Business Reporter
Powertel, a subsidiary of ZESA Holdings, is embarking on key network expansion projects countrywide as it seeks to recover from its current loss making position.

The Internet Access Provider narrowed its loss during the year 2016 recording $352 634 compared to a $497 000 loss in 2015.

Revenue for the company during the period under review went up three percent to about $25,6 million from $25,5 million recorded in the previous year.

The jump was on the back of improved revenue streams aided by new product launches and better market visibility.

“Powertel is embarking on key projects on network expansion, electricity aggregation advancement, retail network expansion, and network improvement projects and running new services to add value to existing customers,” Powertel said.

“Powertel, traditionally has been running as an independent Strategic Business Unit under ZESA Holdings which accessed no capital injection from Government or the parent company.”

“However Government has been very instrumental in mentoring the company and panelling it to remain focused on its main mandate as the company remains one of the flag ships of the power generating utility,” the company said.

Experts are of the opinion that the company would have been in a better position if it had been cushioned with concessionary loans as is the case with its competitors.

When Powertel was formed, it was solely for the purpose of servicing ZESA-the parent company but budding out to go mainstream as a business was a major positive growth for them.

Powertel recently integrated vendors on the electronic prepaid system which allowed many players to act as ZESA agents, cutting down long queues country wide. This even saw ZESA closing some banking halls which had become irrelevant.

“This ultimately became a revenue creation model for hundreds across the nation who are now running a sustainable business out of profit margins for collecting prepaid electricity on behalf of ZESA,” said Powertel.

Powertel in 2014 aggressively registered its presence in the region by becoming the first company to have fibre connectivity via Botswana.

The internet services provider has also been working on rolling out a $32 million fibre optic backbone network project set to improve the country’s connectivity.

The project requires the installation of around 1 850km of cable.

Minister Undenge

Tinashe Makichi Business Reporter
ZESA Holdings operations could soon be merged into one structure as Government is moving to contain costs and improve efficiency at the utility.

Deloitte Consultants are finalising a study expected to persuade Government to consolidate ZESA Holdings operations, as the current structure is considered costly and unsustainable.

The latest move by Government is informed by concerns over corporate governance conflict within the group in terms of mandate, delivery and decision making, according to sources

The Electricity Act (Chapter 13:19) provided for the formation of five successor companies each with its own board of directors.

The companies include the Zimbabwe Power Company, Zimbabwe Electricity Transmission Company, Zimbabwe Electricity Distribution Company, ZESA Enterprises and Powertel Communications.

The existence of individual boards for subsidiary companies has seen the group becoming top heavy.

Also there were cases where there was duplication of roles and parroting of the holdings board’s decision by subsidiary boards.

Energy and Power Development Permanent Secretary, Patson Mbiriri confirmed to The Herald Business that a study is being carried out aimed at improving efficiency at the power utility.

“Deloitte Consultants are finalising a study on how the ZESA Group can be rendered more efficient. Government will consider their recommendations as and when they are made which should be very soon,” said Mr Mbiriri.

Under the current set up, sources said that the role of subsidiary boards still remained unclear and that there was a corporate governance conflict in terms of throughput and the decision making matrix.

“It has become costly for the group that subsidiary boards have to sit over a decision already made by the holding company board and all they do is to mimic what the holding board has already resolved,” said a source at the power utility.

Energy and Power Development Minister Dr Samuel Undenge recently said Cabinet had made a decision in the past that ZESA must be unbundled and another different decision is in now in the offing.

“I think circumstances are now different and now there is a talk that ZESA is top heavy and we should look at the cost structure and that is what is happening.

“Nothing is permanent and things change. You can unbundle today perhaps 20 years to come you go back to the old situation depending on the dynamics. A report is going to be submitted to me, then I will present it to Cabinet,” said Minister Undenge.

Dr Mombeshora

Africa Moyo in VICTORIA FALLS
A ROW has erupted between local financial institutions and Government over the bankability of 99-year leases which had been primed as the solution for farmers to unlock credit from banks.

This comes as the Reserve Bank of Zimbabwe (RBZ) says its interactions with banks show that they will not accept 99-year leases until “some aspects” have been included in the documents.

RBZ deputy director (Economic Research) Mr Samuel Tarinda told delegates at the ongoing ZNCC annual congress here yesterday that: “The major bone of contention is the 99-year leases which are being perfected to incorporate the aspects that banks would want so that they (farmers) use them as collateral.

“But I think banks view farming as a business and where they see value, definitely they will support but this is where we are coming in terms of the collateral registry that we have just developed recently so that some of the movable assets that they (farmers) do have can also be considered as collateral, not just the title to the land.

“So I think once some of those issues have been resolved, you must see banks seeing value in supporting agriculture.”

However, Lands and Resettlement Minister Dr Douglas Mombeshora expressed concern at the attitude by banks saying the amendments done on the 99-year leases recently were suggested by financial institutions.

“We have completed work on the 99-year leases and all the amendments that we did on the 99-year leases were on the advice by the bankers.

“We did what they wanted and I am surprised that they continue to say that the 99-year leases are not bankable . . . it is the attitude that bankers have.

“I have seen white former commercial farmers getting millions (of dollars) from the same banks to fund agriculture when they didn’t have an offer letter.

“And when the (black) farmer goes to the bank and is denied that money, it is just the attitude which means our banks are not supportive to our farmers,” said Dr Mombeshora.

He urged banks to change their attitude and support farmers, adding that the 99-year leases are only designed to give confidence to farmers that they can invest on the piece of land they have and would not be chased away.

There was renewed hope for farmers that they would access loans from banks this season after Government announced that the 99-year leases had been perfected and ready to be used as collateral.

Banks have reduced lending to the agriculture sector by about 15 percent in the last 17 years after Government embarked on the land reform exercise.

Currently, 16 percent of banks’ loan books go to the agriculture sector, compared to over 30 percent in the 1990s, which

resulted in high production levels for all major cash crops.

The RBZ says it is negotiating with banks so that they increase their lending to agriculture to 30 percent.

“We would desire to have that percent (14 percent) go back to yesteryears. . . As you are aware, the Reserve Bank, together with the banking system, we have been supporting agriculture in terms of financing and I think when you look at the outstanding credit at the moment, about 16 percent of total credit is going to the agriculture sector directly.

