Mining, manufacturing to anchor growth: P3

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July 22-28 2021 @ FingazLive www.fingaz.co.zw Facebook: The Financial GazetteESTABLISHED 1969

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ZSE ReportTHE bourse had a positive session Wednes-day that saw most indices regaining ground after three sessions of registering losses. The Mining Index however declined by 100,52 points following losses in Bindura. Turnover was at $80,2 million from a total quantity of 7,5 m shares amid decent trade values in DZL and Delta. Top gainers were Star Africa, Axia and ART.

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Gvt projects 5pct growth for 2022

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Zimre Holdings Limited (ZHL) group chief executive, Stanley Kudenga, says the regional capitalisation plan is being done in phases, with the first phase requiring between US$7 million to US$10 million. The diversified financial services and insurance group aims to invest US$15 million into its regional operations in the next 18 months. See interview on Page 26

Zida partners Singapore firm: P7Z$350

Silverliningto SAchaosPaul NyakazeyaGroup Digital Editor

THERE could be a silver lining to the devastating riots which recent-ly pummelled South Africa (SA) if

this spurs the local manufacturing sector and chips away at Zimbabwe’s high de-pendence on the neighbouring country, experts say.

This comes as SA, the regional eco-nomic powerhouse and Zimbabwe’s big-gest trading partner, continues to reel from

the horrific human and infrastructure cost of the violent protests — the worst spate of chaos experienced by Pretoria since apartheid ended in 1994.

Speaking to The Financial Gazette this week, business leaders and economists said while Zimbabwe would likely expe-rience disruptions to key supplies, at least in the short-term, the South African may-hem also presented local industry with an opportunity to increase production to meet the country’s needs.

To Page 2

ZIMBABWE’s economy is pro-jected to grow by 5,4 percent in 2022, anchored on growth in mining and manufacturing, the government has said.

“In 2022, the government will prioritise to sustain macroeco-nomic stability, to create a con-ducive environment for business investment and to improve the living standards of the majori-ty,” Information minister Monica Mutsvangwa said this week.

Stable electricity generation is also expected to power indus-trial output and boost economic performance. This year's eco-nomic forecast of 7 percent is set on account of a good agriculture season, which recorded above av-erage maize and tobacco output.

See also Page 3

Mining, manufacturing to anchor growth: P3◀

A week of deadly riots in South Africa could cost the country about R50 billion ($3,4 billion) in

lost output, while 150 000 jobs have been placed at risk, the country's Presidency said, citing estimates from the South Af-rican Property Owners Association.

About 200 malls were targeted and some 3 000 shops were looted during the protests, while 200 banks and post of-fices were vandalised, acting minister in the Presidency khumbudzo Ntshavheni told reporters in Pretoria, the capital, on Tuesday.

The protests were triggered by the July 7 jailing of former South African Presi-dent Jacob Zuma, and quickly generated into a free-for-all in the kwaZulu-Natal and Gauteng provinces in which at least 215 people died.

No unrest has been reported since Monday, and most malls have reopened, Ntshavheni said.

In a meeting with more than 90 chief executives and industry leaders on Tues-day, President Cyril Ramaphosa con-ceded that his administration was inade-quately prepared to deal with the scale of the unrest and the security forces didn’t respond quickly enough.

Most of the 25 000 soldiers that had been instructed to assist the police main-tain stability had been deployed, he said.

“we need to take every available step to ensure the return our ports and rail lines to full operation, restore manufac-

turing capacity of vital goods as quickly as possible and put in place contingen-cy measures where facilities have been badly damaged or stocks looted or de-stroyed,” Ramaphosa said in his open-ing remarks that were distributed by his office.

“we need to ensure that medicines are available, health facilities are func-tioning, and the Covid-19 testing and vaccination sites are fully operational.” — Moneyweb

The Financial Gazette

National News

| July 22-28 2021

Silver lining to SA chaosFrom Page 1The president of the Confederation of

Zimbabwe Industries (CZI), Henry Ruz-vidzo, was among those who called for enhanced local production to increase the availability of domestic goods on the mar-ket.

“Logistic challenges are likely to result following the disruptions. This will result in higher costs of exporting and increased working capital requirements.

“An estimated 50 percent of the local industry's raw materials come from South Africa. The hope is thus, that the unrest has been stabilised and that supply lines will not be further disrupted.

“However, the events exposed the vul-nerability of the region and points to the urgent need for greater emphasis on devel-oping internal capacity to provide raw mate-rials for industry,” Ruzvidzo said.

Shipping and Forwarding Agents Associ-ation of Zimbabwe (SFAAZ) chief execu-tive Joseph Musariri also told The Financial Gazette that local industries needed to ramp up production in the aftermath of SA’s ugly riots.

“The movement of … goods has been disrupted. what can be done is not immedi-ate, but we must gradually move away from over-reliance on South Africa.

“we need to take full advantage of the African Continental Free Trade Area (Af-CFTA) and local production must be ramped up to avoid shortages when commodities are imported,” he said.

On its part, the Consumer Council of Zimbabwe (CCZ) said while the recent anarchy in SA had had a negative impact on the country’s imports, it also provided a “silver lining” for local companies to in-crease production.

“SA is Zimbabwe’s biggest trading part-ner and that means raw materials, spares, equipment, machinery, accessories and gro-ceries, among other things, may be in short supply in the next few days, considering that SA’s major highways linking to Durban Port were blockaded for some time.

“It (this recent anarchy) can be positive in the sense that this will be an opportuni-ty for Zimbabwean consumers to start embracing locally-produced products and enhance an appetite for Zimbabwean products and services.

“Therefore, this could propel the ‘Buy Zimba-bwe’ campaign to anoth-er level and ultimately increase local production, which we have been clam-ouring for, for a long time,” the CCZ said.

However, Zimbabwe National Chamber of Com-merce (ZNCC) chief exec-utive, Chris Mugaga, said the recent riots were actually likely to affect local compa-nies’ production performances.

“The trade between the two countries has been heavily interrupted and the move-ment of goods to inland Zimbabwe will be disrupted — hence companies’ operations will be affected and this may result in some shortages,” he said.

Veteran economist, John Robertson, said the expected disruptions in supply chains were likely to be minimal and would not last for a long time.

“Raw materials supplied from South Af-rican factories will probably be affected by delays at Beitbridge, rather than at the fac-tories.

“workers there need the jobs and wages, and so most of them will be keen to get back to work,” he said.

This comes as SA freighters have warned of the country losing to other gateways such as walvis Bay in Namibia and Beira in Mo-zambique.

“what has happened in SA in this last week has also impacted hugely on other

landlocked countries in the Sadc region which rely heavily

on SA for imports of fuel, groceries, pharmaceuti-

cals, mining equipment, vehicle spares, tyres and much more.

“Those countries that have used SA as a transit

route for exports through the port of Durban will

now turn to alternate routes for exports, such as walvis Bay, Beira and Dar es Sa-laam,” the chief executive of the Federation of east

and Southern African Road Transport Asso-ciation, Mike Fitzmaurice, said.

This also comes after experts told The Financial Gazette last week that the star-tling mayhem which had been witnessed in SA was ominous for all neighbouring coun-tries because when “Pretoria sneezes, Hara-re and Sadc invariably catch a cold.”

The violent protests shuttered business-es and disrupted transport networks in the country’s two richest provinces, Gauteng and kwaZulu-Natal, with essential services like banking operations, healthcare and power maintenance negatively impacted.

economist eddie Cross said then that the situation in Zimbabwe’s southern border needed to be taken very seriously.

“SA is the biggest economy in the region and the second biggest in Africa. Its role in the African economy is dependent on confi-dence and the ability of its citizens to trade freely. SA is of critical importance to the region and what is going on there has pro-found implications for many.

“For Zimbabwe, the majority of our for-eign trade is done through SA ports and any disruptions will have profound implications for us. even the movement of our high val-ue platinum products to SA are under threat and so are our cashflows. This is very seri-ous,” he said.

Victor Bhoroma, an economic analyst, last week also said Zimbabwe’s trade with SA was likely to suffer significantly, while there was also a risk of raw material short-ages locally going forward.

“The violent protests will seriously im-pact Zimbabwe's trade with SA valued at over US$340 million a month.

The burning of property, especially haul-age trucks, warehouses and gun violence will disturb the flow of raw materials to various countries in the Sadc region and be-yond.

“The port of Durban is the gateway to trade for most Sadc countries. export move-ment will be slowed down by the violence and unrest depending on how long the pro-tests last.

"This will lead to temporary shortages of raw materials and other commodities,” he said.

The SA riots came in the wake of the re-cent shock jailing of the country’s former president Jacob Zuma.

Authorities in Pretoria have so far an-nounced that at least 215 people had died during the ugly disturbances.

[email protected]

Henry Ruzvidzo

SA economy set to take R50 billion hit from riots

n The looters targeted 150 000 informal traders.n In total 40 000 businesses

have been affected by the protests.n About 1 400 automatic bank

teller machines were damaged.n Some 100 malls were burnt

or significantly damaged by fire.n Stock worth about R1,5 bil-

lion was lost in the eastern city of Durban alone.n 11 warehouses and 8 facto-

ries were extensively damaged.

What the South African Property Owners

Association also said:

The Financial Gazette July 22-28 2021 |

Nelson GahadzaStaff Writer

THE government says mining and manufac-turing will anchor economic growth next year, with its main priority on sustaining

macroeconomic stability to create a lucrative en-vironment for business to thrive.

This is according to a budget strategy paper tabled by Finance minister Mthuli Ncube in Cab-inet on Tuesday.

This comes as the manufacturing sector is on a recovery path — with capacity utilisation expect-ed to reach 56 percent from 45 percent — amid attempts by the authorities to create a US$12 bil-lion mining economy by 2023.

Speaking during the weekly post-Cabinet meeting briefing this week, Information minister Monica Mutsvangwa said the economy would re-main on an upward trajectory, driven by the min-ing and manufacturing sectors respectively.

“The 2022 Budget Strategy Paper is part of the annual budget preparatory process issued in order for stakeholders to understand macro-fiscal issues that will guide prioritisation of budget allo-cations,” Mutsvangwa said.

She said the projected economic growth fo-cus in 2022 would be anchored on growth in the mining, manufacturing and electricity generation sectors.

Priority areas included inclusive growth and macro-economic stability, developing and sup-porting productive value chains, optimising value in the natural resources, infrastructure, informa-tion communication technologies and the digital economy.

Other priorities are social protection, human capital development and well-being, effective institution building and governance and engage-ment and re-engagement and debt restructuring.

In other projections, Mutsvangwa said govern-ment revenue was expected to improve from 16,4 percent at $390,8 billion of the Gross Domestic Product (GDP) in 2021 to 17,8 percent at $533,2 billion in 2022, while expenditure will increase to 19,4 percent to $579,1 billion of the GDP from the 18,2 percent at $421,6 billion in 2021.

According to Mutsvangwa, the 2022 national budget would also aim to improve the living stan-dards of the majority.

Cabinet also adopted the 2021 Mid-Year Fis-cal Policy and Economic Review and Balance of Payment Developments, the State of the Financial Sector and Outlook, which was presented by the finance minister.

Mutsvangwa said the 2021 Mid-Year Fiscal Policy will be presented next Thursday. This comes amid encouraging signs of economic re-covery in the last 12 months.

The central bank and the government expect annual inflation to drop below 10 percent by De-cember 2021.

All this comes as industry remains bullish that the country’s improving economy will continue on an upward trajectory during the second quarter of this year.

In its latest economic quarterly bulletin, the Confederation of Zimbabwe Industries (CZI), said it also expected capacity utilisation to in-crease.

“Business is bullish on the prospects of the economy in the second quarter, with the country’s expanding coronavirus vaccination programme an added contributory factor to the growing con-fidence.

“Business is bullish .., but remains alive to the risks that may unsettle the stability at the back of which the current recovery is premised.

“The challenges may provide a lifeline to un-desirable arbitrage opportunities in the economy, which can undermine the gains achieved so far,” the CZI said.

The CZI report also comes at a time when the

National News

Mining, manufacturing to anchor 2022 growthonce poorly regarded Zim dollar has been rela-tively stable against the greenback over the past year, on the back of a raft of measures introduced by authorities, including the launch of the foreign currency auction system.

The forex auction system has been credited with stopping a precipitous decline in the value of the once wobbly local unit — which has seen the prices of basic goods and services stabilising, and the once rampant black market being kept in check.

As a result of all this, business has com-mended the government for its recent cock-tail of measures that have put the economy on a growth path — including the unveiling of the foreign currency auction system, which has improved access to hard currencies. [email protected] utilisation is projected to increase, as authorities target a

US$12 billion mining economy by 2023.

Adelaide MoyoFeatures Editor

SPIRITS maker and distribu-tor, African Distillers (Afdis) registered a 56 percent in-

crease in volumes during the first quarter ended June 30, 2021 than prior quarter, owing to improved access to the market.

In a trading update, Afdis said the environment for the quarter under review was relatively stable.

The firm said revenue for the first quarter increased by 38 per-cent in inflation adjusted terms, whilst in historic terms it grew by 228 percent.

“Revenue growth was due to firm demand for the company’s products which resulted in higher volumes,” Afdis said.

The company manufactures, distributes and markets branded spirits, ciders and wines for the Zimbabwe market and for export.

Afdis’ spirits volume grew by 17 percent over prior year, benefit-ing from the good performance of

brown spirits.The company recently

launched a new product, Gold Blend Number 9, and Afdis said its widespread market acceptance contributed to spirits volume growth.

“The business, however, con-tinued to witness an influx of cheap and illicit spirits in small packs from several producers in the market,” Afdis said.

Wines and ready to drink (RTD) volumes grew 113 percent and 116 percent respectively, rid-ing on improved availability in the quarter.

The firm said the good agri-culture season as well as the par-tial easing of Covid-19 lockdown restrictions improved consumer spend and the general business op-erating conditions. The availabili-ty of foreign currency generated

from trading enabled the company to meet its current obligations, Af-dis said.

“Consistency in government policies plays a pivotal role in the performance of the economy. Management will continue to fo-cus on market share growth, prof-itability, innovation, and cost man-agement to enhance shareholder value,” Afdis said.

Afdis recently said it is plan-ning to invest in the local produc-tion of some imported products to cut its import bill.

In a statement accompanying the company’s results for the nine months to March 31, 2021, board chairman Pearson Gowero said localising production is among Afdis’ immediate priorities as it looks to increase revenues, limit costs and improve production ef-ficiencies.

“This will ensure improved business profitability and reduced foreign currency requirements,” Gowero said.

[email protected]

Farai MabezaStaff Writer

THE government says it will open up more space to private capital as it bids to build on the momentum from the

2020/21 agriculture season and register an-other surplus in the coming summer cropping period.

This comes after Zimbabwe produced more than 3 million tonnes of cereals during the 2020/21 season, giving a surplus of 828 000 tonnes.

Information minister Monica Mutsvang-wa told the media after this week’s Cabinet meeting that the government’s strategic objec-tive for the 2021/22 season is to sustainably increase crop production and productivity to meet and surpass national requirements for both human consumption and industrial use.

“This will be achieved through the imple-mentation of the agriculture recovery plan an-chored on, inter-alia, ... access to appropriate finance for inputs and working capital involv-ing the private and public financial services sectors,” Mutsvangwa said.

“The financing of the summer cropping and livestock programme will be through the public and private sector as well as development partners.

“…The National Crop Production Plan for the 2021-2022 season also includes proposals on private sector-led programmes, catego-rised into potato value chain financing and private sector com-modity value chain financing or contract farming,” she added.

The government will finance the Presidential Crop and Livestock Input Schemes through the Treasury and provide default guarantee for pro-grammes funded through Agricultural Fi-nance Corporation and CBZ Bank.

Mutsvangwa said the government would also ensure timely provision of inputs such as

fertilisers, seed, fuel and agrochemicals and consistent supply of key utilities such as pow-

er, fuel and water to farmers.There will be continuous support of the targeted farm-

ers with irrigation and mechanisation services to improve efficiencies and climate proofing, according to Mutsvan-gwa.

Capacitating the extension and advisory service delivery system

to enhance responsive-ness to farmers’ needs;

and strengthening gov-ernment-wide coordination,

monitoring and evaluation will also be integral to the strategy.

“The strategy will result in more area being put to crop produc-tion as evidenced by the proposed increase of the hectarage of the following crops: maize; sorghum; pearl millet; finger millet; soya bean

and tobacco,” she said.The 2021-2022 season will also witness

the operationalisation of the Rural Presidential Horticulture Plan which will target priority fruit trees, namely: passion fruit (granadilla), pecan nuts, apple, guava, mango, lemon, avo-cado and macadamia.

Each targeted household will be given 10 trees of each fruit variety, depending on suit-ability of the fruit tree to the agro-ecological regions and potential income to be generated.

“The first phase running to December 2021 has a target of 500 000 seedlings,” the Infor-mation minister said.

“In addition, a total of 35 000 gardens will be established, and each will be equipped with a solar borehole, cattle water trough and an ablution facility. Each garden will cater for a village, school or youth ward centre”.

The Agriculture Recovery Plan (2020-2023) was developed to engender the en-visaged agricultural transformation agenda aimed at food security, import substitution, di-versified exports, value addition, employment, and improved incomes and standards of liv-ing. [email protected]

The Financial Gazette | July 22-28 2021

National News

Monica Mutsvangwa

Afdis manufactures, distributes and markets branded spirits, ciders and wines.

Govt to rope in private capital to bolster agric

Nelson GahadzaStaff Writer

ZIMRE Holdings (Zimre) says it has been mandated by the government to conduct a feasibility study and raise

capital for the Beitbridge-Bulawayo-Victoria Falls highway project.

This comes as the insurance group has ex-panded its focus to wealth creation through its investment unit — Zimre Capital.

“Already Zimre Capital has taken the step towards impact projects and now has a man-date on the Beitbridge-Bulawayo-Vic Falls highway as part of a concession of financial advisors which will be responsible for raising capital for the project,” chief executive Stan-ley Kudenga told The Financial Gazette last week.

He said the group has already secured US$3 million to conduct the feasibility study.

“It is going to be a concession and the study is going to tell us whether we are doing duali-sation or widening of the road. Therefore, the study will give us an idea of what we need to raise.”

The Beitbridge-Victoria Falls highway joins Zimbabwe’s borders with neighbours Zambia and South Africa. The highway also links Zimbabwe to the Trans-African High-way, which runs from Cairo to Gaborone through to Pretoria, Kimberly.

Zimbabwe is among countries in the Com-mon market for Eastern and Southern Africa that have established dedicated road funds and road development agencies to undertake maintenance, and development of roads for both the regional and national road networks.

The country’s road network, which was previously considered among the best in Af-rica, has suffered over a decade of neglect due to economic problems.

