Business Reporter

NMBZ shareholders FMO of the Netherlands and Norfund of Norway have joined forces with Rabobank of the Netherlands to pool their investments in financial institutions across Africa. The new company formed out of the partnership will be called Arise. Arise will have a presence in 20 African countries and capital will be allocated to support current investee companies as well as new minority investments in the market.Banco Montepio, a Portuguese financial group with banking investments in Africa, is expected to join the partnership in the near future.

Norfund, FMO and Rabobank, in a joint statement, said their teaming up reaffirmed their long-term commitment to Africa’s future development, growth potential and the local financial sector.

They currently hold stakes in several financial service providers (FSPs) in Sub-Saharan Africa which they have agreed to pool together.

They said as a pro-active shareholder they would engage in a hands-on manner with NMBZ to help it grow and realise its ambitions.

The partnership was committed to strengthening and developing effective inclusive financial systems in Africa with a long-term perspective, they said.

FMO is one of the largest bilateral private sector development banks in the world with a committed portfolio of EUR 9,3 billion spanning 85 countries. Norfund, on the other hand has a portfolio of approximately US$1,8 billion, 53 percent of which is in Sub-Saharan Africa.

NMBZ chief executive Benefit Washaya has welcomed the partnership, which, he said, should enable NMBZ to benefit from a wide network of other African banks that are part of the group.

“NMBZ is excited and welcomes this partnership as an important shareholder for our company and as an important contributor to building a stronger financial sector in Sub-Saharan Africa.

“NMBZ will also benefit from a wide network of other African banks that are part of this group,” he said.

The ambition of the partnership is to build strong, locally owned FSPs that serve small and medium enterprises (SMEs), the rural sector and clients who have not previously had access to financial services.

For NMBZ, the change will offer several opportunities. The bank will become part of a large pan-African Bank network. The presence of the new foreign shareholders will assist NMBZ in its quest for much needed lines of credit.

The partnership will be a proactive shareholder, just as FMO and Norfund have been, providing knowledgeable board members and dedicated experts to support NMBZ’s growth strategies.

Current technical and management services programmes run by Norfund and FMO will continue, while new programmes can leverage on the added expertise of the new partners.

The partnership, which will be firmly rooted in Africa, will result in consolidation of the partners’ respective portfolios, by the creation of an investment and development vehicle under joint-ownership.

The transaction is subject to regulatory approvals being obtained both at shareholder level and at the various underlying investee levels.

JOHANNESBURG. – Standard Bank – trading as Stanbic Bank – has been formally awarded a banking licence in Côte d’Ivoire. The group opened a Representative Office in December 2013, signalling a drive towards establishing a presence in Francophone West Africa, and is now gearing up to commence banking operations in a market which stands out for its diverse, rapidly growing economy and business friendly reputation.The country currently enjoys one of sub-Saharan Africa’s fastest GDP growth rates, expected to maintain 7 percent or more over the next three years.

“We are delighted to be actively expanding into this attractive market alongside many of our existing multi-national corporate clients and look forward to partnering with them and other players, as well as supporting enterprises considering entering Côte d’Ivoire and the wider region for the first time”, says Stanbic Bank CEO Hervé Boyer.

Mr Boyer says Stanbic Bank in Côte d’Ivoire will provide the same high quality Corporate and Investment Banking products, advice and service experience that customers have come to expect across the continent.

This most recent banking license is seen as a milestone for Standard Bank Group, Africa’s largest lender by assets, which prizes its ‘on-the-ground’ footprint across the continent, now 20 countries, and views its ability to support clients locally as a defining competitive advantage. The mostly French speaking West African Economic and Monetary Union (UEMOA) region was identified as a key growth opportunity and an excellent strategic fit for the Group which has committed to play a leading role in driving Africa’s growth.

“With the addition of Côte d’Ivoire to our portfolio, we will be able to meet our clients’ banking needs in one of the continent’s most exciting growth regions”, says Victor Williams, head of Corporate and Investment Banking for Africa.

UEMOA as a whole is regarded as having substantial business advantages stemming from its stable single currency, shared central bank and stock exchange, as well as its increasingly harmonized business legal structures and burgeoning population.

Côte d’Ivoire is ideally positioned as a hub for the region which also includes Benin, Burkina Faso, Guinea-Bissau, Côte d’Ivoire, Mali, Niger, Senegal, and Togo.

The key drivers behind Côte d’Ivoire’s well-diversified economic growth are public investment led initiatives in power and infrastructure in conjunction with successful public-private partnerships, natural resources (oil, gas and mining), agriculture, telecommunications, and the country’s consumer market – all linked to core sectors of activity for Standard Bank.

As a bank rooted in Africa with a 153 year history, Standard Bank is committed to broadening and deepening its footprint on a continent we call home and to being Africa’s leading financial services organisation. -Online.

DAR-ES-SALAM. – Standard Chartered Bank has announced plans to step up investment and leverage its unique footprint and international banking expertise to drive growth in Africa. Through a new brand campaign, “Here for Africa”, the bank is reiterating its commitment to invest in Africa’s future and continuing to support key growth sectors across local economies, including infrastructure, telecommunications, transport, retail and trade.Under the bank’s refreshed global strategy announced late last year, the bank reiterated its heightened focus on Africa, seeking to grow its business across all markets, with a keen focus on corporate and commercial segments. Standard Chartered operates across 38 African economies, 16 on a full-presence basis and 22 on a transactional basis.

The bank’s footprint of 180 branches and outlets now has an extended reach, thanks to the bank’s continuous evolution of its digital platforms and mobile banking channels.