“We would like to see that percentage grow again and I think in 1996 it was about 35 percent, now (it) is down to 16 percent and we want to get back to 30 percent and . . . we have been discussing with banks so that we can allocate at least 30 percent of their portfolio to the agriculture sector,” said Mr Tarinda.

He added that agriculture’s value chain linkage with the manufacturing sector could catapult the economy to stardom.

Agriculture contributes about 60 percent of raw materials used in the manufacturing sector, making its revival critical.

The RBZ says it has also licensed about 180 microfinance institutions (MFIs), some of which are more suited to cater for the needs of smallholder farmers in particular and the agriculture sector in general.

Mr Tarinda said already, some of the MFIs have advanced money to farmers and farmers’ organisations with a view to growing productivity.

“I think 10 percent of their portfolios are currently within the agriculture sector,” he said.

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Business Reporter
The Africa Enterprise Challenge Fund (AECF) says it will avail additional funding for upcoming solar projects in Zimbabwe.

This comes as the organisation has already made a $10 million commitment towards funding of solar energy projects in four African countries including Zimbabwe this year.

The fund which was formed in 2008 at the World Economic Forum in South Africa sources funds from investors and finances companies in different sectors of the economy.

AECF fund consultant Oliver Bowler told The Herald Business last week that funding will be availed for existing solar businesses so that they can scale up to profitability levels.

“The funding will be used to scale businesses so that they can reach more customers and improve people’s lives in rural areas. “Because we will do this in several investments to many companies we will therefore create a wider market which is investment-ready,” said Bowler.

“This will make investors feel safe and comfortable in committing their fund for a financial and social return in the solar household system market,” he said. Bowler said the fund will be providing grants from $250 000 to $1, 5 million for development of different solar projects.

“These will be invested into businesses so that they can grow and scale their business models to be more profitable and make a greater impact for socio-economic and gender factors.”

AECF portfolio manager Victor Ndiege recently said that the Fund is targeting both start-up and established companies. He said the funding tenure is up to five years. “In 2010 we introduced a renewable energy portfolio and specifically for this session we have come to promote renewable energy projects which are focusing on four countries across Africa namely Zambia, Malawi, Zimbabwe, and Sierra Leone.

“Currently we have 10 grantees in Mozambique who are benefiting from our funding and they have received investment of $13 million in the last four years. We have come back now with another $10 million to be competed through and hoping to bring on board another 10 or 12 companies across the four countries.

In Zimbabwe the organisation has also financed Better Agriculture, a company that has been promoting chilli production with rural farmers and is now expanding into regional and international markets.

Clean energy projects have tended to dominate the green bond market

Jeffrey Gogo Climate
Zimbabwe has stepped into the fast growing market of investors seeking to do the environment good, announcing plans for its first green bond issuance of $200 million.

Now that’s according to an exclusive report carried by this paper earlier last week. Details remain sketchy, but indications are that banking group CBZ Holdings Ltd — the country’s biggest by deposits — will be the lead book-runners in an offer that aims to fund renewable energy.

About $140 million will help finance the construction of a 100 megawatt PV solar power plant at Gwanda in the country’s south-west, the report said. The remainder will go towards the building of a 30 megawatt hydro-electric plant along the Gairezi River in eastern Zimbabwe.

Whereas the thrust on renewable energy dovetails with Zimbabwe’s long-term energy plans under the National Energy Policy of 2012, as well as national greenhouse gas emissions targets under the Paris Climate Agreement, it is the manner of fund-raising that catches the eye.

To achieve its goal of a 33 percent reduction in emissions by 2030, mostly through increased investment in renewable energy and improvements in energy efficiency, the Zimbabwe Government has said it will need up to $55,8 billion in global finance, with only a small portion funded by Treasury, according to its climate plan under the Paris Agreement.

Until now, funding for projects in grid-electricity supply has tended to rely on bilateral country-to-country loan arrangements, including finance from global lenders such as the World Bank. And that’s all right. Large-scale power plants in hydro or thermal, and even solar, are for those whose pockets go deep enough.

Any developing nation faced with varying competing socio-economic needs could struggle to deliver the adequate amount of money necessary to keep the engines in industry running, and the lights on, in the home.

But never before has Zimbabwe as a sovereign borrower looked to selling debt to bankroll environment-centred projects.

Booming market

The green bond market works in the same way as conventional bonds, except they raise funds for environment-specific, but not necessarily climate-focused projects. An issuer comes to the market with an issue, states how much it is they want to borrow, and at what coupon, and the reasons for which they are borrowing. The market takes over after that.

Across the world, the market for green bonds has swelled to $72 billion at the end of 2016, according to Climate Bonds Initiative, a not-for-profit global organisation that tracks and mobilises climate-oriented bond issuances from around the world.

Ten years ago, when green bonds set in, only a few million dollars worth of debt was issued, in a market that has largely been dominated by private institutional borrowers from Europe and America.

But amid growing global effort at halting the emission of climate-changing gases in an effective, verifiable manner, world governments are only starting to catch on.

In Africa, Nigeria announced plans in May to issue up to $63 million of green debt, in a phased offering that aims to fund projects in renewable energy, agriculture and transport.

It is interesting that clean energy projects have tended to dominate the green bond market. That’s because the energy industry, as indicated by the run-away burning of fossil fuels to produce electricity or to provide fuel for cars and airplanes, is the biggest source of emissions worldwide, and that’s where most of the emission cuts are needed.

Here, energy accounts for 49 percent of the national greenhouse gas emissions total, according to data from the Climate Ministry.

New funding options

With its maiden green bond issuance Zimbabwe appears to be following a global pattern, but without extra legislative incentive to attract big money investors such like mutual, pension or insurance funds to invest into climate-centric projects, there is no telling whether local investors — who are the prime target — will be keen on such an issue. Unlike Nigeria which is targeting wealthy offshore investors for its issue, Zimbabwe is a little short on that luxury.

Most of its debt isn’t investment grade, a rating keenly followed by world investors. That means the energy bond will likely attract only those investors attracted to assets considered by many as risky, or junk, with a high default risk, even if its foreign capital that’s been hooked.

And with a debt overhang in excess of $6 billion, the country has already been finding it tough to seek new, cheap money to fund growth in sectors other than climate or the environment.

However, what the green bond offers is an expansion of the channels that are now available to Zimbabwe for raising climate-specific funds, seeing as it is overall public spending on such projects make up an insignificant one percent of total Government expenditure for 2017. And again, this is for self-interest.