Under the National Development Strategy 1 (NDS1), the government committed to in-frastructure development, supported by the private sector.

The NDS1 is a five-year economic man-agement master plan through to the year 2025, with focus on building, expanding and restor-ing infrastructure.

Under the strategy, the government is tar-geting to increase the number of kilometres of road network converted to meet Southern Af-rica Transport and Communications Commis-sion standards from five percent to 10 percent by 2025 and to increase the number of kilome-tres of road network in good condition from 14 702km to 24 500km by 2025.See also Page 26 [email protected]

Afdis sales improve on better market access

Emmerson NjanjamangeziDeputy News Editor

AUDITOR-GENERAL (AG) Mil-dred Chiri says the resurgent spike in Covid 19 cases has hamstrung her

office’s operations.For most of the year, government depart-

ments operated at 40 percent staffing levels in line with level four lockdown measures instituted by authorities to contain the dead-ly respiratory disease.

Chiri told the Parliamentary committee on Public Accounts Monday that the mea-sures will further restrict audit coverage to government ministries and state enterprise head offices and leave out outpost visits en-tirely for the 2020 audit report.

For the recently issued 2019 report, the AG was only able to visit 138 (0,05 percent) stations compared to 549 (14 percent) in the previous financial year, mainly due to the in-adequacy of financial resources, fuel and the

outbreak of Covid-19.Due to the spike in Covid 19 cases in the

country, the auditor-general said the bulk of audits for the 2020 financial year as well as Fund Accounts audit will be done virtually.

“Audits by their very own nature are sup-posed to be an interface as we ask questions to accountants and whomever we may direct different cases for clarity's sake.

“But as the cases continue to spike, we are now relying more on virtual audits. We have around 20 office orderlies who have tested positive and this has caused a bit of a scare for the office.

“Despite that, you know the government has directed office manning to be reduced to 40 percent. We have also reduced office manning to that threshold though we are an essential service.

“This is mainly because if you visit any government ministry or state enterprise, most employees are working from home and there isn’t much that you can do.”

Despite the coronavirus pandemic dis-ruptions, Chiri was optimistic that her office will be able to complete the 2020 audit re-port.

“We are now in the process of going dig-ital. We have started acquiring tools of trade to be able to carry on our mandate.

“The ministry of Finance has asked us to submit a list of tools that we need to use with the view of procuring it for us to be able to carry out our mandate.

“It’s still a process. We want to be able to fully digitise such that we are on top of the game to carry out our mandate.

"We should be able to connect to gov-ernment ministries and parastatals financial applications,” Chiri added.

In her recent state enterprises and para-statals report for the financial year ended December 31, 2019, Chiri said most of the parastatals face extreme cases of weak cor-porate governance, resulting in huge finan-cial losses. [email protected]

Zimre to raise funds for highway projectCovid-19 restrictions hit AG operations


National News

Basel to inform Zim crypto-regulation


THE Reserve Bank of Zimbabwe (RBZ) says the country's crypto-assets regulation and supervision mechanism, which is yet to be finalised, will be in-

formed by guidance from the Basel Committee on Bank-ing Supervision (Basel).

The apex bank does not allow official trading in digital assets through the banking system, as it believes exposure may have “negative spill-over effects and impact on fi-nancial stability.”

RBZ’s head of communications, Khumbulani Shirichena, said the apex bank took the approach to test and design an appropriate regulatory framework for vir-tual assets with other financial regulators in the country.

“We will, therefore, continue to monitor and assess implications of financial technologies including virtual currencies like cryptocurrencies on the financial system. Furthermore, our responses will be guided in due course by the outcomes of a consultative paper on prudential treatment of crypto assets exposure being prepared by the Basel Committee,” Shirichena said.

Basel, which is the primary global standard setter for the prudential regulation of banks ― has said cryptocur-rencies should come with the toughest bank capital rules to avoid putting the wider financial system at risk should their value suddenly collapse.

Shirichena said the apex bank remains cautious on cryptocurrencies, adding that “the challenges posed by Fintech innovations, which include risks of cyber-attacks, money laundering and threats to data privacy are a real concern.

“We are working with other regulators, not only to foster responsible Fintech innovation, but also to ensure adequate regulation in line with international practices. Through such stakeholder consultations and sharing of experiences with other countries, we are making good progress in coming up with a framework that suits and works for Zimbabwe,” he said.

Last week, Cabinet approved additional principles for the anti-money laundering and proceeds of crime law to counter the risk of money laundering and terrorist financ-ing stemming from virtual assets.

Information minister Monica Mutsvangwa, told a post Cabinet briefing that the Money Laundering and Proceeds of Crime Act and Securities and Exchanges Act will be amended to reflect the changes.

“Cabinet reports that the Money Laundering and Pro-ceeds of Crime Act will be amended to provide for identi-fication and assessment of money laundering and terrorist financing risks that may arise in relation to virtual assets, acts and the activities,” Mutsvangwa said.

She said the Act will be amended to ensure that sanc-tions are also applicable to virtual asset service providers, their directors and senior management.

Global regulators have warned that the “growth of crypto-assets and related services has the potential to raise financial stability concerns and increase risks faced by banks”.

Governments around the world, including India and China, have started to heavily regulate, or even outlaw, the use of cryptocurrency.

[email protected]


INSURANCE and pension companies face closure if they fall foul of a new industry framework meant to protect customers and end unfair practices.

According to the industry regulator, the In-surance and Pensions Commission (Ipec), firms which receive more than 50 valid complaints from customers would be shut down under the Treating Customers Fairly Framework, which took effect on June 1.

This came amid concerns that some insur-ance and pension companies were short-chang-ing clients and declining to address their con-cerns.

The commission, it said, shall monitor and test all insurance and pension service providers’ culture, strategies and behaviour in the treat-ment of their clients.

“The commission shall invoke the provi-

sions of section 5 of the Insurance and Pensions Commission (Issuance of General Guidelines and Standards) Regulations, 2020 published in Statutory Instrument 69 of 2020, where an insurance or pension service provider fails to comply with the provisions of this framework,” Ipec said.

“Insurance and pension service providers shall furnish the commission with a typology report of the complaints received during each quarter, as part of their quarterly returns.

“Where an insurance or pension service provider has more than 50 valid complaints against it, during the quarter, the commission may revoke the insurance or pension service provider’s registration, in terms of the Insur-ance Act… or the Pension and Provident Funds Act… as the case may be,” the commission added.

Ipec would publish in its quarterly and an-nual reports the names of entities that have 20 or more valid complaints against them lodged

with the commission during each quarter year.According to Ipec, examples of unfair prac-

tices for short-term policies include unjustified delays in settling valid claims; failure to pay in-terest when such delays occur; and financial in-stitutions and hire purchase shops directing all business to an associated insurance company.

Misleading marketing material such as promising to settle claims within 24 hours where there are no structures to ensure such a turnaround time are also considered unfair practices, together with use of unqualified and unlicensed personnel such as bank staff, churches or community groups to sell insurance products and services.

“They are (unqualified and unlicensed per-sonnel) unable to explain the full characteris-tics of products, which may result in customers making ill-informed decisions,” Ipec said.

For life insurance policies, the design and sale of inappropriate products and services; high penalties for policy terminations; delay in

the settlement of claims and unjustified repudi-ation of claims are among the practices deemed by the regulator as unfair.

Funeral policies that refuse to pay or pay very little cash in lieu of service, contrary to what is provided for in the Insurance Act; de-sign and sell inappropriate products and ser-vices, for instance funeral policies that do not mature; or unilaterally increase contract terms, especially for maturing policies without policy-holders’ consent, among other practices, will be penalised.

Late payment of pension benefits; forced commutations particularly during the hyper-inflation era; paying benefits that do not meet members’ reasonable expectations; writing off of contributions arrears by some sponsoring employers and or fund administrators without engaging scheme members and accruing little to no interest on outstanding contributions are included on the list for the pensions sector.

[email protected]

New insurance law seeks to protect clients


National News


STATE-OWNED diamond min-er, Zimbabwe Consolidated Di-amond Corporation (ZCDC),

says firm prices during the first half of the year, averaging US$85,60 per carat against an expected price of US$68.30, drove the company’s prof-itability.

The firm recorded a profit of US$26,3 million during the half year against a target of US$18,6 million.

“We managed to achieve sales of 756 518 carats during the half year against a budget of 1,1 million carats but our full year target is three million carats so we are on track to achieve that” ZCDC management told a Port-folio Committee on Mines this week.

Sales of diamonds during the half year raked in US$64,7 million, against a target of US$78,6 million.

The firm said it achieved US$20,6 production cost per carat during the half year against a target of US$29,7 per carat due to various optimisation initiatives.

Responding to issues raised in the 2019 auditor-general’s report, ZCDC said its failure to account for related party debts and investments was mainly a result of legacy debts it inherited from previous diamond mining companies. The diamond miner was established as a merger of DTZ-Ozgeo, Marange Resources, Kusena Diamonds, Diamond Mining Company (DMC) and Gye Nyame, when Anjin and several other miners were de-licensed by the government.

“Consolidation of mining conces-sions in Chiadzwa resulted in some financial obligations being transferred onto the ZCDC balance sheet from former mining companies in which

government had an interest through Zimbabwe Mining Development Cor-poration (ZMDC) such as DMC and Marange.

“ZCDC has created a provision for all the doubtful debts owed by related parties, while a comprehensive lega-cy debt management is being worked on, through the Ministry of Mines,” ZCDC said.

The company also said it had en-gaged an independent professional firm to do a business valuation of its investment in DTZ-Ozgeo whose results will be used to determine the appropriate value of the company’s investment.

“This transaction had the effect of giving ZCDC access to the mine and the use of DTZ Portal and assets which included diamond processing and sorting plants and earth moving vehicles. Currently, ZCDC is utilising these plants on exploratory work at Portal E,” ZCDC said.

Regarding the loopholes noted by the auditor-general on diamond stocks reconciliation by ZCDC, the manage-ment attributed these to delays in the “operationalisation of sales and distri-bution module in the SAP system”.

“ZCDC has since engaged anoth-er local SAP support agent and the sales and distribution module is now running and up to date. This module is linked to the inventory module in SAP. ZCDC and Minerals Marketing Corporation of Zimbabwe (MMCZ) are now doing weekly, monthly, quar-terly reconciliations as well as af-ter-sales reconciliations of diamond stocks,” ZCDC said.

To curb leakages, ZCDC said it had commissioned a security optimising exercise to enhance security across its entire diamond value chain.

[email protected]

Firm diamond prices bump ZCDC income

Omega UkamaCompanies and Markets Editor

PADENGA Holdings (Padenga) lost 47 percent in early trades on the Victoria Falls Stock Ex-

change (VFEX), to close Tuesday at US$0,19.

Shares of the crocodile skins pro-cessor started trading on the recently launched exchange last Monday at US$0,36 after it migrated from the ZWL$-denominated Zimbabwe Stock Exchange, a move management hopes will improve the company’s ability to raise capital in foreign currency.

“The VFEX will allow Padenga to raise capital… from a wider and deep-er potential market, to expand existing business… establish new businesses.

"It will also fund acquisitions… and its gold mining subsidiary Dal-laglio Investments,” Padenga said in a circular to shareholders pre-migra-tion.

The company grew by supplying crocodile skins to luxury brands in Europe, but mining now accounts for 57 percent of its revenue.

Meanwhile, SeedCo International, the only other listing on VFEX, was unchanged during the period under review, closing at US$0,25.

Interest in the VFEX seems to be growing as the US$-denominated market is anticipating a third listing in September.

The VFEX was launched last Oc-tober, with authorities hoping it would shore-up foreign capital inflows fol-lowing years of massive investor flight.

“... hopefully by September we will have a third counter. So, we are mak-ing progress and more counters will join,” Finance minister Mthuli Ncube said during a recent interface with the insurance and pensions industry.

The minister did not reveal the identity of the company expected to list next, but exchange principals have said they are negotiating with “sever-al” entities that have shown interest.

In May, the Treasury unveiled measures that include an incremental exports scheme allowing entities list-ed on the VFEX to retain 100 percent of their proceeds in foreign currency, on volumes above their monthly av-erage.

The measures are meant to attract listings on the exchange, among other objectives.

The country had previously re-stricted retention of export earnings in foreign currency to 60 percent, with the balance paid in local currency at the official exchange rate.

The VFEX says it is also planning to introduce a low capital board to en-courage listings.

Current rules stipulate a minimum subscribed capital of US$3 million.

[email protected]

Padenga sheds 47pct in early VFEX trades


Zida partners Singapore firmFreedom Mashava and Emmerson NjanjamangeziStaff Writers

ZIMBABWE Investment De-velopment Agency (Zida) has partnered Singapore Co-

operation Enterprise (SCE) for the cross pollination of ideas to develop special economic zones, and other investment promotion initiatives.

The deal was brokered by AF Power, a global independent power producer, currently constructing a 50 MW solar power plant in Bulawayo set for completion in the second quarter of 2022.

In a statement during a virtual signing ceremony with SCE in Ha-rare yesterday, Zida chief executive Douglas Munatsi said Zimbabwe has a lot to learn from Singapore in terms of investment promotion.

“Singapore has huge experience in investment promotion, economic zones development and manage-ment, which has evolved over the years.

“We are in the process of devel-oping our own economic zones and I think we have lots to learn from SCE.

"The development of any success-ful SEZ is dependent on good plan-ning and ability to obtain the right

kind of investment into the spaces," Munatsi said.

SCE is an agency formed by the ministry of Trade and Industry and

the ministry of Foreign Affairs of Singapore to respond effectively to the many foreign requests, and to tap into Singapore’s development expe-rience.

The primary role of SCE is to serve as the focal point of access for foreign parties interested in adapting Singapore’s public sector expertise for their own development journey.

In this regard, SCE aims to be the key vehicle for exporting Singapore’s public sector expertise and to ensure that requests for the country's pub-lic sector expertise are met with the highest standards. SCE works close-ly with Singapore’s 15 ministries and

over 60 statutory boards to customise solutions for its foreign partners.

The objective of the Zida-CSE cooperation would be to help Zim-babwe to apply some of the lessons learned to reconceive better arrange-ments for the existing investment promotion, economic zone develop-ment and operations work.

Speaking at the signing ceremony, AF Power country head, Jonathan Chalk, said he hopes the initiative will further help to re-establish and develop partnerships between Zim-babwe and Singapore.

[email protected] See also Page 8


ZIMBABWE is still fine-tuning its tariff offer framework for member states of the African Continent Free Trade Area (AfCFTA).

This is despite the fact that Zimbabwe ratified the treaty in May 2019, becoming one of the earli-est countries to embrace the deal as the government continues to search for new entry opportunities for local companies into the lucrative African market outside of its traditional trading areas.

The AfCFTA agreement came into effect on Jan-uary 1, 2021.

A total of 54 of Africa's 55 countries have agreed, in principle, to participate in the agreement, and 41 have submitted their tariff offers.

Only Eritrea remains as the sole outsider to date.For trade to happen under AfCFTA, in addition

to ratification, a country needs to make a tariff offer to its partners. The process includes stakeholder en-gagement within government and the private sector.

“Internal processes are still ongoing with other ministries and the private sector and once they are finalised a final tariff offer will be tabled before member states,” Industry and Commerce permanent secretary Mavis Sibanda told The Financial Gazette this week.

Though there has been a lot of buzz around Af-CFTA, only 34 countries have officially signed it and only a few have ratified it to date.

In principle, a total of 15 countries need to ratify the agreement to enable its full enforcement on the continent. If successfully implemented, AfCFTA will be the largest free trade area agreement in the world.

The continental free trade area offers huge op-portunities to grow intra trade between African countries, particularly after the devastating impact of Covid-19 on trade in most regions.

Africa’s intra-continental trade currently sits around the 17 percent mark. The United Nations has predicted that, on the back of the successful imple-mentation of AfCFTA, that figure could rise to as much as 53 percent.

In contrast, the proportion of trade in Europe that takes place intra-continentally is around 60 percent.

Among a host of other positive impacts of Af-CFTA, the free trade arrangement will likely be a significant catalyst of trade between African coun-tries, while at the same time creating opportunity for participating countries to retain much of their forex flows within the continent.

According to the IMF, every week in sub-Sa-haran Africa, the region’s economies export about US$6,5 billion of merchandise, but only about one-fifth is destined for other countries in the region.

[email protected]

Zim still finalising AfCFTA tariff offer

National News

Douglas Munatsi

The International Monetary Fund (IMF) gives loans to countries in economic trou-

ble. In exchange, countries must implement a programme of painful policy reforms. Countries rarely complete these programmes.

We set out to uncover why.IMF programmes usually last

one to three years. Countries must meet policy conditions in regular reviews — typically every three to six months — to gain access to tranches of funding. Failure to implement them interrupts the programme. Of 763 programmes between 1980 and 2015, 512 were interrupted, of which 291 did not resume — as our data from the IMF Monitor Database shows. This is a very high failure rate given that the IMF enters into ev-ery agreement on the basis that it wants to see it completed.

We argue that reform pro-grammes may be unimplementable by design. We show that they sim-ply entail too many policy condi-tions. even reform-minded gov-ernments struggle to implement them. Our research also investi-gated financial market responses to programme interruptions. We found that programme failure has serious repercussions for econom-ic development. Failure sends a negative signal to markets, caus-ing them to lose confidence in the ability of governments to stabilise the economy and undertake re-forms. The result very often is a rise in inflation and increases in capital flight that deprive countries of much-needed capital for invest-ment in public goods and services.

Behind the failure rateSome scholars have blamed the

failure rate on a lack of motivation by borrowing governments. Fac-ing pressures from special inter-est groups, such as labour unions and business groups, governments often backpedal from previous commitments. In addition, schol-ars have found that countries that are friends with powerful donors like the US also experience more implementation failure. They re-ceive favourable treatment, such as regaining access to IMF loans much faster than other countries, creating a moral hazard problem. In other words, encouraging bad behaviour.

We looked at whether the pro-grammes themselves were in fact unimplementable. To do this we collected detailed compliance

data for all 763 IMF programmes between 1980 and 2015. Our aim was to test if the number of con-ditions was related to programme interruption. We found that each additional condition increases the likelihood of a programme inter-ruption by at least 1,1 percent — a moderate effect given the average failure rate of 58,6 percent, but programmes typically include 22 such conditions, which boosts the failure probability accordingly.

Conditions to privatise state-owned enterprises, liberalise prices and overhaul the public sector were especially prone to cause imple-mentation failure. This is because these conditions mobilise domes-tic opposition that can thwart pro-gramme implementation.

Our explanation for our find-ings was that over-ambitious pro-gramme designs were the result of intra-organisational bargaining within the IMF bureaucracy. While an area department within the IMF drafted the initial reform pro-gramme, functional departments used their amendment power to include policy conditions that they cared about, without due consider-ation of local circumstances, which led to overambitious programmes.

