The issue comes on the heels of the $20 million which the Agricultural Marketing Authority sought to raise to finance the production of soya beans. The bids for the bills will open on the 9th of December 2011 at 0800 hrs and close on the same day at 14 hrs.
The finance minister, Tendai Biti said in his budget statement that the country’s agriculture needs $2.5 billion to be fully revived and that there is need for private players to chip in. for its part, the government has put in sweeteners or features which will make the bills attractive.

The leading features include the prescribed asset status, liquid asset status and the tax exempt status.
In normal circumstances banks are supposed to jump onto these yet the results will not be as certain especially in this current illiquid environment.

The government further guarantees the bills meaning the event of the issuer failing to pay, the government will pay. This is especially a new development in the dollarization era but concerns remain about the government’s ability to meet its end of the bargain should the issuer default.

The soya bean issue managed to raise about $4.3 million which was about $15 million short. However barring unforeseen events, the ‘sweeteners’ are supposed to ensure that at least a significant amount is raised if not all.
More details pertaining to this issue can be obtained from the advising financial institution, CBZ limited on the following numbers 263 4 705 001-9 ext 2114,2017,2119.

Mining to increase power demand

HARARE – Zimbabwe’s power demand is expected to increase significantly in 2012 on the back of industrial growth particularly in the energy intensive mining sector, Zimbabwe Electricity Transmission and Distribution Company (ZETDC) says.
This will put more pressure on Zimbabwe, which currently imports 35 percent of its electricity from Mozambique, South Africa and the Democratic Republic of Congo to plug a 30 percent gap between national demand and supply — currently at 1 800 MW and 1 200MW respectively.ZETDC is Zesa’s power distribution arm.
The power utility’s recent presentation to the Energy ministry, on the state and future of energy in the country, revealed that electricity load demand in the mining sector is set to grow by an average 29 percent in 2012, up from 6,2 percent in 2011.
The survey was divided into the northern, southern, eastern, western and Harare regions and customers were put in four categories- mining, industrial, farming, commercial and institutions.
Findings on the mining sector were weighed down by the Harare region which recorded no change in power demand in the extractive industry for 2011 and 2012. The average change, excluding Harare, stands at 7,8 percent and 36,2 percent in turn.
The Northern region will see the mining sector grow by 22 percent in 2012 whilst industrial sector and farming will grow by 55 percent and 33 percent respectively.
“Developments in the mining sector include Maranatha Ferrochrome at 13 Megavolt-Ampere (MVA), Mazoe Gold Mine at 5,5MVA and Riozim at 5MVA,” Zesa said in a report.
Zim companies increase IT crime awareness

HARARE – Close to 50 percent of Zimbabwean companies underestimate internal cybercrime threats compared with other global markets, global auditing firm Ernest &Young (EY) said in its December, 2011 Global Information Security Survey (Giss).

The survey, conducted in conjunction with nearly 1 700 information security and IT leaders in 52 countries across all economic sectors, revealed that Zimbabwe is lagging behind global averages of 21 percent risk perception.

“We also lag in the following best practices in terms of controlling data losses due to mobile computing: encryption techniques, which stand at 30 percent usage for Zimbabwe versus 46 percent globally,” the survey said.

The country is lagging by 19 percent from global averages on restricting the transmission of sensitive information through e mail and or instant messaging.This, according to EY, is as a result of low perception of IT crime amongst Zimbabwean businesses.“Nearly half of organisations do not have an information security strategy, and for the rest, plans continue to evolve despite a sense they may not be effective,” added the Giss.
“Almost three quarters of the respondents have done almost nothing to mitigate new or increased risks related to the use of cloud computing.
Eighty four percent of respondents indicated that their current information security strategy needs to be modified or needs further investigation.”
Cyber security threat levels remain high in Zimbabwe as companies scramble to refine strategies to adjust to an ever-changing environment.
Sixty four percent of respondents in Zimbabwe see an increasing level of risk due to increased external threats compared to a global average of 72 percent whilst 34 percent say cybercrime is on the increase due a surge in internal vulnerabilities.

AMA agro-bills below target
The Agricultural Marketing Authority (AMA) and CBZ Bank agro-bills to raise $50 million for agricultural production failed to raise the targeted amount after just over a third of the total bids were allotted.
A total of $17,7 million was raised after $31,9 million, which showed bills were under-subscribed.
A statement from the bank indicated the highest rate tendered for the 360 days was 19,75% while the minimum was 10%.The average weighted rate of allotment was 11,27%. Bills are money market instruments used to raise funding. The government plans to raise $100 million 360-day agro-bills to finance agricultural activities.
AMA and CBZ are expected to open a second tender of bills on December 21 and close on December 23 2011 with the $50 million issue guaranteed by CBZ Bank.The first $50 million issue, fully guaranteed by the government opened on December 9 and closed on December 15.

