have also provided appropriate diver- tion-adjusted terms and six percent in US$ The future of business processes is digital incomes. sification and smoothening of performance. terms, despite currency devaluation against and on demand services. The company is fo- The Covid-19 outbreak and lockdown Surviving the Covid-19 pandemic the US$ across our regional operating mar- cused on growing and improving the delivery measures instituted by the government to Simbisa managed to mitigate the impact kets. business which is being realised through the curb its spread have also contributed to the of the pandemic on customer counts by in- •In Kenya, delivery sales increased 31 per- continued development and refinement of the already difficult situation. Families, just like creasing promotional activities, value offer- cent year-on-year. Dial-a-Delivery mobile application. This will businesses, have had to adjust and rationalise ings and continued growth of its footprint. •Simbisa Zambia achieved a seven per- enable the company to enhance the user expe- their consumption to meet available income. The pandemic also helped change customer cent year-on-year increase in customer counts rience and with the target of growing applica- But through all this Simbisa, a consumer-fac- buying habits with more preference on deliv- against the prior year same period. Local tion-related customers and orders. In Zimba- ing business, has managed to perform excep- ery services instead of sit-in arrangements. currency average spend remained stable, re- bwe, the number of delivery zones has been tionally well and surpassed all expectations. In addition, the company pursued aggressive sulting in a nine percent increase in revenue increased to shorten delivery distances and to The company achieved excellent infla- cost-saving measures in response to the afore- versus prior year. improve on delivery times and coverage. A tion-adjusted results (for the half year to 31 mentioned operating environment challenges. •In Mauritius, improved average spend cut to the delivery distance and delivery times December 2020) exemplified by the follow- This re-aligned its cost base and optimised realised through increased delivery contribu- will lower the cost to serve customers without ing: its operating margin efficiencies, which al- tion resulted in a more moderate seven per- compromising quality. •101 percent growth in revenue lowed the company’s profitability to remain cent year-on-year decline in local currency In Kenya, Simbisa is leveraging on data •96 percent growth in profit before tax resilient. revenue to create value for the customer and the •300 percent growth in cash generated In the second half of the year during which •In Namibia, though revenue was down shareholder. Through its subsidiary Kutuma from operating activities the Zimbabwean market was mostly in lock- 17 percent compared to prior year, manage- Kenya Limited, the company is developing •91 percent growth in headline earnings down counter hours fell 19 percent, resulting ment’s success in rebasing costs resulted in a a customer database to improve the delivery per share. in a fall in customer count of seven percent. 51 percent improvement in the restaurant op- businesses’ performance and the customers’ Simbisa Brands Ltd is in the quick service But when the market opened up between 4Q erating profit versus prior year. experience. restaurant and casual dining business operat- FY2020 and 2Q FY2021 customer counts The company wasn’t immune to the va- Data is the oil of the new digital era or the ing popular brands like Chicken Inn, Pizza grew by 166 percent. This is testament to garies of the Covid-19 pandemic and the fourth industrial era. Companies that are in- Inn, Bakers Inn and Steers. Apart from the the way the company exploited the re-open- persistent struggles faced by developing sights driven will be able to improve efficien- Bakers Inn unit, which sells bread as its an- ing of the economy after the first lockdown. economies. However, the company mitigated cy through data, engage the client and serve chor product, it can be argued that the other The average amount spent by customers also revenue declines accordingly and compli- them better and above all monetise the data brands sell discretionary food products whose increased during the first half of 2021. The mented the revenue sustenance with appro- at a profit. By investing in technology plat- demand can be sensitive to economic trends. company continued to increase its footprint priate cost efficiencies to further protect the forms, Simbisa is also proactively disrupting The company has a wide presence through- by opening six new counters, taking the total bottom line. itself and positioning for the future. The Financial Gazette July 22-28 2021 | Page 17 Column Increased M&A activity in consumer sector CCORDING to the International Monetary ing its footing in food production through investments Fund (IMF), economic recovery in Zimba- in businesses such as Profeeds, Probrands, Probottlers Abwe is underway and is expected to strength- and Prodairy. en in 2022, despite some constraints at the local, Of course, the investment thesis in Innscor lies in regional and global level. In fact, Gross Domestic the integrated business model (highly interdependent Product (GDP) is projected to grow by 3,9 percent in businesses with synergistic advantages). Elsewhere, 2021, signalling a rebound from the recession in 2019 Dendairy and Dairibord are still in merger and acqui- and 2020. sition negotiations while Tanganda Holdings (Meikles While the second and third waves of the pandemic Limited) and Ariston Holdings have also issued cau- and uncertainties about the likely timing for a broad- tionary statements. based roll-out of the vaccine in Zimbabwe and its key It appears that we should expect more transactional trading partners will suppress external demand, the activity among the consumer names on the Zimbabwe key agricultural sector has provided a sound footing Stock Exchange (ZSE). for a rebound. All in all, we remain overweight on the sector and In fact, the agricultural sector is expected to spear- recommend investors take long-term positions in Del- head Zimbabwe’s recovery given the favourable rain- ta, Innscor Africa and Dairibord Holdings. fall in 2020. Already, there has been strong recovery  Matsika is head of research at Morgan & Co, signs from some of the listed consumer-facing com- and founder of piggybankadvisor.com. He can be Shake-out period for mature products/businesses. panies such as Innscor, Delta Corporation, Dairibord Source: Corporate Financial Strategy, Dr Ruth Bender reached on +263 78 358 4745 or batanai@morgan- Holdings and Meikles Limited from a volumes-growth zim.com/[email protected] perspective. That said, an important assessment would be on what would be the major growth drivers for these companies in 2022 and beyond. The question on growth drivers is best answered by studying the life cycles of some of the product of- ferings. A very important element highlighted by the product life cycle is the concept of changes in market share for the competitors in any industry.