We are not the first to voice such concerns about the complexity of the IMF’s programmes. The fund’s own Independent evaluation Of-fice noted in relation to the 1994 programme of the Philippines:

The IMF was simultaneously pushing for reforms to the oil pric-ing system and to tax policy, each of which required congressional approval … In the view of some staff, this may have been overam-bitious, exceeding the capacity of the political system to digest sever-al major reforms at the same time.

The dependency trapOur research also investigat-

ed financial market responses to programme interruptions. Using annual data for all developing countries, we found that investors rate a country lower when it had a permanent interruption of an IMF programme.

Monthly data from 30 emerg-

ing market economies showed that a permanent interruption increased the cost of borrowing by govern-ments by about 3 percent.

Programme interruptions lead to adverse financial market reac-tions. When investors lose con-fidence in a country’s ability to undertake market-liberalising re-form, they require higher interest rates on their loans. Borrowing countries that failed to implement IMF programmes therefore faced the risk of more volatile capital flows and higher refinancing costs. Ultimately, higher financing costs made them even more dependent on the Fund, entrapping them in a cycle of dependency.

What to do about itOur findings have important

implications for theories of com-pliance as well as for policymak-ing in international organisations. Given the detrimental effects of IMF programme interruptions for developing countries, it is puzzling that the reform of IMF condition-ality is lagging. The IMF has often blamed weak capacity and lack of “political will” for poor imple-mentation. This predominant view was challenged by horst Köhler, a former IMF managing director, who launched a “streamlining ini-tiative”. Its goal was to reduce the number of conditions.

But the number of conditions remained high. This is partly be-cause of the rigid process by which new IMF programmes come about. When a country requests a programme, the draft agreement must be approved by all nine of the IMF’s sector departments. This empowers departments to include their “pet issues”, which results in overambitious programmes.

An implication of our find-ings is a need for greater leader-ship to ensure policy coherence in IMF programmes. This is even more important right now with a record-high number of 80 new IMF lending arrangements due to the Covid-19 crisis in developing countries. Under the dual Covid-19 health and economic crises, these programmes run the risk of having too many conditions. This may drive countries into financial disas-ter … and back to the IMF again.n Reinsberg is an Interna-

tional Relations lecturer at Uni-versity of Glasgow and Stubbs is an International Relations se-nior lecturer at Royal Holloway University of London.


Leader Page | July 22-28 2021

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News Worth Knowing

Open Forum

with

Bernhard Reinsberg & Thomas Stubbs

Private capital will spur agric output

MARKETING

Advertising ManagerEdwin Vengesa: [email protected]

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EDITORIAL

Associate EditorChris Gumunyu: [email protected]

News EditorKudakwashe Chideme: [email protected]

Deputy News EditorEmmerson Njanjamangezi: [email protected]

Companies EditorOmega Ukama: [email protected]

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Production SupervisorKudzai Rushambwa: [email protected]

THE government’s plan to open up more space for private capital in agriculture and build on the momentum from the 2020/21 season is right on the money.

Agriculture contributes 18 percent of the country’s Gross Domestic Product, 40 percent of national export earnings and 60 percent of raw materials to the industrial sector.

When agriculture performs poorly, the whole economy suffers.

With predicted growth of 5,4 percent in 2022, the im-portance of the sector to those prospects cannot be over emphasised.

As it opens up the sector to private capital, the govern-ment can replicate the tobacco funding mechanism, which has rejuvenated production for the crop.

But unlike in tobacco farming, the model will be funded using local capital.

The government says it will provide a default guaran-tee for programmes funded through the Agriculture Fi-nance Corporation and CBZ Bank. The CBZ Agro Yield programme has produced significant returns for the bank and should be extended to other private capital sources.

The insurance and pensions industry holds funds which can be funnelled to the sector and boost production.

However, there is a need to weed out arbitrage oppor-tunities and side marketing to ensure that the sector be-comes a safe investment zone.

It is also critical to ensure that bona fide farmers access the contract farming opportunities.

The African Continent Free Trade Area (AfCFTA) pres-ents an elastic demand for Zimbabwe’s fresh produce, of-fering bright prospects for return on investment.

Irrigation development will allow crop production all year round.

The right funding can allow us to cut the import bill on cereals and fresh produce, while expanding our export base at the same time.

Thus, the government's strategic objective for the 2021/22 season to sustainably increase crop production and productivity, anchored on private capital investments is welcome, but can and should be refined and developed.

Lots of IMF programmes are never completed, here's why

Zida chief executive Douglas Munatsi flanked by AF Power country head, Jonathan Chalk and Zida CFO Duduzile Shin-ya, follow proceedings during a virtual MoU signing ceremony with Singapore Cooperation Enterprise (SCE) in Harare yesterday. SCE is Singapore's investment promotion body championing enterprise development and supporting the growth of the Asian country as a hub for global trading and startups.


News

PFIZER Inc and BioNTech SE Wednesday said they had struck a deal for South Africa’s Bio-vac Institute to process and distribute over 100

million doses a year of their Covid-19 vaccine for the African Union beginning in 2022.

Technical transfer, on-site development and equip-ment installation activities will begin immediately, they said.

Biovac, a public-private partnership focused on vaccine production, will receive Covid-19 vaccine drug substance made in plants in Europe, and will begin so-called fill-finish operations, the last stage of drug manufacturing and packaging, in 2022.

Pfizer announced the partnership ahead of a speech by chief executive Albert Bourla at a World Trade Or-ganisation (WTO) summit.

WTO members have been in talks for months on waiving drug firms’ intellectual property (IP) rights for Covid-19 vaccines.

Most developing countries support the waiver but several wealthy countries remain strongly opposed, saying it will deter research that allowed Covid-19 vaccines to be produced so quickly.

In his prepared remarks, Bourla made a plea for the group to maintain the current IP rules.

“Weakening IP rules will only discourage the type of unprecedented innovation which brought vaccines forward in record time and make it harder for compa-nies to collaborate going forward,” Bourla said.

Last month, the World Health Organisation said it was setting up a hub, or training facility, in South Afri-ca to give companies there the know-how and licenses to produce Covid-19 vaccines. Biovac was one of the initial participants in the hub.

Biovac has partnered with Pfizer since 2015 to manufacture and distribute its Prevenar 13 pneumonia vaccine. — Moneyweb

Pfizer/BioNTech strike Covid-19 manufacturing deal with Biovac

PROPOSED changes to European Union (EU) law would force companies that transfer Bit-coin or other crypto-assets to collect details on

the recipient and sender.The proposals would make crypto-assets more

traceable, the EU Commission said, and would help stop money-laundering and the financing of terrorism.

The new rules would also prohibit providing anon-ymous crypto-asset wallets.

The proposals could take two years to become law.The Commission argued that crypto-asset transfers

should be subject to the same anti-money-laundering rules as wire transfers.

"Given that virtual assets transfers are subject to similar money-laundering and terrorist-financing risks as wire funds transfers... it therefore appears logical to use the same legislative instrument to address these common issues," the commission wrote.

While some crypto-asset service providers are al-ready covered by anti-money-laundering rules, the new proposals would "extend these rules to the entire crypto-sector, obliging all service providers to con-duct due diligence on their customers," the commis-sion explained.

Under the proposals, a company transferring cryp-to-assets for a customer would be obliged to include their name, address, date of birth and account number, and the name of the recipient.

David Gerard, author of Attack of the 50 Foot Blockchain, told the BBC: "This is just applying exist-ing rules to crypto. This has been coming since 2019."

He said that although these were European propos-als their impact would reach much further.

"If you want to make real money, you have to fol-low the rules of real money," he said. – bbc.com

EU plans to make Bitcoin transfers more traceable


News


THE Zimbabwe Revenue Authority (Zimra) is carrying out risk-based audits with assistance from tax

inspectors, as well as intensifying intelli-gence gathering on business activities to plug revenue leakages.

In a statement accompanying the tax collector’s second quarter performance this week, Zimra vice board chairperson, Josephine Matambo, said there was a de-liberate effort to implement various reve-nue enhancement measures.

“…we are embarking on a foreign cur-rency voluntary disclosure compliance project. The project’s focus is to encour-age taxpayers to voluntarily disclose their foreign currency activities and remit to Zimra what is due to it. This project will ensure continued voluntary compliance by taxpayers who are trading in foreign currency.

“We are also carrying out risk-based audits with the assistance of Tax Inspec-tors Without Borders (TIWB) experts. The audits are mainly focusing on cases with high revenue potential,” Matambo said.

Apart from intensified intelligence gathering, Matambo said the authority continues to implement its debt recovery strategy including effective follow up on outstanding taxes.

“Dedicated teams to follow up on debt were created within the Debt Manage-ment Unit,” Matambo added.

To curb smuggling, Matambo said

Zimra was engaging with other security agents on border patrols and roadblocks.

She said efforts were also underway to coordinate fully with other border author-ities from countries with which Zimba-bwe shares borders.

For the period under review, Zimra’s net revenue collections surpassed the tar-geted $94 billion by 16 percent to $109 billion while net revenue grew by 202 percent in inflation adjusted terms com-pared to the same period in 2020.

All revenue heads registered positive

growth in nominal terms as Zimra paid out refunds of $2.29 billion during the quarter under review.

Cumulatively, net revenue collections for the first half of 2021 amounted to $195 billion after deducting refunds of $4,64 billion to achieve an 8,16 percent surplus above target.

In comparison with the same period in 2020 where a total of $20 billion was col-lected, nominal net revenue collections grew by 430 percent.

[email protected]

Zimra bids to plug tax evasion

Zimra is intensifying intelligence gathering on business activities, as part of efforts to plug revenue leakages.


THE government is offering tax deferments and duty rebate to support struggling companies

hit hard by the coronavirus pandem-ic.

Local firms were already reeling under operational pressures arising from limited access to fresh capital long before the pandemic broke out.

“The ministry is providing an enabling environment by assist-ing companies to access funding through IDC, providing support let-ters towards accessing fiscal incen-tives such as rebate of duty, VAT de-ferments, among others,” Permanent secretary in the Industry and Com-merce ministry, Mavis Sibanda, told The Financial Gazette this week.

Earlier this year, the Industry ministry’s head of quality, Mildred Machiri, told a parliamentary com-mittee on Industry and Commerce that the ministry had only managed to resuscitate seven companies in 2020 out of a targeted 11 due to Covid-19 disruptions and lack of funds.

“Companies revival is a process which takes a lot of time. We have started, but it needs a lot of time. The companies’ revival action plan,

which falls under Lending and Eq-uity was hamstrung by lack of funds last year.

“We had planned to use US$240 million for our re-industrialisation plan for the year. We would use US$60 million each quarter but no funds were released by the Treasury in the first quarter. We only received US$60 million in Q2.

“Even up to the end of the year, we haven’t received any funding. This has really affected our re-in-dustrialisation strategy and we have since engaged the Treasury over that matter.”

The Zimbabwe National Cham-ber of Commerce (ZNCC) has over the years been advocating for the use of tax holidays and rebates as stimu-lus packages for industry. However, the cumbersome and costly approval procedures for rebates make it near impossible for businesses to benefit from available tax incentives.

“In some cases, Zimra refuses to offer rebates to companies that would have received approvals from line ministries and there is need for a one-stop-shop for rebate processing.

“Delays at border posts, per-mit processing, among many oth-er non-tariff barriers are increas-ing the cost of doing business.” [email protected]

‘Tax deferments for struggling firms’

Pan-African re-insurer's Zim bet pays off

WEST African reinsurance giant, Waica Rein-surance (Waica) says its Zimbabwe business grew by 138 percent in 2020, resulting in a

proportionate growth in the unit’s contribution to group gross written premium (GWP) to eight percent.

The group, which reported a GWP of US$102,6 mil-lion for the year, acquired a local reinsurance company —Colonnade Re — through a US$5,5 million investment in 2018, with the business being subsequently re-branded to WaicaRe Zimbabwe.

Besides Zimbabwe, Waica also has operations in Gha-na, Nigeria, Ivory Coast, Tunisia and Kenya.

In its recently published annual report, the group noted that the Middle East market led GWP growth momentum with 157 percent, followed by Tunisia, which now serves the whole of northern Africa, with 153 percent.

“Zimbabwe had a robust growth of 138 percent fol-lowed by Kenya with 103 percent, Asia with 99 percent, the Gambia 90 percent,” the company said.

It added that the rest of Africa grew by 41 percent, while Francophone West Africa grew by 28 percent.

“Only Liberia had a negative growth of three percent,” the group noted.

In terms of GPW for the year, the group’s dominant market Nigeria contributed 31 percent of total GWP whilst Ghana brought in 16 percent.

“Altogether, Anglophone West Africa, which is our home market, continues to be our backbone by contribut-ing 49 percent of our total GWP, with Francophone West Africa contributing 10 percent, Tunisia 11 percent, whilst the rest of Africa, Middle East and Asia brought in seven percent, five percent and four percent respectively.

"Our subsidiaries in Zimbabwe and Kenya contrib-uted eight percent and seven percent respectively,” the group noted.

The group said its improved underwriting result was underpinned by an increase in business volumes and a growth in claims reserve.

Net claims increased by 63 percent to $30,5 million in 2020 from $18,7 million in 2019. — Staff Writer


CONSUMER discretionary stocks were the best performing cluster on the Zimbabwe Stock

Exchange (ZSE) during the second quarter of 2021, with aggregate returns of 60 percent, compared to 38 percent for the All-Share Index.

The bunch is made up of companies that provide non-essential services and products such as Edgars, Truworths and Simbisa Brands.

During the period, the sector became the major cluster on the exchange, clos-ing with a capitalisation weight of 17,8 percent after surpassing technology ― 15 percent.

Within the consumer discretionary group, Dairibord Holdings, Delta and Afdis were the best performing count-ers, registering returns of 116 percent, 57 and 56 percent, respectively.

The gains were on the back of the sector’s rebound during the fi rst half of the year on account of a rebound in demand within the economy amid the ZWL$’s stabilisation, and the opening up of the economy due to the loosening of Covid-19 restrictions.

Restrictions have, however, been re-introduced to curb resurgent infections.

“Discretionary spending will di-minish as people struggle to afford essentials due to shrinking disposable income,” Fincent Securities said in a recent note.

“Innscor has good business in bor-derline areas which can be both discre-tionary and essential. Demand for fast foods has remained high for Simbisa but as long as Covid-19 worries lin-

ger, the business will be constrained as measures to contain the virus affected restaurants and other consumer facing operations.”

Meanwhile, turnover on the ex-change amounted to $11,5 billion rep-resenting 20 percent compared to the previous quarter.

The growth in the value of trades was underpinned by trades in FBC Holdings ($2,72 billion), First Mutual Holdings ($1,48 billion), Delta ($1,46 billion) and Econet ($1,04 billion).

The relatively high value traded for FBC was buoyed by the exit of one of the bank’s technical partners, while ac-tivity in FMH was underpinned by in-vestor interest following NSSA’s inten-

tion to divest.On the other hand, Delta and Econet

have traditionally been amongst the most traded securities on the local bourse.

Analysts say there remains a pos-sibility of continued growth for the exchange due to triggers from money supply growth and, or positive fi rm per-formance “as the asset prices for certain listed companies on the ZSE still remain below their intrinsic value”.

“It has to be mentioned that greater prudence on company selection is now warranted as some companies are trad-ing above their fair valuations,” First Mutual Wealth said in a recent note.

newsdesk@fi ngaz.co.zw

July 22-28 2021

Companies&MarketsThe Financial Gazette

BRIEFSZSE speeds up direct payments

Woolworths’ online sales spike

THE Zimbabwe Stock Exchange (ZSE) this week in-troduced a new feature for its direct access service to speed-up payment processing for sellers.

In a statement Monday, chief executive Justin Bgoni said with the new feature ― ZSE Direct Instant ― pro-ceeds from a sell order will be credited to the investor’s wallet rather than being transferred to their bank account.

“… sale proceeds will be credited to your ZSE Direct wallet on the same trading day… now you do not have to wait for the settlement cycle of trade-date plus three days to receive your sell proceeds,” he said.

ZSE Direct was introduced last September to allow in-vestors direct access to the market without manual inter-vention by brokers. – Staff Writer

A PANDEMIC-LED boom in online shopping in South Africa has seen Woolworths report a 118 percent increase in online food sales in the 52-

week period to June 27, 2021.“Online sales grew by 117,9 percent over the current

year, contributing 2,3 percent to our South African food sales. This was further supported by the expanded click-and-collect offering and the roll-out of our on-demand de-livery service, Woolies Dash,” the retailer said in a trading statement Monday.

Online sales in the Woolworths Fashion, Beauty and Home business also grew spectacularly ― up by 114,4 percent year on year ― as consumers shunned physical stores in favour of online shopping. – moneyweb

Apple pushes back office return

Discretionarystocks top ZSE

APPLE is pushing back its return to offi ce dead-line by at least a month to October at the earliest, responding to a resurgence of Covid-19 variants

across many countries, people familiar with the matter said.

The iPhone maker becomes one of the fi rst US tech giants to delay plans for a return to normality as Covid-19 persists around the world and cases involving a highly transmissible variant increase.

Apple will give its employees at least a month’s warn-ing before mandating a return to offi ces, the people said, asking not to be identifi ed discussing internal policy.

Chief executive offi cer Tim Cook said in June that em-ployees should begin returning to offi ces in early Septem-ber for at least three days a week.

In an internal memo, Cook cited the availability of vaccinations and declining infection rates. – Bloomberg


Companies & Markets

| July 22-28 2021


ARISTON Holdings (Ariston) is optimistic that its operations will not be disrupted much by continuing Covid-19 restrictions,

and expects to sell all its stocks by year-end.The agro-industrial company, however, said the

sale of stone fruit was negatively affected by lock-down measures during the quarter ended June 30, 2021, resulting in a disproportionately larger vol-ume being sold to processors at discounted prices.

The company said while the return of level four lockdown is expected to continue to put some pres-sure on low disposable incomes, it does not expect the effect to be significant on its operations “as this is the tail end of the season”.

“The group is confident that all stocks still on hand will be sold by year end. In this new quarter


CAMBRIA Africa (Cambria) says its sub-sidiary, Millchem, has exited the industrial chemicals sector and focused on producing

hand sanitisers and disinfectants.Cambria, a Zimbabwe-focused investment

company, has in the past downsized its local oper-ations to contain costs due to the harsh economic environment.

Millchem is producing antiseptics in a joint venture with the Merken Group, a personal health-care company based in Zimbabwe, Cambria said in a statement accompanying its results for the six months ended February 28, 2021.

The group said its revenue continued to drop as a result of discontinuing Millchem's industrial sales, to $526 000 from $1,31 million in the prior comparative period.

Profit, however, increased by 164 percent on the back of asset sales and above break-even opera-tions to $95 000 compared to $36 000 during the same period in 2020.