CBZ also floated bills to raise $20 million for soyabean production with a tenor of $270 days and they were also under-subscribed managing to raise $4,5 million.The agricultural sector is facing challenges that include lack of capital as well as the absence of title deeds that can be used as collateral to obtain loans from banks. In his 2012 National Budget statement, Finance minister Tendai Biti said: “Treasury is mindful of the need to put sweeteners to the bills to ensure full subscription

West Star mulls direct ZSE listing
WEST Star is planning to list its wholesale business directly on the Zimbabwe Stock Exchange in case it fails to acquire Red Star Holdings Limited’s listing.
This is most likely the route West Star will pursue after it encountered complications in carrying on with the Red Star legacy, using the brand due to a troubled past.The budding wholesale giant looked to perpetuate the Red Star brand after acquiring the group’s two wholesale business branches in Harare and Bulawayo.

After acquiring Red Star assets West Star initially traded as Red Star Wholesalers before a change of heart and subsequent rebranding to trade under the new name.But apart from wanting to start on a new footing and cultivate its own identity, consistent with the trademark for other group operations, a reverse listing looks unlikely.
West Star chief executive Mr Ken Sharpe dropped the biggest hint to date when he mentioned direct listing for the first time since acquiring Red Star assets.”We are considering the possibility of acquiring Red Star Holdings’ listing on the stock exchange, but even if that doesn’t happen, we will still list on our own,” he said.
And there apparently has not been much unanimity with the owners of Red Star Holdings regarding the acquisition of Red Star’s listing and of the remaining assets of the group.Notwithstanding challenges around reverse listing, this route would be faster and less laborious and would be involved in reactivating the suspended listing.

IMF chief warns Africa to prepare for Europe fallout
NIAMEY — Many countries in sub-Saharan Africa are less prepared to deal with an economic shock now than they were during the 2008 food and fuel crisis and the global financial turmoil that followed, International Monetary Fund (IMF) chief Christine Lagarde said on Wednesday, urging developing nations to build up their economic defences.
Lagarde was speaking during a trip to Niger, one of the world’s poorest countries and Africa’s newest crude oil producer, during which she met President Mahamadou Issoufou and praised his development plans.
Lagarde’s December 18-22 trip to Africa, which also included a visit to Opec-member Nigeria, comes as concerns grow over the impact on developing countries of Europe’s sovereign debt crisis through a possible drop in global trade, workers’ remittances and investment.
She said many African countries were able to weather the 2008 and 2009 economic shocks well, maintaining health, education and infrastructure spending and recovering quickly to growth rates enjoyed in the mid-2000s.
“In short, they built up macroeconomic buffers and put their economies on a fundamentally stronger footing. This enabled most countries to maintain critical social and infrastructure spending when the crisis hit,” she said in a speech to Niger’s National Assembly.
“But, for many countries in the region, my main worry is that their capacity to absorb further shocks is less than it was three years ago,” she added.“This would be even greater cause for concern if the global slowdown turns out to be more pronounced this time around.”She said a sustained growth slowdown in advanced countries could cut into demand for Africa’s exports.

“It may also inhibit private financing flows, remittances and possibly aid. This is not a welcome thought for Niger. Aid flows are important and remittances have already been disrupted by the upheaval in Libya,” she said.
Zimra gets tough with firms
HARARE – Companies that have not yet complied with the Zimbabwe Revenue Authority (Zimra)’s fiscalisation programme are in for a fix amid revelations that the revenue collector has resolved to give tax clearance certificates only to compliant firms.

Information gathered by businessdaily revealed that companies that have minimum monthly sales of $20 000 will only get their ITF 263 certificates upon submission of proof of payment for fiscalised tax registers (FTRs) from Zimra approved suppliers.

An ITF 263 is a tax clearance certificate that is issued to clients who are fully paid up and whose Income Tax, Value Added Tax (VAT) and PAYE returns are up to date.
A valid tax clearance confirms that its holder’s tax position is satisfactory and there is no need for the payer to withhold 10 percent tax in a business transaction.Companies polled by businessdaily said it would be difficult for them to get tax clearance as they have no money to buy the “expensive” fiscalised registers.
“We won’t be able to deal with those large corporates which do their tender processes above board because we are not cleared by Zimra. A lot of corporates are updating their suppliers list and we are left out because of this,” said a consultant who requested not to be named.
Government enforced the fiscal measure in a bid to plug tax collection holes and increase VAT collections by 20 percent.According to Zimra, the fiscalised registers will improve collection of VAT through installed high security features.FTRs record sales at the point of sale and the device is identified by a security number.