As countries like the United States, the world’s second largest polluter after China, play poker with our future, refusing to fund green growth within the Green Climate Fund scope, the bond market is a viable option for raising money domestically, to help the Zimbabwe Government fulfil its share of pledges under the Paris Agreement.

The recent revival of the domestic bond market by authorities at the Zimbabwe Stock Exchange, allowing both companies and public entities to issue and trade debt, is also an opportunity to tap into local funds.

It could be here that the Government is looking to for its capital raising initiatives, targeting local pension funds and insurance companies who are reportedly sitting on $10 billion worth of assets, and are by law required to invest a minimum 15 percent of their money into public paper.

Whatever the outcome, Zimbabwe’s maiden green bond comes at a critical moment, when the country is seeking to ease two decades of severe power shortages, and to meet up with its greenhouse emission goals under the Paris Agreement, in part achieved through domestic spend.

God is faithful.

•  jeffgogo@gmail.com

Mr Makore

Business Reporter
HWANGE Colliery Company Limited is in the process of resuscitating underground operations which will enhance product mix thereby improving margins, managing director Thomas Makore said.

Mr Makore, who was speaking after the company’s annual general meeting on Friday, said the targeted timeline to commence underground production is October.

“Underground is where we have high value coking coal so it will be a good addition to our product mix. It will improve our margins and our volumes, of course,” said Mr Makore.

In the year to December 2016 HCC recorded a 41 percent decrease in revenue to $39, 9 million from $67, 5 million recorded the previous year mainly due to a decrease in sales volumes, but the company expects a positive outturn this year.

The company is expecting to close June at about 230 000 tonnes as production is continually improving since a scheme of arrangement was struck with creditors.

In May, Hwange did 170 000 tonnes rising from 50 000 tonnes in the prior month. “We are optimising and introducing change processes but it’s a whole variety and cocktail of things that range from equipment, people, processes and systems and just becoming better at what we do,” said Mr Makore.

The company is forecasting to increase production by about 50 000 tonnes to about 280 000 tonnes in July and 300 000 tonnes in August. In May, creditors gave Hwange breathing space to retool and return to production after the agreed to the scheme of arrangement which rescheduled the company’s debts.

“The scheme of arrangement means that we have a compromised position with our creditors. That means that we are able to convert our short-term debts into long-term,” according to the managing director.

The scheme of arrangement also saved the company from having its assets auctioned off to settle long standing debts of about $352 million as it had been facing difficulties in meeting its obligations.

Hwange is in the market to raise $15 million for working capital. “Our balance sheet is being restructured and that allows us to access working capital from banks and we are busy negotiating for that working capital from banks. The discussions (with banks) are underway and let’s see what happens in the next 30 days,” he said.

Hwange’s principal activities include exploration, mining processing and marketing of coal and the production of coke and related by-products in the north western part of Zimbabwe.

Mr Ken Mekani

Tinashe Makichi Business Reporter
METALLON Corporation, the parent company of Zimbabwe’s largest gold producer, is expediting processes to operationalise mining ventures in Tanzania and the Democratic Republic of Congo(DRC).

The miner’s long-term target is to produce 500 000 ounces (14, 2 tonnes) of gold per annum. Chief executive Ken Mekani told The Herald Business that the group was optimistic of securing funding for its projects as initial assessments, particularly in Tanzania, were encouraging.

“A scoping study on our prospects in Tanzania has been completed and the results are encouraging. A bankable feasibility study will be developed and this will be used to secure funding for the project,” he said. “Metallon is focused on resource development across the group as a way of securing the future of all our mines. We have in place a dedicated team tasked with development and mine planning across the group.”

In Zimbabwe, Metallon, which is listed on the Alternative Investment Market of the London Stock Exchange (LSE), owns and operates five gold mines namely How Mine, Redwing, Mazowe, Acturus and Shamva.

Its local gold resource is estimated at eight million ounces. Production in Tanzania, especially at gold fields near Lake Victoria, is forecast for 2019. However, in the DRC focus is on Maniema province near Bukavu.

“Metallon has the assets and the mineral resources able to support our long term expansion plan. “Efforts continue to raise the funding required to exploit these resources and to optimally sweat our assets. “Despite the challenges in our environment, we are confident that these efforts will eventually bear fruit and that we will remain on track to fully leverage on our mineral resources to achieve our expansion plan,” added Mr Mekani.

Asa Resource Group (former Mwana Africa) has also begun investing in the DRC. Plans are underway to develop Motapa mine — whose lease and additional mining claims were acquired from Oleaster Investments in October 2003 — which is located in Bubi (100 kilometres north of Bulawayo).

There is also another venture at Midwinter in Mashonaland West Province. Metallon Corporation says plans to list its local unit on the Zimbabwe Stock Exchange (ZSE) are presently on hold.

Reserve Bank of Zimbabwe

Business Reporter
ENDEMIC financial indiscipline in Zimbabwe has resulted in money being treated as a commodity instead of a medium of exchange and is one of three major reasons the country is currently battling chronic cash shortages.

Newly appointed Reserve Bank of Zimbabwe Deputy Governor Dr Jesimen Tarisai Chipika said bond notes were no longer an internal medium of exchange with hordes of the surrogate currency being stashed in homes or shipped to border posts and regional countries.

She said this last Friday while addressing Professional Women, Women Executives and Business Women’s Forum, which advances the interests of women and seeks to help them participate in the mainstream economy through starting their own enterprises.

“There is financial indiscipline in Zimbabwe and I think part of it was picked from the era of ‘burning’ (arbitrage in currency trading). Money is now being treated as a commodity, instead of a medium of exchange. Basic economics say that money is a medium of exchange. If we have an economy driven by the parallel market for currency, we are destroying ourselves. We have a problem, because we are drifting back to the era of burning currency, where we also did not bank, but stashed money at home.

“We have been told that the money which we are saying is in shortage, be it bond notes or otherwise, is all stashed up at the country’s border posts. We have been told by our financial intelligence that the bond notes are now hard currency within the Sadc region.

“The currency is now accepted as legal tender in countries such as Zambia, Mozambique and South Africa. When we introduced it, we only meant it as an internal currency to help us in transacting and as incentives for exporters,” she said.

“As such, a lot of dynamics are happening in our country and we have since invoked the Bank Use and Promotion Act, which many people had forgotten about, to say as business people you must take all your daily cash receipts to the bank,” she added.

