Nelson Gahadza : Business Correspondent

The Central Africa Building Society (CABS) has sold only 700 houses from the 2 800 constructed under the Budiriro Housing project in partnership with the Harare City Council and so is introducing a rent-to-buy scheme to make it easier to raise a deposit. CABS, a subsidiary of Old Mutual, saw the group injecting in excess of $15 million into the project.In an interview, CABS managing director Simon Hammond said the mortgage lender is re-modelling some of the houses and launching a rent-to-buy scheme in order to offset the low uptake.

“The four-roomed houses are more popular than the smaller two rooms, so we are converting some of two rooms to four rooms and they will be available by end of August. In the meantime, we have only sold about 700 houses and we still have a long way to go,” he said.

Mr Hammond said the bank will soon launch a rent to buy scheme for the houses so that people who can’t raise a deposit can move in and raise a deposit over a period. Initially home seekers were expected to pay about $5 000 deposit for two-roomed houses that were being sold at a total cost of $22 000 while the four-roomed houses cost $27 000 with a deposit requirement of more than $7 000.

In February last year, the deposits were reduced to 10 percent from 25 percent of the total house value. This means that home seekers who wish to buy a two-roomed house without a slab that has a total value of $25 302,30 would pay a deposit of $2 530,23, instead of the $6 000 that was being charged before the reduction. Two-roomed houses with a slab are valued at $27 451, while one will have to fork out $31 262 for a four-roomed house.

According to Mr Hammond, the bank is finalising some infrastructure issues to improve the area which include electrification while the City of Harare is completing construction of the roads.

Commenting on the $10 million Youth Fund, Mr Hammond said the bank is still engaging relevant authorities while recoveries from the initial scheme remain slow.

“But we will continue to make efforts.”

Zimpapers is proud to once again join TM Pick n’ Pay in bringing value to our clients. Get ready for this year is branded “Big Bonanza Promotion” where you stand a chance to win big with your favourite media house. Up for grabs are 56, yes that is a whooping 56, 390l fridges from Capri with water dispensers.

To stand a chance to win one of these fabulous, all you have to do is buy any of our publications in store, fill in the coupon attached, drop it in the box provided and you are with the a chance to keep real cool this summer. Running from August 4, 2016 until September 30, the promotion offers people a chance to win an shop.

Here is the story of a winner of the 2014 edition of TM Pick n’ Pay popular promotion:

The Dangamvura woman was on cloud nine after winning one of the 17 Jeep Compasses that were part of the promotion prizes of the TM Big Brands Bargain Bonanza promotion. The lucky winner, Mrs Nyasha Muparutsa (50), of Area 15 was all smiles about winning the car and emphasised that promotions held by various supermarkets were aimed at empowering customers.

“I am still shocked that I won this car. I did not expect to win a brand new car when I don’t even own a second hand one. I only bought a bottle of salad cream, tomato sauce and a few other items which cost me about $9. It was on Thursday and that was the last day of the competition.

“I was reluctant to fill in the competition coupons because I did not have time, but the till operator persuaded me until I complied. I was called on Monday by people from TM Harare telling me that I had won a Jeep Compass. I was excited and shocked, but I also figured out that these competitions are real. There is absolutely no corruption involved,” said the jovial Mrs Muparutsa.

Mrs Muparutsa also described the car as a blessing from God saying she now has transport to carry her ailing sister around.

“God answers prayers in different ways. This car comes as a blessing to me and my family because I have a sick sister and carrying her around was proving to be a challenge. We had to hire transport to ferry her to hospital most of the times. Now that we have a mode of transport, mobility will be easier,” she said.

The mother of three urged people to participate in competitions as everyone was capable of winning. The Big Brands Bargain Bonanza was an idea by TM and Pick n Pay supermarkets to celebrate the nation’s biggest brands and some of the prizes included 17 top-of-the-range Jeep Compasses and a Jeep Cherokee.

Fast-growing Zimbabwean tobacco firm Savanna Tobacco has acquired the Remington Gold brand from local manufacturer Cut Rag Processors. With the addition of the Remington Gold brand, Savanna Tobacco now holds four of the Southern African region’s leading cigarette brands. Nick Hales, CEO of Savanna Tobacco, says the IP acquisition strengthens Savanna’s brand portfolio and provides additional choice for customers. “Remington Gold is a long-standing brand of impeccable credentials in the Zimbabwean and regional markets.This acquisition is in line with Savanna Tobacco’s strategy of organic brand growth and acquisition,” says Mr Hales.

Remington Gold was launched in Zimbabwe in 2001, for local and export markets. The brand will now benefit from the synergies at play in the Savanna Tobacco stable.

Distribution of Remington Gold products will be optimised for geographical reach and spread in all markets, and its marketing and merchandising efficiencies will be improved.

“Remington Gold will create value from its identified markets segments and price point, and play a key role in Savanna Tobacco’s overall price segmentation strategy and brand architecture,” says Mr Hales.

With the acquisition, Savanna Tobacco now owns four key brands – Pacific, Branson, Pegasus and Remington Gold, all of which are positioned to offer high quality and competitive pricing.

Savanna Tobacco has also expanded its market reach into eight countries and rebranded its Pacific brand portfolio to give pan-African consumers access to world class quality and style while still catering for local price sensitivity and pack size requirements.

Savanna Tobacco’s updated go to market strategy now delivers industry-leading margins for every channel level and has stepped up support for the important small and micro-enterprise sector. – Metrowatch

Sanderson Abel

Lack of access to finance is often rated as the most serious constraint to informal businesses, preventing them from expanding their production and productivity. This relates to both informal small and medium enterprises, as well as smallholder farmers who often cite cash flow as their major problem. Lack of official status or collateral, low levels of literacy and inconvenient location of banks are among the main factors impeding businesses in the informal sector from accessing finance.Given their heterogeneity, informal sector includes a wide range of businesses, which differ in their dynamism, technical advancement and risk attitude.

Many are relatively stable in their technology, market and scale, while others are more technically advanced, filling crucial product or service niches.

This makes their financing of great interest.

What are the potential sources of funding for informal sector?

Informal sector players should understand that while banks have a comparative advantage in credit information processing and intermediation, they must continue to play an important role in funding the informal sector segment, a more diversified mix of funding options than those currently available would represent a more sustainable long-run in the country’s financing environment.

At the national level, a range of policy actions have to be put in place, which aim to create a more diversified set of viable funding options. It is then imperative that the informal sector critically evaluates these various financing mechanisms before settling on what they think will best suit their business models.

Before any informal sector player decides to approach a bank, it is important to develop a checklist of potential sources of financing.

It is always important that they continuously evaluate to check on the proportion of their working capital and new fixed investment that has been financed from some of the following sources during their subsistence, bearing in mind that financing innovation and small businesses requires a funding system that sustains entrepreneurship and drives job creation

The potential sources of financing would include:

Internal funds/retained earnings

Borrowing from local private commercial banks

Borrowing from state-owned banks

Loans from family/friends

Money lenders or other informal sources (other than family/friends)

Trade credit from suppliers

Trade credit from customers

Leasing arrangement

Non-bank financial institutions

Non-Governmental Organisations

Venture capital is also an important part of such a framework

Is diversification away

from banks good?