Sanjay Rughani, CEO for Standard Chartered Bank in Tanzania, said “Standard Chartered Bank continues to be committed to our business in Tanzania and the launch of our ‘Here for Africa’ campaign is timely.

“We are currently working on a number of initiatives that will see our Bank in Tanzania (BoT) further supporting the economic growth of our country through various segments of people and organisations spanning from individuals, corporate and commercial clients as well as the government.

“Standard Chartered Tanzania continues to deliver tangible benefits to support local economic growth.”

These benefits include development of human capital; roll-out of digital banking solutions to more than 15 000 retail customers and sovereign advisory expertise; attracting new investor capital from across Europe, US, Middle East and Asia, as well as empowering local entrepreneurs by bridging the gap between large multinationals and local suppliers through our successful supply chain financing proposition. – TDN.

African fintech is not disrupting the existing financial service providers. This is because, in many areas of the continent, there is nothing to disrupt. Across most of the continent, there is no formal banking or financial infrastructure in rural areas, due to the high cost of rolling out banking infrastructure.Even those in urban areas are priced out of more developed financial services such as credit and insurance.

African banks have, in a way, admitted their own infrastructure failures by leaving the roll-out of mobile money services mostly to mobile operators. This is in sharp contrast to developed economies, where traditional banks and institutions have a broad presence, and the majority of consumers are able to get loans or purchase insurance. There, fintech is about disrupting these markets to offer better services at lower cost.

Banks have, in a way, admitted their own failure in building sufficient and accessible infrastructure by leaving the roll-out of mobile money services mostly to mobile network operators. These mobile wallets are functioning as bank accounts in most cases. They offer better services at lower cost and this means there is likely to never be a need for most Africans to adopt traditional banking services.

Therein lies the real opportunity for fintech startups in Africa. Rather than disrupting an existing infrastructure as their counterparts in the developed world are, they are in fact building a whole new infrastructure of their own.

One such example of groundbreaking, innovative fintech is MFS Africa, which has connected 80 million mobile wallets in Africa, enabling cross-currency, cross-border, cross-network payments through entirely new infrastructure.

Traditional banks are now reaching out to fintech startups on the continent to connect with young consumers in informal markets. Traditional banks are now reaching out to fintech startups on the continent, with initiatives such as the recent Barclays Africa Accelerator which took place in Cape Town, South Africa. Banks know that they have failed when it comes to reaching lower income consumers in informal markets, and they are therefore turning to more innovative, younger companies to help them connect with these consumers, which in turn gives small companies the chance to scale much faster.

It is this opportunity, and the size of this unclaimed market, that has resulted in such levels of investment in African fintech companies. Investment is flooding into startups providing innovative ways of offering financial services, with companies in the fintech space taking on almost 30 percent of the total funding raised by African tech businesses in 2015.

In order to protect Africa’s unbanked and underbanked from the surge in products that will shortly be at their disposable, there is a need for better regulation of mobile financial services in Africa.

The GSMA Mobile Money Code of Conduct, the SMART Campaign and the UN Principles for Responsible Investment are already providing a useful set of guidelines, but all those involved in fintech in Africa as operators or investors must do more to ensure the end-user of mobile financial services is protected. – Quartz.

The Reserve Bank of Zimbabwe (RBZ) says it is targeting to boost the number of Point-of-Sale (POS) machines in the country by 50 percent by year-end. Zimbabwe currently has 20 000 POS machines in operation, but these have shown to be inadequate due to the prevailing cash challenges. According to the director for national payments at the central bank Josephat Mutepfa, the need to increase the number of POS machines has also been necessitated by unlikelihood that the country’s automated teller machines (ATM) population will rise exponentially because of high costs.“The ATM population might not grow much because ATMs are expensive to install . . . and in this market they talk to cash (which is currently limited),” he said.

“The POS population has grown. Actually we had 4 000 POS machines in 2009 and we had reached 17 000 POS machines as of June 2016. In terms of current figures we should be between 19 000 and 20 000 as of last week. We have a target of 30 000 POS machines by year-end. It’s a daunting target but we are confident we can achieve it. Comparatively in Zambia they have between 5 000 and 7 000 POS machines.”

Mr Mutepfa added that the central bank has noted a steady growth in POS machines largely attributable to the financial services sector.

“On a monthly basis since the beginning of the year, POS machines have been steadily growing due efforts by the banks,” he said.

In January the total population stood at 16 500, and we have noted a steady and consistent growth to 20 000 presently.”

The RBZ has been pushing for the use of electronic payment systems and plastic money to drive financial inclusion and for an eventual drive towards a cashless economy. And latest figures from the central bank show that the value of transactions processed through the country’s National Payment System (NPS) increased 6 percent to $6, 48 billion in May from $6, 13 billion recorded in the previous month.

This growth was largely on the back of increased use of the Real Time Gross Settlement (RTGS) system. The statistics show that transactions processed through RTGS increased by 8,6 percent to $3,86 billion in May from $3,56 billion in April.

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

According to Mr Mutepfa, with the advent of mobile money platforms, Zimbabwe’s level of financial inclusion currently stands at 69 percent. — BH24.

Business Reporter

CHINESE firm, Xu Construction Machinery Group, has put on hold delivery of gold mining equipment under a $100 million credit facility from China Import and Export Bank, as it battles to recover money for equipment supplied to Chiadzwa diamond firms. But the Government has provided guarantees and only payment of freight and insurance is outstanding.The Xuzhou Construction Machinery Group of China supplied equipment to diamond companies, which have since stopped after the Government took over the operations.