Group finance costs dropped by 63 percent to $13 000 in during the half year under review com-pared to $35 000 in the prior period as the group's outstanding debt nears zero.

Payserv Africa improved consolidated prof-it after tax earnings by 157 percent to $136 000 during the half year from $53 000 on the back of improved performance by Autopay and Tradanet.

Tradanet continued to provide loan manage-ment services to CABS, the country's largest build-ing society.

With the delta variant of the Covid-19 having forced a renewed lockdown in Zimbabwe, chief executive Samir Shasha said Cambria did not ex-pect this to negatively impact its operations in the short term.

“The lockdown may also spur sales of sanitiser products by our joint venture partner, Merken,” he said.

Cambria cash net of liabilities outside Zim-babwe totalled $1,3 million as at May 31, 2021, while a further US$50 000 was held in cash and US dollar denominated accounts in Zimbabwe.

The company said it intends to negotiate with the Reserve Bank of Zimbabwe relating to blocked funds of US$1,39 million.

[email protected]

Cambriarefocuses

Ariston in positive outlook

the group commences its prepara-tions for the next summer season. All factories go into shutdown for repairs and maintenance while lands and or-chards are prepared for the next sea-son. Cost containment continues to

be an area of focus,” Ariston said in a trading update.

Ariston’s revenue for the nine months ended June 30, 2021 in-creased by three percent compared to the prior period.

The company said revenue remains predomi-nantly in foreign currency.

“Whilst the group sells its export crops ex-farm gate, reduced availability of containers for out-ward storage and logistics channels being affected by Covid-19 has resulted in a slower movement of goods from the farms.”

All of Ariston’s estates remained operational during the lockdown as the group’s operations are classified as essential services.

Tea production at 2 500 tonnes slightly increased during the period under review, from 2 400 tonnes recorded in the prior period, due to good weather conditions experienced in the current period.

Tea sales registered an increase to 2 200 tonnes during the period from 1 700 tonnes recorded in the prior quarter, mainly driv-en by an increase in local market demand. [email protected]

Ariston's tea sales increased to 2 200 tonnes from 1 700 tonnes.


Companies & MarketsJuly 22-28 2021 |

Companies & Markets


DELTA Corporation (Del-ta), says it is optimistic that Zimbabwe will soon relax

Covid-19 restrictions, resulting in a rebound to business activity, on account of the significant progress made in the rollout of vaccines in the country.

With a million people already in-oculated, Zimbabwe is scaling up its vaccination programme as it aims to inoculate at least 10 million citizens.

As of last week, the country had received 4,2 million doses, with an-other 1,5 million expected soon.

Delta, which has operations

across the region, said business in Zimbabwe is also expected to bene-fit from improved agricultural output and better access to foreign currency.

“The company expects a return to reduced lockdown regulations and improved business activity as the country increases the vaccination rollout programme.

“Further to this, it is hoped that the monetary authorities implement their stated intentions for the auction exchange rate to reflect macro-eco-nomic developments following pronouncements made in the recent monetary policy,” the beverages maker said in a trading update for the quarter ended June 30, 2021.

This comes as authorities within

the region have tightened restrictions in response to resurgent waves of coronavirus infections.

Meanwhile, Delta’s revenue grew

by 114 percent during the quarter in inflation adjusted terms and by 391 percent in historical cost terms.

“This reflects the volume recov-

ery across all beverage categories off a low prior year base.

“The historical cost figures re-flect lower and less frequent price increases in line with a more stable exchange rate and lower inflation in Zimbabwe,” Delta said.

The company reported that it had benefited from improved access to foreign currency through domestic nostro sales, but said this was dis-rupted somewhat due to the unin-tended consequences of the policy change under Statutory Instrument 127 of 2021.

There are also cost disparities arising from the wide exchange rate margins, Delta noted.

[email protected]


HIPPO Valley Estates’ parent, Tongaat Hulett (Tongaat), anticipates demand for sugar to remain firm in the Zimbabwe market, under-

pinned by continued economic recovery.The regional sugar producer said raw sugar pro-

duction for the 2021/22 season was forecast to in-crease to 431 000 tonnes in Zimbabwe, but remain below historical levels as cane yields begin to recover post-drought.

“Export volumes are expected to normalise after higher-than-average exports during 2021,” Tongaat said in a statement accompanying its results for the year ended March 31, 2021.

The company said capital expenditure is focussed on cane root replant programmes to improve cane yields in the future years.

The JSE-listed group said its local operations gen-erated revenue in line with the prior year at R6,16 million during the year ended March 31, 2021, down seven percent on the prior year, and an adjusted oper-ating income of R2,12 million.

“Our Zimbabwean operations are significant and continue performing well despite ongoing hyperinfla-tion effects,” Tongaat said.

Sugar production declined by seven percent to 408 000 tonnes during the year under review, from 441 000 tonnes recorded in the prior period.

Tongaat said production was affected by unsea-sonal rainfall during harvesting, which impacted cane quality and ended the season early, resulting in 555 hectares of sugarcane being carried over for harvest in the 2021/22 production season.

“Sugarcane yields declined due to low water avail-ability and electricity interruptions, which limited ir-rigation during the crop’s peak growing season. Ex-cellent rains this year have ensured water security for irrigation for at least three seasons,” Tongaat said.

Ethanol production increased by 10 percent to 31 million litres during the year under review, benefitting from increased molasses throughput imported from Mozambique and Zambia to maximise available ca-pacity.

Local sugar sales volumes of 325 000 tonnes were in line with the previous year, as supply and pricing into the market were responsibly managed to prevent arbitrage into surrounding regional markets.

The company said demand in the local market re-mained firm despite low disposable incomes.

[email protected]

Tongaatexpects firm

demand

Delta banks on Covid-19 vaccination

Zimbabwe aims to inoculate at least 10 million citizens.


Companies & Markets

| July 22-28 2021

ZIMBABWE

MINISTRY OF TRANSPORT AND INFRASTRUCTURAL DEVELOPMENT

CONDOLENCESTHE LATE CDE EDZAI CHIMONYO

The Minister, Hon Felix Tapiwa Mhona (MP), Deputy Minister, Hon Michael Madiro (MP), Permanent Secretary, Eng T K Chinyanga and the entire staff

in the Ministry of Transport and Infrastructural Development join His Excellen-cy, the President of the Republic of Zimbabwe, Cde Emmerson Dambudzo Mnangagwa, the entire nation and the Chimonyo family in mourning the un-

timely passing on of Cde Edzai Chimonyo. The nation has been robbed of an icon of liberation struggle who dedicated his life to the emancipation and empowerment of his people. His contribution to the

history of our nation and continent will never be forgotten.

May Your Dear Soul Rest in Eternal Peace.


THE Cotton Company of Zimbabwe (Cottco) says it expects to buy 68 000 tonnes more cotton from farmers this year compared to

the previous season, on the back of improved rain-fall and availability of inputs.

In a trading update for the first quarter ended June 30, 2021, the company said it was targeting an intake of 150 000 metric tonnes compared to the 82 479 metric tonnes received last year, an increase of 76 percent.

“Rainfall in the current agronomic season im-proved and was more widely distributed than in the past season. Delivery of inputs to farmers also im-proved for the season under review,” Cottco said.

As of June 30, 2021 the company had received 56 700 metric tonnes, representing 38 percent of its

Cottco targets 76pct increase in deliveries

intake target, while ginning had also commenced.

Cottco also expects a boost from lint prices, which had dropped last year to a low of US$0,56 per pound, but have firmed this year to levels

of around US$0,88 per pound due to increased demand and low world stocks.

“The order book is full for both lint and ginned seed and the company is forecasting to export 76 percent of

its lint,” Cottco said.Cottco believes its cost containment activities

and improved operational efficiencies should en-sure that the company does not incur a loss for the financial year ended March 31, 2022.

Side marketing continues to be a challenge for the company although it has in recent years main-tained a market share of 90 percent.

The government recently promulgated Statutory Instrument (SI) 96 of 2021 to control the marketing of selected key crops including cotton, and Cottco expects the SI to further curb the illegal sales.

Meanwhile, the government has committed to clear the 2020 outstanding subsidy balances for farmers who grew cotton under the Presidential Input Scheme.

“These balances arose as a support price to farmers to encourage increased cotton production,” Cottco explained. [email protected]

Cottco is targeting to buy 150 000 metric tonnes of cotton this year.


THE Zimbabwe Stock Exchange (ZSE) extend-ed its lead over regional markets with gains of 38 percent during the second quarter of 2021,

18 percentage points ahead of the second best — the Ghana Stock Exchange (GSE).

The ZSE gained 148 percent during the first half, compared to the GSE’s returns of 36 percent, and third placed Lusaka Stock Exchange’s 19 percent.

It comes as Zimbabwe’s inflation has remained high, driving demand for "real assets" such as prop-erty and stocks.

After wild swings during the first half of 2020, the ZWL$ has been stable for close to a year on account of the Reserve Bank of Zimbabwe’s monetary target-ing framework, and the success of its weekly foreign currency auctions.

This has seen inflation coming down from 837 percent last July to 106 percent last month. Still, only Sudan has worse figures on the continent at 195 per-cent.

Analysts, however, expect the ZSE’s bull runs to be less pronounced in real terms for the balance of the year as its capitalisation is now ahead of historical averages.

“Notwithstanding the generally improved funda-mental performance of listed companies as indicated from the first cycle of published results in 2021, we believe that a number of ZSE listed companies, par-ticularly in the small and medium cap segment, may now be overvalued,” First Mutual Wealth said in a recent note.

Still, the firm believes the market remains an infla-tion hedge offering better value retention and growth prospects than cash and other near cash assets cur-rently.

“Annual inflation has come down significantly in 2021 but it still remains high, thus investor preference remains skewed in the equity asset class for medium to long term investment tenures.

“The continued positive performance of the ZSE will depend on the stability of the exchange rate on the one hand and whether or not companies continue to improve their operations going forward,” FMW said, adding that major risks to these factors are poli-cy inconsistency “through abrupt policy changes that affect the relative stability currently prevailing as well as Covid-19’s impact on the business environment as national lockdowns are imposed or worse yet, if a full out health crisis occurs”.

The firm warned that investors would have to be selective in their choice of investments on the ZSE going forward. [email protected]

ZSE extends lead over

regional markets


of inflation on the public. CPI measures changes in prices, paid by consumers for a basket of goods like WPI, but in this case using retail goods, instead of wholesale goods.

It is important to note that these goods/commodities can be classified as primary goods (food, non-food, minerals, fuel, and power) and manufactured goods, and then their weighted average can then be taken to measure CPI.

Headline inflationThe RBZ always reports headline infla-

tion and core inflation. Headline inflation is a measure of the total inflation within an

economy, including commodities such as food and energy prices (e.g., oil and gas),

which tend to be much more volatile and prone to inflationary spikes.

Core inflationOn the other hand, core inflation

(non-food-manufacturing or underlying in-flation) is calculated from a consumer price index minus the volatile food and energy components.

Headline inflation may not present an accurate picture of an economy's inflation-ary trend since sector-specific inflationary spikes are unlikely to persist.● Gopoza is an economist. He writes in his capacity as the chief economist for the Bankers Association of Zimbabwe. He can be contacted at [email protected]

July 22-28 2021 |

Column

Tillas Gopoza

THIS article is a continuation of last week’s instalment which seeks to define and explain some key terminologies often used by mone-

tary and fiscal authorities. Various indicators are used to measure the eco-

nomic and financial sector performance of an econ-omy and understanding these key indicators is of paramount importance to the public.

Today’s article will focus on one of the most used indicators of economic and financial performance which is inflation.

InflationIn the field of economics, inflation is defined as a

general increase in the price level of goods and ser-vices in an economy over a period.

The general increase or rise in prices results in each unit of currency buying fewer goods and ser-vices and therefore, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of ac-count within the economy.

On the other hand, we have what is called de-flation, which is the opposite of inflation, which is defined as a sustained decrease in the general price level of goods and services.

Measuring inflationThe common measure of inflation is the inflation

rate, which is the annualised percentage change in a general price index.

Price indices are used to measure the relative price changes of goods and services in a region (general-ly a country) during a specific period (e.g., financial year, or quarter, or month) and we do have a variety of the price indices which will later be explained in this article.

Using the price indices, we measure how much the price of goods and services have increased (in-flation) or decreased (deflation) from a fixed normal year, known as the base year, and with respect to this base year, a calculation is made on how much in-crease or decrease in prices happened in this current year.

Generally, the price indices are used to measure the cost of living in order to determine salaries or wages necessary to maintain a constant standard of living.

Price indicesGoods and services are provided to the consumer

by the producer and such the various price indices are calculated depending on the various stages/lev-els i.e. either at producer level (PPI), wholesale level (WPI), and retail/consumer level (at the retail mar-ket, from where consumers buy) – CPI.

Producer Price Index (PPI)A producer price index (PPI) is a price index that

measures the average changes in prices received by domestic producers for their output. PPI is used to track pure price changes at the producer level for goods as well as services.

Wholesale Price Index (WPI)WPI is used to track the prices of goods at the

wholesale stage (i.e., goods sold in bulk, rather than retailed), and traded between organisations, before being forwarded to consumers.

It is impossible to calculate price changes of all the goods traded in an economy, and therefore it is logical to take a sample set, or 'basket of goods to measure the inflation of a few important goods/com-modities to determine the price changes in relation to a base year.

WPI indicator tracks the price movement of each commodity individually, and then determine through the averaging principle employing techniques or methods such as the Laspeyres formula, Ten-day Price Index, etc.

Consumer Price Index (CPI)While WPI is calculated in the wholesale stage,

CPI is determined at the retail stage, where consum-ers are directly involved.

Hence, the CPI method better measures the effect

Unpacking basic banking concepts (II)


Column

Role of the board amidst a pandemicIt Is without doubt that the Covid-19 pan-

demic has turned the world upside down and disrupted all areas of human life, in-

cluding businesses. Due to the unprecedent-ed business disruption, the role of the board of directors in every company has changed dramatically.

During these peculiar times, robust corpo-rate governance is more important than ever. this article considers how Covid-19 has shifted the role of boards, as well as details practical steps to be taken by boards during this pandemic, to serve the company compe-tently and resourcefully. the pandemic has ushered in a volatile, uncertain, complex and ambiguous (Vuca) environment. Vuca is a term coined by the Us army in the 1990s to describe a Post-Cold War world. the same term has also been adopted in the business world. the board has a vital role to play in addressing the challenges of a Vuca envi-

ronment. In addressing these challenges, the board should do the following:

a Counter volatility with vision – the board must accept and embrace change by developing a clear, shared vision of the fu-ture.

a Counter uncer-tainty with understand-ing – the board must take time to understand the "new normal" and develop new ways of thinking and responding to uncertainty.

a Counter complex-ity with clarity – the board must communicate clearly with all stakeholders and clearly express the direction the company is taking.

a Counter ambiguity with agility – the board should be able to adapt swiftly and

move with agility in the "new normal."Additionally, directors must be cognisant

of the fact that decisions made during the pandemic must be guided by different prin-ciples to those utilised before the pandemic.

Specifically, boards need to exhibit excep-tional leadership skills and decision-making abilities guided by prin-ciples of preservation of lives and jobs, while ensuring continuity of

the business and profit making through use of innovative methods. In addition to the foregoing,

the board should:1. Prioritise health and safety of em-

ployees, customers and suppliersthe Covid-19 pandemic has claimed mil-

lions of lives, therefore the health and safety

of employees, customers and suppliers must be the top priority for every board. the board must monitor man-agement’s efforts to support containment of Covid-19 e.g. ensuring that employees in the workplace wear masks at all times, having employees report to work on alternate days to reduce the numbers and to ensure social distancing in the workplace, ensuring that em-ployees have hand sanitisers and are protected when travelling to and from work. this should be on the agenda of every board meeting and must be empha-sised and communicated internally within the organ-isation as well as outside to other stakeholders. Clear communication to all stakeholders will address any ambiguity in a Vuca environment. It is advisable for boards to develop or revise their crisis management measures and develop new policies for workplace safety and efficient operations.

2. Finance the business.the pandemic has had a negative impact on most

business operations and this has resulted in many be-ing unable to operate. the board must thus, ensure that they assess and evaluate the financial resources of the company to ensure that they have short- and long-term financial measures to curb the impacts on the financ-es of the business. Boards may consider seeking ad-ditional financing and restructuring existing debt to accommodate loss of income during this period; this can be done by either equity injection or new debt being provided. Boards ought to be creative at this time and engage experts to provide bespoke financing solutions to alleviate the financial pressure invariably faced by many businesses during this time. Companies may consider sale of debt claims and income streams to raise much needed finance; alternatively, sale and lease backs to raise short term finance. For companies in financial distress, the boards ought to consider com-mencing corporate rescue proceedings as a way to re-suscitate the ailing companies.

3. Effectively communicate.With the dawn of “working from home”, an ef-

fective communication strategy with employees, cus-tomers, vendors and the entire supply chain is crucial. the role of the board during this and any crises is to be available and up to date on the status of all the issues affecting the company. the board must also be well-versed with the constantly changing legal requirements pertaining to lockdowns and curfews. While survival is on the forefront of businesses agenda, during this period, the board must also consider and plan for re-sumption of business activities as the lockdowns ease and communicate such plans internally to all material stakeholders. It is imperative for board members to in-dependently be up to date on key topics so that they can bring additional insight to management's discus-sion of problems and solutions. to ensure that com-munication lines are open and efficient, boards should establish a Covid-19 crisis committee tasked with ur-gent daily decisions arising from or caused by the pan-demic. succinct framework for this committee should be drawn up giving the committee leeway in decision making and programme implementation.

4. Evaluating the business itself.the board should, together with management, re-

view the operations of the business and the principal risks to the organisation and assess and monitor man-agement’s efforts to identify, prioritise and manage them. Directors should consider whether business continuity plans are in place. the board also needs to be honest about the financial viability of the company. the board, in performing its duties, must be cognisant of their statutory duties including but not limited to, the duty of care to act in good faith and in the companies’ best interest; the duty to not carry on company busi-ness recklessly or with gross negligence and the duty of loyalty and to communicate with management on material issues affecting the company.

5. Long-term strategy- business post-Covidthe pandemic will eventually come to an end and

businesses will revert to their full capacity as before. It is thus, important for boards to consider how to best position the organisation for success after the pandem-ic through adoption of appropriate business strategies. the board also needs to ensure that decisions made to address the short-term needs do not come at the ex-pense of the organisation’s relationships with its stake-holders.

n Moyo, Mafongoya and Sabao are registered legal practitioners. They have co-authored a hand-book entitled The Directors’ Handbook in Zimbabwe and are so also the co-founders and legal bloggers of ‘Lex Amicus’. (https://lexamicuszw.wordpress.com/). They write here in their personal capacities.