Diversification away from reliance on bank funding is desirable, it is important that policymakers mitigate the risk that firms are merely turning to other under-developed and costly forms of financing due to inability to access bank credit.

Policy must aim simultaneously to stimulate the flow of bank credit and to create well developed markets for a range of alternative financing sources to complement the role of banks in financing the informal segment.

There is need for increased coordination among various and often disconnected stakeholders interested in sustainable informal sector financing.

Institutions whose objectives are to stimulate and promote private capital for poverty alleviation and promotion of sustainable development could be used as platforms for a coordinated mechanism for various stakeholders including investors from public, private and philanthropic institutions, active in informal sector financing and seeking synergies with players from complementary sectors.

Against all odds, the existence of marked informational asymmetries between small businesses and lenders, or outside investors; the intrinsic higher risk associated with small-scale activities and the existence of sizeable transactions costs in handling informal sector financing are some of the inherent challenges faced by institutions that have an appetite to finance informal sector.

It is therefore important that policy frameworks governing the operations of the informal sector should be able to proffer potential solutions so that these factors cease to be the scaring for those with the appetite to finance this group of entrepreneurs.

It has been observed that the majority of the players once they find business opportunities, apply for loans from banks. And they ask banks to offer loans as soon as possible in order to organise materials and realise transactions in time.

However, commercial banks have to follow strict procedures and operational standards before issuing loans.

This is the standard procedure everywhere, which sometimes could not satisfy their needs for financing though necessary from a banks point of view.

It is in light of this urgency that the informal sector players should resort to other sources of financing so that they don’t jeopardise their business deals.

Although bank loans will certainly remain the dominant source of financing for economic activities, long-term investments are better financed by equity capital.

In particular, share capital is preferable to foster innovation and growth in businesses with uncertain results and pronounced information asymmetries.

While banks can count on guarantees and long-term relationships with firms to reduce the information asymmetries, equity capital enables investors to benefit in full from the returns to successful innovation.

Sanderson Abel is an economist. He writes in his capacity as senior economist for the Bankers Association of Zimbabwe. For your valuable feedback and comments related to this article, he can be contacted on abel@baz.org.zw or on numbers 04-744686 and 0772463008

Poverty and inequality reduction has remained less responsive to growth successes across the continent – Pic from www.nubimagazine.com

Business Reporter

African economies have grown substantially over the past decade, but poverty and inequality reduction has remained less responsive to growth successes across the continent, according to the 2015 edition of the African Development Bank Report. The theme of this edition is on “Growth-poverty and inequality nexus: overcoming barriers to sustainable development”.Despite earlier periods of limited growth, African economies have grown substantially over the past decade. However, poverty and inequality reduction has remained less responsive to growth successes across the continent.

With questions such as how does growth affect poverty and inequality and how can Africa overcome contemporary and future sustainable development challenges being asked, the report offers analysis, synthesis and recommendations that are relevant to these questions.

The objective of the report is to guide policy processes by contributing to the debate analysing what has happened during recent years, what has worked well, what hasn’t worked well, and what needs to be done to address further barriers to sustainable development in Africa.

Africa’s recent economic growth has not been accompanied by a real structural transformation. As a result, millions of Africans, especially women and youth, have been left behind.

The report highlights the intermediating role of various forms of inequality that limit the transformation of Africa’s growth into prosperity for all.

Unequal access to economic resources and opportunities is mirrored in the continent’s high income inequality, gender gaps in earnings and opportunities, the rural-urban divide, youth under-employment and in the limited priority given to key poverty-reducing sectors like agriculture, agro-industries, and manufacturing.

Business Reporter

Zesa Holdings continues to incur huge costs for the storage of equipment acquired from an Indian firm under a shady deal that is subject to an ongoing probe. The transformer manufacturing equipment was supplied to ZENT Enterprises, a unit of Zesa, which specialises in the manufacturing of transformers for domestic use and for export.As The Herald Business reported before, the equipment was part of a $16 million consignment delivered to ZENT without orders being raised for it or specifications to suit project needs.

The power utility, left agonising after its proposal for a 14,69 percent increase in the power tariff shot down by the regulator, this week said tight fiscal latitude will put the group under strain.

But Zesa continues to doll out huge amounts of money every year in demurrage fees for the millions of dollars worth of idle equipment whose fate remains a subject of conjecture.

A source said the Ministry of Energy and Power Development recently demanded details of all procurement transactions since 2005, which also covers the deal with PME of India.

“The ministry requested details of all transactions starting from 2005, but did not indicate for which particular period. We gave them everything, but some not in detail,” said the source. There still is stock of the equipment supplied by PME. Part of the equipment is still at the warehouse owned by ZENT, but the warehouse is manned by ZIMRA,” the source said.

While the power utility’s public relations department had promised a response to questions sent on Monday, no response had been received by the time of going to print yesterday.

It is understood that while ZESA’s transmission and distribution unit, ZETDC, would buy the equipment, it either has no capacity to buy the equipment or cannot find use for the equipment. While the issue has not been finalized, sources said the manner in which the deal was executed showed blatant disregard of rules and corrupt tendency involving senior executives.

The auditor general’s report suggested that possible connivance between officials from the two firms benefitted in the multimillion dollar.

The officials allegedly took advantage of a technology transfer agreement between ZENT and PME, which was supposed to run up to 2010, but was extended by a further five years.

Ms Chiri pointed out then that there were a number of apparently irregular features to the deal, which include supply of equipment outside of amounts raised in specific orders.

“These extra goods are for projects which have not commenced or are not on order. This has resulted in the creation of a consignment at Ardbennie location to cater for these items,” she said. While ZENT received equipment not ordered for and paying demurrage costs for their storage, PME would also send official to Zimbabwe, with the power utility meeting their travel costs.

Local mining companies have a key role to play in reviving the manufacturing sector through increasing spending on supplies and consumables that they use in their operations, a Cabinet Minister has said. Mines and Mining Development Minister Walter Chidhakwa said for instance, through leveraging their capacity to purchase, mining companies could encourage local manufacturing industries to acquire franchises of reputable global firms to manufacture equipment and other consumables locally.Minister Chidhakwa said Zimbabwe possessed both the skills and capacity to produce some of the consumables that mining firms need, but was being limited by funding challenges.

“Can you imagine what would happen to this economy if every year we were manufacturing cyanide for all your requirements, if you were buying roof bolts and all of them were made by a company in Mutare and you were buying mill balls which were being made in Zvishavane, can you imagine what that would do to our economy?” he asked at a recent Chamber of Mines briefing.

“So I am calling on the Chamber of Mines, we will walk you that walk so that we go and say to the Chamber of Industries these are the items that we want, this is the quality that we want and these are the quantities per month that we want. What do we do to get them? That is how industry happens these days.”