Dr Chipika said all daily proceeds of business and idle cash should, as per requirements of the law, should be banked in order for the money to circulate in the economy since Zimbabwe was not printing money and used foreign currencies to transact.

She also pointed out that expenditure by Government, of financial resources not yet available was one of major causes of the prevailing cash shortage.

“One of the major problems causing the cash shortage in Zimbabwe is deficit financing. Deficit financing in an economy can be in the form of expenditure patterns of Government, in our companies or by us as individuals.

“Deficit financing, if its Government, it pays civil servants based on money which is not there and so, it approaches the Reserve Bank for overdrafts or it issues Treasury Bills. It’s not only Government guilty of such, even companies, they obtain overdrafts of money that is not available and use it to pay salaries,” Dr Chipika said.

Such a scenario, the central bank’s second in command said, puts pressure on banks to meet huge demands for cash when the financial institutions do not have the funds.

Potraz

Business Reporter
Mobile operators’ revenues declined by 9,7 percent to $179,8 million in the first quarter to March from $199,2 million recorded in the previous quarter, signifying the negative impact Over-The-Top services have had on operators.

In its quarterly report, the Postal and Telecommunications Regulatory Authority of Zimbabwe said OTTs will continue to present opportunities and challenges for operators. “The anticipated overall impact on revenue performance is expected to continue unless operators come up with innovative ideas to deal with the impact of OTTs on their revenues,” Potraz said.

Total voice traffic declined by 7,1 percent to record 993 582 256 minutes from 1 069 944 767 minutes recorded in the previous quarter. Voice service is still the major revenue contributor contributing 58,9 percent. The revenue contribution of data and internet services is improving after having contributed 21,5 percent in the quarter under review, up from 20,2 percent recorded in the previous quarter.

Most voice traffic categories experienced reduction in volumes with mobile off-net experiencing the biggest decline of 13,2 percent. There was also a general decline in SMS traffic in the period under review. “The substitution of traditional voice and SMS with Over-the-Top (OTT) services text and voice is attributed to the general decline in voice and SMS traffic,” the report said.

However, there were cheers for the second largest mobile operator, NetOne, which led the sector in the first quarter, recording a 1,9 percent increase in active mobile subscriptions to 4 801 762 from 4 712 410 recorded in the last quarter of 2016.

Econet recorded a marginal 0,5 percent increase to 6 390 232 in the period under review from 6 360 904 recorded in the previous quarter while Telecel declined 1,1 percent.

“Active mobile subscriptions totalled 12 977 315 in the quarter under review. This represents a 0,8 percent increase from 12 878 926 recorded in the fourth quarter of 2016. An active mobile line is one which has been used to make or receive a call and/or send or receive a message at least once in the past 90 days.

“Using the 2017 population figure of 13 727 493 as per projections by ZIMSTAT, the mobile penetration rate was 94,5 percent. This represents a 0,3 percent decline from 94,8 percent recorded in the previous quarter,” Potraz said.

Potraz said mobile internet data usage increased by 4,7 percent to record 2 688 410GB from 2 567 401GB recorded in the previous quarter. Active mobile money subscribers declined 1,6 percent to 3 251 784 in the first quarter from 3 303 188 recorded in the fourth quarter of 2016.

An active mobile money subscriber is defined as a customer account that has used the mobile money service to make transactions that involve the movement of value (such as cash-in, cash-out, bill payments, airtime top-ups) at least once in the last 90 days. There was a general decline in cash-in, cash-out and cross network mobile money transactions in the first quarter of 2017.

There was a marginal increase in active internet subscribers in the first quarter of 2017. The total number of active internet subscriptions increased by 0,01 percent to reach 6 722 677 from 6 721 947 in the previous quarter.

Using the 2017 population figure of 13 727 493 as per projections by the ZIMSTAT, the internet penetration rate was 49 percent. This represents a one percent decline from 50,1 percent recorded in the previous quarter.

Mobile internet subscriptions constituted 98 percent of total internet subscriptions. Of the total mobile internet and data subscriptions, 271 252 accessed and used LTE in the quarter under review. This represents a 28,2 percent increase from 211 566 subscribers recorded in the previous quarter.

Obert Chifamba Agri-Insight
Cue the sad and strong nostalgic tone running through this piece of writing! Yes, I yearn for a return to that spirit of communalism demonstrated in the ‘nhimbe/ilima’ (communal collaboration) concept, which used to prevail in our communities, especially the rural when it involved doing tasks that would naturally have proven insurmountable to individuals.

I remember, as I grew up villagers would invite those they were friends with to come and help do tasks such as tilling the land, ferrying manure to the fields, weeding, harvesting or thrashing and winnowing of large harvests or many other tasks without extending a monetary payment.

They would just brew some traditional beer and “maheu” (for non-alcoholics), buy a few loaves of bread or even bake their own from wheat flour and slaughter one or two road runners and in some cases slaughter a goat depending on the attendance.

This would be enough to see many people from the village or even beyond coming together to do the work in one day. A task that would have taken weeks for an individual to accomplish would be completed in one day; usually starting very early in the morning to somewhere around midday.

The rest of the day would be spent people drinking the traditional brew in the shed catching up on many social matters. It was on such occasions that sticking out social issues would also be discussed and solutions proffered. Nhimbes would provide a platform for people to iron out differences that would have otherwise seen them taking up arms against each other or even resorting to witchcraft.

The traditional concept of nhimbe runs deep in Zimbabwean culture, not just among the dominant Shona but the entire nation and was responsible to a very large extent for the food self-sufficiency that used to prevail throughout the country. No one would miss important seasonal deadlines owing to lack traction power, as is happening today. Even those that did not have cattle or donkeys would have their fields ploughed in time and people would even use Open Pollinated Varieties of seed if they could not afford treated seed from the shops. The burden would be less.

Nhimbes managed to erase the differences between the haves and have-nots and the concept was generally a social unifier, as it took care of both nutritional and social issues of the populace. Implements would be used communally and everything for the day of the function was for everybody and all people would have a sense of oneness that also promoted a very high sense of responsibility in most things people did.

Sadly, the concept just died a silent and natural death – its demise probably hastened by the advent of changes in agricultural technology, massive urbanisation and a shift in agricultural practices in recent years. Where people would congregate to plough using 10 spans of oxen, a farmer now uses a tractor or hires someone with his oxen for a fee.