For more information, please contact us on [email protected]

Beatrice Moyo, Chido Mafongoya and Kelvin Sabao

The Financial Gazette July 22-28 2021 | Page S1

Manzungu retains ZNCC presidency

THE Zimbabwe Nation-al Chamber of Commerce (ZNCC) has re-elected Ti-

nashe Manzungu as president, as-suming the position for the next calendar year.

The Gweru-based businessman and property developer retained his post following a virtual elec-tive congress hosted by the busi-ness member organisation recent-ly.

He will be deputised by Ha-rare businessman Mike Kamun-geremu, who replaced Bulawayo businessman Golden Muoni.

Also elected were Josephine Takundwa (Mashonaland region), Itai Zaba representing the Mid-lands and Chalton Chimbira, rep-resenting Manicaland province.

Elections for the Matabeleland region chapter will be held in due course. Tinashe Manzungu, ZNCC president Mike Kamungeremu, ZNCC deputy president

The Financial Gazette Page S2 | July 22-28 2021

ZNCC leadership profiles

ZNCC 2021 PRESIDIUM SPECIAL FEATURE

MANZUNgU is a busi-ness magnate who has pioneered TM group

into a diversified investment port-folio.

The group’s name is derived from his initials. He is a celebrat-ed Zimbabwe-born businessman who founded TM group from humble beginnings.

He is a multilingual business mogul with extensive profession-al and entrepreneurial experience who has established various busi-nesses in Zimbabwe.

Having invested close to a de-cade in real estate, health insur-ance and financial services in Zimbabwe, he is a major share-holder and board chair in private limited companies, which include Zimbuild and Zimbabwe general Medical Aid Health Fund.

He has seats on other boards in-cluding that of the Midlands State University and Zimbabwe Prisons and Correctional Services.

He is a holder of a Doctorate in Business Leadership (DBL) from the International Women’s University (IWU), a Masters of Science in Business Leadership (MBL) from the International Women’s University (IWU).

Manzungu also holds an Hon-ours Degree in geography and Environmental Science (HongES) from the Midlands State Universi-ty (MSU) and a Master of Busi-ness Administration (MANCOS-SA UNIVERSITY) SA Candidate.

His substantial experience and expertise continue to be rec-ognised as he has been appointed

to sit on the following boards:• Zimbabwe National Chamber

of Commerce (ZNCC) president• Midlands State University

(MSU) council member• Zimbabwe Building Contrac-

tors Association (ZBCA) junior vice president

• ZIMCARE TRUST (commit-tee member)

• Crime Consultative Commit-tee (CCC )committee member

• Association of Health Care Funders of Zimbabwe (AHFOZ) member

• Zimbabwe Association of Mi-crofinance Institution (ZAMFI) member

• Global Appeal for Accelerat-ed Youth Empowerment and De-velopment (gAAYED) founding appellant

KAMUNgEREMU is the managing director of Ten-do Electronics Pvt Ltd and

current board chairman of Ramola Security Pvt Ltd.

Before becoming the ZNCC VP for Mashonaland, he was the Ha-rare branch chairperson and ZNCC National Finance Committee chairperson for two years.

He was recently elected into the Zimsec and ZimTrade boards.

Mike is a qualified Chartered Management Accountant (CIMA) and a Chartered global Manage-ment Accountant (CgMA) with a track record in private sector Financial Management, Strategic Management, Corporate gover-nance, Taxation, Turnaround Strat-egies and Administration.

He holds a Bachelor of Accoun-tancy Honours Degree from the University of Zimbabwe, a Di-ploma in Financial Management (ACCA-UK), a Master’s Degree in Business Administration (UZ) and

is a member of the Institute of Risk Management South Africa, and the Institute of Directors of Zimba-bwe.

In recognition of his achieve-ments with Tendo Electronics, he was awarded the ZNCC Harare Businessman of the year 2014 and Megafest Top 20 Businessmen 2015.

Mike Kamungeremu, deputy president

Dr Tinashe Manzungu, president

To S3


ZNCC leadership profiles

Chimbira joined the hospitality industry in 2008 after graduating from the University of Zimbabwe in 2007, with an honors in business

Studies. he is an experienced general manager with a demon-

strated history of working in the hospitality industry. he is skilled in front office, accounting and finance, engi-neering, owner and stakeholder management, catering, OnQ, budgeting, food and beverage, and hotel manage-ment.

he is a strong sales professional who graduated from University of Zimbabwe and is a chartered hotel Gm with the american hotel and Lodging institute. has been a GM since Nov 2012. Great Zim (five months), Holiday Inn Beitbridge (two years), Troutbeck Resort (four years) and currently Holiday Inn Mutare.

Chimbira has run nine of the group's prime prop-erties. he is Gedes Young host of the year 2015 and megafest most Promising Young Executive of the Year (Manicaland) 2019. He has also been Manicaland chairman for the hospitality association of Zimbabwe (HAZ) and currently ZNCC president for Manicaland.

Josephine Takundwa vice president Mashonaland region

TakUndwa is a dynamic entrepreneur who has been in the ICT and power protection industry since 1997.

She is the founder and managing director of Earth-link Technologies, a company that specialises in surge protection, lightning protection, power back-ups, volt-age regulation and ICT hardware. Earthlink has a spe-cial interest in servicing the telecommunications sector providing mainly surge protection for aC dC, and rF/Fibre.

Currently, it is venturing into alternative energy solu-tions for lighting targeted at the rural community of Zimbabwe. She is also the founding director of Southern africa Centre for Entrepreneurship, an entrepreneurship development organisation focusing primarily on soft skills complemented by the technical skills.


Itai Zaba vice president Midlands region

Chalton Chimbira, vice president Manicaland region

iTAI is the chief executive and founder of Golden Waves Enterprises (Private) Limited, which is a foundry and engineering company that produces

castings for the mining, construction, farming and gen-eral industrial sectors, and fabrication of smelting equip-ment and other steel structures in Zimbabwe.

he is an industrial metallurgist, entrepreneur and businessman with a passion for the development of the local foundry industry, including value addition of base minerals in Zimbabwe. itai has been active in the resus-citation of the Zimbabwe institute of Foundries, where he is the recent past President.

in this position he has been lobbying for the need to ban export of scarce raw materials such as scrap metal, in favour of local beneficiation. He has worked in the local foundry industry for the past 31 years during which he gained extensive experience and skills in all aspects of business management and leadership in this sector.

in addition to industrial metallurgy, he holds profes-sional qualifications that include: Executive Diploma in Business Leadership (ZOU); Certificate in Quality Assurance (City & Guilds of London Institute); and a pending Master’s in Business Administration (MBA).

he is also the President of the mCm Group Fund Trust, a local charity organisation that has been paying off the tuition of underprivileged children, among other community projects, in mhangura since 2015.

The Financial Gazette Page S4 | July 22-28 2021 ZNCC 2021 PRESIDIUM SPECIAL FEATURE

THE Zimbabwe Nation-al Chamber of Commerce (ZNCC) has re-elected Tinashe

Manzungu, pictured, as the president. We caught up with Manzungu as he articulates his vision for the offi ce. Be-low are excerpts from the interview.

Q. Congratulations on your re-election as President, can you briefl y tell us about yourself?

A. I am a versatile individual who is highly-attuned to make a difference in society. I am a holder of a Doctorate in Business Leadership. I have served in the Chamber as chairman Gwe-ru Branch in 2016, Vice President for Midlands for two terms that is 2017 and 2018. In 2019, I was elected deputy national president before becoming the president from 2020.Thank you for con-gratulating me.

Q. What does this re-election mean to you?

A. It is a refl ection of the confi dence that the Chamber has in me and I shall do my best to justify the trust that has been bestowed upon me. As the preem-inent voice of business, we are going to represent, support, and guide so that we develop the national economy that cre-ates the business environment favour-able for the economy to thrive.

Q. What will be your major focus as ZNCC President?

A. The main focus will be on em-powering the private sector through capacitation, engagement, skills en-hancement, incubation programmes and business linkages so that they can scale up their business for radical eco-nomic transformation. I’m a youthful President passionate about enterprise development and so I am excited for the opportunity to help serve the business community.

Q. How do you hope to achieve these goals?

A. I will advocate an empowerment model that focuses on partnering with strategic partners and giving opportu-nities. One of our proud advantages as a chamber is the allegiance to local regional and international associations which places us on a better place when it comes to trade and economic develop-ment agenda.

During my fi rst term as the Presi-dent, I am proud that we have already partnered with various institutions that include UNDP, Liquid Telecoms, Zim-babwe Stock Exchange (ZSE), Indian Economic Trade Organisation, Algerian Chamber of Commerce, Canada Africa Chamber of Business to mention just but a few. With the new term I am confi -dent that more partnerships are coming on board

Q. How has the Covid-19 pandem-ic changed the way businesses oper-ate? Has the industry adjusted to the new normal?

A. The Covid-19 pandemic outbreak has led to an unprecedented disruption of commerce in most industry sectors There was no anticipation on business and even governments of fi rst world economies. Business should adjust to business as usual when business is un-usual.

This has created a huge dent in our economy which requires resilience from businesses.

Many of them are not linked to or integrated in the supply chains of major private sector businesses.

From a research we have conducted

over the past quarter, most of our mem-bers are in a transition phase to suit the new normal. Some have embraced the opportunities that the crisis has present-ed, particularly those in ICT.

The pandemic has disrupted supply chains but in general there is a good adjustment from business as statistics show that the industry capacity utilisa-tion has boosted.

Q. What are the major challenges confronting business this year?

A. The economic activity has been restricted with industries deemed non-essential closing down, the most affected being the informal sector which constitutes about 60 percent of the GDP size.

Two-fold disruptions on supply and demand, shortages of imported raw ma-terials supply chain, reduction in both local and foreign investments all has strained business with capacity utilisa-tion performing at 58 percent meaning a potential loss of $400 million in rev-enue. Covid-19 has impacted on em-ployment with the most affected sectors being tourism and arts.

Q. What can the government do to help business under circumstances?

A. There is a private sector funding gap and this gap needs to be fi lled up in order to enable industry to undergo the restructuring and transformation nec-essary to thrive in the new normal post Covid-19 environment.

The value addition and benefi ciation of local produce is key as outlined in the National Development Strategy 1 (NDS1). Agriculture and mining sectors need support for the turnaround of the economy.

Q. In terms of retooling for in-dustry, what can be done to address funding constraints? What are some of the funding options for business?

A. The Economic Recovery Packag-es should be introduced aimed at revital-ising the economy and providing relief and insulate businesses and industries from shocks caused by the economic slowdown caused by the Covid.

Development Finance Institutions should be established with a revolving fund facility that as other benefi ciaries repay; the reserve being built becomes available to others.

Q. Your outlook for the rest of the year?

A. Amid the ravaging effects of the Covid-19 pandemic, the Zimbabwean economy has demonstrated remarkable resilience with institutions like Bretton Woods revising the growth upwards.

However, the signifi cant threat to sustained economic recovery remains the uncertainty caused by Covid-19 pandemic and its associated restrictions.

‘We need economic recovery packages’


ZNCC mid-term budget submissions 2021The Zimbabwe Na-

tional Chamber of Commerce (ZNCC)

says the operating envi-ronment continues to be weighed by the impact of the Covid-19 pandemic.

Finance minister, Mthu-li Ncube will present his 2021 Mid-Year Fiscal Pol-icy and economic Review next week.

The Chamber made the following submissions for the 2021 Mid-Term Bud-get Review. ZNCC said its fiscal submissions are intertwined with monetary submissions given that some of the market devel-opments are as a result of monetary interventions.

Public debt No debt should ever be

procured without the in-volvement of the Parlia-ment of Zimbabwe. There is a need for a Debt Re-payment Plan, especially outstanding offshore debt assumed by RBZ from various local producers, which is affecting raw material imports and new lines of credit, more-so how local debt will be set-tled over time.

The Chamber contin-ues to propose that no debt should ever be procured without the involvement of the Parliament of Zim-babwe. This will serve as a confidence-building mea-sure.

There is need for a debt breakdown as a transpar-ency measure, there is debt distress. It appears gov-ernment is understating its debt and recommend that Parliamentarians should for a debt breakdown be-fore approving the budget.

The US$5 billion owed by RBZ and the US$3,5 billion for farmers were not included in the US$8,1 billion

Exchange rate exchange rate move-

ment is a concern; there is a strong market perception that the exchange rate is moving from a managed exchange rate to a fixed exchange rate. The spread between the auction rate and the alternative rate is quite disturbing

The dragged nature of the auction exchange rate is promoting arbitrage and, in the process, it will

promote a currency slip. There is need to handle the spread between the auction rate and the alternative market rate as a matter of urgency

Tax-free threshold There is need for in-

crease of the tax free threshold from $10 000-$20 000 to lift the burden on civil servants and other low income bracket earn-

ers, who have not had a salary adjustment. This will help increase dispos-able income

Fuel import duty There is need to scrap

the Road haulage fuel im-port duty of US$0,05/litre so as to reduce the cost of fuel in the economy and allow importation of fuel by licensed petroleum re-tailers, while also reducing

fuel import duty to about US$0,20. Zimbabwe now has the most expensive fuel in Sadc and it does not do the country any favours on AfCFTA or export com-petitiveness. Taxes and duties on fuel now consti-tute US$0,50 on every litre sold, which is too high

Transparency on Agriculture commodities payments

There is need to detail how government is going to finance the buying of maize and other agricul-ture commodities consid-ering the bumper harvest for the current season.

Mid-term budget should outline financing initia-tives that are in place

$18 billion stimulus package

Our members did not have access to the $18 bil-lion stimulus package. The credit guarantee arrange-ment with the government is not offering enough comfort to banks to lend to the private sector.

There is need to set a fund for drawdown by businesses — the cred-it guarantee arrangement

with the government is not offering enough comfort to banks to lend to the private sector

Infrastructure devel-opment

Overall support under the 2021 Infrastructure Investment Programme amounting to $139,8 bil-lion (is a positive), howev-er there is need to strength-en PPP’s and more private sector participation in in-frastructure development projects. enhanced priori-tisation of projects is also important given that they are key when it comes to the ease of doing business.

De-dollarisation framework

While the 2021 Budget was silent on the de-dol-larisation framework, we expect the mid-term bud-get review to provide clar-ity on the de-dollarisation framework

Subsidies It is commendable that

these were budgeted for in the 2021 budget. There is need to stick to what has been budgeted for. Subsi-dies should be targeted and

To S6

ZNCC 2021 PReSIDIUM SPeCIAL FeATURe

Mthuli Ncube


ZNCC’s mid-term budget submissions 2021From S5

should only be limited to vul-nerable households.

Civil service remuneration There is now an urgent need

to utilise the budget surplus and

other revenue gains to award civil servants a living wage in line with the actual cost of liv-ing (informed by market rates and prices of food, transport and rentals).

The low morale in the civil service is affecting service de-livery in education, health and government departments as a whole. It is also breeding ram-pant corruption in the economy


on processing of export permits and licenses required by businesses to operate in the economy.

Tripartite Negotiating Forum There is need for the implemen-

tation of the proposed operationali-sation of the TNF through setting up of an independent Secretariat head-ed by an executive director as well as instituting the necessary statutory instruments, with necessary operat-ing procedures to guide the TNF as was stipulated in the 2021 National Budget.

Currency There is need to promote the dual

currency model currently existing, US dollar and the Zimbabwe dol-lar, with much focus on reviving the Zimbabwe dollar. This can only be attained through structural reforms economy wide and not only focusing on the forex auction market. Broader reforms are needed to address cur-rency and exchange rate issues.

There is artificial demand for the Z$ where people prefer not to spend/buy using the US$, and this does not reflect distortions in the exchange rate market.

Industry 4.0 Government should set up and

fund a department on Industry 4.0 which should be under the ministry of Industry and Commerce. There is need to promote Education 5.0 to complement digitisation. Higher al-locations in ICT are needed for the foundation for automation. Legis-lation around digitisation is lagging behind so there is need for review/expediting.

Border management While 2021 budget set aside re-

sources amounting to $1,5 billion towards upgrading of facilities at ports of entry; there is need for al-location of funds towards improving efficiency for boarder systems — modernise the infrastructure at ports

of entry in line with changing global trends and business needs.

There is need to digitise all Zim-ra operations at the boarders, Zimra should move to paperless opera-tions.

There is also snail pace progress in implementing One-Stop border posts across the entry points with the Beitbridge Border supposed to be the second to implement after Chirundu. Modernising infrastruc-ture will be key and will help ad-dress the impact of the Kazungula project on Beitbridge.

Corruption Chamber acknowledges that fight

against corruption scourge for the next five years will be guided by the National Anti-Corruption Strategy as was stipulated in the 2021 Na-tional Budget. The Chamber recom-mends that appointments at ZACC should not be done through one ap-pointing authority — this will help on independency.

Parliament should play a role in the appointments of commission-ers at ZACC, this will contribute to its effectiveness. We estimate that almost 20 percent of the National Budget is lost through corruption; this continues to weigh on the ease of doing business. There is need to change laws and give prosecuting powers to ZACC and to strengthen its independence.

Industrial Development Corpo-ration (IDC) restructuring

IDC should be restructured to make it a development finance insti-tution which supports Industry than for it to remain an investment vehi-cle as it is now.

There is need to capacitate IDC more than commercial banks to make it a development finance insti-tution which supports Industry than for it to remain an investment vehi-cle as it is now.

Mining sector We acknowledge the standardi-

sation of the corporate tax/review of the tax rate on income accruing from mining operations from 25 per-cent to 24 percent with effect from January 1, 2021. There is need to conclude on the Extractive Indus-tries Transparency Initiative EITI and Mines & Minerals Act.

ZIDA There must be an arrangement

where the institutional framework is a joint venture between government and the private sector; which means the secondment of board members must be derived from both private sector and the government with gov-ernment only appointing 50 percent of the board membership. There is need to speed up the ZIDA initiative to fully undertake its mandate so that there is value.

Energy There is need to accelerate the

deployment of solar. Its equipment should be imported freely. Solar should be used as an alternative for rural areas electrification rather than putting them on the grid. There is need for broad incentivisation of so-lar with a view of offloading from the main grid.

Solar should be used as an alter-native for rural areas electrification rather than putting them on the grid.


ZNCC’s state of industry report

AfCTA: Business focuses on capacity building

THE Zimbabwe Nation-al Chamber of Commerce (ZNCC) says it is focusing

on building local business’ capacity to exploit opportunities under the recently launched African Conti-nental Free Trade Area (AfCFTA).

The business-member organi-sation and the United Nations De-velopment Programme (UNDP), together with the United Nations Economic Commission for Africa (UNECA) and other partners ― in-cluding ZimTrade and the Competi-tion and Tariff Commission (CTC) — launched an AfCFTA training programme for businesses in Zim-babwe training programme last month.