Minister Chidhakwa added; “I think it’s a model that we need to replicate across industry because that is how we revive Bulawayo, for example. We need to do so also with small scale mining equipment, this is the message that I want us to run seriously with because I believe, yes we are under pressure to generate foreign currency but let’s do other things also which move us towards the recovery of the Zimbabwean economy.”

Mining houses have had to import most of their equipment and consumables following the economic meltdown of the past decade that resulted in most industries closing or scaling down their operations after failing to retool.

The closure of the Zimbabwe Iron and Steel Company has also had a significant effect on many downstream industries that depended heavily on steel and steel products that it produced for the manufacture of various items used in the mining industry.

Some of the machinery and consumables that mining companies are importing include cyanide, mill balls, mill rods and explosives. -New Ziana.

Business Reporter

Zimbabwe Stock Exchange revenue for the six months to July 2016 fell 23 percent to $14 million on the back of a significant fall in volumes traded. Statistics from ZSE also show that the volume of shares that were traded retreaded by 36 percent to 56,52 million shares during the period in review.Trade was concentrated in bellwether stocks with beverages manufacturer, Delta Corporation accounting for half the value that was traded.

Coming a distant second was seed producer, Seed Co, which accounted for only 14 percent and mobile phone network operator, Econet at 13 percent.

The local bourse has lost nearly 14 percent of its year to date value, as the weak economy continues to weigh down on the value of local stocks.

This comes as the stock market, which opened this year at $3,3 billion, has fallen and is trading below the psychological (rebase) 100 level barrier.

But the ZSE was not the heaviest faller in the region in the six months to June with at least two other exchanges recording a worse outturn.

The Nairobi Stock Exchange lost 14,6 percent while the Nigeria Stock Exchange has retreated by 14,66 percent since the beginning of the year.

Investors on the Mauritius Stock Exchange may not have suffered significant loss in value, with the market losing only a marginal 0,17 percent.

The second best performer was the Johannesburg Stock Exchange, which gained 3,14 percent behind the region’s best performer, the Botswana Stock Exchange, which put on 11,65 percent in the half year period.

Equities analysts are downbeat on

the stock market’s performance in

the year ahead as the challenging

macro-economic environment

continues to negatively affect investor sentiment.

Testimony to the challenges the economy is facing, the Zimbabwe Revenue Authority saw collections fall 6 percent below target at $1,65 billion.

Ahead of solutions to improve the ease of doing business, cost of funding, labour laws, attraction of foreign direct investment, currently lower than regional peers, the equities market remains in a bit of trough.

At current company performances, foreign investors are expected to continue sitting on the fence.

Mr Gwasira

Business Reporter

FOURTEEN companies have submitted bids to supply smart meters for the Zimbabwe Electricity Transmission and Distribution Company smart metering project, spokesperson Fullard Gwasira said yesterday. The smart metering tender was divided into two separate tenders — for smart meters and for the platform — the meter data management system.The tender for smart meters closed on June 14, 2016 and evaluation is expected to be completed by end of next month. The deployment of meters is expected in the first quarter of next year.

The tender for the platform is scheduled to close this month and the contract will be awarded before year end.

Under the project, the ZETDC intends to deploy 40 000 smart meters for medium and large consumers where the current prepayment metering technology cannot be deployed because of technological limitations.

“The key driver for deployment of smart meters is revenue assurance, energy efficiency and management of distributed renewable energy,” said Mr Gwasira.

ZETDC, the subsidiary of Zesa Holdings has made a decision to migrate to smart metering technology following recommendations by a local audit and accounting firm.

Mr Gwasira said the decision by ZETDC to go smart metering was in line with the metering road map recommended by the firm.

“Smart metering project is a game changer for ZETDC as it will change the way business is done by the power utility,” said Mr Gwasira.

He added that there was a lot of due diligence that had to be performed before tendering.

“There are pertinent issues beyond functionality that must be taken into consideration

when making decision to migrate to smart metering.

“Choice of technology is key to success of project.”

ZETDC engineers had to carefully deal with uncertainties in the smart metering technology and adopt a design that avoids pitfalls. Interoperability and robust telecommunications are among the key technical issues to be considered,” said Mr Gwasira.

The scope of the smart metering project includes acquisition of a Meter Data Management System, Head End system, and deployment of 40 000 smart meters and provision of the communication media.

Phase one of the smart metering project comprises 4 000 meters and the plan is to select four different meter manufacturers so that there is diversification of technology to avoid technological risk.

The strategic goals to be addressed by migrating to smart metering include financial turnaround, migration of large power users to prepayment, loss reduction and efficient utilization of energy and management of distributed energy generation.

The Ministry of Tourism and Hospitality Industry in partnership with the International Conservation Caucus Foundation (ICCF) has proposed to place three major waterfalls under one tourism package with the aim of increasing revenue for all countries involved. The ICCF is a non-profit organisation based in Washington DC, the United States, which lobbies for global conservation management. Recently Zimbabwe formed a Parliamentary Conservation Chapter in order to promote sustainable management of environmental resources in association with the ICCF. Speaking at a press conference in the capital on Monday, Tourism and Hospitality Industry Minister Walter Mzembi said discussions were already underway with relevant authorities to implement the initiative.

“It has always been my wish that we package the major falls of the world together and I speak here of three of them, Niagra shared by Canada and the United States, Iguazu shared by Argentina, Brazil and Paraguay and lastly the Victoria Falls shared between Zimbabwe and Zambia.

“I envisage going forward, I am in conversation with the authorities of the other two, that we sell the waterfalls together as a package,” he said.

Minister Mzembi said Zimbabwe was yet to realise the full benefits of the Victoria Falls when compared to other tourist destinations abroad, noting that the Niagra Falls was a “$30 billion economy” while Victoria Falls was only at an estimated $1 billion.

He said it was “absolutely imperative” that Zimbabwe became a member of the ICCF to promote conservation efforts as well as to further connect with the United States tourism market.

“The ICCF is headquartered in the United States which is our chief source market and the passionate attachment that market attaches to the subject matter of conservation,” he said.

Referring to his candidacy for the United Nations World Tourism Organisation (UNWTO) secretary general post, Minister Mzembi said he felt “confident” especially after receiving numerous endorsements.

“We are now going into the phase where we are internationalising our campaign from not just being the African candidate but being Africa’s man for the global position,” he said.

Minister Mzembi also said the invitation to chair the new Corporate Council for Africa board which he received last week should be viewed as a vote of confidence in him.

ICCF vice president Susan Lylis said it was important that Africa be represented in the UNWTO as tourism played a major role in conservation.

“We feel it is very exciting that there is so much support for an African candidate for secretary general for the UNWTO.

“It is so important for Africa to be represented at the highest levels in the UNWTO and that is because biodiversity conservation is so key to economic development and tourism has to play an integral role in that and what better way to elevate that relationship and nexus than Africa’s key role in the WTO,” she said. – New Ziana.