Each FTR is also fitted with a memory that is placed in a permanent non-transparent substance that enables the permanent single recording of data by the programme for the register operations, to deny the user a possibility of erasing the fiscal data.

ZOSS reduces investment registration period
The One-Stop Shop (OSS) which the Government established in 2010 has reduced the period for processing investment applications from 90 days to five working days, a Cabinet minister has said.
President Mugabe launched the OSS in December 2010.
The OSS houses all Government departments and agencies involved in the processing of investment applications such as the Zimbabwe Revenue Authority, the Environmental Management Agency, the Registrar of Companies and the Department of Immigration.
It was established to facilitate investment, streamline and simplify business set-up processes such as company registration immigration permits among other things within the shortest possible time.
Economic Planning and Investment Promotion Minister Tapiwa Mashakada said initial teething problems had been ironed out.”Investors are giving us positive feedback about the registration process,” he said.
“In some instances we are now taking five working days to process investments from the 90 we used to take.”
Minister Mashakada said in most cases where investment approval took long it was the fault of the investors who usually they did not have the requisite documents.

Banks adopt new regulatory system

BANKS are next month expected to start executing the Basel II Implementation Action Plan by the Reserve Bank of Zimbabwe, which sets new criteria for determining the minimum regulatory capital for banking institutions.
The new system that seeks to strengthen the financial sector and expand the central bank’s supervisory role commences on January 1, 2012.
This means that banks are required to initiate a parallel run of the revised framework.
The action plan will see banks adopting the Modified Standard Approach for credit risk and alternative standardised approach for operational risk.
Under MSA banking institutions are required to develop or revise their internal rating systems to ensure reliable and accurate mapping to the new supervisory rating system.
Adoption of the advanced approach is subject to satisfactory supervision validation by the central bank.

In his monetary policy statement in July, RBZ Governor Dr Gideon Gono said with effect from January 2013, all banks would be required to comply with Basel II. As from that date Basel I will no longer be available to any bank.

Zim’s economy banks on diamonds

HARARE – With a projected diamond windfall of $600 million in 2012 — making diamond revenue the third — largest source of revenue — Zimbabwe’s government expenditure is expected to rise by 35 percent to $4 billion next year, diamond trade watchdog Rapaport Group said.

Most of the diamond funds are earmarked for capital investment in water, transport and education.

The bulk of this diamond revenue, about $530 million, will come from the state’s 51 percent stake in the Marange diamond fields through its Zimbabwe Mining Development Corporation (ZMDC), with the balance coming from diamond royalties.

“If growth does slow to less than five percent — as private sector forecasters including the global research and publishing unit Economist Intelligence Unit and the IMF are predicting — the revenue projections for personal income tax, company profit tax and excise look inflated,” the group said.

It said although experts say the diamond revenue projection is speculative — since it depends not just on output but costs, exchange rates and world market prices, while also being vulnerable to a range of factors from rampant smuggling to political manipulation and quality issues — Zimbabwe pins its high hopes of economic recovery on the diamond proceeds.

ICT, fast growing sector

Information Communication Technology has emerged as one of the fastest growing sectors of the economy, statistics from the International Communications Union have shown.
Zimbabwe was ranked 128 out of 152 countries in 2008 and over the past three years managed to jump four places to 124.ICT development is largely driven by the telecommunication sector, which has seen voice penetration rate or tele-density reaching 68 percent in 2011.
Mobile penetration accounted for 65 percent, making Zimbabwe one of the countries with the highest rates alongside South Africa, Botswana and Mozambique.
However, the Internet penetration rate at around 13 percent, remains below the international levels of 26,6 percent, although above the regional average of 11 percent.Cumulatively, the country’s three mobile service providers share close to 8,1 million subscribers, up from 7,7 million last year.
In recognition of the importance of ICTs, the Government created a fully-fledged ministry of ICT and all sectors of the economy have embraced ICT to increase production, efficiency and market share.
The ministry has also come up with an ICT policy that seeks to develop broadband optic fibre links to all major cities and towns by December 2014.

GWERU — The government has hinted it will soon craft laws to stop platinum miners from exporting the unprocessed mineral after realising it is losing revenue and jobs to South Africa.
Mines and Mining Development minister Obert Mpofu said the government was worried about loss of revenue and pilferage of other minerals, which are extracted as by–products from platinum in the refinery process.

He said he would soon approach Cabinet with a law that would force platinum miners to set up refineries in the country.

“They should start setting up refineries before we force them to do so,” said Mpofu. “If they don’t do it on their own then I will be formulating laws that will stop the exportation of concentrates to South Africa,” said Mpofu.

The minister dismissed as mere excuses by major miners of platinum like Zimplats, the notion that quantities of minerals being extracted from Zimbabwe did not make it viable for them to set up refineries.