“It is difficult for diamond firms to pay for the equipment because they have since closed,” said a source within Ministry of Mines and Mining Development.

“So for them to release the equipment for gold miners is now a big risk. That has basically stalled the deal.”

Government, through the Zimbabwe Mining Development Corporation, entered into a $100 million facility agreement with Xuzhou Construction Machinery Group of China for provision of small scale mining equipment on credit in line with the ZimAsset thrust.

Deputy Minister of Mines and Mining Development Fred Moyo confirmed that the deal was having some challenges.

“The Government had provided the guarantee and the only outstanding issue was the payment of freight and insurance,” said Mr Moyo.

Gold is the second largest mineral export earner after platinum, and small scale miners have been a significant contributor to the total output.

Production has been on the rise incrementally, with mining industry report for the first quarter of the year showing that volumes produced grew by 21 percent from 4,18 tonnes to 5,06 tonnes.

In terms of output small scale producers and custom millers recorded the biggest jump in production of 54 percent from 1,21 tonnes during first quarter in 2015 to 1,87 tonnes.

Large scale producers recorded a 5 percent increase to 2,73 tonnes from 2,59 tonnes during the same period last year. Earning were up 17 percent to $189,65 million during the period under review from $161,67 million in the prior comparable period.

Artisanal and small-scale gold miners are targeting to produce more than 15 tonnes of gold this year, surpassing the 3,9 tonnes of last year.

The projected increase was linked to the Government’s plans to licence the miners to legalize their operations.

At their peak, small scale producers’ output reached 17 tonnes in 2004. The equipment was expected to significantly improve operations of the small scale miners.

Defying all economic hardships and market trends Titan Garages has risen through organic growth and internal resources

Tinashe Makichi : Motoring Correspondent

Born out of the will to deliver reliable, cost effect and a client focused personal touch, Titan Garages has roared to life. Situated at number 381 Limpopo Way, Willowvale (behind Savanna Tobacco) Titan has provided a breath of fresh air in the industrial areas. Defying all economic hardships and market trends the company has risen through organic growth and internal resources.It has proven to be a clear tick that Government through the Ministry of Youth, Indigenisation and Economic empowerment together with the Ministry of Small to Medium Enterprises and Corporative Development should be proud of.

The company has a new way of looking at the industry that is both practical and sensible.

They believe that the current economic environment calls for strong partnerships and not just service delivery.

Titan looks to understand its partners, their needs and their business cycles. They have incorporated a fleet management system which they believe will help their partners manage their cash flows and business cycles.

The company looks to advise its clients on fleet replacement and depreciation valuation so as to give management a true reflection of deviation from their book values.

They pride their fresh thinking that is supported with the latest diagnostic and key programming machinery a wealth of experience and a fresh energetic team.

What do they

bring to the game?

Excellent service that caters to your personal needs

Free diagnostic and key programming for the first 3 months

Assistance with fleet management and valuation

Dedicated after service follow ups

Off sight assistance

Panel beating

Where is the

company going?

“Well, wherever you are going. By this, we are talking about the physical location of you and your vehicle, but we are also talking about your business horizon,” said company representative Tino Kambasha.

The company believes that strong relationships equal long lasting business and we pride our clients support as we strive to reach a win-win situation.

Titan also believes that in great service delivery, a good reputation and honesty.

“Our economic environment calls for a synergy of all three and we are the glue. At Titan we want your car to feel like a Bull ride as you give the streets of Zimbabwe horns,” said Mr Kambasha.

Aliko Dangote (Picture from forbes.com)

Golden Sibanda : Senior Business Reporter

THE Zimbabwe Investment Authority has allayed fears about the possibility of Nigerian billionaire Aliko Dangote aborting planned multi-million dollar investments in Zimbabwe. This comes as the Department of Immigration refuted claims by a local weekly publication that Dangote’s aides had been denied entry visas into Zimbabwe to assess progress of planned investments, which could see the deals going off the rails.ZIA chief executive Richard Mbaiwa said Dangote Holdings, owned by Nigerian billionaire Aliko Dangote, was granted a licence for an integrated project entailing a cement plant, coal mine and power station in September 2015 and since then, its officials have visited Zimbabwe many times without any hitches for the sole reason of implementing the projects. Aliko Dangote is a Nigerian national, founder and owner of Dangote Group, which has investments spread across a number of African countries and is Africa’s richest man with an estimated net worth of $17 billion. He recently extended his tentacles to oil.

Mr Mbaiwa said Government, and all its regulatory arms have done everything to bring the Nigerian’s billions to Zimbabwe and communication in this regard has been regular amid hope the deals will materialise.

“We are in constant communication with the team; particularly the corporate strategy division and they have not reported any problems in acquiring visas, or any other permits. In their last communication they advised that they are in the due diligence stage, and are examining the mineral deposits in the laboratory in Nigeria,” the ZIA chief executive said yesterday.

In fact, Mr Mbaiwa said the Dangote Group recently paid glowing tribute to ZIA and the Chief Secretary to the President and Cabinet, Dr Misheck Sibanda, for setting an investor friendly inter-ministerial forum that has served as a “one- top-shop” for projects.

“Through the inter-ministerial forum, we were able to openly interact with the technical representatives of all the relevant State ministries and departments, to understand the various requirements, and have all our questions addressed,” reads a testimonial from Dangote, which ZIA said it will publish on its website.

The investment authority said there has been maximum co-operation from all the Government departments, including Department of Immigration, a full member of the One-Stop-Shop at ZIA and whose principal director is a member of the board of directors.