Business Reporter

ZIMASCO (Private) Limited’s woes continue to mount amid revelations that some Kwekwe residents are mobilising for a class action suit against the troubled ferro-chrome producer and the private prosecution of its directors over a looming environmental disaster at its Midlands plant.This also follows reports that the company has failed to secure a $7 million bailout from its major shareholder Sinosteel Africa Corporation (Sinosteel) to finance short-term operations and it is facing a $30 million tab to clean up its operations.

“The company has been heavily criticised in a report commissioned by the Ministry of Mines earlier this year and the community is seeking legal advice on a class action suit against Zimasco and possibly its bankers for funding an environmentally-damaging operation around Golden Horizon,” an insider told The Herald Business this week.

“Essentially, residents want Government to step in and hold Sinosteel accountable especially after the Chinese went to Kwekwe and misled the community about the money needed to fix the mess.

“As it is, some former Zimasco directors are facing private prosecution,” said the source adding that these environmental concerns and lack of funding commitment from the major shareholder have undermined the company’s revival prospects.

While the Environmental Management Agency was not immediately available for comment on the issue, deputy Mines Minister Mr Fred Moyo has previously confirmed the existence of the report saying Government action is pending.

“The most evident elements discovered during the assessment includes, incorrect storm water management, incorrect separation of clean and dirty water, overflowing of dirty water containment trenches. The toxic materials could cause such diseases as cancer and other deadly ailments.

“It was further stated that groundwater and boreholes are contaminated, and the Chinese-owned company was failing to “contain, and prevent pollution from entering the natural receiving environment,” reads part of the report.

It further says highly toxic water is not only seeping into the receiving environmental surface water systems and into the natural stream, but also into the groundwater aquifer surrounding the site, posing a serious health threat to people and livestock dependent on this water.

The development also comes as Zimasco’s judicial management process has been mired in further controversy amid revelations it had been instructed by Sinosteel to withhold critical information about its business resuscitation plans from creditor banks last year and that it misled Vice President Emmerson Mnangagwa about its operational status just days before it approached the High Court for preservation.

According to analysts, the recent funding snub by its Chinese parent had not only undermined the ferro-alloys producer’s 60-day bankable recovery plan — commencing June and under which Sinosteel was to commit funding in excess of $180 million to clear debts — but also further strengthened suspicions that the major shareholder was unwilling to recapitalise the company.

“We confirm that Zimasco had instructed its legal practitioner to file an application for provisional judicial management. This instruction was not disclosed to third parties on the instruction of the shareholders (Sinosteel) to avoid causing unnecessary alarm, particularly as there was a likelihood of withdrawal of the application . . .,” wrote Mr Ngoni Mpofu on December 21, 2015, to five bankers led by MBCA Bank Limited.

While the controversial document and admission of procedural flaws form part of court papers to the ferrochrome miner’s initial judicial management process application, it elicited an immediate response from MBCA chief risk officer Mr Allan Mutenda, who accused the Midlands-based company of dishonest behaviour.

“The lender banks became aware of the application . . . only by virtue of the application being listed on the motion court roll,” he said.

Mr Mutenda said the process was being opposed on the basis of “the dishonesty displayed by the applicant (Zimasco)” and that company directors, including Mr Li Jinqian and Mr Lu Xiangkun, had already started to push for business rescue since November 2015.

“The lack of explanation . . . as to how it will generate the funds necessary to trade given the fact that the lender banks will no longer fund a company in judicial management. The clear unwillingness of the shareholder (Sinosteel) to commit whether they will or will not provide the financial support required by the applicant,” Mr Mutenda said.

Crucially, the MBCA senior staffer not only argued that Reggie Saruchera’s caretaker management was unlikely to “succeed as there will be no funding” from lender banks, but Sinosteel had also totally ignored South African bank Nedbank’s November 25, 2015 letter for funding commitment.

“The shareholder has neither acknowledged nor responded . . . although the applicant’s managing director (Mr John Musekiwa) confirmed on the 16th of December that the letter had been forwarded to the shareholder. There is no reason to believe . . . that the shareholder will inject fund . . . This further supports the argument that a judicial manager would not have funds to trade . . .,” Mr Mutenda said.

“Further, the applicant has advised that the shareholder had required that the management . . . make no disclosure of the current proceedings . . . This is sheer dishonesty on the part of the shareholder and shows that it is not concerned to act in the interests of the applicant or its creditors,” he said, adding “the underhanded nature of Zimasco’s judicial management process also meant that lender banks had little time to consider all issues under review.”

In an internal review document covering the 2009 to 2015 period, the company said its “viability had progressively worsened” at the back of “low market prices and continued increase in operating costs”.

“. . . the company had $150 million (in) current liabilities covered by $103 million current assets, thus a net liability position of $47 million. This is an unhealthy state of affairs,” Zimasco said.

Despite its woeful finances, Zimasco says it can crack a $2,8 million profit in 2016, nearly $13 million next year and $7,8 million thereafter if it is allowed to cull staff, shut down non-performing businesses and rehabilitate ferrochromium slag dumps.

While Mr Musekiwa’s company was banking on a cash injection under a plan put together by Deloittes Hong Kong and its Zimbabwean peer, the latest developments have virtually put paid to its recovery efforts.

Tinashe Makichi recently in VICTORIA FALLS

BANCAbc will invest more funds to support small-scale sugarcane farmers in the Lowveld after having already invested $21 million in the sector over the past four years. BancAbc head of retail Rufaro Hatendi on Tuesday said the financial services company has been active in the agricultural sector despite the challenges that have been bedevilling the sector’s viability.He said an investment of $21 million has already been made but BancAbc is likely not to exceed a $30 million investment in the subsector.

“Sugar cane agricultural support in Chiredzi has been our focal point in terms of funding support. This has been a huge boost for the farmers and for the past four years they have managed to produce enough to sustain themselves and the country. This programme has been successful and we are looking forward to increase our footprint in that sector,”said Mr Hatendi.

About 550 small-scale farmers are benefiting from this support programme.

Mr Haatendi said this after the handover of a vehicle to Chinotimba Primary School in Victoria Falls on Tuesday.

BancAbc in a statement said it recognises the role played by schools in child development and reshaping the future leaders of our country.

The bank embarked on a drive to encourage schools to save through the Balance Maximiser Promotion from October 2015 to the 30th of April 2016.

The grand draw was held on May 26 this year where Chinotimba Primary School emerged as the winner of the Nissan NP 300 Truck.

Chinotimba Primary’s relationship with the bank dates back to 2013 and together the partnership grown tremendously.

During the course of the competition, the bank conducted monthly draws where Roosevelt Girls High, St Peters Catholic Primary, Kyle School Trust, Regina Mundi and Little Angels ECD Centre were winners.

The monthly prizes were courtesy of the Bank’s partners, Lighthouse Printers and Rank Zimbabwe who donated printers and white boards, respectively.

“BancABC’s promise to schools countrywide is to ensure a secure and sustainable learning environment for our future leaders through tailor made products that include loans for constructing new class room blocks, computer labs or any projects that the school may require,” said the bank in a statement.