Economics & Market Intelligence with BATANAI MATSIKA

Most consumer goods tend to follow a well-estab- lished life cycle in that the trends in sales values are ra- tionally explained by reference to the current stage of development of the product. In addition, by breaking down the life cycle into several stages, it does become possible to assess what the long-term future trend in sales levels might be. In the beverages sector for example, (Pepsi and Co- ca-Cola), the fast growth in demand attracts late en- trants into the market. The new entrants will increase the total capacity for the product, but the existing play- ers are also trying to increase their share of this grow- ing market. As illustrated in the infograph, this can cause a sig- nifi cant increase in total industry capacity, even though the demand for the product is stable. As a result, many businesses in the industry will have spare new capacity, which can cause fi erce price competition until a more stable equilibrium position is established. The bottom line is that the “happy state of affairs” eventually ends when demand for the product starts to die away. This can be caused by saturation of the market or by the launch of a better replacement product which rap- idly attracts most of the current mature product’s users. When this happens, some of the strategies that could be pursued by corporates include exploring export markets or acquisitions to consolidate market share. Taking Delta Corporation (Delta) as an example, we note that alcoholic beverages have a unique ad- vantage in that they are habit-forming and consumers always tend to up or down-trade to suit different dy- namics. However, the sparkling beverages business is dif- ferent and Delta has gone ahead and acquired Mutare Bottlers to consolidate its foothold in the space. In terms of opaque beer, Delta has embarked on a region- al growth strategy by acquiring National Breweries in Zambia and United National Breweries Proprietary Limited (UNB) in South Africa. Similarly, Innscor Africa has also been consolidat- Page 18 | July 22-28 2021 The Financial Gazette Column Framing disciplinary offences correctly (I) ndisCiplined employees to HRp is the labour (national be important to the readers. We shall example of the tea urn above, if the such as “that is not what we have done at the workplace need to employment Code of Conduct) - look at some offences which can be urn is left to boil and it is sitting above in the past”. The employee has disdain Ube corrected through a fair statutory instrument (si) 15 of 2006. included in an organisation’s offences computers, this can produce costly for authority and goes on to do what disciplinary system. Undisciplined Misconducts that an employee can be schedule to illustrate this write up. and unsafe condition should water he/she believes to be right thing. employees do not follow instructions charged with are found in section 4 Negligence - this should be left spill over into the computers. Refusing to obey an order - using or obey established organisation’s of this si. The decision to use either for an employee who fails to check Failing to carry out an the example in disobeying a lawful rules, systems and orders. They section 101 of the lA or statutory his/her engine oil in a car that he/she instruction - this is when a supervisor order, an employee is found inside the usually have no respect for their instrument 15 of 2006 is the HRps. is entrusted with and results in the has instructed his/her subordinate to premises and instructed to leave but superior officers. Whenever an employee works engine getting damaged or leaving carry out a task but the employee does says he/she will not leave. discipline is as “acting in a or behaves contrary to the laid down materials that can get damaged from not do it in the manner required for This a sure case of refusing to obey manner and behaviour that directs an requirements of his/her employer, he/ bad weather in the open without being example, he/she has been instructed a lawful order. it has to do more with employee’s energy towards satisfying she is committing a misconduct and covered adequately or knocking off to move 20 cases of water bottles the “now” meaning that the employee an employer’s established safety, subject to disciplinary action being without securing the employer’s from one office into another in an is actually saying he/she is not going operating and administrative rules and taken against him/her. premises as examples. hour’s time, but moves only 15 cases to do what he/she has been directed. systems”. This implies an employee disciplinary action against Carelessness - is carrying out a then he/she decides to sit down for no There is a thin line between following lawful instructions that are an employee for committing a task without due care and attention. apparent reason. Refusing to obey an order and given by supervisors at all times. misconduct is initiated by his/her His/her failure has nothing to do disobeying a lawful order. it is the discipline is the atmosphere of supervisor who fills in a Complaint with him/her being incapable but action that takes place immediately respect and adherence of employees Form (CF), which we can also call a behaving in an undisciplined manner. or thereafter that may determine the to their employer’s lawful instructions, charge sheet. it is this document that Theft - this is concerned with an correct offence to be placed in the CF. orders and rules. in this situation triggers the disciplinary process. employee removing or taking his/ Bad time keeping - employees employees respect; the employer and it is in the CF that details on the her employer’s property without agree with their employer when they Kingfrey Chizema his/her assets, superiors, colleagues nature of the offence is entered. The permission and with an intention to are supposed to report for work on and their occupations in pursuit of selection of the offence and the details deprive the employer off the property their work days for example 8am, but attainment of planned productivity that will support the offence allegedly This implies carrying out works permanently. it is important that the the employees report for work outside level. to have been committed must be or behaving in a manner that stolen property is clearly identified this stipulated time, then this becomes To maintain a disciplined clear for the HRp to investigate it demonstrates that the employee is and witnesses to the offence can a case of bad time keeping. workforce the labour Act (lA) 28:01 correctly and the Hearing Committee not applying his/her mind to it, an support the supervisor’s charge. Bad time keeping cannot be used provides the “disciplinary process”. it (HC) to understand the offence when example is that of following a vehicle Disobeying a lawful order - to charge an employee who is failing guides the employer in ensuring that conducting the hearing process. it is in front so close that should it stop for supervisors or an employer has a right to meet his/her targeted production for disciplinary action against employees the selection of the correct offence that any reason the driver will hit into its to instruct an employee to carry out a instance. is applied fairly. section 101 of the we are concerned with in this write up. back or leaving documents on a table task in a particular manner or adhere it is important to think through lA provides the manner in which in a labour Court case judgment with a boiling tea urn, which can send to an order but the employee refuses offences carefully before deciding an employment Code of Conduct to number lC/H/186/2004, the Judge splashes of water on to the documents to do as directed. what to insert in the CF, to avoid regulate discipline at the workplace ordered the reinstatement of an close by or leaving aeroplane tickets For an example, the supervisor charging staff with a wrong charge. in can be formulated. A works council in employee who had been charged for your manager who will fly early says no employee will remain inside the next article, we shall analyse other conjunction with the human resource and dismissed from employment for in the morning of the following the premisses after 6pm, but one is offences that we have not covered. practitioner (HRp) can formulate a failing to report an accident instead of day on a table that can be accessed found inside after the stipulated time, n Chizema is a Past President Code of Conduct (C of C) that lists the negligence. by any employee or placing a fire this can then be termed as disobeying of both the Zimbabwe Institute offences that will address discipline The employer initially had charged extinguisher in a car without securing a lawful order. of Management (ZIM) and the matters in the organisation. The list the employee with misuse of company it in its bracket. disobeying a lawful order has Institute of People Management of can cover peculiar offences to the vehicle. This confusion in selecting depending on the seriousness more to do with the action that follows Zimbabwe (IPMZ). He writes in his organisation as well. the correct offence in this court case is or degree of carelessness, this can after a directive and it is usually personal capacity. Another instrument that is available an example of why this article should become a negligent matter. Using the accompanied by a heated discussion The Financial Gazette July 22-28 2021 | Page 19 Column T IS here and here to stay. To be a part of it or not is the big question. We all have a choice to be Iactive participants or to be spectators. It is every- The digital tide, swim or sink! where around you and it is now a part of your every- day life, whether you are at work or you are