The Department of Immigration said while Nigeria is in Group C, which has a visa regime requiring nationals from these countries to submit visa applications online prior to travel, there has not been any application by Dangote or any of his team for visas or permits and no application in their respect is pending.

According to the Immigration Department, since no application for visas or permits submitted or was received from Dangote, “it is logically and legally impossible to refuse a visa that was never applied for”.

The Department of Immigration’s principal immigration officer Ms Patricia Mafodya pointed out that Dangote Group has Josey Mahachi, as their local agent, and a local law firm which liaises with the department for their visa and permit applications and are yet to report any difficulty in processing either their visas or permits, labelling the reports of alleged challenges faced by the Dangote Group as misleading.

“During the past year Dangote technical teams have been coming to Zimbabwe attending to their investment initiatives without any visa challenges,” she said.

Minister Bimha

Business Reporter

Industry and Commerce Minister Mike Bimha is in South Africa where he is meeting with his counterpart Rob Davies to discuss bilateral trade matters. This is a routine meeting between the countries and is a follow up to a technical meeting that was held by officials of the two countries a fortnight ago.On arrival, Minister Bimha — whose delegation includes officials from the Ministry of Finance and Economic Development, the Reserve Bank of Zimbabwe, the Zimbabwe Revenue Authority, the Competition and Tariff Commission and the Ministry of Industry and Commerce — said he would use the opportunity to clarify the Statutory Instrument 64 of 2016, which put controls on imports of certain goods.

“We have both had some very busy schedules of late, with lots of travel, and it has been difficult to synchronise our timetables,” he said.

“Now that we are able to meet, I should be able to also use the opportunity to explain some of our policies, including SI 64 of 2016.”

Zimbabwe recently gazetted Statutory Instrument 64 of 2016 to restrict the importation of certain goods as a way of supporting its local industry. While this has courted some debate regarding its impact on the importation of goods into the country as well as raising questions regarding protocols governing regional trade, the minister is on record as having said Zimbabwe had already notified SADC about the measures and the reasons behind them.

“Even then, we think it is important to engage our trading partners on a one-on-one basis so that they also understand directly from us what we are doing to drive our industrialisation strategy, which is a strategic goal for SADC,” the minister said, adding that he would soon be engaging Zambian officials.

South Africa remains Zimbabwe’s biggest trading partner, with the latter still importing more from its neighbour than it exports to it.

CBZ

Tinashe Makichi : Business Reporter

LISTED financial services group CBZ Holdings is scouting for investment opportunities in the region with possible destinations already identified, group chief executive Never Nyemudzo said. CBZ has already started the process of reviewing the viability of the identified opportunities as it seeks to diversify its outcome in the face of growing headwinds in the local operating environment.“The group has seen it fit to start scouting for opportunities in the region, so we have already identified the countries of destination and we are currently reviewing the various opportunities before us so that we can then invest.

“The basic objective is to diversify the income from a Zimbabwean source so that we manage the risks that are associated with the local operating environment,” said Mr Nyemudzo while responding to questions at the company’s analyst briefing yesterday.

The company’s plans to expand into the region come at a time when its profitability declined slightly in the half year to June 2016 with after tax profit retreating 13 percent to $11,9 million.

CBZ Holdings revenue for the period was also down 11,9 percent at $73,2 million from $82,3 million recorded in the same comparative period last year.

Mr Nyemudzo said the half-year results were an indication of the challenges affecting the economy.

“The group has managed to maintain and enjoys strong market position with the bank commanding pole position at 31 percent in terms of deposits.

“Strong deposits growth has been achieved under a difficult operating environment. This growth is supported by strong innovation and customer service delivery approach,” said Mr Nyemudzo.

He said since dollarisation deposits have grown by over 206 percent from as low as $50 million in 2010 to the current $1,8 billion.

Mr Nyemudzo said the group has followed a deliberate approach to reprice all lines of credit and at the same time continued to review the cost of funds and project viabilities to enhance borrower performance.

“The quality of earnings remains a key focus area and as such collection of bad debts continues to be intensified. The current rate of non-performing loans is at 7,2 percent compared to the Reserve Bank prescribed 10 percent,” said Mr Nyemudzo.

The group’s total assets for the period increased to $2,06 billion during the period from $1,96 billion during the same period last year. Total advances were down at $1,02 billion compared to the $1,11 billion of the comparative prior period.

Despite the prevailing challenges in the financial sector, CBZ said it responded by strengthening its market presence and synergistic benefits. Aggressive collection of bad debts and rehabilitation of clients with future potential were also some of strategies adopted by the financial services group to enhance performance.

Mr Nyemudzo said the group is also looking at strengthening its presence in the infrastructure market, as it seeks to contribute to resolving the national housing backlog.

He said significant developments continued to be recorded in the medium to high density residential property sector.

People walk through the lobby of the London Stock Exchange. – Reuters

LONDON. – Voter rebellions? A protectionist wave? Looming recession? Islamic militancy? Perhaps the biggest shock to world markets now would be if central banks met their inflation goals. After nearly 10 years of near zero or even negative interest rates and trillions of dollars in new cash stimulus, the world’s top central banks have just about kindled a spluttering, sub-par expansion with jobs to boot.

But they have failed to get wages growing for large parts of the population or to sustain consumer price gains above targets of about 2 percent for any length of time. Financial markets have stopped believing they will – in some cases not for the remainder of our working lives.

Inflation expectations embedded in interest rate derivatives and inflation-linked bond markets are below target to at least 2026 and even, where visible, 2046. Nominal sovereign yields out three and even five decades into the future for Japan, Germany, Britain, France and Switzerland are all below these targets too.