Dr Gift Mugano

The World Economic Forum defines competitiveness as the set of institutions, policies, and factors that determine the level of productivity of a country. The level of productivity, in turn, sets the level of prosperity that can be reached by an economy. The productivity level also determines the rates of return obtained by investments in an economy, which in turn are the fundamental drivers of its growth rates. In other words, a more competitive economy is one that is likely to grow faster over time.The concept of competitiveness thus involves static and dynamic components. Although the productivity of a country determines its ability to sustain a high level of income, it is also one of the central determinants of its return on investment, which is one of the key factors explaining an economy’s growth potential.

Zimbabwe is part of the global village. Zimbabwe’s economy is driven by developments in global arena. Today we are witnessing imports from both regional and international markets choking local companies.

Last week, the National Economic Forum (NECF) and the University of Zimbabwe’s Graduate School co-hosted a conference on National Competitiveness. The conference’s objective was to get views from various stakeholders on the second Zimbabwe National Competitiveness Report which is focusing on the competitiveness financial and manufacturing sectors. This is a timely intervention.

In many forums I participate — whether in workshops, meetings or radio dialogues especially the “Morning Grill” which is hosted by Tawanda Gudyanga, the question which continues to come back is how Zimbabwe can regain its yesteryears status — economic powerhouse. There are many answers to this question one of which is the need to deal with political environment but from the economic front one needs to address the competitiveness issues.

Against this background, this week’s issue will draw on ten drivers of competitiveness based on Global Manufacturing Competitiveness Index (GMCI) produced by Deloitte and Council on Competitiveness to unpack the major drivers of manufacturing competitiveness. My hope is that we can take a reflection on these drivers as they are mainstreamed at an international level and see how we can align our strategies in the same direction since we are in the same global village.

For the benefit of readers it is important to note that China, Germany and United States occupies first, second and third positions, respectively. And, interestingly, our neighbour, South Africa, occupies position number 24 ahead of powerful economies like France, Belgium and Russia. We trade mostly with South Africa. This must be a wakeup call for ourselves. The following are the most important drivers of competitiveness which we should take leaf from:

1. Talent-driven innovation drives manufacturing

competitiveness

The GMCI revealed that talent-driven innovation is the most important driver of a country’s ability to compete. For talent-driven innovation to positively impact on the country’s competitiveness, individual countries, through universities and colleges, should work on quality and availability of scientists, researchers, and engineers and the quality and availability of skilled labour as areas of priority.

2. Economic, trade, financial and tax system

The economic, trade, financial and tax system of a nation was noted as the second critical enabler required to enhance manufacturing competitiveness. The GMCI showed that economic volatility, trade barriers, structural cost tax burdens, and crushing national indebtedness, combined with high degrees of policy and regulatory uncertainty, has likely caused them to now place government-related forces and actions as more important to determining a nation’s competitiveness than anything other than the quality of its workforce.

Government-driven trade, financial, and tax policies have now supplanted labour and materials costs, supplier networks, infrastructure, energy costs, local market attractiveness and everything else as a more important driver of a nation’s competitiveness.

This seems driven by executives concerns that economic, trade and tax policies are often detracting from competitiveness for manufacturers versus helping create an advantage.

3. Cost and availability

of labour and materials

GMCI noted that cost and availability of labour and materials continues to transform the global landscape significantly with respect to creating manufacturing competitive advantage. Historically, as reflected in the prior section regarding exports, numerous companies moved their production to emerging economies where labour and materials were cheaper. As a result, the economic prosperity of the citizens in these once low cost destinations has improved, giving rise to a growing middle class — and demands for higher wages.

As these countries continue to evolve and move up the product complexity ladder — and in turn, grow their economies and become involved in the production of more complex products — they are becoming less competitive on their labour advantage.

They look more like developed countries and are beginning to shift production to lower cost countries for more commoditised products. China, for example, is now shifting production to countries like Thailand and Vietnam, and is one example of this dynamic.

4. Supplier network

GMCI survey ranked supplier network as the fourth most important driver of manufacturing competitiveness. Interviewed Chief Executive Officers (CEOs) emphasised significance importance of supplier network as one of the major drivers of manufacturing competitiveness.

In addition, CEOs and senior executives have elevated the standing of supply chains as they are taking strategic actions to mitigate supply chain risks in response to natural disasters and to gain more control and transparency of sources.

In evaluating a country’s competitive advantage in this area, executives cited financial stability and resources within a supplier network as the most important factor contributing to competitiveness, followed closely by its ability to innovate, cost competitiveness, and suppliers’ availability and responsiveness.

The old adage, “getting the right products to the right markets at the right time in the right amounts at the right cost” translates into efficient and effective supply chain management. Access to a well-oiled supplier network makes large multinationals successful in the production and continued advancement of complex goods to meet the needs of global customers.

5. Legal and regulatory

system

Much like with the supplier network driver, executives ranked developed nations as leaders when it comes to the competitive advantage they deliver through their legal and regulatory systems. Stability and clarity within the legal and regulatory environment stood out as the primary factor influencing the individual country rankings. Other contributing factors include labour laws and regulations, compliance costs, intellectual property protection, enforcement of laws and regulations, and antitrust regulations.

6. Physical infrastructure

Physical infrastructure was ranked the sixth most important driver of manufacturing competitiveness, noting specifically the cost and process efficiencies, as well as productivity improvements that directly result from access to quality infrastructure.

This driver includes support for the basic logistics involved in the movement of physical goods, as well as the efficient movement of information and energy through technology-based infrastructure investments in smart-grid, broadband and other networks.

In addition to reducing costs and improving efficiencies to conduct business, supplemental research reveals that ongoing investments in infrastructure drive innovation, and in turn, boost job creation, fostering a growth cycle within a nation.

Research reveals that ongoing investments in infrastructure results in long-term economic benefit.

Specifically, a recent estimate by the United States Congressional Budget Office suggests that every dollar of infrastructure spending generates an additional 60 cents in economic activity (for a total increase to GDP of $1,60). This multiplier effect bodes well for India, which recently announced plans to invest USD $1 trillion on infrastructure through 2017.

7. Energy costs and policies

As energy becomes scarcer and costs continue to rise, executives participating in the 2013 GMCI reported that those nations with the ability to provide access to clean and renewable energy at competitive costs would have an advantage over their competitors.

And while respondents also indicated that the level of investment in energy infrastructure, as well as the comprehensiveness and efficiency of energy policy also contributed to a nation’s competitiveness, increasing demand and limited supply coupled with market forces that drive prices up resulted in energy costs being the most important driver in this category.

8. Local market

attractiveness

Size and access to local markets is the most important driver in this category, according to 2013 GMCI Survey results. It is perhaps no surprise that China — with its large population and explosive economic growth — is considered among the most competitive countries in the world.

At the same time, relative market attractiveness parity among China, the US and Germany demonstrates that country size is not the only factor.