“They know they are stripping us and making more profits by refining our minerals in South Africa where they have created jobs from our resources,” he said.

“Platinum is not even the major mineral. You get seven other minerals in the process like gold, vanadium and many others, which we do not tax them for. That should stop,” said Mpofu.

Govt strategy needed for RBZ debt

HARARE – Economic analyst, Eric Bloch says government needs to come up with a clear strategy on how to deal with the Reserve Bank of Zimbabwe’s (RBZ) $1,1 billion debt.

The Bulawayo-based economist said the situation had been worsened by failure of Finance Minister Tendai Biti in his 2012 Budget , to make a provision to clear the RBZ dues.

“The RBZ owes about $1.1 billion to various companies like in the mining sector, after it expropriated their money in 2009 and it is regrettable that government is yet to pay up the debt,” Bloch said at a national budget review meeting.

Bloch said silence by the finance minister in his budget statement on the debt had a negative development, as it perpetuated lack of confidence by the private sector in the country.

“These debts also dampen some companies to have interest in investing or expanding their operations in the country,” said Bloch.

Many companies including non-governmental organisations in the country had their money expropriated by the RBZ about two years ago and are still to be repaid.

According to figures released by RBZ Governor Gideon Gono, the apex bank owes more than $80 million to three central banks including $49,8 million to the Malaysian Central Bank.

External financial institutions, suppliers, corporates and other governments are owed over $561 million with $220,8 million being due to the Equatorial Guinea for a 2006/7 fuel importation facility among its various creditors.

The government was last year forced to invoked the Presidential Powers (Temporary Measures) Act to protect RBZ assets from being attached by various creditors.

NFL rules out cooking oil production in 2012

National Foods Limited (NFL) has ruled out production of cooking oil next year due to a severe shortage of soyabean on the local market.
NFL group human resources and communications director Innocent Magaya said they required at least 50 000 metric tonnes to efficiently run their soyabean crushing plant.

“We require 50 000 metric tonnes per annum to operate our plant efficiently and the local soyabean crop was less than 50 000 metric tonnes last year.

Our main challenge is getting the raw material locally at the right volume and right price,” he said.
The company reopened its Bulawayo flour plant this year after it was mothballed last year.

The factory was opened after the company realised that the Harare factory was operating at full capacity.

Magaya said maize volumes had improved by 89% compared to last year.

“We will continue to invest in improving the operating efficiencies of our core manufacturing operations, namely maize and flour milling, stockfeeds , rice and salt down packing and we will be spending $5 million in 2012,” Magaya said.

He however said the company was facing power problems as the reliability of power supply has deteriorated over the years.

ICT Bill to be finalised soon: PM

HARARE – Government is finalising the proposed Information Communication Technology (ICT) Bill to fast-track the growth of the ICTs sector, Prime Minister Morgan Tsvangirai has said.

He told Zimbabweans at ICT achievers awards ceremony in Harare last week that the Bill was before Cabinet and was set to be finalised soon to enable the country to be kept up to date with global economic trends.

“For us to take advantage of this positive development, government must develop policies, legal frameworks and strategies that stimulate and promote the use of ICTs, policies that attract investment, and policies that are in sync with international best practices,” Tsvangirai said, adding that the ICT reforms in Zimbabwe were being stalled by political interests.

“I am alive to the fact that some members of the inclusive Government are suspicious of ICT players and this has resulted in delays in some key projects that would have transformed this nation into a knowledge-based economy,” he added.

“For fear of an informed citizenry, some have hindered progress in this critical sector and have made ICT sector stakeholders’ operations difficult as well as inhibiting ingenuity.”

The ICT Bill, which has been contested by other government departments who felt the law was encroaching into their functions, is set to regulate cyber security, competition and pricing amongst other provisions.

Tsvangirai commended combined efforts by government and the private sector to boost the country’s ICT sector despite the various constraints.

Sanctions will not hurt operations — Marange Resources

Diamond mining firm Marange Resources says the imposition of sanctions by the United States administration will not hurt its operations.
The company’s mine manager Munashe Shava yesterday told journalist during a media tour that it was a government issue, but “it has always been and will not affect our operations”.

Shava said they were still validating the mine’s lifespan, but said: “We will be here for a long time.”
He said the firm plans to ensure the community not only benefit from employment opportunities, but also from training skills.

Shava would not disclose number of carats produced per day. “It’s classified information,” he said.

Marange Resources believe their biggest capital is their workforce. The current staff complement is 550, but it should rise to 670 next year.

“In 2012 there will be a fully-fledged department to develop current skills levels.”

One of the biggest challenges facing the firm is power supply, resource evaluation and marketing of the diamonds.