Some suspect the extraordinary bond-buying intervention used to flood banks with all that newly-minted cash – still in full flow in Japan and the euro zone, and possibly relaunched in Britain this week – has skewed all pricing to make it unreliable.

But the US Federal Reserve stopped its “quantitative easing” almost two years ago and has been no more successful in either meeting its inflation targets since or in convincing its markets it will mange to do so over time. The Fed’s favoured household inflation gauge – the core Personal Consumption Expenditures index – has remained stubbornly below a presumed 2 percent goal now for eight years.

“Inflation expectations at 2 percent would be bordering on irrational at this point given the Fed’s inability or unwillingness to achieve its target year after year,” wrote Morgan Stanley economist Ted Wiseman, adding his forecast for this year and next meant there would be a full decade of misses.

Failure to generate enough economic activity to get wage and inflation expectations rising clearly matters to governments, households and business for a whole host of reasons – coaxing the public to buy goods today rather than saving for tomorrow, getting private firms to invest in future production and innovation, debt sustainability and even political stability.

And for financial markets, a deeply-embedded belief that central banks will not meet their targets over the coming decades has led to extraordinary changes of behaviour and herding that mean any sign of success could be seismic. With monetary stimuli now looking inadequate on their own, governments may resort to a combination of budget spending and monetary pumping to get a grip.

Japan nodded to that tilting policy mix this week with plans for 7,5 trillion yen of new government spending – likely funded by the sale of 40-year bonds, just after the Bank of Japan said on Friday it would expand purchases of equities rather than bonds.

That change of policy tack may jar ossifying market expectations. The 25 basis point rise in 10-year Japanese government yields this week – the biggest such move in three years – is eye-catching as a result.

Inflated Assets
But how exposed are world markets to shifting assumptions?

Equity prices have been nudging record highs again even though underlying corporate earnings growth has stalled and global money managers polled by Reuters last month are drifting away, their holdings of bonds and cash exceeding equities for the first time since the credit crisis seven years ago.

And yet, bonds too have never been more expensive, with record low yields undermining their critical fixed income function. German 10-year Bunds now have zero percent coupons and that means any move higher in yields involves significant losses on this supposedly “risk free” asset.

Put another way, if markets believed the ECB would meet its near 2 percent target over those 10 years and 10-year Bund yields at least matched that level, then Bund holders would suffer a capital hit of over 20 percent.

Fitch estimates that a rapid reversion to just 2011 levels for almost $38 trillion of investment-grade government bonds could crystallize market losses of as much as $3,8 trillion. So what gives? An assumption central banks will continue to try but ultimately fail to meet inflation goals is akin to presuming they’ll prevent another recession but not get enough growth to push up prices.

In that world anaesthetised from the sort of steep equity drawdowns associated with economic contraction, simple yield plays between assets makes the 3,6 percent dividend on European equity or even the 2 percent on US equivalents sparkle next to near zero or even negative government bond yields.

Citi’s estimate of the global “equity risk premium” – adding expected growth to current dividend yields across major developed economies and comparing it to an average 10-year government bond yield – is a whopping 5,3 percent.

That’s far above 25-year averages of 3 percent and most other bull market or bear market peaks except 2009. With conservative investors now relying on equity for income and playing bonds for capital gain, the shock of policy success could be sizeable by squeezing that ERP from the bottom up and whipping away a prop for already pricey, jaded stocks.

“Markets are very doubtful that policymakers will be able to meet their inflation goals,” said Citi’s global equity strategist Robert Buckland. “The surprise from here would be that they actually do achieve their goals.” – Reuters.

Martin Kadzere Senior Business Reporter
QUEST Motor Corporation has started assembling Yutong buses at its Mutare plant after receiving approval from the world largest luxury coach builder, an official said last week. “Their strategy is to use Zimbabwe as a launch pad to enter the Common Market for Eastern and Southern Africa and SADC,” Quest operations manager Carl Fernandez said.“Yutong’s long-term plan for expansion in Africa is not to export fully built buses but rather to supply kits for local assembly. It is an arrangement which presents huge opportunities for us.”

Mr Fernandez said the arrangement makes Quest the only assembler of Yutong buses in Southern Africa. Already, Yutong is an accepted brand in Zimbabwe and the company was hoping local buyers would prefer locally assembled units to support the company and related downstream industries.

He said, Quest was strengthening the buses to make them suitable for rural road conditions. “This will make them much better than the imported versions,” said Mr Fernandez. The model being manufactured by the company is Yutong F11 63-seater coach. Apart from Yutong F11, Quest is also assembling Foton 28-seater buses. He said the company was receiving good enquiries from schools “and hoping to get good results”.

Other brands assembled by Quest are Chery, and JMC and Q buses. It also produces Foton Tunland single and double cabs, Mitshubishi Triton double cab. However, as a result of economic challenges Quest’s capacity utilisation has dropped making it more difficult to buy new kits, a problem worsened by the delays in banks processing payments for imports

When the factory was working at full capacity on a single eight-hour shift, it was between 12 000 and 15 000 vehicles per year and was employing close to 15 000 workers.

Appearing before the Parliamentary Portfolio Committee on Transport and Infrastructure Development in April this year, Quest Motors chief executive Mr Tarik Adam said the company had to significantly cut down its production as uptake for locally manufactured vehicles had been decimated by high level of vehicle imports.

He said line ministries and Government departments have developed innovative ways to circumvent the 2002 Presidential directive that all Government institutions should buy their vehicles locally, which has left the sector struggling.