Everything has just gone commercial and highly mechanised. This recent trend, though good and extremely productive, tends to nurse individualism and does not have room for that inclusivity that nhimbes used to foster.

Ideally, nhimbes allowed communities to come together and join hands to accomplish a task. Now all that is gone and people only see the dollar as the answer to their problems but this shuts the door on those that do not have cash.

They cannot always hire labour or implements yet under nhimbe they would do so without digging into their pockets for cash. This is really forcing the not-so privileged to either reduce the hectarage under cropping or even leave the land fallow, which in most cases is the ideal recipe for food insecurity.

Also, nhimbes offered a platformfor old foes to settle their grudges and forgive each other while doing something productive like tilling the land, digging anthill soil to fertilize fields or winnowing harvests for storage in the granaries, amid merry tales and drink. In the process disputes were discussed and solved, rumours verified, suspicions allayed and other forms of communal discord dealt with. All this was done in a funny, jocular and all-inclusive manner, such that at the end of the day, none went home burdened but refreshed.

In this regard, nhimbes were not just fora for ‘many hands coming together to make work lighter’, but also for peace making, conflict resolution, peace-building, early warning, and conflict prevention.

Nhimbes left the social fabric revitalised and working as one and allowed communities to use the social sphere they created to deal with underlying issues of conflict in their areas.

The nhimbe concept has been used in many countries globally as vehicles to promote the spirit of voluntarism and sustainable local development.

At independence Government sought to uphold the concept but at a slightly different level. Then, it was called “mushandirapamwe” (co-operative), which meant working together for the general good of production in most activities, of course with a huge slant towards agriculture.

This practice saw Zimbabwe leaving a very legible footprint in agricultural circles on the continent and even globally, as most of the food that earned it the status of bread basket of Africa came from smallholder farmers that thrived on “mishandirapamwe” while the large commercial farmers, predominantly white, concentrated on lucrative cash crops such as tobacco, flowers and sometimes cotton.

The natural death of mishandirapamwe also had telling consequences on production just like the nhimbes. Maybe it’s worth giving them a second chance and compliment Command Agriculture, just food for thought!

•  Feedback: obert.chifamba@zimpapers.co.zw

Comesa

Business Reporter
Researchers and trade experts have implored the Common Market for Eastern and Southern Africa to integrate policy research into the institutional structure and budgeting of the Secretariat to make it sustainable.

Speaking at the closing of the 3rd Comesa Annual Research Forum in Rwanda experts noted that this will facilitate continuity in the implementation of high impact project interventions that the regional bloc has achieved in the last three years.

Currently, the Comesa Research project is financed from a $3 million kitty provided by the African Capacity Building Foundation (ACBF) for capacity building in economic and trade policy research and analyses. The project financing will come to an end in September this year.

Experts asserted that policy research was not an option but an imperative for the success of regional integration. “The Comesa research project demonstrates a highly successful programme that has come up with findings and policy recommendations that have informed key decision-making by the Comesa policy organs,” said the experts.

They cited the decision to establish the Comesa Virtual University of Regional Integration which is set to begin enrolling students in September this year as an outstanding accomplishment. A total of 22 Universities in the Comesa region are involved in this project.

Other success stories cited were six key studies that the Comesa research project has undertaken in the last three years. Among them was the study on Comesa intra-regional trade potential.

The study found that the potential value of trade in goods that exists among Comesa Member States stands at $ 83 billion. This is above the current intra Comesa trade of $20 billion.

The other studies that have informed policy decisions in regional integration include an Audit of non-tariff barriers in Comesa and their impact, Competitiveness study in Comesa which resolved the Kenya sugar safeguard application concerns, the implications to Eritrea on joining the Comesa Free Trade Area and the impact of the Transpacific Partnership on AGOA eligible Comesa Member States trade with the United States.

At the Kigali Forum, 18 research papers focusing on the key pillars of regional integration namely; market integration, industrialization, economic infrastructure, investment and the blue economy were presented and reviewed.

They included the testing the level of market integration in Comesa and EAC and Implications to Tripartite Free Trade Area (TFTA towards operationalisation of the Comesa shipping line.

The forum described the papers as candid in their policy implications which if implemented would play an important role in boosting intra-Comesa trade and consequently the intra-African trade.

This is in line with the key motivation for the ongoing negotiations for Continental Free Trade Area to be launched this year.

Fidelity Printers and Refiners

Michael Tome and Kudakwashe Mhundwa
Fidelity Printers and Refiners has so far disbursed close to $29 million from the $40 million gold development initiative availed for small mining players last year.

This funding intervention,which cuts through the whole sector was aimed at capacitating small scale miners across the country. Speaking during a Mine Expo in Bindura last week, Fidelity Printers and Refiners operations manager David Mpofu said small scale miners should take advantage of the fund as it was aimed at capacitating them.

“The fund is targeted at all categories of mining particularly small scale miners. What we require is a transparent proposal notifying us of what you want to do. The proposal should encompass a geological map of where you are mining and a metallurgical report on how much gold is available. “However we implore small scale miners to use proper mining methods and desist from illegal gold panning practices,” said Mr Mpofu.

He further said that the state owned refinery has loosened conditions of accessing the fund as movable assets now qualify as collateral. Mr Mpofu also advised small scale miners to avoid middlemen by selling their gold to Fidelity Printers. This is aimed at boosting the country’s gold reserves and to enhance effective record keeping for individual miners

“We have relaxed conditions for issuing the loans to an extent where livestock can be used as collateral cover. “The loans have to be secured by some asset, because it is a state fund, where we give out the funds expecting a collateral cover,” he said.

According to the Reserve Bank 2016 fourth quarter report, sectorial contributions reviewed that small scale gold producers surpassed large scale producers for the first time in the history of gold production.

Small scale producers delivered a total of 3 163 kgs during the fourth quarter of 2016, compared to 2 230 kgs produced during the same period in 2015.

Large scale miners produced 2 959 kgs, compared to 2 935 kgs during the same period. The rise was mainly attributed to increased throughput from primary producers, small scale producers and PGM activities.

Zimbabwe has in recent times prioritised small-scale gold mining operations taking into account the pivotal role small scale miners are playing in the yellow metal’s production.

Government is also in the process of negotiating for a loan facility from South Korea aimed at capacitating small scale miners to boost current production of the sector.