at home. reputational risks through loose comments ly to showcase some of the gory images of cannot be trusted’. It is these laggards who Whether you are stationary or in transit. Whether you on social media, that do not represent the human remains and people fi ghting for their are adamant about continuing to use cash as are doing business or you are engaged in social ac- views of the organisations they work for. lives. Some of the videos were very worry- a mode of payment. Many still prefer to use tivities. Whether you are sending money or receiving Social media as the alarm bell ing because one would imagine that instead cash that they can touch and feel. They are it. Whether you are purchasing a product or you are In Zimbabwe, we ex- of taking a video that will suspicious about card use, inaccuracies of selling it. Whether you are bothered by something and perienced two bus disas- go viral, one could actual- bank charges and exposure of personal in- you want to solicit the views and opinions of others or ters in the month of No- ly be helping to save the formation. The risk factor is valid because not. The digital wave is here, no holds barred. vember 2018, in which life of someone who is personal information may be accessed by For most people, your phone is the last thing you jointly close to 90 people on the brink of death. The other companies and it may be used for oth- attend to before you sleep, some even close their eyes perished. We also experi- Pamela Gwanzura question is what was more er purposes such as personalised advertis- while it is still in their hands. For most people, the enced several fi re disasters important? Has social me- ing and marketing, targeted at one’s profi le. phone is again the fi rst thing they look for as soon across the country in sev- dia taken away the human Maximised privacy may fast be a thing of as they open their eyes in the morning. It is a game eral institutions which resulted in damage to instinct (ubuntu spirit), that would make any the past with the integration of the digital of catch up and be up to date with what is going on property worth millions. Social media, es- human being rush to assist in such a disaster, platforms that now exists. around you and the world. The news feeds are ex- pecially Whatsapp and Twitter were awash unprompted. See full article on www.fi ngaz.co.zw tremely popular in the morning as everyone wants to with live horrifi c images of the disaster sites Paperless transactions  Gwanzura is the chief executive of the Zim- know what the breaking news is. After discovering as the disasters unfolded, some of the im- Given the advent of technology, appli- babwe Advertising and Research Foundation what the breaking news is, everyone wants to be the ages too sensitive for those with a nervous cations (apps) are now the fastest way to (ZARF). She is a seasoned marketer with over 20 fi rst to spread that breaking news, whether good or disposition. Social media was used posi- link organisations with customers. Contact- years’ experience in the marketing and advertis- bad, most of the time it is bad. In a way we have all be- tively to raise alarm and make a wide call less payments are now the in thing, the old ing industry. She is a member of the Marketers come alarmists, eager to spread news that alarms and for instant help to those able to come to the school customers still struggle with online Association of Zimbabwe (senior executive mem- shocks society in the name of, ‘Can you believe this?’ rescue. However, it was also used negative- payments because in their heads, ‘machines ber). She writes in her personal capacity. Convergence on the mobile devices The digital revolution as it refers to digital devices is an issue of convergence. Convergence simply put, is the point at which multiple tasks and skills and pro- cesses meet on one platform. It is the convergence of many skills, tasks and processes on the digital plat- forms in particular, the mobile phone, tablet, comput- er and smart tv. Of particular interest, is the hand-held devices, the smart phones. It is on the smart phones, where the social, business and transactional needs and processes intersect. It is now common place for one’s phone to be used to watch television (TV) through on demand platforms such as Kwese Ifl ix, DSTV on the go and TelOne platform. The same phone can be used to pay for subscrip- tions for the same TV platforms through mobile money applications such as Ecocash, Telecash and NetOne Wallet. One can also send emails, type and edit documents on the mobile phone. Facebook, Twit- ter and Whatsapp are also accessed for social and business use on the mobile phone. Music streaming and downloading through iTunes, Teletunes, Buddie Beatz, Spotify and YouTube are also accessed via the mobile devices. News as it happens in real time, is often easy to access and consume on the same mobile devices. The key thread that ties everything together is the Internet through ISPs like ZOL, TelOne, Telco and mobile data through the mobile phone networks such as NetOne, Econet and Telecel. Almost overnight, the Internet’s gone from a "technical wonder to a business must,” Bill Schrader, a businessman, said. The positives and negatives of social media Social media as an advocate In South Africa (SA), a couple who had a life assurance policy with an insurance company had a brush with the effectiveness and impact of social media. When the husband died, the wife approached the insurance company to cash in on the husband’s life policy. The husband had in fact died of gunshot wounds, but his post mortem also revealed that he had an existing low blood sugar level condition. The insurer decided to withhold the claim on the basis that the husband, on taking out the policy had not dis- closed that he had that condition. After several attempts to negotiate with the fi rm, the wife decided to take up the issue for discussion on social media, specifi cally Twitter. There was an uproar in society via Twitter, with many people condemning the insurer for being insensitive to this woman’s plight and for choosing to profi teer from this couple when they had faithfully paid their premiums. The outrage was so widespread that it put a huge dent on the company’s image and reputation. Many policy holders cancelled their policies as a result of this case. The long and short of it is that the insurer, upon weighing the consequences and damage, ended up making an executive decision to pay the woman what was owed to her on the life policy. This case prompted other insurance companies to closely look at their terms and conditions to avoid falling into a similar situation. Social media as the equaliser A distinguished economist in SA’s banking sec- tor was forced to resign after working for the bank for several years. This followed some comments and views he had shared on Twitter that were viewed as having some serious racial slur in them. The bank he worked for took an executive decision to request him to resign, to protect its image. In this case, his posts on Twitter cost this executive his job after years of work- ing to reach the status he had. This case prompted a lot of banks and other organisations to come up with so- cial media policies for their employees, so as to guard against employees putting organisations at serious The Financial Gazette July 22-28 2021 | Page 20 Column Some legal implications of working from home

he scourge of Covid 19 has forced gal obligations, considerations and oppor- by creating an effective team with remote when crafting WFH policies. businesses to find new and effective tunities that arise from working capabilities. On Who is eligible Tways of working. With ever-tighten- working from home ar- the other hand, one may Not all work can be done from home. There are ing lockdown regulations being enunciated rangements. simply want to cut costs. technicians and other professionals whose expertise by government, employers need to find a This week’s piece will The former would look to is most useful when applied on-site. A WFH poli- way to work round the negative effects of deal with what to look hire aggressively or alter- cy must be able to differentiate between those who the pandemic while remaining productive. out for when crafting natively equip its in-of- are eligible and those who are not. Where possible, The most common adaptation that com- work from home policies fice staff with the skills a middle ground where turning up to the office is re- merce has had to employ is working from as well as the legal im- and equipment needed to quired periodically can be drawn up. home (WFH). While the change has been plications that can arise Legal Matters work from home. update terms of engagement obligatory, there are some benefits that from the several avail- with The latter would cut It may be necessary to update employees’ con- come with employing an effective working able options. HiLary Muza out expenses such as tracts of employment to cater for the new nature of from home policy. Work from home shutting down entire work they are expected to do. An employer-employ- For instance, employers can expand policies branches and using the savings to equip ee relationship must never have murky and unclear their work force without being constrained The type of work from home policy a their staff to work from home. duties and obligations. by office space. Companies also save on company utilises should be informed by In deciding the general principles that Unclear contractual relationships are hotbeds for overheads such as employee shuttle ser- its overarching response strategy to the guide the chosen process, companies must disputes. A typical example is regulating whether re- vices, electricity