The directive was introduced to support the local industry and conserve scarce foreign reserves, but local motor vehicle manufacturers claim that the directive has not been adhered to.

Vice President Emmerson Mnangagwa

Business Reporters
Vice President Emmerson Mnangagwa said there is need for a collective effort to fight corruption as it is not only limited to the public sector but is also spread across the private sector. He said this in a key note speech read on his behalf by Minister in the Vice President’s Office Clifford Sibanda at the African Association of Financial Forensic Analysis and Exhibition Conference last Thursday.

Vice President Mnangagwa said forensic science should play a key role in stemming corruption. He therefore implored company boards to incorporate forensic accounting methodologies in their audits to enable them to get better value money.

“On a related note, I particularly want to urge the audit committees of the various company boards, be they State enterprises, parastatals and companies, to deliberately incorporate forensic accounting methodologies in their audits as this enables them to get better value money,” said Vice President Mnangagwa.

He also stressed the urgent need for the local chapter of the African Association of Financial Forensics Analysis to conduct comprehensive research on the nature, causes architecture and magnitude of corruption attributed to the public and private sectors in Zimbabwe.

Vice President Mnangagwa said such knowledge enables financial forensic analysts to effectively target appropriate interventions to stem the cancer. He said Government is currently implementing the Ten Point Plan enunciated by President Mugabe which essentially evaluates the thrust to maintain growth and creation of jobs.

“As Government, we have come up with a National Code of Corporate Governance, which provides additional impetus for Government to review critical pieces of legislation in order to ensure that there is a broad legislative framework and measures to tackle issues of corruption, which have become a cancerous drawback in our efforts to grow the economy.

“Corruption is not limited to the public sector alone but it is cross-cutting across all sectors,” said Vice President Mnangagwa.

“I wish to underscore the fact that the fight against this alluring but malignant cancer must be adequately broad based and within the framework of a national call to all Zimbabweans and all sectors to eliminate the contagion. Forensic science will be a key handle in this fight.”

Martin Kadzere Senior Business Reporter—
CFI Holdings’ key subsidiaries have been placed under provisional judicial management to allow for debt restructuring, re-organisation and recapitalisation of the entities. The High Court granted the order to have milling company Victoria Foods and stock feed producer Agrifoods placed under provisional judicial management last Wednesday. The two companies require about $12 million for recapitalisation.

Mr Regis Saruchera of Grant and Thornton was appointed the provisional judicial manager. CFI said the two companies have well recognised brands with significant brand equity and tremendous market opportunities.

“The board looks forward to a rebound of the two operations in the short to medium term,” said CFI in a statement. According to affidavits filed at the High Court, the reasons for poor performance of Agrifoods included inadequate recapitalisation, expensive raw materials, the use of old equipment, loss of skills while the company had a negative working capital position.

Various creditors had obtained orders and writs of execution against the company assets. About $6 million is required for recapitalisation with projected revenues expected to progressively rise from $25 million next year to $40 million by 2020. Recapitalisation options would include joint ventures or partnerships as well as toll manufacturing.

Since 2012, annual revenues have dropped drastically from $52,7 million to $14 million last year. Similarly, revenues at Victoria Foods declined to $10,3 million from about $24,4 million in 2011. As at June 2016, current liabilities stood at $17,7 million, well ahead of its current assets. Capacity utilisation is averaging 24 percent and the company is under pressure from creditors.

Victoria Foods will require $6 million for recapitalisation. It has installed milling capacity of 147 000 tonnes per year. In a note to shareholders, CFI said the group has concluded a debt compromise and settlement agreement with local banks owed $16 million. This has resulted in the group debt declining to $4,8 million. Shares of the company will continue trading normally.

Dave Van Niekerk
We’ve heard the sensationalism before — that the unbridled array of opportunities in Africa are either being “squandered”, “exploited” or just now seeping to the surface for globalisation to capitalise on the “Rising Continent” in a timely fashion.

Though rhetoric, it’s no doubt significant, though that doesn’t make the voices behind it authorities on the continent.

For we are routinely adapting to advances in enterprise as the youngest continent on the planet (as the African Development Bank has reported Africa has more than 200 million people aged between 15 and 24, which means approximately 65 percent of the population is made up of “millennials”), with dynamic evolutions in the provision of technological access and thusly, global inclusion occurring on a regular basis, cross-sectoral and throughout all walks of life.

Africa is simply growing at too quickly a pace to be dissected.

Africans are also well-versed in not only the present day challenges to doing business but moreover the abundant prospects for affluence, indeed held back only by long-ingrained bureaucracy and the lack of fundamental access; barriers inevitable to be broken.

For the intrepid entrepreneur and through technological breakthroughs in, for instance, “cloud”-centric, aerial-implemented services, there is simply no better place to be in business, particularly the FinTech business, one which is just getting warmed up and with no ceiling in sight.

Wim Van Der Beek, a contributor to CNBC Africa and the Founder of Goodwell Investments, recently and rightly stated that African FinTech is particularly unique, non-partisan and is regarded highly as a viable enterprise on the continent.

For FinTech in Africa is non-disruptive; traditional brick and mortar banking institutions aren’t going anywhere. And where in many cases abroad, there are regulatory constrictions on implementing alternative, cutting-edge offerings in financial services, as;

“ . . . (with) developed countries, the formal banking system is very widespread, with physical bank branches available in every city, town and village, this is not the case in most of Africa. (Africa) has not been financially viable for traditional banks to offer last-mile services”, according to Van Der Beek.