Anjin China is a diamond mining company in Marange which was not slapped with sanctions.

“We don’t deserve sanctions and neither do the other companies placed under sanctions by the US,” Munyaradzi Machacha, Anjin China director said.

More Pelhams shares change hands

A special bargain involving about 59,8 million Pelhams shares worth US$419 014 was recorded on the Zimbabwe Stock Exchange yesterday, arousing suspicion that one of the major players in the furniture industry was out on the market.
The transaction was 17,6 percent discount to the group’s last trading price of US0,85c, in trades worth US$419 014.
Coincidentally, a 3,3 percent stake in diversified group TN Holdings with interests in the furniture business was executed at US4c through a cross of 24,5 million shares in trades worth US$980 000.
The deal helped total turnover for the day at the Zimbabwe Stock Exchange to improve 41 percent to US$2,4 million from 89 million shares where foreign investors were net sellers with outflows of US$308 988 against purchases of US$175 729. The deal represents 6 percent stake in Pelhams.
TN has become one of the most liquid stocks on the ZSE having traded 106,2 million shares worth US$3,2 million since August 24, compared to just 32,9 million shares traded in the first eight months of the year. TN is one of the best performing stocks on the ZSE with a YTD gain of 400 percent.
Speculators have linked the transaction to businessman Mr Tawanda Nyambirai as it came two months after TN acquired 36 percent of the furniture group through a special bargain of 358 million shares in late October. However, Mr Nyambirai told Herald Business yesterday that the two transactions were not linked.
Mr Oliver Chidawu owned the shares in question but lost them to businessman Mr Jayesh Shah after failing to repay a US$2 million debt. He had pledged his Pelhams shares as security. Mr Shah subsequently sold the shares to TN Asset Management, a deal Mr Chidawu opposed on the basis that the claim for the US$2 million, which he was contesting, was still before the High Court. Mr Nyambirai bought the shares after stockbrokers ISB Securities approached him, saying the shares were available to the highest bidder.

Anjin China invests $300m

Anjin China has so far invested $310 million into the diamond mining operations and is in the process of marketing three million carats in its stock.
Anjin is a 50/50 joint venture between the government-owned Zimbabwe Mining Development Corporation (ZMDC) and Anhui Foreign Economic Construction Company Ltd of China.

Yesterday Anjin was scheduled to commission two additional processing units acquired at a total cost of $18 million to the current five that are operational.

Company director Munyaradzi Machacha said installation of additional units would boost the processing capacity, which it hopes to grow in future.

“We are now the largest diamond mining company in the world and it has been confirmed by the Kimberley Process (KP),” said Machacha.

“We are the largest because of sheer size and amount of ore we are capable of processing per day.”

Anjin mine manager Hu Shie Jie said production expansion was an ongoing exercise.

“We are producing seven million carats a year, but with the new processing plants we should be able to do 10 million,” said Jie.

Commenting on the recent strike by employees at the mine, Machacha said workers were demanding the review of their salaries at a time when no diamonds sales had been conducted.

Caledonia to meet indigenisation board

HARARE – Blanket Mine owners, Caledonia Mining Corporation (Caledonia)’s, executive management is set to meet Zimbabwe’s black economic empowerment implementation body National Indigenisation and Economic Empowerment Board to discuss its compliance options.
“Caledonia expects that it will be able to address any outstanding concerns regarding the indigenisation of Blanket Mine within the applicable time frames,” said Caledonia in a statement.
“The chairman of the board of Caledonia confirms that the board and executive management remain fully committed to the negotiations that are currently on-going with the government in an attempt to arrive at a mutually agreeable indigenisation implementation plan,” the company said, in what appears to be a climb-down from its chief executive Stefan Hayden’s recent statements that they did not expect to cede a minimum 51 percent stake to black locals as required by the Indigenisation Act until the run-up to an election.
The Caledonia boss said indigenisation was only a “political football at the moment” and meant to give political mileage to President Robert Mugabe and his Zanu PF party.
The move did not go well with Mugabe who, according to highly placed sources in his office, immediately vowed to “break the miner’s back” and set an example to all potentially rogue companies.

MBCA Bank to cut staff levels

MBCA Bank Limited, a unit of South Africa’s Nedbank, has embarked on a staff and management rationalisation exercise to reduce costs
and establish a structure in line with the bank’s strategy.
A total of 52 workers will be affected by the retrenchments.
In a statement, the bank said following applications to the relevant authorities in July 2011 to retrench, staff selected included both managers and non-managers.
“Negotiations with these two groups have been handled separately,” said the bank.
“A determination has been passed by the authorities with regards to managerial staff.”
MBCA said it was currently fulfilling the conditions on the determined and agreed retrenchment packages for the identified managers and non-managers.
A market update by the bank follows media reports on a biting retrenchment dispute with employees who are said to have demanded at least US$10 000 per worker in exit packages.
Most banks embarked on retrenchment exercises soon after the dollarisation of the economy in February 2009 as structures had become bloated due to hyperinflation.
A decade ago companies hired more staff to
deal with the huge volumes of the local currency and, with the introduction of the multiple
currency, companies had to retrench at huge
cost.