This comes as gold production target for small scale miners this year has been set at 10 tonnes after missing the 2016 target by 600kg, producing 9,4kg in 2016.

Isaac Kwesu

Business Reporter
Zimbabweans should start recognising leaders who achieve growth and success rather than celebrating survivors of the current economic environment, Zimbabwe Institute of Management honorary fellow and Chamber of Mines Zimbabwe chief executive Isaac Kwesu said.

He said this while addressing the Zimbabwe Institute of Management 2016 northern leadership awards last Friday. “We must move away from celebrating the survivors to celebrating the achievers defined by growth and prosperity. We must not have pride in resilience but growth and success,” said Mr Kwesu.

He said true leaders are the ones who thrive in times of crisis and produce demonstrative results. “The true leadership capacity of a person is tested during times of crisis. Performance under stress can show how quick witted or level headed a person is. The current situation demands a change in the mindsets of leaders.

“We need to think outside the box. There has to be a paradigm shift if we are to make headways. Crisis provides a unique opportunity to create a transformative change in your organisation. It is now time to innovate, to understand your business and meet the needs of your consumers,” said Mr Kwesu.

He said business leaders have to make a conscious effort to develop capacity within their organisations to innovate and adapt. “In other words, we need to move away from our comfort zones to pursue business unusual. Leadership is not only about position experience, knowledge and education.

“It’s also about our willingness to experiment with possibilities to help solve problems that no-one has encountered before “The award tonight recognise women and men who have made a mark in the way they steered their businesses in such turbulent times.

“The fact that you are still operating is enough proof that we are all making an effort to disengage from long held beliefs of doing business and surviving,” he said.

Meanwhile Securico managing director Divine Ndhlukula won the Private Sector Leader of the Year Award while the managing directors of RioZim and First Mutual Life Assurance Company Ltd Bhekinkosi Nkomo and Ruth Ncube were first and second runner-ups respectively.

The Public Sector Leader of the Year Award went to Zimbabwe Energy Regulatory Authority chief executive Engineer Gloria Magombo and Great Zimbabwe vice chancellor Professor Rungano Jonas Zvobgo.

TelOne managing director Mrs Chipo Mtasa was the first runner-up. Businessman and Zimbabwe Football Association president Dr Phillip Chiyangwa was the biggest winner after he got the Most Influential Leader of the Year Award.

Dr Chiyangwa said Zimbabweans should not be overly obsessed with impending elections to the extent of putting their plans on hold but should take advantages of opportunities that are available.

“They say money is a visitor and if it has not visited you, you should ask yourself why? There are a lot of opportunities in the country and instead of waiting to see what happens after the elections you should be focused on what you can do to better yourself or your businesses.

“What happens if you wait and after the election nothing changes?” he asked.

The ZIM awards were held under the theme “Business unusual, Swim or Sink”.

China is Africa’s largest economic partner. Yet it has been a challenge to understand the full extent of the partnership due to a dearth of data. A new report by McKinsey Africa finds that its involvement is bigger and more multifaceted than previous studies suggest.

Through a study conducted across eight countries that together make up about two-thirds of Sub-Saharan Africa’s gross domestic product, the report finds that there are already over 10 000 Chinese firms operating in Africa—four times the previous estimate.

About 90 percent of these are private firms, of all sizes and operating in diverse sectors, with about a third in manufacturing. These firms are bringing capital investment, management know-how and entrepreneurial energy to the continent, and in so doing, are helping to accelerate the progress of Africa’s economies.

Across trade, investment, infrastructure, financing and aid, China is a top five partner to Africa—no other country matches this level of engagement. The China-Africa relationship has ramped up over the past decade with trade growing at around 20 percent per annum.

FDI has grown even faster—at an annual growth rate of 40 percent. China’s financial flows to Africa are 15 percent larger than official figures suggest when non-traditional flows are included. China is also a large and fast-growing source of aid and the largest source of infrastructure financing, supporting many of Africa’s most ambitious infrastructure developments in recent years.

Chinese firms are market-driven and investing for the long-term

Operating across many sectors of the African economy, in addition to manufacturing, a quarter is in services and a fifth in trade and in construction and real estate. Chinese firms already handle 12 percent of Africa’s industrial production—valued at $500 billion a year in total. In infrastructure, Chinese firms’ dominance is even more pronounced, having cornered nearly 50 percent market share of Africa’s international EPC (engineering, procurement and construction) market.

Chinese firms are making healthy profits. Nearly a quarter of the 1 000 firms surveyed said they covered their initial investment within a year or less. A third recorded profit margins of over 20 percent. These firms are agile and quick to respond to new opportunities.

They are primarily focused on serving the needs of Africa’s fast-growing markets rather than on exports. Chinese firms have made investments that represent a long-term commitment to Africa. Of the Chinese firms surveyed, 74 percent said they are optimistic about their future in Africa.

Clear benefits, but challenges must be addressed

The report points to three main economic benefits to Africa from Chinese investment and business activity:

Job creation and skills development: Of the 1 000 firms surveyed, 89 percent of the employees are local. The research suggests that Chinese firms employ several million Africans. Nearly two-thirds of Chinese firms provide skills training to their workers.

Transfer of knowledge and new technology: Chinese firms are modernising African markets by introducing new products and technologies. Some 48 percent introduced a new product or service and 36 percent have introduced a new technology in the last three years.

Financing and development of infrastructure: When asked what they value most from their Chinese partners, for some 50 African public-sector leaders, low-cost financing and improved infrastructure topped the list. They cited Chinese firms’ efficient cost-structures and speedy delivery as major value-adds.

While on balance, China’s burgeoning partnership with Africa is a positive for Africa’s economies, governments and workers, there are areas that need significant improvement:

By value, only 47 percent of Chinese firms’ sourcing was from local African firms, which is lost opportunity for these firms to benefit from Chinese investment.

Maximising the impact of the partnership

Kartik Jayaram, a senior partner and co-author of the report said, “Chinese engagement with Africa is set to accelerate—by 2025 Chinese firms could be earning revenues worth $440 billion, from $180 billion today. Additional industries could be in play for Chinese investment, including technology, housing, agriculture, financial services and transport and logistics.

However, to unlock the full potential of the China-Africa partnership, we have identified 10 recommendations for Chinese and African governments as well as the private sector. To highlight two key ones—African governments should have a China strategy and the Chinese government should open financing and provide guidance to Chinese firms.” — AN.