AfCFTA — the world’s largest free-trade area ― started trading on January 1, 2021, creating a market of 1,2 billion people and the eighth economic bloc in the world with a $3-trillion combined GDP, that is expected to more than double by 2050.

“…with the launch of trade on the AfCFTA… It is the chamber’s goal that members take advantage of the benefits arising from the AfCFTA. In this regard, capaci-ty building initiatives such as the ZNCC/UNDP training sessions on ‘Unpacking the AfCFTA for Zim-babwean Business’ shall remain a priority,” ZNCC president Tinashe Manzungu said in the chamber’s annual report for 2020.

ZNCC chief executive, Chris Mugaga, added that the business lobby group would continue to ad-vocate for a free market economy.

“The chamber of commerce con-tinues advocating for a free market economy, where the government’s hand is limited and where markets are not perceived as failing, every time pressures simmering from prices or exchange rate are experi-enced,” Mugaga said.

Mugaga said ZNCC would this year launch its inaugural state of in-dustry and commerce report.

“An exciting product is also on the offing. As the chamber of com-merce, we are to launch the inaugu-ral State of Industry and Commerce Survey Report.

“It shall be our flagship product for reference in policy advocacy. As the name implies, the survey shall be the premier source of up-to-date information on industry perfor-mance, the number of companies operating in the country, company closures and business confidence levels within the economy.

"The release of the first issue is scheduled for the last quarter of the year,” Mugaga said.

“The industry continues to face myriad of challenges ranging from forex shortages, hard lockdowns, smuggled goods competing with locally manufactured products, and unfavourable legislation which negatively impact profitability.


Christopher MugagaZNCC Chief Executive

SIPPING tea in the cor-ner of a chic café at Sam Levy Village in Borrow-

dale, the leafy suburb north of Harare, Thembani Mugadza seems like another yuppie on his lunch break. With a dis-arming smile, he chats about his job as an insurance agent. Before long, however, the 38-year-old warns that the government may impose a total lockdown as Covid-19 cases continue surging.

The clock is ticking for Thembani as he has to rush back to the office and attend an urgent meeting on ways to implement new Covid 19 regulations at his workplace. This literary defines how an average day has been for business in the period 2020 to 2021. The novel coronavirus continued ravaging both lives and livelihoods, with the Zim-babwe National Chamber of Commerce survey conducted last year estimating job losses for the 2020 calendar year at 25 percent.

The industry continues to face a myriad challenges ranging from forex shortages, hard lockdowns, smuggling

goods competing with local-ly manufactured products, and unfavourable legislation which negatively impact prof-itability. As the Chamber of Commerce, we have consis-tently lobbied for a predictable business environment.

The catatonic uncertain-ty posed by policy flip flops remains the biggest "tax" to our prospects, worse than the fiscal tax or even sanctions imposed upon our nation. We can no longer afford hard lockdowns regardless of the third wave, which we expect to last until the last quarter of this year. The solution lies in adhering to Covid-19 regula-tions and achieving national herd immunity of at least 45 percent, not the largely touted 60 percent. The argument is that over 40 percent of Zim-babwe’s population is under 15 years, making 45 percent vaccination rate an impressive number by our standards. The Chamber of Commerce con-tinues advocating for a free market economy, where the government’s hand is limited and where markets are not perceived as failing, every time pressures simmering from prices or exchange rate are experienced.

The recent SI 127 of 2021 remains an eyesore to our vi-sion for a liberalised economy. We shall continue engaging the government for its total repeal, knowing fully well the unintended consequences this piece of legislation will pose as it attempts to amend the parent or enabling act, that is, the Exchange Control Act. The solution lies in promoting a forex auction system that promotes competitive bid-ding, an auction that is not a forex rationing mechanism

but rather a price discovery platform, an auction that is progressive and aims to ulti-mately scrap the priority list, not to consolidate it. These are clear policy recommendations we shall continue presenting to the authorities as we march towards a business-friendly environment.

We are grateful to our membership for taking heed of our advice not to overcharge their products and shun abus-ing forex accessed through the auction. The fact that not a

single ZNCC member was ex-posed for abusing forex from the auction continues to send the right signals that we are a law-abiding business member organisation whose commit-ment to nation-building re-mains unquestionable.

Equally on the policy front, we urge authorities to religiously and timeously re-lease monthly data, notably monetary variables. The knee-jerk approach to data release creates mistrust between the private sector and the govern-ment, worse still at this stage when the alternative market rate continues behaving stub-bornly.

We recently witnessed the dearth of Reserve Bank of Zimbabwe monthly data since December 2020, with the Feb-ruary 2021 data released four months later, in June. What is unattractive about the trend is the massive 490 percent growth in money supply, with reserve money rising 139 per-cent.

This literary means the printing press is still on, tak-ing advantage of cheap forex given the stationary exchange rate.

At a strategic level, the reporting period was a busy

one for the Chamber as it was involved in several initiatives. The institution rebranded, coming up with a new logo whilst retaining the corporate colours that define who we are. A training school was also launched and has already be-gun making strides, with sol-id partnerships having been forged.

We managed to engage institutions such as UNDP, Zimbabwe Stock Exchange and Procurement Authori-ty of Zimbabwe, with many training programs and part-ners lined up on this exciting journey. An exciting product is also on the offing. As the Chamber of Commerce, we are to launch the inaugural State of Industry and Com-merce Survey Report.

It shall be our flagship product for reference in pol-icy advocacy. As the name implies, the survey shall be the premier source of up-to-date information on industry performance, the number of companies operating in the country, company closures and business confidence levels within the economy.

The release of the first issue is scheduled for the last quar-ter of the year.


ZIMBABWE Stock Exchange (ZSE)-listed mobile network operator, Econet Wireless, was crowned the best

performing company on the local bourse for the second year running at the Financial Gazette’s Top Companies Survey 2021 awards spon-

sored by financial services giant, Old Mutual Zimbabwe.

Leading beverages manufacturer, Delta Corporation, was the first runner-up, while fast foods giant Simbisa Brands was crowned sec-ond runner-up.

Accepting the award, Econet chief exec-utive Douglas Mboweni said the technology firm received the award with gratitude.

“I am so grateful to our customers, because without our customers our business will not be in existence. To our customers, thank you for

the support you have continued to give us over the years. Even as we go into the future, we have no doubt that we will continue to walk together. As an organisation we will continue to dig new ground to be innovative in terms of coming up with solutions that will appeal to our custom-ers as we go into the future,” Mboweni said.

“In challenging times such as these, we have the coro-navirus around us not only here in Zimbabwe but it is a worldwide phenomenon. But we also have economic challenges that we have to deal with. All these factors present tough operating challenges for the business. So how are we making it and navigating such a terrain. As Econet we have perfected the art of execution and will continue to focus on it,” he said.

Pan African banking group Ecobank was crowned the best bank during the period under review. Stanbic Bank was the first runner-up. The award is given to the most outstanding bank for the year based on both quantitative and qualitative attributes of each bank reviewed.

Doves Morgan won the best life assurer while Clarion Insurance was crowned the best short-term insurer.

CBZ Holdings was recognised in the best tangible investor returns category. The award recognises the com-pany that would have delivered the best tangible gains to investors during the period under review.

Diversified conglomerate Padenga Holdings Limited walked away with the Special Mention Award, which recognises outstanding achievement or contribution to a current topical issue.

Padenga for the second year running also won ESG award which recognises a company that upholds good environmental, social and governance principles and op-erates an ecologically friendly business model that pro-motes the efficient and sustainable use of resources, con-ducts value adding social development programmes in the community and for employee wellness and promotes ethical governance practices by the board of directors, ex-ecutive management, employees and interacts with exter-nal stakeholders.

Delta Corporation for the second year running walked away with the Disclosure and Investor Relations Award of the Year. The award rewards companies that are vig-ilant and make full disclosure of information about their business, satisfy the requirements by regulators, stock exchange disclosure rules as well as disclose information in a timely manner and simplified financial language. Inn-scor Africa was the first runner-up.

A panel of judges and analysts, independent of both The Financial Gazette and Old Mutual, come up with the judging criteria and categories for the top awards.

Judges chairperson Simbiso Musa said the 2020/21 financial review process marked the second consecutive year of Zimbabwean based companies operating in a hyperinflationary environment and where the Covid-19 pandemic effects continue to be topical and largely influ-ential to business model dynamics.

The awards were held under the theme: ‘From Surviv-ing to Thriving: Reimaging Business after the Pandemic.’

“As a country we no longer need to just talk about sur-viving but thrive to reach new heights notwithstanding all this chaos…We urge all firms to benchmark their perfor-mance to the set criteria of the awards,” she said.

“The period was characterised by late publication of results, an issue we believe our accountant by now should nip in the bud. Going forward publication deadline exten-sions should not be acceptable anymore as timeliness is a very important factor in financial analysis,” Musa said.

The awards were launched in 1980 and have proved invaluable in promoting transparency, good corporate governance, ethical conduit and corporate social respon-sibility. — Staff Writer.

Econet Wireless wins Top Companies award

The Financial Gazette July 22-28 2021 | Page S9TOP COMPANIES 2021 SPECIAL FEATURE

ZIMBABWEAN businesses have made significant prog-ress in instituting needed

reforms to survive, increase profit and lure more foreign investment as the country’s economic growth outlook is showing positive signs.

Speaking at the 2021 Top Companies Survey awards hosted by The Financial Gazette in part-nership with blue-chip financial service group Old Mutual, In-victus Energy managing director Scott Macmillan said adjusting to the new normal had created many obstacles but at the same time presented new opportunities to reshape business practices and culture.

“The world and Zimbabwe is beginning to emerge from lock-downs, economies are gradually opening up and business is now looking into the future,” he said at the awards held virtually under the theme: ‘From Surviving to Thriv-ing: Re-imagining business after the pandemic.’

“For businesses, when Covid was spreading, survival was es-sential but not guaranteed. Look-ing at the impact of the pandemic, through a Zimbabwean lense, our business leaders were placed bet-ter than most to deal with a crisis like Covid-19. The business envi-ronment in the country has been challenging over the past 25 years

and for many it was just another event to steer the ship through. The threads that have defined survival of successful business in Zimbabwe are agility and resil-ience,” said Macmillan, who was guest of honour.

“The backdrop of this survey is a lot brighter than last year when the world was in the early stages of fighting a rapidly growing glob-al pandemic. Government, busi-ness and citizens were battling to understand what the future would unfold and what the depth and du-ration of the crisis would be,” he said.

He said for Zimbabwe to thrive in the post Covid-19 pandemic world there was a need to build ex-isting competitive advantages and national wealth and continue with the necessary structural reforms to address the ease of doing business and boost competitiveness.

“Being agile in a dynamic business environment has been essential to overcome multiple crises that have played out in the country, including periods of eco-nomic and political instability and the devastating hyperinflationary period. This required an adaptable approach and strategy in the face of an ever changing economic and regulatory environment.

“Resilience was forged through surviving multiple crises and

building a belief that the problems that we face are always transient and if you can weather the storm you will come to the other side. The adversity that is being faced and overcome by business has cre-ated a mindset that any challenge can be solved with an innovative approach and a relentless drive to survive and succeed. These two trains engrained in Zimbabwean business set companies to survive the Covid-19 pandemic,” Macmil-lan said.

“As an individual, without mental and physical health you are a liability to your business… Our competitive advantages (as Zimbabweans) lies in what is

symbolised by our national flag, the land, agriculture, tourism, the mineral wealth in the ground, our history as a nation in overcoming adversity, our human capital and ingenuity…Beneficiation and val-ue addition of minerals will create more jobs and support exports,” said Macmillan.

Speaking at the same event, Old Mutual Zimbabwe chief executive Sam Matsekete, said in the face of the third wave of the pandemic, nothing was constant in life but change and to adapt to models that allows businesses to survive.

“…Threats to endeavours of business are more real and more pronounced under the condi-tions such as those induced by Covid-19, but change is indeed a constant and we cannot escape it. In a way, crises are an adrenalin for innovation, more and more we need to make decisions faster un-der conditions that are extremely volatile, uncertain and often with less information. The choices are also not getting any easier, this demands that our minds embrace change,” he said.

Old Mutual Zimbabwe’s head of group marketing and innova-tion, Lillian Mubaiwa, said agility was key to success as it allowed businesses to quickly respond to the sudden and constant changes of customers' needs as they also

respond to the changes in their en-vironment.

“Agility defines who falls and who survives in troubled waters such as 2020. As Old Mutual, oth-er than slamming the brakes in the face of Covid-19 headwinds, we downshifted in order to listen to customers, track the market, conserve resources, and regroup to enhance our ability to change direction in a nimbler and smarter way,” she said.

She said this gave the group the impetus to roll with the changes that the crisis presented to launch new, safer and ergonomic prod-ucts which have resonated well with their existing customers and critically, attracted the attention of new, younger clientele.

“We have continued to act in the best interests of society as a whole by putting our employees, our customers and the communi-ties in which we operate first. As a responsible corporate citizen, Old Mutual believes that “Crisis be-gets opportunity”.

“The company will continue to put its best foot forward to be cre-ative and to find novel solutions to customer problems. We will con-tinue to reimagine the way we run our business to deliver in-person experiences online and engage customers in new ways,” Mubai-wa said. — Staff Writer

Zim businesses adjust to new normal

Sam Matsekete


Simbiso Musa

THE 2020/2021 financial review process marked the second consec-utive year of Zimbabwean-based

companies operating in a hyperinflation-ary environment.

It also marked another year in which Covid-19 pandemic effects continued to be topical and largely influential to busi-ness model dynamics.

In light of our usual normal being dom-inated by these vagaries which seem to be here to stay, our theme for this year was termed: “From surviving to thriving: Re-imagining business after the pandemic”.

As a country we no longer need to talk about just surviving, we need to thrive in the midst of all this chaos.

Having developed an entirely new eval-

uation model for 2020 in order to adjust to the highly inflationary environment, this year the model was again put to the test and it showed its resilience, robustness and functionality.

Continuous improvement is our key competitive advantage and this year it saw us recalibrating the insurance sector mod-

el with the aim of increasing its relevance to the obtaining environment and placed more focus on yield, pure business perfor-mance and asset quality.

In addition, we introduced qualitative factors for our banking sector model to enhance the quality and objectivity of our results.

The period under review was still characterised by late publication of results, an issue we believe by now our accountants should have nipped in the bud.

Going forward publication deadline extensions should not be acceptable anymore as timeliness is a very important factor in financial analysis.

Additionally, with the advent of hyperinflation accounting, disclosures and investor relations be-come very important as investors need to be kept abreast of the different implications brought about by the accounting methods, spanning from adjust-ment factors, monetary gains or losses and fair val-ue adjustments.

A lot of management discretion is involved in some of these decisions and it's of paramount im-portance to communicate the decisions to stake-holders as much as possible.

Resultantly this year, we introduced the Disclo-sure and Investor Relations 1st runner up award largely to acknowledge the level of improvement we have witnessed with regards to efforts being made to uphold high standards of disclosures and investor relations.

Noticeably, Covid-19 has affected the tradition-al way of engaging specifically for annual general meetings and analyst briefings and agile companies have not reneged their responsibilities, but have in-stead geared up and taken advantage of digital plat-forms to continue dispensing their duties to share-holders and stakeholders at large.

Our main model and the banking sector model were premised on the combination of 70 percent contribution from quantitative factors and 30 per-cent contribution from qualitative factors.

The quantitative factors are based on ratios ex-pounding on financial health, efficiency, size and earnings quality.

From the qualitative aspect the model evaluated disclosure and investor relations, environmental, social and governance factors, corporate gover-nance and leadership aspects.

Overall a top company should exhibit a balance between financial performance and non-financial performance.

Still lagging is the insurance sector, the model is premised on 100 percent contribution of quantita-tive performance largely due to the source of infor-mation being the Insurance and Pension Commis-sion (Ipec) submissions. We further encourage the regulator to probe submission in the form of non-fi-nancial metrics possibly through annual reports.

The quantitative and qualitative factors are pre-mised on the following guiding principles:

The recognition of:•consistent financial performance;•sustainability of business model•strategic leadership and adaptive culture•healthy financial position; and•superior tangible total returns to investors or

shareholders; andThe promotion of:•good corporate governance practices, including

providing adequate disclosures, transparency and accessibility to investors and analysts;

•environmental awareness and sustainable busi-ness practices; and

•corporate social responsibility.We maintained a robust scorecard of quantitative

metrics which covered the following: •earnings performance - including assessment of

growth and quality of earnings •size - including levels of market capitalisation,

net asset value and total assets•financial health - liquidity, solvency, profitabili-

ty and operating efficiency and•investor returns - including issues of share li-

quidity, share price growth and payment of divi-dends to shareholders.

To evaluate and ascertain the level of consisten-cy the overall result was a combination of 30 per-cent performance from 2019 and 70 percent contri-bution from 2020 performance.

To Page S11

Top Companies Survey 2021 judges’ report

Simbiso Musa Batanai Matsika Prosper Matiashe

TOP COMPANIES 2021 SPECIAL FEATURE


Top Listed CompanyWinner

Econet Wireless1st runner-up

Delta Corporation2nd runner-up

Simbisa Brands

Top Banking InstitutionWinner

Ecobank1st runner-up

Stanbic

Life AssurerDoves Morgan

Top Insurer (Long term)Clarion Insurance

Top Insurer (Short term)Sanctuary

Environmental, Social and Governance (ESG) Award

Padenga Holdings

Best Tangible Investor Returns AwardCBZ Holdings

Special Mention AwardPadenga Holdings

Disclosure And Investor Relations AwardWinner

Delta Corporation1st runner-upInnscor Africa

Top Companies 2021winners


Top Companies Survey 2021 judges’ reportFrom Page S10

This year’s awards recognised winners in the follow-ing categories;

▪Top Listed Company – recognises the top company listed on the Zimbabwe Stock Exchange excluding banks and insurance companies.

▪Top Banking Institution – recognises the top bank licensed by the Reserve Bank of Zimbabwe, excluding micro-finance institutions, whether deposit-taking or not.

▪Top Insurer (long-term) – recognises the top life in-surance company licensed by the Insurance and Pensions Commission of Zimbabwe.

▪Top Insurer (short-term) – recognises the top casualty insurance company licensed by the Insurance and Pen-sions Commission of Zimbabwe.

▪Best Disclosure And Investor Relations – recognis-es a listed company that goes out of its way to provide as much information as possible to the investing public, through detailed and informative annual reports, investor relations website, analyst briefings, etc.

▪Best Tangible Investor Returns – recognises a com-pany that managed to reward its shareholders the most during the past year through dividends and capital gains (that are supported by volumes of trades).

▪Best ESG Practices – recognises a company that up-holds the sustainability and ethical impact of their busi-ness model to the operating environment

▪Special Mention – this year it recognises a company that was visionary and agile in quickly modifying the business model to suit the obtaining environment.