Rather such parity between emerging and developed economies on competitive advantage is driven by a vibrant domestic consumer base with significant spending power. These nations, as well as others like Singapore and South Korea, all have established middle class consumers that demand more complex and higher quality goods — and as a result, are likely to make these markets more attractive for large multinationals.

In the long term, trends for emerging economies to have higher disposable incomes bodes well for those lower-cost manufacturing destinations, as the good manufacturing jobs will inherently create economic prosperity for their citizens. These trends then act to create a virtuous manufacturing cycle: increased incomes, higher spending ability and increased market attractiveness.

9. Healthcare systems

With respect to healthcare systems,the GMCI noted that, on average, that the overall cost of healthcare was the most important driver within this category, followed closely by access to quality healthcare and regulatory policies for public health.

It’s no surprise then that Germany, which is regarded as having the world’s oldest employment-based social health insurance and has recently started to inject money from Government revenues into the social health insurance system to reduce wage-based health insurance contributions.

The report showed that Germany is rated as the most competitive nation in this category. Japan is close behind Germany in healthcare system competitiveness. While the US ranks third, there is a wide gap between it and second-ranked Japan.

With respect to regulatory policies for public health, survey participants consistently cited costs associated with compliance — including Government mandates that result in reduced corporate profitability and increased healthcare cost burdens — as a key factor negatively impacting a country’s overall competitiveness.

10. Government investment in manufacturing and

innovation

A number of factors were noted by 2013 GMCI participants as critical in evaluating a country’s overall competitive advantage with respect to government investment in manufacturing and innovation. Primary among them was the number of public-private collaborations, followed by investments in technology, research and development, and engineering.

Countries that lead in developing public-private collaborations not only bring together the skills required to spur innovation, but also create an ecosystem that thrives on innovation through collaboration.

The GMCI shows that China and Germany, which place heavy emphasis on creating public-private partnerships, were ranked by 2013 GMCI survey respondents as being most competitive among the six focus nations of the study.

The impact of public policy

With economic, trade, financial and tax systems ranked as the second most important driver of a nation’s competitiveness, public policy should be tailor made to support the country’s competitiveness.

In China, policies either encouraging or directly funding investments in science and technology, employee education, infrastructure development along with safety and health regulations and sustainability policies, are helping to provide a competitive advantage according to Chinese executives surveyed.

Sustainability policies in China — often met with a raised eyebrow in the west — are seen by Chinese executives as helping them drive innovations in manufacturing and movement toward the next generation of energy efficient products and processes supporting the Green Growth Agenda, for example.

Improving energy and environmental sustainability, which is a significant challenge for China, is also being used by policymakers as a catalyst for the development of a domestic innovation culture, understood to be essential for China to make the next significant step forward.

Perhaps more notable this time around in China are the policies business leaders see inhibiting their success including antitrust laws and regulations, government financial intervention and ownership in companies, which has been at the very core of Chinese capitalism, foreign direct investment (FDI) policies, immigration policies and corporate tax policies.

In Europe, business leaders see only the continent’s intellectual property protection policies contributing to a competitive advantage for them, with over 90 percent of executives indicating that current European intellectual property policies give them an advantage.

At the other end, only three policies have been cited by European business leaders as contributing to a clear disadvantage for them; they include labour policies, immigration policies and policies resulting in government intervention and ownership in companies.

Dr Mugano is an Economic Advisor, Author and Expert in Trade and Competitiveness. He is a Research Associate of Nelson Mandela Metropolitan University. Feedback: +263 772 541 209 or gmugano@gmail.com

Zachary Aldwin : Milkshake in the boardroom

The crux of the conversation was the differences in the people he would interview here in Zimbabwe and those in the USA. His main observation was that workers here, when interviewed, were all copy-paste clones that could tell you what they did, but had no tie-in to the company vision or history. Essentially you can interview almost any person in any industry and be able to use that interview in any other company’s documentary.They all sound and behave the same. He compared this to his experiences in other countries where you could have two companies in the same industry, the same field, and interview two workers in the same position and get totally different flavours of interview.

Take, for example, oil drilling rigs. Company One is a long standing company with a rich history and tradition.

The worker might say ‘‘I work here because I know these guys will take care of me, I’m in it for the long haul and love security of the job. This part I’m replacing today has been chosen because it will last longer than anything else on the market.’’ Company Two is a rapid rise, new firm that has been going for ten years.

The interview goes something like ‘‘I love change and innovation, here we are on the cutting edge of technology and this part we are changing here today is the most up-to-date, efficient one we can find.’’ The Zimbabwean equivalent, should we drill oil, would be ‘‘I work here. We drill oil. I’m taking this part out and putting another one.’’

In summary, he said, no one has their own story. There is no personal buy-in to the company brand and no filter down of company vision. Even upper management, where you may expect education to play a role, tend to parrot from which ever management book they have just read.

Flowing on from this conversation I looked at the vision and values of a random selection of half a dozen ZSE listed companies. Five of the six listed ‘‘Integrity’’ as a value. ‘‘Teams’’, ‘‘accountability’’, ‘‘excellence’’, ‘‘openness’’, and ‘‘passion’’ each scored three hits.

Phrases like ‘‘the best’’ and ‘‘a market leader’’ peppered vision and mission statements. I am tempted to expand the comparison across the entire stock exchange to see if the similarity persists on a larger scale.

Now these are not wrong values. If all we are doing, however, is creating textbook companies with no flavour of their own then perhaps that is why our workers all behave the same across sectors.

When there are five of you trying to be ‘‘the best’’ in a field it leaves little to differentiate between you.

Tell your story. What do you really do and why do you do it? Figure that out and put it into your vision. Let your webpage resound with your story and the particular edge you bring to the field.

Filter your vision (which really should encapsulate your story) down. Don’t just hire for the sake of hiring; hire for the match with your vision.

Hire for the attitude that matches what you want in your company. Create a position where others of a similar persuasion are joined to your cause.

I do not think that all Zimbabweans are clones of each other. They just need to be put in the right places that allow them to flourish. Bring out the different flavours of personality that we have working in our organisations.

Create the buy-in with them so that when someone asks what they do they do not just parrot out company policy in a mindless fashion, but rather, with exuberance, passion and pride they tell your story as if it was their own.

E-mail: boardmilkshake@gmail.com

“No industry has been affected more permanently and positively by the Internet than Public Relations”. This is one assessment made by Internet PR guru — Don Middleberg (2001) — on the emergence of the Internet and new media. Mr Middleberg further said that “ . . . the internet is an environment of dialogue, not monologue.However, a better description for online communication could be multilogue as, at times, there are more than two participants communicating in a particular area of the net, and on one or more subjects at a time”.

Welcome to the world of multilogue! Indeed it is multilogue and this is what increased media technology and social media platforms have brought into this world.

While multilogue is one of the telling effects of the massive influx of media, Middleberg’s assertion that PR is one exclusive industry that has permanent and positive scars of this increased media complexity is all but true whichever way we look at it.

This increased media complexity together with traditional media has transformed PR in many ways.

PR is already a creative profession from the traditional media perspective, and the new media has elevated that creativity to another level.