Mr Mboweni

Business Reporter
ECONET Wireless has reduced EcoCash tariffs on all merchant payments by up to 50 percent with effect from yesterday, to reduce cost of transacting on the payment platform.

The reduction, Econet said, was aimed at making it less expensive and convenient for customers to transact using EcoCash, which had become the most used system when transacting in Zimbabwe owing to the current cash shortage.

Econet Wireless, the largest mobile telecoms company in Zimbabwe, says its mobile money service, EcoCash, has processed over $23 billion transfers over five years.

A third of this figure was transacted in the last 12 months driven by prevailing cash shortages. The mobile money transfer service has over 6,8 million mobile customers. Econet says it has over 10 million registered subscribers.

The reduction of EcoCash merchant tariffs, Econet said, would see customers being charged transaction fees as low as $0,01 for purchases starting from as little as $1.

Econet Wireless chief executive officer Mr Douglas Mboweni said: “We are inspired to transform lives of our customers through the use of technology. In view of liquidity challenges, EcoCash continues to give customers the convenience, security, as well as affordability to buy goods and services without the worry of accessing cash,” he said.

“Our vision is to see a situation where our customers can buy literally everything using EcoCash from payment of utility bills, hospital bills, purchase of groceries, fuel, school fees, and at the vendors’ markets,” Mr Mboweni added.

He said he was grateful that Zimbabwe was already moving in that transition towards a truly cashless society. The reduction of merchant fees by EcoCash comes at a time when customers are increasingly using their mobile wallets to transact through merchant payment solutions.

This increase in cashless transactions aligns with the current cash shortages in the market. General manager for EcoCash Natalie Jabangwe-Morris said, “We are ever thankful to our customers for their continued support.

Our ‘Zero Fees Thursdays’ where we were not charging our customers merchant fees ended on 30 June 2017 and the reduction of merchant fees is part of our vision to continue giving our customers value for their money,” Mrs Jabangwe said.

Econet Wireless is Zimbabwe’s biggest mobile phone network ahead of State owned NetOne, which has 5,8 million customers and Telecel Zimbabwe with 4,7 million.

NRZ has so far this year overhauled 165 wagons in an effort to bring profitability to the firm

The National Railways of Zimbabwe (NRZ) has secured a $5 million loan from a local bank to repair part of its fleet and is also negotiating with a Russian firm to supply it with 100 new wagons, a senior Government official has said.

The debt ridden parastatal, which owes creditors millions of dollars, among them its workers, is in urgent need of recapitalisation to buy new equipment and restore its aged infrastructure.

Transport and Infrastructural Development deputy Minister Michael Madanha said the NRZ had sourced for finance from local banks to repair locomotives and wagons as an interim measure to improve capacity and business volumes.

“To date, the organisation has secured a loan of $5 million from a local financial institution, which will be used to repair five locomotives and 200 wagons,” he said.

“The NRZ has also been involved in negotiations with a Russian wagon manufacturer, UNIWAGON for the supply of 100 new wagons through a $10 million facility from the Russian Exim Bank. The NRZ has submitted a business case on its capacity to service the loan and other relevant documentation, which the Russians are currently going through.”

Mr Madanha said the NRZ had so far this year overhauled 165 wagons using its own resources. The NRZ had also engaged a consultant to assist in the right sizing of the organisation against the background of its failure to meet its wage bill requirements.

The parastatal, which has said it requires $2 billion to fully recapitalise, has failed to run profitably for years due to under-capitalisation and ageing rolling stock, incurring losses of over $200 million between 2009 and 2013.

At its peak, the NRZ employed about 20 000 workers and moved 18 million tonnes of freight annually.

The NRZ is one of the 10 state enterprises that the Government has targeted for reform and its revival is seen as crucial to the turn-around of local industries. — New Ziana.

The tropical storm Cyclone Dineo which hit Zimbabwe during the last rain season resulted in the growth of massive vegetation which translated to fuel load, an essential ingredient for veld fire occurrences.

The dry season is upon us and it is imperative for everyone to know their role in preventing and controlling veld fires which have become an annual catastrophe destroying velds, property worth millions of dollars and human life.

In the past seven years, from 2010 to date, 85 have people have died as a result of veld fires during the dry season.

In our bid to address this challenge, the following stakeholders are critical in veld fire management:

1.Traditional Leaders

• They are empowered under the traditional leaders Act to apprehend and prosecute environmental law offenders including those that breach veld fire regulations. Traditional leaders are encouraged to:
• Spearhead the construction of standard fireguards in their communities.
• Establish fire–fighting teams within the local communities who will lead the rest of the community in extinguishing veld fires.
• Use traditional courts to sanction veld fire offenders.
• Keep a record of all the veld fire occurrences in their areas since they are on the ground and to hold fire awareness meetings and campaigns throughout the fire season.
• Establish a veld fire alert system in every village such as drum beat, bell/gong or whistle.

2.Farmers

• Farms are vulnerable because crop residues act as fuel which is required for the occurrence of veld fires.
• Farmers should construct standard fireguards every year which are at least 9m wide on both sides of the farm boundaries and also internal fireguards which are 4,5m around plantations and fields in order to protect crops.
• Ensure that fire-fighting equipment such as; water filled knapsack sprayers and bowser, fire beaters and sacks are at an accessible point during the fire season.
• Report all fire incidences to the Zimbabwe Republic Police (ZRP) or EMA offices within 7 days.
• Have agreed fire alert systems such as drums, whistles and bells;
• Listen to weather personnel on the fire danger index so as to improve your state of preparedness.

3.Law Enforcers/ The ZRP/EMA/Forestry Commission:

• Prosecutes veld fire offenders.
• Holds awareness meetings with communities on veld fire management,
• Establishes fire fighting teams in the local communities and

4.School Children

• School children should:
• Not try to cross over veld fires as this may result in fire related fatalities.
• Immediately report fire incidences to adults such as parents or teachers before the fires spread and should not in any way attempt to extinguish the fires in the absence of adults.
• Never climb trees to flee from a veld fire as both you and the tree can be burnt to death.

5.Smokers, Motorists and travellers

• Smokers should extinguish their cigarette stubs before throwing them away to avoid veld fires.
• Motorists should ensure that car electrical systems are serviced and mechanical parts such as the exhaust must be tightened to avoid sparks created after rubbing onto the road.
• Do not drive through flames or areas where your vision is obscured by smoke from veld fires.
• Travellers boarding early morning buses should completely extinguish road side fires used to keep warm whilst waiting for transport. This can be done using water or moist soil.