African govts urged to focus on research, development

African governments should introduce a small levy on exports of minerals to be channelled towards funding research and development of the resources.
Analysts contend that availing adequate funding for R & D was crucial in enhancing economic growth in many countries.
Funding for R & D has been elusive in most African countries as most budgetary allocations are channelled towards fighting diseases and poverty alleviation among other pressing commitments.
In most African countries, funding for R & D was as little as 0, 3 percent of GDP compared to countries like Switzerland which spend more than one percent of GDP on R & D.
Addressing a press briefing at the ongoing 6th Africa Material Research Society (AMRS) conference being held in the resort town of Victoria Falls Professor Wole Soboyejo from Nigeria said doing this would add value to minerals.
“I believe that if we levy at least one percent on every mineral that is exported we can find money to finance science and technology,” he said.
“In a country like Zimbabwe where you have rich resources, a one percent levy can finance science and technology in a way that will improve this country’s economy.”
Prof Soboyejo gave the example of Nigeria which charges a fuel exportation levy with the money going towards funding research and development.

Altfin Holdings Limited subsidiary Altfin Medical Aid Scheme — in collaboration with mobile phone operator NetOne — yesterday launched a medical aid scheme called MedAccess to provide health access to the uninsured and employees in the informal sectors. Altfin Medical Aid Scheme will provide medical cover while NetOne will be the technical partner.

Speaking at the launch, Altfin Holdings group chief executive officer Douglas Hoto said the group was increasing its product range in health, life and pension through technology-based distribution.“We invested $55 000 using locally available resources,” said Hoto.
“We are targeting 100 000 customers in the first six months and a revenue of at least $1 million a month.”Hoto said many people were earning around $300 per month and could only afford health and pension cover averaging between $20 and $30.

Under the scheme customers are required to pay a monthly subscription of $3.The medical aid scheme is faceless and accessible at municipal clinics, mission hospitals and government hospitals.

Liquidity slows Starafrica

Tight liquidity on the local market slowed down the pace of disposal of Starafricacorporation’s non-core assets with the exercise taking longer than earlier projected.
The Zimbabwe Stock Exchange-listed entity however said the restructuring of the group and unbundling of non-core business was nearing completion.
In a statement accompanying the group’s, unaudited financial results for six months ended September 30, company chairman Passmore Matupire said the group posted a loss before tax of $2,4 million from continuing operations compared to $2 million for the same period last year.
Continuing operations entail sugar refining, packaging and logistics business.
“Progress has been slow as a result of property and business disposals taking longer than projected to materialise in a market still suffering from market constraints, hence the high charges incurred for the six months ended September 30 2011,” said Matupire.

Proposed ‘restructuring’ courts Nssa board ire

HARARE – National Social Security Authority (Nssa) has been rocked by fresh problems which have divided board opinion following mooted plans to restructure, the Daily News has been told.

The fresh squabbles have allegedly been necessitated by management’s proposals to restructure the authority’s divisional directorate barely four months after Nssa posted impressive results, a first in its history since formation.

Nssa General Manager James Matiza, who is credited with steering Nssa towards profitability and efficiency, together with his divisional directors, is said to have angered some members of the board who are against the “proposed” restructuring.

Matiza, however, yesterday told the Daily News that there was no impending restructuring.

“We are not restructuring. Go and ask those who have told you that we are restructuring,” said Matiza when asked why Nssa would restructure at a time when the authority is enjoying good times.

Natfoods commissions $700 000 packaging plant

Zimbabwe Stock Exchange-listed food processor National Foods Limited (Natfoods) is set to confine all its rice packaging to Mutare after successfully commissioning a $700 000 rice packaging plant in the area to meet the increased demand for the product.
Natfoods said Mutare was a convenient location given its proximity to Mozambique and the Beira port, through which the firm brings its rice imports from Asia.
Prior to commissioning its Mutare rice packaging plant, the company’s
rice was packaged in Harare.

This comes after Finance minister Tendai Biti imposed duty on all pre-packed food stuffs.
Natfoods recently rebranded its Mahatma rice packaging, one of its premier Thai rice brands.
Other Natfoods rice brands include Red Seal rice, also Thai, and Mama Africa rice.