and so on. These are just Covid-19 pandemic. Responses can either decide what it is they want to achieve. muneration is time-based i.e based on hours worked some of the perks of the working from be short or long-term. Once they have done that, they can craft or is performance-based i.e based on the volume of home revolution. For example, one either wants to scale WFH policies that suit their needs. I will work done. Regard must also be had to the new le- up the business and increase service fluidity deal with some of the things to think about Employment contracts typically outline the hours that an employee is expected to work, usually 8am to 5pm. That no longer works in the WHF era. Perfor- mance-based contracts are beneficial to both parties in that they allow employees to be effective in the manner that best suits them, while ensuring that they are kept to a certain standard of performance. A good WHF policy specifies how an employee’s productiv- ity will be measured. Sensitive information accessed and stored at home Employees who have access to sensitive compa- ny information have to be put on terms to protect this information as they work from home. Employers do not control who accesses their information the same way they would in an office environment. Employ- ees may not even use company servers when they work from home. Use of mobile devices and open networks opens company information to misappropriation. There is a need to deal with any potential exposure resulting from misuse of company information. One way to do this is by having employees sign non-disclosure agreements (NDAs). These agreements outline the extent to which an employee is responsible for the information under their care, how and when they can access sensitive information and what they are expected to do to keep that information safe. Also, NDAs should state what happens if an employee mistreats information en- trusted to them. Equipment A WFH policy must state what equipment, if any, will be made available to an employee. This is com- mon sense, but there are underlying legal implica- tions that employers must protect themselves from. Often, employers without set policies trouble- shoot problems on the fly and this leads to inconsis- tencies that can expose employers to needless legal disputes. In the Australian case of McKean v Red Energy Pty Ltd [2020] FWC 5688, an employee claimed that he was "forced" to resign because his employer did not provide him with a desk to work from home. The Fair Work Commission dismissed the case for the reason that having to buy a desk for himself was not tantamount to him being forced to resign. This case is instructive though because it shows that WFH policies are fertile grounds for labour disputes. if not handled well. Modes of communication The digital space is awash with communication options from SMSs to Zoom meetings. A WFH pol- icy must state what the employer considers appro- priate means of communicating both internally and with external clients. Permitted modes of communication must include channels that optimise data protection. Specific email, phone and instant messaging platforms must be established through the WFH policy. In conclusion, while establishing a WFH policy may be as simple as sending a company-wide mem- orandum, there are legal considerations to keep in mind that warrant giving your WFH policy the atten- tion it deserves. Seeking legal advice in drafting such a policy averts potential exposure down the line. n Muza is an admitted legal practitioner, con- veyancer and notary public. He writes in his per- sonal capacity and is reachable at hilarykmuza@ gmail.com and at 0719 042 628. Page 21 | July 22-28 2021 The Financial Gazette Column Facets of double taxation, treaties HE complex interaction and possible overlap Zimbabwe tax treaty ing sourced in that State. treaty shopping. between different tax jurisdictions justifi es provides that the treaty It has also been said that In conclusion double taxation is one Tcoordination efforts to avoid double taxation, “apply to persons who other than the qualifi ca- aspect of international taxation issues that which can harm international trade and investment. are resident of one or tion of being resident of could potentially affect any taxpayer. The Originally, countries established tax jurisdiction over both of the Contracting a contracting state, the knowledge of taxation treaties or DTAs and their own residents and over non-residents to the ex- States.” person should also be how they are administered is important for tent that they receive income from domestic sources. Ordinarily, a resident benefi cially entitled to taxpayers. Taxpayers engaged in interna- Tax treaties allocate and often limit taxing rights of a contracting state is the income. tional trade are highly likely to be affected and impose obligations on both contracting states. a person who is liable An absence of trea- by double taxation and knowledge of the The core provisions of a tax treaty deal with this al- to pay taxes in one of ties could lead to tax tax relief options available is essential to location function, while other provisions target the the contracting states treaty shopping i.e. ar- allow utilisation of the incentives. elimination of double taxation (for example, through by reason of domicile, Tax Matters tifi cial creation of an Meanwhile Matrix Tax School invites with credit or exemption in the residence country) and place of management or MARVELLOUS TAPERA entity in another state you to take part in the Managing Tax Prac- protection of treaty provisions against tax avoidance other similar criteria. with the main or sole tice course. The course will run from the schemes. Tax treaties intend to benefi t taxpayers re- Article 4(1) of the OECD tax treaty is of purpose of obtaining treaty benefi ts which 6th of July to the 26th of August 2021. We siding in either or both contracting states; the extent the view that has however been the require- would not be available directly to such a are open for late registrations. to which they do ultimately depends, inter alia, on ments that one should be a resident does not person. The requirement of tax residency is  Tapera is the founder of Tax Matrix how treaty provisions compare with the domestic include a person who is liable to tax in a meant to avoid the abuse of a tax treaty by (Pvt) Ltd and chief executive of Matrix law of each country. Contracting State on the basis that income non-treaty residents for the sake of deriving Tax School. He writes in his personal ca- Double taxation occurs when two states impose was received or accrued on the basis of be- tax benefi ts, a practice commonly known as pacity. a comparable tax on the same taxpayer or when two or more people are taxed on the same income. Tax treaties are generally regarded as important instru- ments for the promotion of trade and investment be- cause they remove the potential for double taxation. A multinational enterprise or investor would not be willing to do business or invest in another country if this would result in being double taxed. Because it would be exposed to different countries' tax laws which could result in a potential for double taxation. Generally, DTAs are modelled after the OECD Model (net capital exporting countries) or the UN Model (net capital importing countries). Zimbabwe- an DTAs import both models so interpretation of such can be done with reference to them. UN Model accords taxing rights to source state; while the op- posite is true for the OECD Model. In a tax treaty a balance is to be struck between taxing rights of the source and residence state. Some rights to tax are given to the source country, with the residence coun- try being required to relieve double taxation either by giving a credit for such source taxes paid, or by exempting the relevant income from its taxes. The chief purposes of DTAs are to provide a means of settling, upon a uniform basis, the most common problems which arise in the fi eld of inter- national juridical taxation (per the OECD’s introduc- tion to its Model Tax Convention, hereafter ‘OECD MTC’); prevent evasion of tax, by making provision for exchange of information between tax authorities and for assistance in collection of the tax debts owed to the treaty partner; protect taxpayers against dou- ble taxation, direct or indirect, to a greater extent than the protection offered under domestic law; prevent tax from discouraging the free fl ow of international trade and investment and the transfer of technology; prevent discrimination between taxpayers and pro- vide a measure of fi scal and legal certainty in inter- national operations. Ordinarily each country’s domestic legislation provides for unilateral relief where no tax treaty ex- ists. In the case of Zimbabwe, section 93 of the In- come Tax Act provides a credit for foreign taxes paid on income. Furthermore, sections 94, 95 and 96 give credits on Non-Residents Tax on Interest, Non-Res- idents Tax on Fees and Non Residents Tax on Roy- alties which have been withheld elsewhere. Hence in effect if the source tax rate is lower, the investor would pay the difference in Zimbabwe; but such a credit means that the income always bears taxes at the higher rate. Every tax treaty specifi es the taxes to which it relates, for instance, the title to the OECD Model Tax Treaty highlights that it is a Convention with re- spect to taxes on income and capital. Article 2 of the OECD Model Tax Convention provides that the trea- ty applies to ‘taxes on income and capital imposed on behalf of a contracting State or of its political subdivisions or local authorities, irrespective of the manner in which they are levied’. Article 2(2) there- of provides that all taxes imposed on total income or total capital, elements of income or of capital, in- cluding taxes on gains from alienation of movable or immovable property, taxes on total amounts of wages or salaries as well as taxes on capital apprecia- tion shall be regarded as taxes on income and capital respectively. A tax treaty applies exclusively to residents of one of the treaty states or both, as defi ned in the tax trea- ty therefore a person who is not a resident may not benefi t therefrom. For instance, Article 1 of the UK, The Financial Gazette July 22-28 2021 | Page 22 Motoring Jaguar E-PACE D200 AWD HSE R-Dynamic