• Send your feedback to; eep@ema.co.zw, like us on Facebook and twitter or visit our website www.ema.co.zw. Alternatively, call us on: Tel 04-305550/ 305407/ 305188 and Toll-free 08080028; or use our Whatsapp platform 0779565707. We are ready to listen.

Banks should be able to log on and do a reference check on anyone desiring credit facilities without fear or favour

Dr Sanderson Abel
The going live of the central credit registry system is a big milestone for the financial services sector in Zimbabwe since the introduction of the multi-currency system.

It is a accepted fact that the central Credit Reference System was a long overdue development in the country given that each and every monetary policy statement that has been announced since 2009 has articulated the hazard of the growing non-performing loan book in the economy.

It had become common knowledge that banks were becoming hesitant to continue lending to defaulting creditors. This process was fast leading to disinter-mediation in the whole financial system in the country hence destabilising the recovery of the economy. The feedback effects from the non performing loan phenomena undermined the recovery of the economy and imposed significant vulnerabilities on the banking sector.

Acknowledging the gravity of the problem, the Central Bank in collaboration with the Bankers Association of Zimbabwe and other stakeholders placed the resolution of the NPLs problem as a priority and devised a number of strategies to tame this big elephant in the room.

It is the considered opinion of bankers and other lenders that the creation of the Credit reference system will assist to check the credit histories of would be borrowers before resources can be advanced to them.

The credit reference system is expected to reduce the cost of banking, reduce the cost of funds, and reduce default rates as borrowers seek to protect their reputation collateral by meeting their obligations in a timely manner.

The system will also increase the motivation for clients to repay their loans; encourage consumers to maintain good credit records; reward consumers who maintain good payment histories as well as providing a more comprehensive picture of consumer financial behaviour.

With these potential benefits in a fully operational credit system, stakeholders have a number of expectations from the system. These expectations of the stakeholders are supposed to be taken aboard. I highlight here a number the expectations that will allow the reaping of full benefits from the system;

• The Credit reference system needs to take into account the historical data already in existence, e.g. FCB, TransUnion and XDS. It should also start including data from other business entities (microfinance, utility operators, Zimra, department stores etc). That way the assessment at least takes into account a number of stakeholders.
• The credit reference system should have a way of including court judgements in a more formal manner instead of picking newspaper reports which can be sometimes be misleading or not cover all details.
• Charges for the use of the system should not be too high. Procedures on how one can “remedy” their blacklisted status should be very clear. Some people are able to rehabilitate themselves. It is important to have procedures on they can seek remedy.
• BAZ expects all creditors to be part of the system with no exceptions so that information obtained on any particular client is complete and accurate.
• The database should contain both negative & positive data to help in decision making. Transparency of the credit reference system is of paramount importance, banks should be able to log on and do a reference check on anyone desiring credit facilities without fear or favour.
• The process should not be discriminatory hence should not be intercepted or manipulated to give a report that depends on who is being checked.
• The RBZ should also make it mandatory for anyone desiring credit to have their credit standing checked so that there are no “sacred cows” who are exempted from the process.
• Standardised scorecards that are in line with Basel recommendations for all CPA members required. This will help banks since they will be using the same measuring tool for their decision making.
• Confidentiality of the system is of out-most importance as failure to abide by this will destroy credibility of the whole system. We expect that there would be penalties for any breaches of any sort. For competitive reasons members should not be able to access information they are not entitled to, maybe with the motivation to “steal” another bank’s clients.
• We expect an efficient system that will not overly delay the process when assessing the credit worthiness of a client in order to make a lending decision.
• Issue of adequate data protection laws to support credit reference should remain top of the agenda. For instance is it legally correct for a bank to “blacklist” a defaulter before obtaining a court judgment etc. Can an aggrieved defaulter blacklist the bank or its officials?

In conclusion let’s understand that the introduction of Credit Reference Bureaus in our financial landscape is an effort to encourage sharing of information by institutions so as to reduce the incidences of serial defaults by bank customers as well as minimize the incidences of non-performing loans. Credit reference bureaus are meant to complement the central role played by banks and other financial institutions in extending financial services within an economy hence the system is meant to help all of us.

•  Dr 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

Steve Curtis

Business Reporter
Caledonia Mining Corporation is on course to achieving its 2017 gold production target of 52 000 ounces to 57 000 ounces at its 49 percent-owned Blanket Mine in Zimbabwe.

This is after the Toronto Stock Exchange listed gold mining firm had cut its production target to between 52 000 and 57 000 ounces from 60 000 ounces despite improvements in tramming capacity at its Blanket Mine.

Caledonia chief executive Steve Curtis said in a statement yesterday that the company is progressing towards increasing annual production to 80 000 ounces by 2021.

“We are targeting production of 52 000 to 57 000 ounces of gold from the Blanket Mine during 2017 as we progress towards increasing annual production to 80,000 ounces by 2021 as a result of our Investment Plan.

“I am confident that as gold production continues to increase at the Blanket Mine, the cost per ounce of gold produced will continue to fall, with a commensurate improvement in cash generation,” said Mr Curtis. “Caledonia remains committed to distributing cash to shareholders whilst simultaneously retaining a robust balance sheet,” he said.

In the first quarter of this year, the mining company reported an 18 percent increase in production to 12 794 ounces from 10 822 ounces of the corresponding quarter in 2016.

Increased production Blanket Mine was due to increased tonnes milled, higher grade and improved recoveries. As part of its initiative to please shareholders, Caledonia declared of $0,0687 on each of the company’s common shares yesterday.

This amount represents a revised quarterly dividend policy following the recently completed consolidation of the company’s common shares on an overall one for five basis.

“Caledonia maintains its quarterly dividend but at a new level of 6,875 cents per share, reflecting the successful share consolidation on an overall one for five basis, which the company completed at the end of June 2017,” said Mr Curtis.

The mining company which is current listed on the Toronto Stock Exchange intends to list on the New York Stock Exchange as it seeks increased trading liquidity and access to a larger pool of potential United States investors.

The company has already made submissions with a view to listing as soon as reasonably practicable following the Annual General Meeting subject to approval from NYSE MKT.