PR practitioners in the corporate world can now activate the creative nature of organisations with social media platforms from LinkedIn, Facebook, My Space, YouTube, Twitter, blogs to Instagram.

Organisations now have the creative flexibility of these social platforms which is different from the linear creativity of traditional media.

We now have companies like Mimosa, Zimplats and others showing activities on different media platforms choreographed in exclusive creative appeal all at once.

The new media has also injected the “luxury” of multiple media channels to reach mass and niche audiences, thus enabling the media consumers to make a choice.

This is something which could not happen in the traditional “magic bullet” media. And this luxury has somehow encouraged the traditional media to curve into some digital media communication through mobile Short Messaging Services (SMS) messages.

The private and public media in Zimbabwe have warmed to the online communication where debates and conferencing is taking place on their online platforms.

We have all seen The Herald flagging online messages of a subject matter that would have appeared on its broadsheet pages.

Social media has just but transformed the flow of communication by speeding it up. There is more interaction now — from monologue to dialogue and now multilogue.

And this transformation has aided the PR practice. The corporate world now communicates with its publics and stakeholders in a more speedy way. This acceleration in the communication juggernaut opens more doors for effective interaction with publics.

The more interaction the organisation has the more and increased competition it brings in the industry.

This is mostly exemplified in the cellular mobile communication industry where Econet, NetOne and Telecel have increased competition due to the diversity of interaction they create with their publics.

Increased competition also brings about “guerrilla PR” where PR practitioners in these organisations are in undercover “competitive” creativity to sell their corporate identity, image and reputation through the communication of their products to their publics.

One of the qualities of PR is research and the new media frenzy has brought more immediate feedback outlets which aid PR and corporate governance activities of an organisation in research. This feedback comes with it accountability, trust, loyalty, reputation and altruism.

This is just a snippet into the glaring positives of the increased media complexity on the PR industry.

However, a snippet into the supposed negatives of the new media platforms and technologies show that PR is also transformed magnificently from this end.

The social media has resulted in citizenship journalism where users have increased user control, personalisation, responsiveness, connectedness, real time interaction and, of course, the trust factor.

This social media freedom has resulted in organisations and artists using unorthodox ways of marketing. Musicians in Zimbabwe have used the “death” factor to market themselves and their music. Recently, the social media was awash with fake “death” of dancehall singer — Tocky Vibes.

Now PR is not about spin or propaganda and such social media buzz only help PR practitioners in organisations to measure, weigh and evaluate the messages they disseminate to their organisations’ audiences.

PR has to ensure that the organisational messages to its publics have trust, reputational and responsibility factors to protect the image of the entity.

There are also notions that the increased media complexity has more entertainment value or playfulness which remove the seriousness of opinion and views of the corporate world, especially by its publics. While entertainment is critical for the jovial publics on the social media platforms, PR has a job to censor that playfulness to ensure the richness of the corporate identity, image and reputation.

Discordant feedback and discourses vis-a-vis useful information for organisations have also raised questions of seriousness and trust given to the social media platforms.

Again, PR has a role to assert the style, system, code, colour and fabric of the organisation. And this can only be done by PR practitioners giving a close scrutiny to the “footprints” of the organisation in its life cycle.

Another supposed negative issue on the increased media complexity has been the regulation deficiencies of the social media platforms.

The Arab community could not control social media platforms that led to the Arab Springs that toppled leaders in Tunisia, Egypt and Libya.

The Obama Whirlwind in his first election was as a result of an uncontrolled social media environment.

This regulation deficiency therefore calls for PR practitioners to ensure that their organisations practice corporate citizenship in their communication. Organisations have to protect and own their host countries like patriotic citizens.

Yes, the multilogue world is here and it is here to stay. The combined power of traditional and new media has a permanent and positive impact and transformation of PR no matter how mild or extreme its consequences might have on the corporate world.

PR is destined for a greater appeal and profile because of the increased media presence and it is up to organisations to harness and value the practice to ensure maximum utilisation of the new media.

This article has been prepared by the Zimbabwe Institute of Public Relations. For feedback please email zipr@mweb.co.zw.

Telecel Zimbabwe

Business Reporter

Mobile telecommunications network Telecel Zimbabwe has opened 15 additional franchise stores in Zimbabwe, as part of its retail footprint expansion initiative, which is meant to meet growing customer service needs. The mobile company said that the retail expansion initiative, which begun last year with thirteen shops, has now added fifteen more shops across the country.Together with its own 24 shops, Telecel Zimbabwe said its customers can now enjoy 52 fully fledged customer service centres spread across the whole country.

These franchises come after Telecel started a similar project last year to increase its retail presence through the rolling out of kiosks across the country.

The kiosks are operated by selected local business partners in the communities they reside. Currently there are over 500 kiosks deployed countrywide. Telecel’s franchise shops and the kiosks stock airtime, mobile accessories, and phones. The centres are also customer service centres providing Telecash, SIM replacement and SIM registration services for the country’s second biggest network.

With these latest customer service centre additions, Telecel now offers more than 550 customer service points across the country to get closer to its customers and make their lives easier, the mobile phone operator said yesterday.

Telecel’s communications and branding director Obert Mandimika, said that the opening of the additional franchise shops is expected to help improve Telecel Zimbabwe’s customers’ experience through increased convenience.

The retail outlets expansion initiative is part of the mobile phone network’s multi-channel customer experience strategy which was announced last year.

“Following the success, popularity and impact of the first batch of franchise shops we saw it fit to add more retail shops across the country particularly in areas that had little Telecel corporate retail presence,” said Mr Mandimika.

The additional franchise shops will still be run in partnership with local entrepreneurs with the mobile network providing capital for stocking and branding the shops.

“These franchise shops represent a win-win scenario were both Telecel and local business partners from the communities in which we operate stand to benefit financially,” he said.

Telecel said the new franchise shops are in urban, rural and peri-urban areas and in Harare cover areas that include Mbudzi Round-about, Budiriro and Mbare, Entumbane and Fife Street in Bulawayo, Birchenough, Murewa, Mutoko, Gweru, Hwange, Mvurwi, Chegutu, Kwekwe, Tsholotsho and Murombedzi.

Aurex Holdings workers busy at the company’s $1,1 million new diamond cutting and polishing plant. — (See story on Page B3) (Picture by Munyaradzi Chamalimba)

Martin Kadzere : Senior Business Reporter

AUREX Holdings, which recently commissioned a diamond cutting and polishing plant, has entered into a toll manufacturing arrangement with Zimbabwe Consolidated Diamond Mining Company to add value to the latter’s gems. Toll manufacturing is an arrangement where a company provides its raw materials or semi-finished goods to a third-party service provider for processing.The service provider, who often has specialised equipment or infrastructure, provides a subset of manufacturing processes on behalf of the company using those materials or goods for a fee.

Aurex, a division of the Reserve Bank of Zimbabwe, commissioned the $1,1 million state of the art plant in May this year. The plant has capacity to process between 2500 and 10 000 carats per month of rough diamonds depending on the size of the stones. Aurex said that the toll manufacturing arrangement with ZCDC will boost its production.