Note that the engine’s de- livery is punchy when needed – 0-100 takes 8.4s on the way Evoque in a cat suit to 211 km/h - and relaxed on the cruise, but given its low rev TOP GEAR with muscle, the need for a 9-speed Richard Wiley auto is called into question. Sure, the gearbox, complete LATFORM and parts with useful paddle shifters, sharing is nothing new does its work smoothly and Pin the motor industry decisively, but all those gears and JLR certainly follows the are really there to massage same trail when it comes to its government-instigated emis- SUV models with the Jaguar sions and consumption fi gures. E-PACE and the Range Rover Over a week’s varied use, Evoque having an awful lot in I recorded an overall con- common under their otherwise sumption of 9.5L/100km but very dissimilar skins. this rose to a disappointing There are lots of good rea- 12.7L/100km on a typical cold sons for this sharing phenom- start 7km run to the shops and enon which I won’t go into back. here as most of those reasons Along with the engine, are self-obvious, but I some- steering and suspension, the how doubt that much of the way the gearbox reacts is con- buying public is aware of how trolled by the driving mode little in the way of mechanical – Eco, Comfort or Dynamic componentry separates the Jag - that takes your fancy. I pre- from the Evoque. ferred Comfort as the prima- The fact is though that it’s ry ride on those huge 20-inch the Evoque that has grabbed wheels, already bordering on a far bigger portion of the E-PACE shows off its attractive styling. being a tad unyielding on bro- compact, sporting SUV pie ken surfaces, is better suited to probably because they see the typical urban roads. The trade- connection between the moth- off for that fi rmness comes in er brand and the SUV concept minimal body roll and excel- in general as a better fi t. lent rebound control over dips Sadly, the E-PACE just and crests. hasn’t set the cash tills alight Despite its rather lardy un- in its bid to compete with ri- laden weight of around 1.9 vals such as the Audi Q3, the tonnes, the E-PACE avoids BMW X1, the Merc GLB and feeling ponderous and the the Volvo XC40, and given engine has enough muscle that the relatively new CEO to avoid ever feeling over- of JLR, Thierry Bollore, has whelmed. And thanks to the fi guratively set the cat among permanent AWD system, the pigeons in his headlong traction is never a problem “re-imaging” campaign, the Nicely appointed rear cabin is a tad tight on fore/aft space Comfy, supportive seats and modern displays are highlights. even on loose surfaces or future of the current Jaguar when making rapid, turning range is very much up in the front doors and a faintly devi- pers are standard fare together er, electric windows and fold- with the new TFT instrument exits from T-junctions. The air … along with the pigeons! ant leading bonnet edge – were with the posh 20-inch alloys ing mirrors. display) and smartphone con- brakes too deal with the mass For now though, let’s con- not of any great signifi cance, carrying 235/50 rubber. I’m The dash features lots of nectivity. with consummate ease, but I centrate on the very newest albeit Monsieur Bollore would not sure that this wheel/tyre squishy areas as do the doors, Gone is the clunkiness of thought the pedal feel was a interpretation of the compact doubtless have something to combo did not look a little too both of which are capped with the original system and in is little on the soft side. Jaguar SUV with D200 power say. big for the E-PACE and when artifi cial leather. Anthracite a unit with high-defi nition Finally, on the dynamic and fancy HSE/R-Dynamic On a related matter, but time comes to replace the rub- suede cloth (alcantara) inlays graphics, a clearer user menu front. Jaguars have always trim. To all intents and purpos- less obvious to the eye, Jag- ber, a healthy bank balance add plushness to the door and much more rapid reac- been lauded for their steering es, this 2021 model is visually uar’s boffi ns have paid con- will be needed. Hidden away cards while the same material tion times to inputs. Sure, the feel. In this application, and hard to distinguish from the siderable attention to sealing in the rear was an optional is used for the roof lining and systems, complete with over- regardless of the driving mode original E-PACE launched of the doors which all benefi t deployable tow bar which is pillars. The latter, in concert the-air software updating ca- selected, I found the weight- in RSA in the fi rst quarter of from double aperture seals as offered at R15 300. with a shallow rear window, pability, take some learning ing of the helm either side of 2018 and that’s no bad thing well as lower sill seals. Even It’s inside that the up- are somewhat intrusive as far and I still need to be convinced straight ahead to be artifi cially as the high-riding Jag exhibits the trailing edges of the rear dates are most evident. The as external visibility is con- that touch screen function- stodgy, being endowed with a a sporting persona founded in doors sport seals to keep the fi rst-generation E-PACE let cerned, but Jaguar makes up ality is better than a remote rubbery resistance akin to elas- a swoopy cabin design and in wheel arch intrusion clean. the side down a tad with some for this with the provision of rotary controller, but there’s tic bands competing with each a muscular fender execution I was though, surprised by rather dowdy plastics lurking a 360-degree camera supple- no doubting PiviPro is a ma- other. But once past that point, which sees the front and rear the number of spot welds on in the lower reaches, but with mented by front and rear park jor step forward. (Please go weighting and responsiveness wheels nonetheless standing show around the inner tail- the exception of the hard door sensors and on-screen graph- on-line or consult your local felt spot on. slightly proud of the body- gate aperture and reluctantly pockets which are cushioned ics. dealer for a full run-down of Getting back to where we work. report that the lower trailing only with vestigial rubber High grade carpet covers the multitude of options avail- began, the E-PACE under the The end result is an appar- edge of the driver’s door in- “mats” – the cubby by contrast the fl oor as well as the nicely able as well as the differences skin is more Land Rover than ently contradictory but very fl icted a nasty cut on my left is kitted out with high grade fi nished and easily accessed between all the models in the Jaguar and that may just be successful blend of sportiness leg when I alighted in a hurry fl ock – all other furnishings on luggage area (577L/1234L) range in terms of standard kit) why better-heeled car buyers and muscularity which in this to stop rain drops entering the the new model look good and which hides a biscuit spare Powering the D200 is a haven’t taken to the concept instance was further elevated cabin. Owing to the consider- are neatly fi tted. wheel. 2.0 turbo D fortifi ed by a very of a Jaguar in a set of SUV by the attractive extra-cost able tumblehome of the lower The superbly comfortable Other niceties included competitive maximum power clothes in the numbers hoped coat of nicely glossy metallic part of the front doors, there’s and supportive electrically the optional Technology Pack output of 146kW and a torque for. Is it that they feel more Bluefi re paintwork it showed “more door” standing proud to adjustable, heated and cooled which in return for R23 200 de- peak of 430Nm that holds from comfortable behind a badge off to good effect. I would be do such damage if you get my sports front seats, with 3 x livers a head-up display, Clear- 1 750 to 2 500rpm. This Inge- that’s been associated with letting the side down if I didn’t drift.” memory positions for the driv- Sight rear view mirror and a nium engine has been accused the product genre, whereas mention panel gaps, a subject As this unit carried an HSE er, are covered in perforated, phone charging pad with sig- of being rather gruff but in this that leaper logo belongs to which to my dismay seems badge, its equipment levels are white-stitched Windsor leather nal booster and lots of connec- application, I thought its rum- more overtly sporting steeds? not to bother too many motor- top drawer stuff. Externally, as are the steering wheel and tion ports. A 400W/12-speak- blings were very well isolated Whatever, the newly wrought ing hacks for whom the posi- not too much has changed, the rear seat which is usefully er Meridian surround sound other than when stretched to E-PACE, subject to mild res- tioning of the red line on the albeit that slick new daytime split 40:20:40. Headroom in system relieves purchasers of around 4 000rpm when a mild- ervations about ride quality rev counter seems to assume running lights and animated the back is surprisingly good R14 900 in return for some ly gravelly sound intrudes into and rear cabin space, really has much greater importance. indicators add a bit of pizzaz but kneeroom is only average. rather dandy, ear pleasing mu- the cabin. Wind noise is very the wherewithal to compete in The test unit scored well and improved visibility. Rather Talking of cooling, fully elec- sic but the centrepiece of the well controlled and road noise a sector awash with premium but not brilliantly on my “gap dark privacy glass is a R4 900 tronic air con, controlled pri- updated E-PACE interior is intrusion is good, other than on rivals, but my word, it’s not scale,” but the few deviations option along with a huge fi xed marily by clever multi-func- the standard 11.4-inch PiviPro coarse tar, which means over- a value leader in this spec in – namely minor variations in panoramic roof at R15 800, tional rotary switches, is on touchscreen infotainment unit all refi nement levels are very RSA at R1 056 300 (inclusive chrome trim alignment of both but the smart red brake cali- board along with an air purifi - complete with nav (integrated pleasing. of R117 500 worth of extras). The Financial Gazette July 22-28 2021 | Page 23 Page 24 | July 22-28 2021 The Financial Gazette The Financial Gazette July 22-28 2021 | Page 25 Page 26 | July 22-28 2021 The Financial Gazette