As per tradition, the judges maintained a Special Mention Award that goes to a discipline which was not captured by the model but in that current year was very significant and topical to warrant acknowledgment large-ly because of contribution towards creation of shareholder value.

This year our special mention award is in line with

our theme, ac-knowledging a company which acted swiftly not to succumb to the effects of the obtaining environment and shifted their business mod-el. Going forward there is a concerted desire amongst the judges to expand the universe for

the assessments but the major constraint remains availability of information. The low hanging fruits remain the Government institutions which already have a mandate to publish their results. Consistency is going to be key to start building a complete universe.

The judges convey their warm congratula-tions to the winning companies in the various award categories. We also urge other compa-nies to benchmark themselves against the set criteria and strive to be winners next year. We remain grateful to the sponsors, Old Mutual and The Financial Gazette for their continued support of this initiative. As usual, Old Mutu-al was excluded from participation by virtue of being a sponsor in these awards, in order to preserve the independence and integrity of the awards.

Judges Simbiso Musa (Chairperson), Simbarashe

Mangwendeza, Evonia Muzondo, Tinashe Yafele, Prosper Matiashe, Takudzwa Shere-kete, Batanai Matsika and Manatsa Tagwireyi.

Evonia Muzondo Simbarashe Mangwendeza Takudzwa Sherekete


Evonia Muzondo

WE are celebrating Delta Corpo-ration Limited (Delta) in this year’s Top Companies survey

as it lifts the trophy for the first runner-up award in the listed space. To add to the cheer, the company also won the Best Disclosure and Investor Relations award, which evaluates consistency, clarity, and candour in dealing with stakeholders.

The winning formula for Delta despite a difficult financial year is that of con-sistency, one of the Top Companies Sur-vey’s key guiding principles; consistency in returns to shareholders; consistency in the quality of earnings and consistency in financial health. Delta also managed to score highly in qualitative aspects of so-

cial responsibility, sustainability, corpo-rate governance and leadership.

Delta is a total beverages company with products covering the entire market from soft drinks – as the bottler of Coca Cola – cordials, through its investments in Schweppes Zimbabwe, spirits, wines and ciders provided by associate, African Distillers Limited.

In the beer space, Delta supplies the market with both traditional sorghum beer under the Chibuku brand and lagers catering for the mainstreamå and premi-um segments. Markets are in Zimbabwe, Zambia and South Africa. The company is the dominant player in all the market segments in Zimbabwe.

Delta is not only a pre-eminent con-sumer company in Zimbabwe but is also

the most capitalised stock on the ZSE with a weighting of 12 percent. Market capitalisation is around US$1bn at the of-ficial USD exchange rate.

The business model, like most brew-ers, is driven by a strong marketing spend and visibility, strategic pricing and pro-motional activities aimed at growing and defending volumes.

Delta also aims to remain the custom-er’s choice whether customers are down trading or up trading or switching from one product to another; hence it even pro-vides bottled water, for those who opt not to drink soft and/or alcoholic beverages. What are currently missing though; teas and coffees!

Encouraging volume recoveryThe year 2020 witnessed a difficult op-

erating environment characterised by restrictions to social and economic activity occasioned by the Covid-19 pandemic, hyperinflation, and waning disposable incomes.

However, the Zimbabwe macro-economic envi-ronment benefitted, from a stable foreign currency exchange rate and the use of foreign currency for domestic transactions.

Improved access to foreign currency resulted in stable pricing and consistent product supply due to better access to imported raw materials and spares.

The South African market was negatively im-pacted by bans on the sale of or trading in alcoholic beverages while Zambia was adversely affected by the depreciation of the kwacha, high inflation and weakening economic fundamentals.

Delta continued to post a strong operating per-formance propelled by volume recovery across most product categories.

Margins were under pressure, though, as the in-flation lag on operating expenditure narrowed and due to competitive pricing.

Lager beer volumes grew by 20 percent for the nine months to 31 December 2020 attributed to a favourable pricing regime, consistent product sup-ply, benefiting from the injection of new returnable glass and fewer disruptions to production. Volume for sparkling beverages for the nine months ex-panded by 42 percent.

This category was propelled by consistent sup-ply and competitive pricing, although the sales mix has shifted towards take-home packs in response to restrictions on gatherings.

However, sorghum beer volume in Zimbabwe trailed prior year by 14 percent for the nine months due to limited market access, although this im-proved towards the end of the period. Nonetheless, Delta enjoys better margins on clear beer than in sorghum.

In regional operations, volumes for Natbrew Zambia were up 5 percent for the nine months. The company was affected by the resurgence of illegal trading in bulk beer, which trades at a discount to packed product.

United National Breweries was affected by very strict restrictions and bans on the sale and con-sumption of alcohol in South Africa. Associates, African Distillers Limited and Schweppes Hold-ings also witnessed encouraging volumes growth. All this resulted in an above-inflation 837 percent growth in revenues.

The company continues to invest heavily in its brands

Over the years the company continues to fo-cus on value creation by expanding its portfolio of businesses and diversifying its brewing base. This has been achieved through investment in its brands, plant capacity and skills development while remaining flexible to adapt to the changing economic landscape. Brands continue to be re-freshed through package renovations.

The aim is to align customers and consumer preferences with their choice of brands, packs and consumption occasions or settings through seg-mented execution. As a result brands and packs are always relevant to the customer base.

In light of the unstable inflation, and declining disposable incomes, the focus has also shifted to-ward cost competitiveness through driving a prof-itable mix and cost containment.

Capital expenditure programmes have not only increased capacity but have improved production facilities and reduced costs. At the beginning of dollarisation (February 2009), Delta had 50 bev-erage brand/pack units and these have continued to increase as the company addresses the changes to the market.

The strategic framework is also anchored on investing in market development and optimised route to market. There are on-going initiatives to improve service at the customer collection depots and scheduling of deliveries to customers and out-lets deliveries.

Delta: The company of good cheer!TOP COMPANIES 2021 SPECIAL FEATURE

The Financial Gazette July 22-28 2021 | Page S13TOP COMPANIES 2021 SPECIAL FEATURE

Batanai Matsika

THE bank provides retail, corporate and in-vestment banking services and is wholly owned by Ecobank Zimbabwe Holdings

Limited, which in turn is wholly owned by Eco-bank Transnational Incorporated (ETI). It should be noted that for the greater part of 2020, economic activity was negatively impacted by Covid-19 in-duced lockdowns.

For banks, this presented a major risk given that most businesses that make up the clientele base of financial institutions were adversely affected from a credit risk perspective. Further, volumes trans-acted came down significantly as most customers were not able to operate normally due to the re-strictions.

This limited the potential for growth in fees and commissions. Nonetheless, the broader banking sector has benefited from the general stability of prices experienced during Q4 2020. This was a result of the stability obtaining on the foreign ex-change market. Ecobank outperformed its compet-itors on different quantitative parameters detailed hereunder;

Solid total deposits market share Based on our universe of banks, Ecobank had

a total deposits market share of 15,5 percent. The bank has largely been focused on top tier corporate customers which means is has more scope to grow its depositor base. The Zimbabwean economy is expected to recover by 7,4 percent in 2021 (Minis-try of Finance Estimate). This growth should cul-minate in improved disposable incomes and should boost savings and transactional activity within the banking sector.

Exceptional asset quality and high scope for further loan gearing

Ecobank maintains high liquidity and conse-quently has a low loan-to-deposits ratio (LDR) of 23,92 percent and a high cash to total deposits ratio of 72 percent. As such, it has high potential for additional risk asset creation in the long term. We highlight that Ecobank’s target market poses a low risk to asset quality. The bank also has a strong risk management framework with a NPL ratio of 0,15 percent. It should be highlighted that its top tier corporate customers are typically multination-al corporations (MNCs), large regional and local corporates and state-owned enterprises.

However, exposure to SMEs is rising in sig-nificance, which presents additional opportunities for loan growth over the medium term. A sectoral analysis of the loan book indicates 38,8 percent ex-posure in trade and services, 36,9 percent in light and heavy industry and 10,4 percent in agriculture. In our view, the fact that Ecobank is focused on top tier corporate customers means there is low down-side risk to its PAT growth.

Strong returns compared to peersEcobank remains in a strong position to gener-

ate higher shareholder returns on the back of (i) strong revenue growth (ii) efficient operations, (iii) stronger margins due to lower funding and (iv) improved structured finance and retail business. The bank has also registered a significant growth in fees and commissions on the back of structured trade finance products and import letters of credit. On a comparative basis, the bank delivered a return on capital (ROC) of 62,16 percent against a peer average of 40,3 percent.

The return on risk weighted assets was 19,3 per-cent compared to an average of 11,3 percent.

Efficient operationsEcobank also outperformed its peers based on

efficiencies. Cost management as reflected by the cost to income ratio (CIR) was 43,41 percent on a historical cost basis. The bank has invested in a robust core banking application upgrade and has launched new digital platforms and delivery channels that offer convenience and efficiency at a lower cost. The digital banking suite compris-es of the Ecobank Mobile App, Ecobank Online,

OMNILITE and OMNIPLUS. The bank also introduced additional product menus on these platforms to enable them process multicurrency transactions in response to the currency dynamics.

In our view, Ecobank’s key strengths include technology, digital platforms, in-ternational trade payments and remittanc-es.

CapitalisationEcobank ranks relatively well in terms

of its Tier 1 capital ratio. The total core capital for the bank as of December 31, 2020 stood at $4,3 billion (US$46,6 mil-lion). The bank is therefore adequately capitalised as it meets the minimum capi-tal requirement of US$30 million.

In terms of the qualitative aspects, Ecobank has strong ratings in terms of

(i) shareholder backing, (ii) management quality and (iii) disclosure.

We note that the parent company, Eco-bank Group, also won numerous African awards in 2020 including;

•African Bank of the Year and Bank of the Year for affiliates in Gabon, The Gam-bia, Guinea, Guinea-Bissau and Togo (The Banker);

•Pan-African award for Financial In-clusion and Best Bank award for affili-ates in Burkina Faso, Cabo Verde, Chad, Gabon, The Gambia, Guinea, Liberia and Mali (EMEA Finance);

•African Bank of the Year; and Innova-tion in Financial Services Award (African Banker).

•Most Innovative Bank in Africa; and Outstanding Crisis Leadership – Finance

& Business (Global Finance); and•Africa’s Best Bank for Corporate Re-

sponsibility (Euromoney)The strong shareholder support also

ensures that Ecobank management up-holds high levels of corporate gover-nance, transparency and disclosure.

On the corporate social responsibility front, the bank remains very active and has partnered with World Vision in terms of various response programmes in the education sector targeted at marginal ar-eas more prone to national disasters.

In conclusion, we maintain a view that the long-term growth opportunity for Ecobank lies in the implementation of the African Continental Free Trade Area given its strong position in terms of trade finance, payments and advisory services.

Ecobank: A bank for the times


Kuda Chideme

OVER the past year and a half, the Covid-19 pandemic has turned our lives upside down. We have lost

colleagues, friends and family. Our routines have been unsettled. Life is just no longer what we were used to. On the business side of things, supply chains have been disrupt-ed and, in some instances, entire businesses have folded.

The carnage has been particularly gory in the tourism and hospitality sector, which, according to the government, lost north-wards of 90 percent of potential revenues in 2020, as governments-imposed lockdowns and restricted travel.

In normal times, the tourism industry generates at least US$1,25 billion making it one of the country’s top foreign currency earners.

The lockdowns might have been lifted and business opened up (below full capac-ity), but it is certainly going to take some time for us to genuinely fathom the sheer extent of damage the pandemic has caused.

It has been a time of sheer uncertainty reminiscent of, if not worse than, the global financial crisis of 2008, yet the challenges of this period might also be the single larg-est push for us to innovate and build stron-ger resilient institutions.

The pandemic has forced consumer tastes to evolve and with them, so too do the channels of delivery. The competition has gotten more agile and data has emerged as king. With all these changes taking place, this demands of us to reimagine, at break-neck speed, our role in the new world. Busi-nesses and government institutions can act decisively to unlock the next stage of the country’s digital transformation.

The future is digital The future is digital and there is no way

around that. Those that adopt digital tech-nologies first will be ahead of the pack and those that drag their feet will be left to lick

their wounds. On the local banking scene, we have already start-

ed to see the emergence of “digital-first” operating models as lenders resize their branch networks. Ac-cording to CBZ chairman Marc Holtzman, “the move to digitize ahead of the pandemic was very fruitful”.

For BancABC Covid-19 was the real Chief Digital Officer.

“The pandemic has also given us an opportunity to introspect and confront the reality of a new normal and our capabilities to adapt our business model to a new reality. We have used the crisis to accelerate our digital transformation and adoption of the online working environment, product innovation and part-nership formation,” the bank’s managing director, Lance Mambonidyani said.

So going forward it is evident that there is a need to shift approaches—for example, by putting increased focus on digital service delivery channels. Expand online presence and broaden digital offerings.

Businesses must move fast to meet customers’ in-creased appetite for digital offerings and at the same time look for ways to reduce cost and improve pro-ductivity—both during the downturn and in the re-covery.

This drive towards digitisation by large corpora-tions will also present an opportunity for technology companies as demand for their services grows.

Reimagining the role of government in a digital world

Going forward, the government as a regulator and active consumer would have to play a more active role in fostering an enabling environment for rapid digitisation. So this means that other than ensuring that all key enablers are in place to support digital adoption, such as making sure that data is affordable, the government should bring the public sector into the digital age.

The government can step up provision of digital services and information, and harness digital tools to collect, manage, and use data to inform decision mak-ing. They can also enable digitisation in society and the economy by using the crisis as a spur to accelerate the rollout of digital IDs, signatures, and registries.

To support broader digitisation, major infrastruc-ture expansion will be required, including those in backbone networks and last-mile connectivity, as well as electricity supply. As Lacina Kone noted: “How digitised Africa is depends on how digitized our infrastructure is—it’s not rocket science.”

It is estimated that governments, development finance institutions, companies, and investors will need to spend $100 billion on key ICT infrastructure by 2030 to achieve universal broadband access— including 250 000 new 4G base stations and 250 000km of fiber cable.

As a country we need a workforce equipped for the post-Covid-19 “next normal,” in which digital skills will be at the core of many occupations. The government can ensure that training infrastructure is in place for both basic skills, like mobile transactions, and advanced ones, such as coding and graphic de-sign.

Positioning for regional trade In the longer run, local companies must take ad-

vantage of opportunities in intra-African trade and global supply-chain realignments spurred by the cri-sis.

“This crisis has shown that globalization may have led us to over-rely on global supply chains. There will be a big re-think worldwide—not just be-cause of politics, but also because of countries' ability to meet their basic needs,” Ngozi Okonjo-Iweala, for-mer Finance Minister of Nigeria and one of the Afri-can Union’s Covid-19 Special Envoys, said recently.

According to a McKinsey study, for every dollar of manufactured product, Africa imports approximately 40 cents in inputs from outside the continent—higher than most regions in the world.

Over five years, a serious push to reduce reliance on global supply chains could add an initial $10–20 billion to the continent’s manufacturing output if 5 to 10 percent of imported intermediate goods can be produced within the region.

As companies globally rethink their supply chains, opportunities for Zimbabwean firms to reposition themselves abound.

To unlock these opportunities, governments and private-sector partners can focus on accelerating im-plementation of the African Continental Free Trade Area and improving the business environment.

Reimagining business after the pandemic

Marc Holtzman



Top Listed Company

THIS is the foremost top award of the Top Com-pany Survey and recognises this company as the best performer amongst the key quantitative and

qualitative aspects of the survey. This award recognises the best performing com-

pany listed on the Zimbabwe Stock Exchange (ZSE), excluding listed banks and those in the insurance sector which are considered separately.

The winner of this category is the company that has gone through the most rigor of analysis and has come up in the top tier amongst the Top Company’s Survey.

The Survey observes profitability, earnings quality, cash generation, efficiency and solvency amongst the quantitative assessment and social responsibility, en-vironmental, governance, leadership, disclosure and investor relations amongst the qualitative assessment.

Top Banking InstitutionThe award is given to the most outstanding bank for

the year based on both quantitative and qualitative attri-butes of each bank reviewed.

From quantitative perspective we looked at how each bank performed based on core banking financial ratios.

In terms of qualitative attributes, we looked at each bank’s governance structures, corporate social respon-sibility activities, leadership and strategy qualities.

Top Insurer (Short-term)This award quantitatively recognises the best per-

forming short-term insurer in the non-life space. Quan-titative data is qualified on the basis of IPEC returns submitted quarterly by licensed short term insurers.

Our short term insurance model provides an analysis of composite measures broadly categorized into dimen-sions relating to each insurer’s, capital adequacy, oper-ating performance, liquidity, competitiveness and size.

Top Insurer (Long term)This award recognizes the best performing Life As-

surance Company as per IPEC submissions. Key quantitative performance measures are selected

and grouped into five weighted categories relating to each Assurers capital adequacy, operating performance, liquidity, earnings quality and yield. The winner exhib-ited sturdy performance despite inflationary pressures in the 2 most recent financial years.

Environmental Social and Governance AwardThe ESG award recognizes a company that upholds

good Environmental, Social and Governance princi-ples.

The company that operates an ecologically friend-ly business model which promotes the efficient and sustainable use of resources; conducts value adding so-cial development programs in the community and for employee wellness; and promotes ethical governance practices by the Board of Directors, executive man-agement, employees and in interactions with external stakeholders.

Best Tangible Investor Returns AwardThis award recognises, quantitatively, the best per-

forming company in terms of annual returns to inves-tors.

In coming up with the winner, capital gains and divi-dend yield are aggregated together for a single compos-ite return for the year.

Inflationary pressures that characterised the operat-ing environment, also spilled into the prices of listed shares.

Caution was also placed in consideration of the li-quidity and availability of the shares.

The ease of entry and exit which allows for the real-isation of gains and losses by an ordinary investor is a key parameter in determining the winner of the award.

A minimum threshold of five percent of the issued shares in each respective company should have cumu-latively traded during the year.

Further, the company’s shares should have traded in more than fifty percent of the available trading days during the year. The year on year price evaluation is conducted on an adjusted volume weighted average price to control for thin volume induced upswings and down swings.

The award recognises the company that would have delivered the best tangible gains to investors during the

year.Special Mention Award

This award is based on the Judge’s deci-sion to award a category that may not neces-sarily have been captured in the framework of

the main model. It recognises outstanding achievement or

contribution to a current topical issue. This year the awards recognised a company that displayed highest levels of agility in respond-

ing to a changing operating environment. Disclosure And Investor Relations

AwardThis award acknowledges companies that

foster comprehensive disclosures pertaining to financials and operations as well as reason-able levels of engagement with all stakehold-ers particularly the investment community.