“We need to champion the development of the industry,” Aurex general manager Engineer Pasipaipa Munhumutema said while addressing journalists during the tour of the plant in Ruwa yesterday.

Aurex said that it has plans, not only to value add the country’s rough diamonds, but to champion the setting up of a diamond cutting and polishing value chain industry in Zimbabwe. It is estimated Zimbabwe has reserves of diamonds enough to account for a quarter of global trade in diamonds.

“Apart from toll manufacturing, we are also working with the Minerals Marketing Corporation of Zimbabwe to look for markets where the country can derive better value from the local diamonds,” Mr Munhumutema said.

“Aurex will further benefit from toll arrangement with Zimbabwe Consolidated Diamond Company, thus creating downstream and upstream business opportunities,” he said.

Aurex contends it has potential to be a major exporter of cut and polished diamonds and the toll arrangement with ZCDC provides the initial steps to that end.

Aurex Diamonds is a subsidiary of Aurex Limited, which was formed in 1991 as a joint venture between RBZ through ResZim, which had 67 percent shareholding and Tower of Gold of Israel, the technical partner, with 33 percent.

Reserve Bank of Zimbabwe

Business Reporter

The value of transactions processed through the National Payment System increased 6 percent to $6,48 billion in May from $6,13 billion registered in April. According to the Reserve Bank of Zimbabwe monthly report for May, the value of cash transactions increased 3 percent to $729,25 million from $703,28 million in part due to the panic withdrawals seen after the announcement of policy measures to ease the cash shortages.Zimbabwe is currently going through a cash crisis which has seen banks lowering customer withdrawal limits. The shortage of US dollars cash in the country is attributable to a number of factors that include the depletion of bank nostro balances and the dysfunctionaliity of the multi-currency system as the country moved to predominantly dollar transactions.

However, people have increasingly turned towards electronic transactions and plastic money to get round the challenges.

The RBZ report says that transactions processed through the Real Time Gross Settlement system increased 8,6 percent to $3,86 billion in May from $3,56 billion in April. Similarly the volume of transactions registered a 23 percent to 199 256 from 161 725 the previous month.

The total value of mobile and internet based transactions registered a 12 percent increase to $479,93 million.

Recently Barclays Bank of Zimbabwe managing director George Guvamatanga opined that with the increase in the use of plastic money, the country can do well with this solution than with the introduction of bond notes.

“Considering that plastic money usage has grown over four times and is continuing to grow and the amount of bond notes to be introduced and also considering people don’t like them. . . given these sentiments, if you were to ask me, I would take a percentage of the $200 million and make it easier for people to transact in plastic money.”

“Don’t misquote me on my position I’m not saying I’m against bond notes or I’m for them. I’m simply giving facts,” he said.

Mr Guvamatanga said the POS machines should be made much more accessible, cheaper and easy for people to transact.

However, the RBZ says that bond notes will be introduced as an export incentive to stem the externalisation of the US dollars.

Card-based transactions were recorded at $418 million in May down from $427,7 million but this was before the banking sector reduced charges for point of sale transactions.

Annual money supply growth was lower at 12,5 percent in May compared to 12,8 percent the previous month. On a monthly basis broad money supply grew 0,9 percent to $5,05 billion.

“This reflected annual increases of 30 percent and 10,2 percent in demand and savings deposits, respectively,” RBZ said.

Melody Mashaire : Business Reporter

Production at Innscor Africa’s pie manufacturing division at Bakers Inn, will increase to 180 000 units per day from 60 000 pies following the commissioning of a new $8 million pie-making factory. Bakers Inn has also launched a new range of pie flavours which will sell for 25c each. Speaking during the product launch, Innscor chairman Mr Adddington Chinake said: “Innscor started off as a small confectionery in the 80’s and has grown to what is has become today. Our new plant will boost our pie production to 180 000 pies per day. We invested $8 million in six months for the plant. We invest in Zimbabwe because we are 100 percent Zimbabwean, we believe in our country,” he said.“We have a responsibility to create jobs for people in the country. We hope to provide consumers with soft delicious pies. At Bakers Inn we say better taste and more value; we seek to increase the volume of sales. We will sell our products using any legal currency. ”

Innscor chief executive officer Ngoni Mazango said the company had improved the quality of its pies.

“I know that we have different pies in the market but Bakers Inn has been a market leader for years now. We were the first to reduce bread prices to 80c from $1. We are reducing our pies to 25c because we seek to give value for money,” he said.

He added that the company spent $7 million upgrading its fleet of bread distributing vehicles to ensure a sound distribution.

“We were also the first to introduce a sound bread distribution system in the country, to date we have spent $7 million on our fleet to ensure that customers get their products no matter where they are.”

Turkish Airlines

Christopher Charamba : Business Reporter

Turkish Ambassador Kadir Hidayet Eris has said a deal to bring Turkish Airlines to Zimbabwe is imminent. In an interview with The Herald Business recently, Ambassador Eris said that the airline should begin operating by the end of the year or early next year. “I have been working to bring Turkish Airlines to Zimbabwe. We have signed the new civil aviation agreement and so operations should begin soon. I sent it (the agreement) to the Civil Aviation Authority of Zimbabwe to be ratified so it is valid now.“They said they were very eager to see Turkish Airlines in Zimbabwe and they will provide all the rights that other airlines like Emirates enjoy,” he said.

Ambassador Eris said that once the airline began operating, it would create numerous business opportunities for Zimbabwe.

“Our investment in Zimbabwe is currently around $20 million but we can easily raise this to $500 million. Once Turkish Airlines starts flying from Harare to Istanbul, you will see a huge difference as it will be easier for investors to travel here.

“It takes seven hours from here to Istanbul and two hours to Germany or three hours to London. Turkish Airlines will provide the best connection to Europe with the best airline in Europe,” he said

The Turkish Embassy had already begun facilitating for investment between Turkey and Zimbabwe.

“The Turkish economy is over $700 billion in size and we want to come and invest in this part of Africa especially Zimbabwe.

“There was a delegation representing the Turkish business association called DEiK in Zimbabwe recently and they signed an MOU with CZI in Harare so we are hoping that with legal frameworks in place they can continue to grow this relationship,” Ambassador Erin said.

The Ambassador added that the two key areas that Turkey could potentially invest in Zimbabwe are construction and agriculture, with a focus on textiles.

“Turkey is very good in construction. We are ranked second after China globally in terms of contracting companies with 35 and have the most contractors in Russia currently. Should they start coming to Zimbabwe, Turkish contractors have a lot of ventures which they can undertake.

“Another key industry for Turkey is the textiles. We rank really highly globally in our textiles and Zimbabwe has a good climate for growing cotton. If the Turks come here, they can invest highly in the textile industry,” he said.

According to Ambassador Erin the US dollar that Zimbabwe currently uses is dollar is good for potential investor and as such Turkey can become a good strategic partner for Zimbabwe.