It also sells Malawi rice.The new development is one of a number of expansion projects Natfoods has undertaken in recent months, the most recent being the establishment of a depot in Beitbridge, on the border with South Africa.

Zimbabwean woman appointed Air Botswana head

A Zimbabwean has scored a first by becoming the first woman to head Botswana’s national airline, Air Botswana.
Sakhile Nyoni also broke new ground when she became the airline’s first female pilot way back in 1988.
“I am humbled by the fact that the government through the board that appointed me gave me the opportunity to be the General Manager of Air Botswana. I am also happy that once again I made history in the aviation industry of Botswana. There are challenges here and there but I believe challenges are part of the solutions.”

“Though still early to talk about the positive things that have happened ever since my appointment there are pointers to show that we are moving in the right direction,” she said in an interview with The Voice.She added : “I was the first female pilot of Air Botswana and one of the very few experienced women in the aviation industry of Africa. It’s always nice to make history and I hope I have and will continue to inspire young women to take up this noble profession so that we can increase in numbers.
“I think that at the moment there are few women pilots in Africa and the world over because of the perception that it’s a tough job which needs masculinity, which is not the case. Anyone can succeed in this career as long as they work hard and are determined to make it.”

Zim not immune to global crunch
Zimbabwe’s fragile economy is vulnerable to the prevailing global economic crisis, Finance RARE Minister Tendai Biti said.
Biti said the slowdown in global economic activity posed “risks of large and abrupt capital outflows from emerging economies, including Zimbabwe.”

“This will likely trigger a slow down in financial lending, commodity prices and export realisations. Banks with underlying vulnerabilities related to excessive credit, might experience systemic risks,” he said in his 2012 national budget.
This comes after South Africa — the continent’s largest economy and key trade partner to Zimbabwe — has said growth forecasts deteriorated following the poor world’s growth outlook.

“Zimbabwe’s vulnerability to growing global financial uncertainties is not small, given that our current account deficit is to a large extent financed by inflows of short-term capital,” Biti said, adding that Zimbabwe should adopt fiscal responses that anchor trade competitiveness and strengthen policy effectiveness in dealing with both global and domestic shocks.
Biti said Zimbabwe’s economic growth pattern was commodity driven, and prolonged sluggish global growth would exert harder policy options for the economy.
“Furthermore, our limited access to external financing necessitates that we employ strategies for re-building fiscal buffers,” Biti said.

GMB must reform

The inter-ministerial committee on commercial financing of agriculture says Grain Marketing Board (GMB) must reform and should settle its debts to farmers using proceeds from sale of grain it is holding.
Chairperson of the committee, who is also the Deputy Prime minister (DPM) Arthur Mutambara on Monday said the government would authorize GMB to offload grain at current import parity prices of around $240 per tonne.
This implies the government would provide a subsidy of $45 for every tonne.
“Major reforms are required at GMB. While the strategic grain reserves must be maintained, grain must circulate,” said Mutambara.

“GMB must be able to continuously buy and sell grain. This will ensure that the SGR is maintained with fresh grain. As a general reform beyond repayment, GMB must operate as a commercially viable and efficient institution.

“If GMB cannot be quickly reformed, another commercial institution must be appointed or structured to develop and execute the farmer stop-order repayment system.”

Mutambara said a reformed GMB must be a local miller’s preferred seller of grain and farmer’s preferred buyer of grain.

Old Mutual disburses developmental fund

HARARE – Life group, Old Mutual Private Limited (OM) has disbursed its $85 million developmental fund into separate accounts in its banking arm CABS, company chairman Muchadeyi Masunda has said.

Group chairman Muchadeyi Masunda told the Businessdaily that the fund is part of its compliance to the black empowerment laws and seeks to assist local authorities provide shelter to its residents.

Old Mutual is committed to set up the developmental fund in its indigenisation compliance plan, comprising $15 million to be channelled towards construction of 1 500 housing units in Budiriro through the Harare City Council and another $40 million towards a national housing fund to be administered by the National Housing ministry.

A further $20 million liquidity fund to assist distressed companies through provision of lines of credit as well as another $10 million, equal to 2, 5 percent shareholding in the group, was allocated to the national youth fund.
“We will only give deserving people the $10 million youth fund; those people should at least provide a good and viable project proposal,” Masunda said.

“The fund is only accessed through CABS and the national housing fund will be provided to local authorities in consultations with the National Housing ministry.”

“We want to assist people get shelter and this will be done through government and local authorities across the country,” he added.

Red Star, Chitrin go bust

RED Star Wholesalers Limited and R Chitrin and Company Zimbabwe have applied for voluntary liquidation following serious financial constrains.

In a statement for the interim period ended September 30, 2011, parent company starafricacorporation said the necessary applications had already been filed in the High Court.
starafrica disposed of Red Star Holdings assets, following a poor performance by the wholesale subsidiary.