‘We are sticking to what we know’ NG: As a diversifi ed group, with operations across ince 2016, Zimre Holdings (Zimre) has been restructuring, seeking to re- underwriting management agency (UMA) the region, how have you managed to navigate the gain control of select business units as well as disposing of "non-core and with dynamic impact and strategies to environments in the respective markets? non-strategic" investments. As a result, the group has recovered control of acquire businesses that complement SK: Southern Africa and Sub-Saharan Africa S innovative customer propositions. We are two key units. The Financial Gazette’s business reporter, Nelson Gahadza (NG), (SSA) has been severely hit by Covid-19, with several also refreshing the Credsure brand to achieve countries unable to combat the effects of the pandemic spoke to Zimre’s chief executive, Stanley Kudenga (SK), pictured, to get insights effective repositioning and currency and in their economies. The SSA economy is estimated on the group’s focus going forward. Below are excerpts of the interview: attain a credit rating that will also cement the to have contracted by 3,7 percent in 2020, pushing SK: The company saw improved character of the business in terms of quality the region into its fi rst recession in 25 years. Worst and strength. The UMA portfolio grew 12,5 affected were those economies reliant on tourism and premium collections and claims recoveries due to prudent underwriting and aggressive percent. In 2020, the business launched a other contact intensive industries, international trade digital application called Autosure, which and export of commodities/resources. credit control. Debtor control and management were implemented, pruning enhanced convenience and accessibility for Zimbabwe went through multi-faceted economic customers. challenges, which included hyperinfl ation, eroded loss making business. Business operated with a solid GCR Rating of A- at National NG: What has been the impact of earnings, power shortages, money supply growth, Covid-19 on group operations? depressed consumer spending and low productivity. level and CCC at International level. NG: What has happened with regards SK: The impact of Covid-19 has been Despite the challenges faced in 2020, good rains and felt, however, accelerated digitisation of improved agricultural output (Pfumvudza) are ex- to your shareholding in Zupco and CFI Holdings? service delivery channels through increased pected to spur economic growth. investment in ICT ensured continuous In Botswana, a decline in private consumption SK: Along the way we had become a conglomerate, which saw us in the agro business infl ows. The impact of the and demand and a volatile diamond market resulted pandemic was equally felt in regional in implementation of economic diversifi cation. value chain through CFI, away from the core business of insurance. This also taught us a operations, albeit with minimal fi nancial The Zambian government has initiated a creditor impact. engagement strategy to obtain debt service relief with lesson that when you venture into an area that you don’t have control of, you will have NG: What is your short to medium external creditors, while Malawi’s new government terms strategy for Zimre Property In- came in with promises of a stable, corruption free, challenges. Therefore, as a conglomerate, we have not been very successful, so we will vestments? sound economic management and diversifi cation of SK: We are in the process of SK: The company will continue to the predominantly agricultural economy. consolidating Emeritus International and stick to what we know, which is insurance. On Zupco, you will fi nd out in the next embark on portfolio diversifi cation by Mozambique continues to face insurgent attacks Emeritus Botswana. In the region, we can reconfi guring existing spaces for other uses mostly in the gas rich northern provinces, which are grow our topline if we address the issue two to three weeks that we have reached an agreement with the government, which will in line with market demands. It will also gaining intensity with potential to destabilise the of competitive capital. We are now taking pursue a retail and commercial development country and divert scarce fi nancial resources. There- advantage of changes in the regulation in allow us to move on with our ambitions. The outstanding one will remain CFI. model that will be supported by sustainable fore, going forward, the group will focus on expand- Botswana and we will try to maximise our fi nancing structures that enhance liquidity ing attention from being insurance-centric to wealth capital and minimise operating expenses NG: What is your strategy in terms of growing Credsure, your short-term in- to the portfolio. We will also reorganise creation through investment banking pursuits in stra- through one licence. the business structure to delink the asset tegic national developments through Zimre Capital. NG: Overall, how would you describe surance unit? SK: We are currently onboarding more holding company from the service offering The group will also complete the reorganisation of the performance of your business units? company. regional operations to enhance competitive capital position. NG: Around 2018, you adopted a strategy to recapture your subsidiaries as part of efforts to recover your DNA. Now that you have managed to get back Fidelity Life Assurance and ZPI, what is your plan going forward? SK: We are now moving to realign and reallocate group fi nancial resources to effi cient utilisation. ZPI was acquired through a successful offer to minorities, and acquisition of Fidelity from Nssa and Imara. We are also crystallising control over wallet power through the ZPI Delink and optimising group treasury. The memories of a rich history and contribution to the Zimbabwean economy through different sectors of insurance, property, and agro-processing, plus renewed strategic thinking have delivered a new dawn to group value for all stakeholders. Zimre now has complete control and infl uence of the pillars of value extraction across the group creating capacity to offer complimentary products and serve customer needs, control wallet power and deployment of resources and destiny and return earned on all investments. For us, our DNA comes through our history. Unfortunately, we could not recover NicozDiamond after we lost it to First Mutual Holdings. But we then used the funds we got from Nicoz to rebuild and bring back the short-term business through Credsure. We also increased our presence in ZPI and also used the funds to strengthen the reinsurance operations. You will see that we have gone back to what defi nes the Zimre DNA, where we are in control of the value chain. In essence, we now have wallet power, and these are the investments that will impact on growth for business and shareholder value. NG: How far have you gone in terms of capital- ising your regional operations? SK: We are moving in phases. What we did in Botswana some three years ago is that there was a perception that the economy is small, but for us we saw opportunities and a number of Zimbabwean companies are also moving into that economy. In the fi rst phase of our investment, we needed between US$7 to US$10 million and so far, we have US$3,5 million sitting in Botswana, which is going to be unlocked by consolidation of the two licences. When we transferred some capital into Botswana, in terms of exchange control, it was approved. We now have control of our assets and we are now able to raise some of the required capital. NG: In Botswana you were moving to consoli- date Emeritus International and Emeritus Rein- surance, how far have you gone in that regard? The Financial Gazette July 22-28 2021 | Page 27 Page 28 | July 22-28 2021 The Financial Gazette The Financial Gazette July 22-28 2021 | Page 29 News Pick n Pay: 136 stores were looted, damaged