And so with diverse demographics today acclimatising to utilise traditional and smart-phone-ready software to the betterment of their financial conditions, be it through the provision of insurance, loans or mobile banking services, FinTech hosts the leeway to continue to innovate.

Like all businesses operating effectively in Africa, there is no doubt public-sector opportunism in enforcing such regulations and while I disagree with constrictions detrimental to providing fundamental access in an industry just getting its legs, I do believe that corporate social responsibility (CSR) standards need to be set, if not exceeded by our sector.

So, while our software already leverages the penetration of “Big Data” to better enable direct donations to people in need (family to family, corporate provisions, cutting out unnecessary middlemen), we choose to partner with Opportunity International to both grow our consumer base as a strategic business exercise, but also to increase transparency while ensuring help arrives to those requiring it in a much faster manner than ever before.

Be social-empowerment-driven micro-finance provided to a young woman allow her to now have access to a loan to start a business, for example, or to open a mobile bank account to secure savings, we stand proud to both join a global network of more than 40 socially-focused micro-finance partners and also to together play a lead role in emboldening that individual and the communities around her to sustainably develop.

We know that in investing in the individual, we are creating more jobs and fuelling Africa’s both ruralised and urbanised economies.

While social responsibility assuages many concerns as to the FinTech business model, there have also been lingering and justified doubts in the offering of loans, due to specific cases regarding a lack of understanding of one’s creditworthiness on many parts of the continent.

Now this is a problem not uncommon in emerging marketplaces around the world and one where FinTech truly needs to serve as a paramount thought leader.

In 2014 alone, FinTech investment increased threefold from $4,05 billion to $12,2 billion. Indeed by pioneering next-generation proprietary software and fortifying an intricate network of like-minded global partners, we are proud to serve at the precipice of this industrial revolution in Africa, forging an offering warranting attention, commentary, and support while differentiating ourselves from the pack.

For, beyond the speculation and sensationalism, as the continent rises, so do the prospects for prosperity within it. — Crowdfunder.

Dave Van NiekerkDave Van Niekerk is the founder / Chief Executive Officer of the MyBucks enterprise. Established in 2012 with international backing, MyBucks is Africa’s first Fintech company, successfully delivering seamless financial services to consumers using technology platforms. Van Niekerk began his micro-finance career working at one of the founding companies of the one-time South African financial giant, African Bank. MyBucks currently operates in nine countries, serving over 300 000 clients and granting loans to 700 000 people.

UNITED NATIONS. – The international prices for major food commodities saw a modest decline in July, following five consecutive months of increases, according to the United Nations Food and Agriculture Organisation (FAO).

The FAO Food Price Index, a trade-weighted gauge tracking international market prices for five major food commodity groups, averaged 161,9 points in July 2016, slipping 0,8 percent below its level in June and 1,4 percent below its July 2015 level.

The overall decline was largely caused by drops in international quotations of grains and vegetable oils, more than offsetting firmer dairy, meat and sugar prices.

Cereal prices fell 5,6 percent from June, led by a sharp drop in maize prices due to favourable weather conditions in the key growing regions of the United States, the world’s largest maize producer and exporter.

Wheat prices also fell in July mainly driven by large global supplies and prospects for abundant export availabilities from the Black Sea region.

By contrast, rice prices strengthened somewhat, as dwindling availabilities underpinned Basmati and long-grain quotations.

Falling for the third consecutive month, vegetable oil prices dropped 2,8 percent from its level in June.

The slide was mainly driven by palm oil, whose price dropped to a 5-month low, reflecting a seasonal recovery in production in Southeast Asia combined with subdued global import demand.

Prices for soyabean, sunflower and rapeseed oil also eased on better than earlier anticipated supply prospects.

Dairy prices rose 3,2 percent from the previous month, with butter prices seeing the sharpest rise in the group. Yet, they remain at very low levels compared to recent years.

Meat prices increased 1,3 percent from its revised June value. Quotations for all meat products remained firm, underpinned by a shortage of pigs for slaughter in the European Union and reduced output of sheep and bovine meat in Oceania.

International demand for meat remains strong, supported by a recovery in purchases by China and sustained imports by several countries elsewhere in Asia.

Sugar prices rose 2,2 percent in the month, largely influenced by movements in the Brazilian currency, which strengthened against the US dollar in July. – UN News.

Customers shopping at Horizon Ivato

Tinashe Makichi Business Reporter
Retail giant, Horizon Ivato says cashless transactions at its supermarket at Long Cheng Plaza have increased 40 percent as customers continue to embrace the use of plastic money in response to the prevailing cash challenges.

Horizon Ivato general manager Hansen Hu told The Herald Business that cashless transactions have since increased and the supermarket has put in place adequate point of sale terminals.

“We have seen an increase in cashless transactions of about 30-40 percent. This is an indication that the market is slowly embracing the idea of plastic money. We have also seen some customers making their payments using RTGS particularly on the furniture side,” said Mr Hu.

Horizon Ivato Supermarket, a leading supplier of various products ranging from gym and sports equipment, office furniture, all kinds of lighting, clothing and dry groceries, says there has been an increase in traffic into the shop since it opened doors three years ago.

Mr Hu said there has been a positive response from the market and the retail company is looking at devising marketing strategies to ensure presence outside Harare.

“Horizon Ivato is the supermarket to be and this is substantiated by the response that we have seen from the market. This supermarket is a one stop shop where you are guaranteed of getting all the products that you need.”

In light of market response and the need to register its footprint on the local market, Horizon Ivato is running the Summer Splash Promotion from August to September 3, 2016.

To enter the promotion one has to spend $10 or more in the supermarket and $20 or more in the hardware section.