Upon disposal, West Foods Distribution Network acquired two branches in Harare and Bulawayo. In addition, West Foods purchased the fixed assets in the two branches and took over the employees and is using the “Red Star” brand.

The remaining assets are operating under Red Star Wholesalers, which has applied for liquidation.
R Chitrin, which has also applied for voluntary liquidation, was acquired by Red Star in 2006 as the retail company sought to consolidate its position both regionally and locally.
starafrica said plans were in the pipeline to sell Red Star Holdings listing to West Foods, who have indicated they intend to relist the business on the Zimbabwe Stock Exchange.

“Subject to fulfilment of agreed conditions precedent and the necessary regulatory approvals, plans are underway to sell the Red Star Holdings Limited listing to West Foods,” said starafrica.

Nestle not compliant yet

Nestle Zimbabwe Private Limited (Nestle) is yet to submit a revised indigenisation compliance proposal, chief executive Kumbirai Katsande has revealed.
Indigenisation Minister Saviour Kasukuwere rejected Nestle’s initial proposal last month saying it was insufficient and fell far short of the minimum 51 percent indigenous shareholding as required by the Indigenisation Act.

Nestle had proposed to dispose of 25 percent equity to the Nestlé Zimbabwe Pension Fund, while the remaining equity would go to the firm’s employees under an employee ownership and empowerment scheme.

The Swiss-backed food processor has been under spotlight after a spat with President Robert Mugabe over the rejection of milk from his Gushungo Dairy Farm citing that it was substandard and contaminated, prompting Mugabe to publicly assign Kasukuwere to nationalise the company.

Speaking at the company’s commercial dairy revival project in Kwekwe on Tuesday this week, Katsande said the company was yet to resubmit their proposal pending housekeeping issues at the food giant.

“We are yet to submit our proposal. The direction we have is that we will soon submit,” he said, adding he had no capacity to answer questions relating to the compliance plan since he was answerable to the company’s shareholders.

According to government’s indigenisation requirements for the manufacturing sector, foreign-owned firms must cede only 26 percentage shareholding to locals, and work to increase the share holding to 51 percent over four years.

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At the height of the economic crisis of the last decade OK limited just like many other retail outlets all but collapsed as the rate inflation made it impossible to sustain operations. The empty shelves became the norm as retailers could not restock merchandise which they had to purchase with foreign currency yet they would be forced to sell in the now defunct Zimbabwean Dollar. However the coming of the coalition government also came the relaxation of the stringent foreign currency regulations and retailers have been on a growth path since.

Capital expenditure for the period amounted to $7 million which was mostly spent on store refurbishments, durable assets etc and also the company’s financial position grew by some 44% to 75.67 million up from 52.67 million during the two comparable periods. On the stock market OK Limited’s stock was trading at 9.2 cents and its market capitalisation stood at $91.72 million as at 23 November 2011.
Going forward OK limited believes the opening of new branches as planned as well the refurbishment of some branches will enable it to maximise its brand strength and capitalise on growth in sales. OK Limited declared a dividend of 0.15 cents clearly signally that it has finally arrived after years of negative performances.

Again this would factor into the group’s operating income which this time was positive, $ 8.56 million up from a loss position of $4.1 million in the corresponding period last year. However the group would then incur finance charges of $13.8 million up from $8.1 million resulting in the group recording a loss of $5 million. It is important to note however that this performance happened in a period that normally contributes about a quarter of the group’s performance for the entire year with the rest coming in the second half.
To illustrate AICO has been incurring losses in each initial interim period since 2009 yet its full year results to 31 March 2011 shows the group made a profit of $17.1 million and this pattern seems normal if one observes that group either directly or indirectly specialises in seasonal crops.

In its commentary accompanying the results AICO believes the absence of medium to long term financing is impeding further recovery and growth. However it does also acknowledge the importance of the stable economic environment that has existed since the start of the coalition government.
In a classic case of the risks associated with commodities or primary products, AICO was hurt by the retreat of international lint prices from a peak of $2.2 to $1 in just 5 months. This caused structural faults like high credit and default risks as well as the inability of local spinners and textile manufacturers to compete with imports from China, India and Pakistan.
AICO’s balance sheet position improved considerably from the corresponding position last year, $278.7 million to $350.26 million this time around. AICO’s share price as at 16 November 2011 was 19.5 cents and the market capitalisation was $103.35 million.
The future looks buoyant as the individual business units continue to enjoy a fair share of fortunes. Cottco remain dominant in the cotton market accounting for about 43% share of the market while Olivine got a boost when government introduced duties on imported foodstuffs like cooking oil. Possibly this may well lead to higher profits this year.