UPERMARKET group Pick n Pay on Wednesday updated the Smarket about the impact of last week’s riots in KwaZulu-Natal and Gauteng on its business, confirming in a voluntary Sens announcement that 136 stores across the company were “looted and/or damaged by fire”. Half (68) of the affected outlets were Pick n Pay-branded stores and the other half were Boxer stores, which largely targets the lower end of the South Afri- can grocery market. Of the overall total, the group not- ed that 28 were Pick n Pay compa- Pieter Boone ny-owned supermarkets, 15 were Pick n Pay franchise stores and 64 were Boxer It pointed out that Pick n Pay and supermarkets. Boxer stores in KZN are currently being “The remaining 29 stores comprised serviced from the group’s Boxer distri- Pick n Pay Clothing stores (2), Express bution centre in Lynnfield, near Pieter- Convenience stores (14), independent maritzburg. Market stores (9) and Boxer Build stores “The process of restocking stores (4). In addition, 76 liquor stores across across the region has been greatly as- Pick n Pay and Boxer were looted and/or sisted by our national, centralised distri- burned, but were not in any event trad- bution capability. Well over 200 trucks ing due to the government’s Covid-19 have so far been routed into KZN from restrictions,” Pick n Pay said. as far afield as the Western Cape and our The group also highlighted that two Longmeadow DC in Gauteng to bring of its distribution centres (DCs) in Pine- vital stocks to our stores in the affected town Durban were looted and damaged. areas,” it said. Fellow Cape Town- headquartered “Although the situation remains frag- food retail competitor Shoprite revealed ile in some areas, the group is tremen- on Tuesday that over 200 of its stores dously encouraged by the progress it has were affected in the two provinces. achieved in recent days, and is confident “Alongside all South Africans, the of its ability fully to restore its operations Pick n Pay Group was saddened by the in the affected areas.” civil unrest and destruction last week in Pick n Pay Group CEO, Pieter Boone, KwaZulu-Natal and parts of Gauteng…. commented: “On behalf of the board At the peak of the unrest, a significant and my team, I want to thank colleagues number of Pick n Pay and Boxer stores across Pick n Pay and Boxer – including in the affected areas were closed as a pre- our valued franchise partners – for your caution,” the company noted in its Sens tremendous teamwork and unfailing update. morale during this very difficult period.” “As a result of this swift action, casu- “We ask for understanding from our alties were kept to a minimum, and the customers for any remaining disruption small number of colleagues who were as we work tirelessly to deliver an unin- injured are now thankfully well on the terrupted supply of food and groceries road to recovery.” around the country. Pick n Pay and Box- “As the situation began to improve er remain absolutely determined to serve from Wednesday July 14, the group customers in all the communities where was able to re-open stores in KZN and our stores are located.” Gauteng that were closed as a precau- Gareth Ackerman, chairman of Pick tion, and a large majority of all stores are n Pay Group said: “Recent events under- now fully open and trading,” the compa- line the importance of food security in ny said. South Africa. “The civil unrest had a significant Businesses like the Pick n Pay Group impact on the group’s operations in the – alongside our valued partners, suppli- affected areas – particularly in KZN – as ers and producers – play a vital role in a result of physical damage to property, maintaining a sustainable and continu- looting of stock, and an interruption to ous food supply.” trade. He added: “In achieving this, busi- “The group moved rapidly to imple- nesses depend crucially on social, po- ment its formal disaster recovery plans to litical and economic stability, effective restore affected operations in KZN and security, and fully-functioning transport Gauteng, and to replenish stock levels in and other infrastructure. the affected regions,” Pick n Pay added. “In the wake of the Covid-19 pan- The company noted that of the 136 demic and the recent civil unrest, all stores which were looted and/or burned, stakeholders must work together to 32 have already been cleaned, repaired achieve stability, security and growth. and have either been reopened or will Pick n Pay has played an integral part in reopen by the end of this week. the lives of South Africans for the past “A number of looted liquor stores 54 years, and will continue to do so.” are also ready to be reopened when Meanwhile, Boone said that the Covid-19 regulations permit. group has seen good sales growth over “By the end of this week, we expect the past week in areas unaffected by the the proportion of the store network still disruption. closed to have reduced to seven per- “We are working to restore a full cent…. Through tremendous teamwork service as rapidly as possible in the af- both of the (affected) DCs will have been fected areas, and will not rest until every repaired and restocked, and will recom- impacted store is repaired, restocked and mence operations,” Pick n Pay added. reopened to customers.” — Moneyweb Page 30 | July 22-28 2021 The Financial Gazette Life & ArtsNews Worth Knowing July 22-28 2021 Page 31 Visual arts help us understand the world

Diana Rodrigues wick has travelled around the countryside, holding F PARENTS could workshops for artists in choose careers for their Karoi, Mutare, Hippo Valley Ichildren, the world would and the Lowveld. be full of doctors, lawyers On trips to the wilderness and engineers. of the Zambezi Valley and Over the last few years, the dry savannas of the students worldwide have Lowveld, Sheena has been been encouraged to study inspired to paint the mystical STEM subjects (science, baobab tree, which she de- technology, engineering and scribes as ‘a potent icon in mathematics), rather than the this country’. arts and humanities (lan- Overall, the steep valleys, guages, literature, history, grasslands and dwarf msasa politics, religion). trees clinging in the mist to In the race to achieve a the rocky slopes of Nyanga, middle income economy by are the landscapes Sheena 2030, Zimbabwe launched loves best, coming to life in its national space agency, paintings such as Nyanga and is encouraging students Musasa Season, and Julias- to take 'A' levels in mathe- dale View. matics, physics and comput- For visitors to Zimbabwe, er science. or homesick diasporans, While seasoned astro- Juliasdale View by artist Sheena Chadwick there can be no better me- nauts, IT specialists , doctors mento of the beauties of and lawyers can command Zimbabwe than an original single stringed musical bow, known affectionately, was a by a number of Zimbabwean Joining an active arts high salaries, the importance landscape painting by a tal- is played at many family major influence in the devel- artists through landscape group at the University of of art should never be under- ented local artist, or a hand- gatherings significant in opment of contemporary painting. Zimbabwe, Sheena learned estimated. made musical instrument to Shona society. Zimbabwean visual art. Less well known than the basic techniques of paint- It's art that gives meaning remind you of our unique Not just an instrument Mukarobgwa’s love of the Mukarobgwa, but growing ing. to our lives, and helps us un- culture. played by herd boys, or by landscape, evident in many exponentially in popularity, Later she enrolled for derstand the world. The growing trend to in- grown men socialising over works of art, will have devel- is landscape artist Sheena classes with renowned artist The art of music is im- corporate the visual arts and beer, the chipendani often oped during his early years Chadwick. Ann Lindsell-Stewart, where portant in every society, re- writing and design skills, features at Bira ceremonies as a herd boy, surrounded by In 1963, aged 19, she left she learned how to use oil flecting and influencing hu- when solving problems in in- when the ancestors are called the montane forests, grass- her home town of Kirkwall paints, and developed skills man emotion throughout dustries and STEM occupa- upon for guidance. lands and perennial rivers of in the windswept islands of in still life, portrait and land- history. tions, emphasises the impor- Thomas Mukarobgwa, an Nyanga. Orkney to visit family in scape painting. Without encouragement tance of art in life. artist and sculptor who start- Where I Used To Go With Zimbabwe (then known as “Ann taught me to see”, from the music of Thomas So if your ambition is to ed working with Frank McE- My Cattle, an oil painting Rhodesia). said Sheena. Mapfumo, Comrade Chinx, be an astronaut or to work as wen at the newly opened Na- from 1962, is an abstract de- Here she met and fell in Three years later, Lind- Zex Manatsa and the Bhun- a control engineer for the na- tional Art Gallery in 1957, piction of a wild Nyanga love with her future husband. sell-Stewart immigrated to du Boys, the struggle for tional grid, include at least played the chipendani as a landscape, created from bold Entranced, also, by Zim- South Africa, and Sheena freedom fighters in the 60s one ‘A’ level subject from young boy, while herding the brush strokes and many lay- babwe’s powerful landscape, took over her classes, pass- and 70s would have seemed the arts or the humanities, family cattle in the wilds of ers of vivid colours. varied in all its forms, she ing on her painterly skills to impossible. and bring creativity, satisfac- Nyanga, in the Eastern High- The strong relationship became inspired to express others. A little known musical in- tion and happiness into your lands. between humans and the nat- her emotions through the vi- An accomplished artist in strument, the chipendani, or life. Thomas Mu, as he was ural world is often expressed sual arts. her own right, Sheen Chad- Zoom offers app store with team-building games OOM is integrating added to meetings separately. that, as a way of playing with operator. "the second chapter of Zoom" as third-party apps into its At launch, 50 apps will be friends and family." It said it expected sales to rise the firm transforms "from a kill- Zvideo conferences, as it available, including meeting He added: "Game developers more than 40 percent this year, er app to a platform that becomes looks to stay ahead in the planning app