These promotions come after Horizon Ivato increased its shelf space for local products to 70 percent.

“Our local content in terms of products is now sitting at 70 percent and this is against earlier impression that all the goods that you find at Horizon Ivato are Chinese.”

The retail giant has since expanded its retail space driven by the increasing demand for hardware products.

Business Reporter
BancAbc is set to introduce agency banking as it looks at penetrating previously under-banked areas while also serving its clientele operating in the less reachable parts of the country.

BancAbc head of retail Rufaro Hatendi told The Herald Business that the financial institution will roll out agency banking before the end of the year.

“We are looking at expanding our presence in the country but the expansion is not necessarily going to be premised on the traditional brick and mortar model. We expect to roll out agency banking to complement the current branch network,” said Mr Hatendi.

BancAbc currently has 22 branches countrywide.

According to the Reserve Bank of Zimbabwe, the use of the agent banking model has potential to significantly increase financial access by the poor and under-served population.

The Reserve Bank recognises that agent banking is critical to overcoming existing barriers to financial inclusion and for empowering the population to realise their full economic potential while contributing to economic growth.

Benefits of agency banking to customers include lower transaction costs and increased convenience due to longer opening hours and shorter waiting queues at agents compared to conventional branches.

Mr Hatendi added that BancAbc has a clear cut strategy to drive Government’s financial inclusion strategy.

Business Reporter
FINANCIAL analysts have projected listed tobacco processor, BAT Zimbabwe, to continue generating healthy dividends due to its low gearing levels and low capex burden.

This is in spite of the fact that the tobacco processor’s revenue is seen 18 percent lower in the next financial year after a 23 percent dip in the first half of 2016 at $17 million.

BAT has a gearing ratio of minus 19,6 percent and capex budget of only $700 000 planned for 2016, which leaves it in good stead to continue to reward investors, although profits are seen taking a knock this year.

“Despite BAT’s deteriorating cash generating ability (OCF/EBITDA 58,3 percent vs 69,2 percent in FY15) we anticipate that the company will continue to adopt a generous dividend policy due to its low debt levels and its low capex burden going forward,” said IH Securities in a research note.

Margins are also projected to shrink, as the company is operating in a difficult environment with margins seen 8 percent weaker at 43 percent in the full year to December 2016 from 48,3 percent in the same period last year.

The group undertook rationalisation measures that included staff reduction and investments in new technologies, which impacted on profits in the first half, but is expected to protect profits, revenue and margins.

Going forward, the company will seek to grow its market share for its popular brands, Madison and Everest, which currently stands at 70 percent and marketing efforts will continue in this regard in the second half.

In their quest for distribution excellence, management will continue to review the route to market, focusing on a model that is feet for purpose and replenishing the fleet, which is where BAT will spend the $700 000 capex.

Distribution efficiencies and cost containment measures in the first half led to a 10 percent reduction in selling and distribution costs to $,192 million, however, costs relating to staff rationalisation exercise and the annualised impact of service fees to the new enterprise resource planning grew administrative expenses.

Management has since indicated that it will continue focusing on rationalisation of costs without compromising quality of operations and investing in the workforce.

Slight concerns remain on the possibility of an increase by Government of exercise duty, which would compel the tobacco processor to pass on the cost to consumers.

MInister Bimha

Golden Sibanda Senior Business Reporter
GOVERNMENT says it will mobilise fresh low cost funding to support selected critical areas of the manufacturing industry whose goods are protected by the provisions of Statutory Instrument 64 of 2016.

Industry and Commerce Minister Mike Bimha said that possible measures included enlarging the Distressed Industrial and Marginalised Areas Fund and reviving the Zimbabwe Economic and Trade Revival Facility.

“The support measures in terms of SI 64 of 2016 are only a component of broad interventions that we are implementing to ensure that our industry grows and is able compete,” Minister Bimha said on Friday.

He made the remarks after meeting South Africa Minister of Industry and Trade on Thursday Rob Davies last week to discuss issues on trade and economic cooperation, including recent import control measures by Zimbabwe.

Minister Bimha said the understanding is that while there is capacity within the domestic manufacturing industry to produce the bulk of products the country is importing, funding remains the biggest constraint.

“This time the funds will not be there for everyone, but will target critical sectors that are supported through SI 64,” he said. Zimbabwe believes the average import bill of $6 billion, against exports of about $3,5 billion, is not sustainable and is a threat to local firms.

Statutory instrument 64 of 2016 removed a total of 42 products from the open general import licence, restricting their importation into Zimbabwe, as it was felt that local industry has the capacity to produce them.

It regulates importation of coffee creamers, camphor creams, white petroleum jellies body lotions, builder ware such as wheel barrows, structures and parts of structures of iron or steel bridges and bridge sections, lock gates, lattice masts, roof and roof frameworks, doors, furniture and parts thereof and metal furniture of steel kitchen units among others. Indications are that SI 64 will run for between two and three years. The full list contains 42 products Government contends the local manufacturing industry can produce and has taken measures to control imports to give the industry time and space to retool and acquire new technology. Industrial capacity utilisation is currently estimated at 34 percent. Minister Bimha said the decision to restrict imports was taken in terms of World Trade Organisation trade rules and the Southern Africa Development Community trade protocols, are available to any country that feels that the surge in imports negatively affects the survival of its industry.

There now is strong belief in Government that, on the evidence of the positive impact of the $40 million DIMAF facility, which helped revive the fortunes of companies such as Cairns Holdings, a bigger and more accessible DIMAF could help reposition a number of industrial companies.