Asana and Dot are actually building games spe- reaching more than $3,7bn embedded in a more useful way" post-pandemic world. Collector, which allows for re- cifically for team-building exer- (£2,66 billion). in people's lives. It hopes that the addition of al-time feedback and polling. cises, icebreakers and kind of Zoom chief executive Eric Ben Wood, an analyst with apps will "make meetings more In an interview with the BBC, keeping that social connectivity Yuan has previously said he is CCS Insight, said of the move: engaging, more productive and Zoom's product lead for Apps, in the changing world." convinced that the post-pandem- "The battle of the video confer- actually even more fun". Ross Mayfield, explained how It is not yet clear how much ic world will continue to em- encing platforms is intensifying Zoom is betting on a future of he saw apps being used in Zoom: people will continue to use brace a hybrid model of work- for Zoom, as Microsoft Teams hybrid working, and hoping to "Using apps for things like tak- Zoom and similar video confer- ing. continues to make incremental maintain its 300 million daily ing notes, whiteboarding, log- encing services as the world Mayfield reiterated that view: improvements. meeting participants. ging action items and managing continues to ease lockdowns af- "The world we are returning to is "Having announced a slew of Experts say it is also keen to your tasks to make you more ter the Covid-19 crisis., a hybrid workplace, we're to re- apps back in October 2020, compete with rivals such as Mic- productive." The firm, which saw exponen- main remotely connected with Zoom is keen to add more value rosoft Teams. And beyond work he envisag- tial rise over the pandemic, re- people, it's not just going to be to the platform and app partner- Zoom already has a market- es apps "including video games, cently announced a $14,7 billion the same people in the same of- ships is a quick win that many place that has 1 500 apps, but casual games, charades, board (£10,7 billion) acquisition of fice doing the same things." users will appreciate." they need to be downloaded and games, card games, things like Five9, a cloud-based call centre He described what he called — bbc.com AFTER a one-year delay, weeks of neg- ative headlines and public backlash, the Tokyo Olympics are set to open tomorrow. But that’s still a maybe, as News Worth Knowing Covid-19 continues to cause a distur- Sport bance throughout Japan. Page 32 July 22-28 2021 SPORT SHORTS Trio scores fifties as Zim go down fighting REGIS Chakabva, Ryan Burl and Sikandar Raza notched brilliant half-centuries to help Zimbabwe to a total of 298, giving them a great chance of a victory over Bangladesh in the third and final one- day international at Harare Sports Club on Tues- day. However, when they chased the target, Bangla- desh proved equal to the task as they cruised to a five-wicket victory, led by a century from their captain, Tamim Iqbal, thus winning the series by three matches to nil. The tourists won the toss and put Zimbabwe in to bat on what soon proved to be the best batting pitch of the series. Zimbabwe made two changes, bringing in Burl and Donald Tiripano for Tinashe Kamunhukamwe and Richard Ngarava. This time Chakabva was promoted to open the batting with Tadiwanashe Marumani. — ZC Lewis Hamilton (right) responded to Max Verstappen’s accusation of ‘dangerous’ driving by declaring his Red Bull rival the aggressor at Silverstone. Milwaukee Bucks win The Hamilton-Verstappen first title for 50 years GIANNIS Antetokounmpo scored 50 points as the Milwaukee Bucks claimed their first NBA title for 50 years with a 105-98 victory over the Phoenix Suns. title fight just got personal The Bucks' 4-2 series win was sealed in front of a 17 000 crowd as 65 000 celebrated outside the Fiserv Forum. They are only the fifth team to win the best-of-sev- en finals series after losing their first two matches. ... and F1 is the winner "I'm happy I was able to do it with this team for Milwaukee," said Antetokounmpo. HERE was an almost in- way past. Horner, insisted it had put the over 15 seasons in F1. Indeed, escapable inevitability to Come the British GP, how- 23-year-old’s life in danger, the Charles Leclerc and Valtteri The Suns were seeking a first NBA crown in their the clash between Lewis ever, the circumstances were “amateur” act of a “desperate” Bottas both agreed it was a 53-year history, having also lost NBA Finals series in T 1976 and 1993. Hamilton and Max Verstappen different, with the world cham- driver. racing incident, as did the dou- at the British Grand Prix on pion trailing Verstappen by a These were battle lines fi- ble world champion Fernando However, they were unable to contain Antetokoun- Sunday. formidable 33 points. The Red nally being drawn and Ham- Alonso. mpo, who became only the seventh player to register The two drivers are locked Bull has improved dramatical- ilton reacted in turn with the “It was an unfortunate mo- 50 points in a finals game. in a fierce fight for the Formula ly, proving the quicker car for most personal criticism of Ver- ment of the race but nothing It was also the third game in the series in which One world championship. the past five races, and if Ver- stappen he has yet issued. intentional or nothing that any the 26-year-old has managed at least 40 points and 10 They are competitive, deter- stappen had stayed in front over “I was pretty aggressive as a of the two drivers did wrong in rebounds. — bbc.com mined and, crucially, unwill- the opening laps at Silverstone, youngster. I’m a lot older now my opinion,” he said. ing to yield to one another for Hamilton would probably have and I know it’s a marathon not Which seems a reasonable fear it would expose a chink been powerless against him. a sprint,” said the 36-year-old. interpretation from a great Joshua versus Oleksandr that could be exploited. The Having battled across half “I have a better view in driver. But it is unlikely to ease irresistible force and the im- of that first lap, Hamilton at- how I approach my racing. But the tension as this cold war hots Usyk fight confirmed movable object butted heads tempted a pass up the inside of we’re in a battle and I think this up. and, when neither gave way the high-speed Copse corner. year he has been very aggres- There are potentially 13 ANTHONY Joshua's world heavyweight title defence at Silverstone, the nature of Neither driver would yield sive and most of the times I’ve races remaining this season against Oleksandr Usyk will take place at Tottenham their title fight fundamentally and the champion’s left front had to concede and just avoid and each one could stage an- Hotspur Stadium on 25 September. changed. wheel clipped the right rear incident with him and live to other flashpoint between the Joshua, 31, will risk his IBF, WBA and WBO Lewis Hamilton won the of Verstappen’s car, sending fight on later in the race. But two drivers. They are pushing belts against the Ukrainian, who is his mandatory British Grand Prix after a first- it hurtling into the barriers at unfortunately the aggression to the limit and the intensity of challenger. Usyk, 34, has not fought for a title as a lap collision that shunted his 180mph. stayed from his side and we that fight has now been ramped heavyweight but held all four belts a division lower title rival Max Verstappen out He was unhurt and Ham- collided.” up to another level. at cruiserweight. of the race. ilton went on to win despite Verstappen has always been Intimidation has been part Joshua was ordered to defend his WBO title after Hamilton and Verstappen a 10-second penalty. It was a clear he will get his elbows out of drivers’ armouries since the the collapse of his bout with fellow Briton Tyson Fury. are in a two-horse race for the high-risk move but acceptable and Hamilton has now served world championship began "We are two Olympic gold medallists who have world championship and have to attempt and, as Hamilton notice that he will not placid- and what is clear is that neither fought our way to the top and never avoided challeng- battled closely this season. proved by repeating it twice ly stand back and take it. With Hamilton nor Verstappen will es," Joshua said. But this is the first time they later in the race, entirely fea- the win and Verstappen’s DNF, submit to being on the receiv- "The venue is exceptional, the atmosphere will be have collided on track. In the sible. that 33-point gap has been ing end. electric, I'm honoured to be the first person to fight in opening four races when they "Most times I’ve conced- reduced to eight, which will What had been a gripping such an awe-inspiring venue. The stage is set and I am were similarly matched on pace ed to avoid incident with him. doubtless rankle hugely with fight now has a dramatic- per ready to handle business." they vied with one another re- Unfortunately the aggression him and Red Bull. sonal element that neither can Despite months of negotiations a fight between peatedly and did brush against stayed from his side and we Hamilton was judged by the ignore and, since neither will Joshua and WBC world champion Fury for all four each other at Imola when, no- collided." stewards to be at fault and took be backing off, Silverstone belts failed to materialise. tably, Hamilton gave ground Verstappen condemned a penalty but accusations that was likely the overture to one Joshua called Fury "a fraud" after their pro- rather than risk being knocked the move as dangerous and he is a “dirty’ driver simply do of the sport’s great rivalries. posed Saudi Arabia meeting was called off. out as Verstappen muscled his his team principal, Christian not hold water with his record — theguardian.com — skysports.com