The award speaks to companies which strive to maintain vigilance and conform to facts whether they are advantageous or disad-vantageous to the company.

Companies that satisfy the requirements by regulators, the stock exchange disclosure rules and more, as well as Companies that disclose information in a timely manner and simplified financial language following the occurrence of facts that require disclosure.

Top Company award unpackedTOP COMPANIES 2021 SPECIAL FEATURE

Manatsa Tagwireyi Tinashe Yafele

The Financial Gazette Page S16 | July 22-28 2021 TOP COMPANIES 2021 SPECIAL FEATURE

Prosper Matiashe

OVER the past two years, there have been significant changes in the econ-omy which have tested the resilience

of companies and individuals. Hyperinflation and currency devaluation have resulted in consumers witnessing a drop in disposable incomes.

The Covid-19 outbreak and lockdown measures instituted by the government to curb its spread have also contributed to the already difficult situation. Families, just like businesses, have had to adjust and rationalise their consumption to meet available income. But through all this Simbisa, a consumer-fac-ing business, has managed to perform excep-tionally well and surpassed all expectations.

The company achieved excellent infla-tion-adjusted results (for the half year to 31 December 2020) exemplified by the follow-ing:

•101 percent growth in revenue•96 percent growth in profit before tax•300 percent growth in cash generated

from operating activities •91 percent growth in headline earnings

per share.Simbisa Brands Ltd is in the quick service

restaurant and casual dining business operat-ing popular brands like Chicken Inn, Pizza Inn, Bakers Inn and Steers. Apart from the Bakers Inn unit, which sells bread as its an-chor product, it can be argued that the other brands sell discretionary food products whose demand can be sensitive to economic trends.

The company has a wide presence through-

out the country and is available in almost ev-ery town and city in Zimbabwe. In addition, the company has regional presence operating in Kenya, Zambia, Ghana, Mauritius and Namibia. Whilst the Zimbabwean opera-tions have continued to grow and be resilient against economic challenges, the regional op-erations have also provided appropriate diver-sification and smoothening of performance.

Surviving the Covid-19 pandemicSimbisa managed to mitigate the impact

of the pandemic on customer counts by in-creasing promotional activities, value offer-ings and continued growth of its footprint. The pandemic also helped change customer buying habits with more preference on deliv-ery services instead of sit-in arrangements. In addition, the company pursued aggressive cost-saving measures in response to the afore-mentioned operating environment challenges.

This re-aligned its cost base and optimised its operating margin efficiencies, which al-lowed the company’s profitability to remain resilient.

In the second half of the year during which the Zimbabwean market was mostly in lock-down counter hours fell 19 percent, resulting in a fall in customer count of seven percent. But when the market opened up between 4Q FY2020 and 2Q FY2021 customer counts grew by 166 percent. This is testament to the way the company exploited the re-open-ing of the economy after the first lockdown. The average amount spent by customers also increased during the first half of 2021. The company continued to increase its footprint by opening six new counters, taking the total

number of counters to 227 across Zimbabwe.Regional operations at a glance•15 new counters were opened in the re-

gion•Customer counts in the regional business

fell 19 percent from prior year, while average spend increased 644 percent in ZWL infla-tion-adjusted terms and six percent in US$ terms, despite currency devaluation against the US$ across our regional operating mar-kets.

•In Kenya, delivery sales increased 31 per-cent year-on-year.

•Simbisa Zambia achieved a seven per-cent year-on-year increase in customer counts against the prior year same period. Local currency average spend remained stable, re-sulting in a nine percent increase in revenue versus prior year.

•In Mauritius, improved average spend realised through increased delivery contribu-tion resulted in a more moderate seven per-cent year-on-year decline in local currency revenue

•In Namibia, though revenue was down 17 percent compared to prior year, manage-ment’s success in rebasing costs resulted in a 51 percent improvement in the restaurant op-erating profit versus prior year.

The company wasn’t immune to the va-garies of the Covid-19 pandemic and the persistent struggles faced by developing economies. However, the company mitigated revenue declines accordingly and compli-mented the revenue sustenance with appro-priate cost efficiencies to further protect the bottom line.

Focus and proactive positioning for the future

Through opening new counters, the com-pany continues to position itself for growth and being ready for recovery post the pan-demic. It is important that companies don’t lose sight of the long-term prospects.

The future of business processes is digital and on demand services. The company is fo-cused on growing and improving the delivery business which is being realised through the continued development and refinement of the Dial-a-Delivery mobile application. This will enable the company to enhance the user expe-rience and with the target of growing applica-tion-related customers and orders. In Zimba-bwe, the number of delivery zones has been increased to shorten delivery distances and to improve on delivery times and coverage. A cut to the delivery distance and delivery times will lower the cost to serve customers without compromising quality.

In Kenya, Simbisa is leveraging on data to create value for the customer and the shareholder. Through its subsidiary Kutuma Kenya Limited, the company is developing a customer database to improve the delivery businesses’ performance and the customers’ experience.

Data is the oil of the new digital era or the fourth industrial era. Companies that are in-sights driven will be able to improve efficien-cy through data, engage the client and serve them better and above all monetise the data at a profit. By investing in technology plat-forms, Simbisa is also proactively disrupting itself and positioning for the future.

Simbisa’s show of strength

The Financial Gazette July 22-28 2021 | Page 17

Column

Increased M&A activity in consumer sectorACCORDING to the International Monetary

Fund (IMF), economic recovery in Zimba-bwe is underway and is expected to strength-

en in 2022, despite some constraints at the local, regional and global level. In fact, Gross Domestic Product (GDP) is projected to grow by 3,9 percent in 2021, signalling a rebound from the recession in 2019 and 2020.

While the second and third waves of the pandemic and uncertainties about the likely timing for a broad-based roll-out of the vaccine in Zimbabwe and its key trading partners will suppress external demand, the key agricultural sector has provided a sound footing for a rebound.

In fact, the agricultural sector is expected to spear-head Zimbabwe’s recovery given the favourable rain-fall in 2020. Already, there has been strong recovery signs from some of the listed consumer-facing com-panies such as Innscor, Delta Corporation, Dairibord Holdings and Meikles Limited from a volumes-growth perspective. That said, an important assessment would be on what would be the major growth drivers for these companies in 2022 and beyond.

The question on growth drivers is best answered by studying the life cycles of some of the product of-ferings. A very important element highlighted by the product life cycle is the concept of changes in market share for the competitors in any industry.

Most consumer goods tend to follow a well-estab-lished life cycle in that the trends in sales values are ra-tionally explained by reference to the current stage of development of the product. In addition, by breaking down the life cycle into several stages, it does become possible to assess what the long-term future trend in sales levels might be.

In the beverages sector for example, (Pepsi and Co-ca-Cola), the fast growth in demand attracts late en-trants into the market. The new entrants will increase the total capacity for the product, but the existing play-ers are also trying to increase their share of this grow-ing market.

As illustrated in the infograph, this can cause a sig-nifi cant increase in total industry capacity, even though the demand for the product is stable.

As a result, many businesses in the industry will have spare new capacity, which can cause fi erce price competition until a more stable equilibrium position is established. The bottom line is that the “happy state of affairs” eventually ends when demand for the product starts to die away.

This can be caused by saturation of the market or by the launch of a better replacement product which rap-idly attracts most of the current mature product’s users. When this happens, some of the strategies that could be pursued by corporates include exploring export markets or acquisitions to consolidate market share.

Taking Delta Corporation (Delta) as an example, we note that alcoholic beverages have a unique ad-vantage in that they are habit-forming and consumers always tend to up or down-trade to suit different dy-namics.

However, the sparkling beverages business is dif-ferent and Delta has gone ahead and acquired Mutare Bottlers to consolidate its foothold in the space. In terms of opaque beer, Delta has embarked on a region-al growth strategy by acquiring National Breweries in Zambia and United National Breweries Proprietary Limited (UNB) in South Africa.

Similarly, Innscor Africa has also been consolidat-

ing its footing in food production through investments in businesses such as Profeeds, Probrands, Probottlers and Prodairy.

Of course, the investment thesis in Innscor lies in the integrated business model (highly interdependent businesses with synergistic advantages). Elsewhere, Dendairy and Dairibord are still in merger and acqui-sition negotiations while Tanganda Holdings (Meikles Limited) and Ariston Holdings have also issued cau-tionary statements.

It appears that we should expect more transactional activity among the consumer names on the Zimbabwe Stock Exchange (ZSE).

All in all, we remain overweight on the sector and recommend investors take long-term positions in Del-ta, Innscor Africa and Dairibord Holdings. Matsika is head of research at Morgan & Co,

and founder of piggybankadvisor.com. He can be reached on +263 78 358 4745 or [email protected]/[email protected]

Economics & Market Intelligencewith

BATANAI MATSIKA

Shake-out period for mature products/businesses. Source: Corporate Financial Strategy, Dr Ruth Bender

Framing disciplinary offences correctly (I) Column

The Financial Gazette Page 18 | July 22-28 2021

UndisCiplined employees at the workplace need to be corrected through a fair

disciplinary system. Undisciplined employees do not follow instructions or obey established organisation’s rules, systems and orders. They usually have no respect for their superior officers.

discipline is as “acting in a manner and behaviour that directs an employee’s energy towards satisfying an employer’s established safety, operating and administrative rules and systems”. This implies an employee following lawful instructions that are given by supervisors at all times.

discipline is the atmosphere of respect and adherence of employees to their employer’s lawful instructions, orders and rules. in this situation employees respect; the employer and his/her assets, superiors, colleagues and their occupations in pursuit of attainment of planned productivity level.

To maintain a disciplined workforce the labour Act (lA) 28:01 provides the “disciplinary process”. it guides the employer in ensuring that disciplinary action against employees is applied fairly. section 101 of the lA provides the manner in which an employment Code of Conduct to regulate discipline at the workplace can be formulated. A works council in conjunction with the human resource practitioner (HRp) can formulate a Code of Conduct (C of C) that lists the offences that will address discipline matters in the organisation. The list can cover peculiar offences to the organisation as well.

Another instrument that is available

to HRp is the labour (national employment Code of Conduct) - statutory instrument (si) 15 of 2006. Misconducts that an employee can be charged with are found in section 4 of this si. The decision to use either section 101 of the lA or statutory instrument 15 of 2006 is the HRps.

Whenever an employee works or behaves contrary to the laid down requirements of his/her employer, he/she is committing a misconduct and subject to disciplinary action being taken against him/her.

disciplinary action against an employee for committing a misconduct is initiated by his/her supervisor who fills in a Complaint Form (CF), which we can also call a charge sheet. it is this document that triggers the disciplinary process.

it is in the CF that details on the nature of the offence is entered. The selection of the offence and the details that will support the offence allegedly to have been committed must be clear for the HRp to investigate it correctly and the Hearing Committee (HC) to understand the offence when conducting the hearing process. it is the selection of the correct offence that we are concerned with in this write up.

in a labour Court case judgment number lC/H/186/2004, the Judge ordered the reinstatement of an employee who had been charged and dismissed from employment for failing to report an accident instead of negligence.

The employer initially had charged the employee with misuse of company vehicle. This confusion in selecting the correct offence in this court case is an example of why this article should

be important to the readers. We shall look at some offences which can be included in an organisation’s offences schedule to illustrate this write up.

Negligence - this should be left for an employee who fails to check his/her engine oil in a car that he/she is entrusted with and results in the engine getting damaged or leaving materials that can get damaged from bad weather in the open without being covered adequately or knocking off without securing the employer’s premises as examples.

Carelessness - is carrying out a task without due care and attention.

This implies carrying out works or behaving in a manner that demonstrates that the employee is not applying his/her mind to it, an example is that of following a vehicle in front so close that should it stop for any reason the driver will hit into its back or leaving documents on a table with a boiling tea urn, which can send splashes of water on to the documents close by or leaving aeroplane tickets for your manager who will fly early in the morning of the following day on a table that can be accessed by any employee or placing a fire extinguisher in a car without securing it in its bracket.

depending on the seriousness or degree of carelessness, this can become a negligent matter. Using the

example of the tea urn above, if the urn is left to boil and it is sitting above computers, this can produce costly and unsafe condition should water spill over into the computers.

Failing to carry out an instruction - this is when a supervisor has instructed his/her subordinate to carry out a task but the employee does not do it in the manner required for example, he/she has been instructed to move 20 cases of water bottles from one office into another in an hour’s time, but moves only 15 cases then he/she decides to sit down for no apparent reason.

His/her failure has nothing to do with him/her being incapable but behaving in an undisciplined manner.

Theft - this is concerned with an employee removing or taking his/her employer’s property without permission and with an intention to deprive the employer off the property permanently. it is important that the stolen property is clearly identified and witnesses to the offence can support the supervisor’s charge.

Disobeying a lawful order - supervisors or an employer has a right to instruct an employee to carry out a task in a particular manner or adhere to an order but the employee refuses to do as directed.

For an example, the supervisor says no employee will remain inside the premisses after 6pm, but one is found inside after the stipulated time, this can then be termed as disobeying a lawful order.

disobeying a lawful order has more to do with the action that follows after a directive and it is usually accompanied by a heated discussion

such as “that is not what we have done in the past”. The employee has disdain for authority and goes on to do what he/she believes to be right thing.

Refusing to obey an order - using the example in disobeying a lawful order, an employee is found inside the premises and instructed to leave but says he/she will not leave.

This a sure case of refusing to obey a lawful order. it has to do more with the “now” meaning that the employee is actually saying he/she is not going to do what he/she has been directed.

There is a thin line between Refusing to obey an order and disobeying a lawful order. it is the action that takes place immediately or thereafter that may determine the correct offence to be placed in the CF.

Bad time keeping - employees agree with their employer when they are supposed to report for work on their work days for example 8am, but the employees report for work outside this stipulated time, then this becomes a case of bad time keeping.

Bad time keeping cannot be used to charge an employee who is failing to meet his/her targeted production for instance.

it is important to think through offences carefully before deciding what to insert in the CF, to avoid charging staff with a wrong charge. in the next article, we shall analyse other offences that we have not covered.

n Chizema is a Past President of both the Zimbabwe Institute of Management (ZIM) and the Institute of People Management of Zimbabwe (IPMZ). He writes in his personal capacity.

Kingfrey Chizema

IT IS here and here to stay. To be a part of it or not is the big question. We all have a choice to be active participants or to be spectators. It is every-

where around you and it is now a part of your every-day life, whether you are at work or you are at home. Whether you are stationary or in transit. Whether you are doing business or you are engaged in social ac-tivities. Whether you are sending money or receiving it. Whether you are purchasing a product or you are selling it. Whether you are bothered by something and you want to solicit the views and opinions of others or not. The digital wave is here, no holds barred.

For most people, your phone is the last thing you attend to before you sleep, some even close their eyes while it is still in their hands. For most people, the phone is again the fi rst thing they look for as soon as they open their eyes in the morning. It is a game of catch up and be up to date with what is going on around you and the world. The news feeds are ex-tremely popular in the morning as everyone wants to know what the breaking news is. After discovering what the breaking news is, everyone wants to be the fi rst to spread that breaking news, whether good or bad, most of the time it is bad. In a way we have all be-come alarmists, eager to spread news that alarms and shocks society in the name of, ‘Can you believe this?’

Convergence on the mobile devicesThe digital revolution as it refers to digital devices

is an issue of convergence. Convergence simply put, is the point at which multiple tasks and skills and pro-cesses meet on one platform. It is the convergence of many skills, tasks and processes on the digital plat-forms in particular, the mobile phone, tablet, comput-er and smart tv. Of particular interest, is the hand-held devices, the smart phones. It is on the smart phones, where the social, business and transactional needs and processes intersect. It is now common place for one’s phone to be used to watch television (TV) through on demand platforms such as Kwese Ifl ix, DSTV on the go and TelOne platform.

The same phone can be used to pay for subscrip-tions for the same TV platforms through mobile money applications such as Ecocash, Telecash and NetOne Wallet. One can also send emails, type and edit documents on the mobile phone. Facebook, Twit-ter and Whatsapp are also accessed for social and business use on the mobile phone. Music streaming and downloading through iTunes, Teletunes, Buddie Beatz, Spotify and YouTube are also accessed via the mobile devices. News as it happens in real time, is often easy to access and consume on the same mobile devices. The key thread that ties everything together is the Internet through ISPs like ZOL, TelOne, Telco and mobile data through the mobile phone networks such as NetOne, Econet and Telecel. Almost overnight, the Internet’s gone from a "technical wonder to a business must,” Bill Schrader, a businessman, said.

The positives and negatives of social mediaSocial media as an advocate

In South Africa (SA), a couple who had a life assurance policy with an insurance company had a brush with the effectiveness and impact of social media. When the husband died, the wife approached the insurance company to cash in on the husband’s life policy. The husband had in fact died of gunshot wounds, but his post mortem also revealed that he had an existing low blood sugar level condition. The insurer decided to withhold the claim on the basis that the husband, on taking out the policy had not dis-closed that he had that condition.

After several attempts to negotiate with the fi rm, the wife decided to take up the issue for discussion on social media, specifi cally Twitter. There was an uproar in society via Twitter, with many people condemning the insurer for being insensitive to this woman’s plight and for choosing to profi teer from this couple when they had faithfully paid their premiums.

The outrage was so widespread that it put a huge dent on the company’s image and reputation. Many policy holders cancelled their policies as a result of this case. The long and short of it is that the insurer, upon weighing the consequences and damage, ended up making an executive decision to pay the woman what was owed to her on the life policy. This case prompted other insurance companies to closely look at their terms and conditions to avoid falling into a similar situation.

Social media as the equaliserA distinguished economist in SA’s banking sec-

tor was forced to resign after working for the bank for several years. This followed some comments and views he had shared on Twitter that were viewed as having some serious racial slur in them. The bank he worked for took an executive decision to request him to resign, to protect its image. In this case, his posts on Twitter cost this executive his job after years of work-ing to reach the status he had. This case prompted a lot of banks and other organisations to come up with so-cial media policies for their employees, so as to guard against employees putting organisations at serious


Column

The digital tide, swim or sink! reputational risks through loose comments on social media, that do not represent the views of the organisations they work for.

Social media as the alarm bellIn Zimbabwe, we ex-

perienced two bus disas-ters in the month of No-vember 2018, in which jointly close to 90 people perished. We also experi-enced several fi re disasters across the country in sev-eral institutions which resulted in damage to property worth millions. Social media, es-pecially Whatsapp and Twitter were awash with live horrifi c images of the disaster sites as the disasters unfolded, some of the im-ages too sensitive for those with a nervous disposition. Social media was used posi-tively to raise alarm and make a wide call for instant help to those able to come to the rescue. However, it was also used negative-

ly to showcase some of the gory images of human remains and people fi ghting for their lives. Some of the videos were very worry-ing because one would imagine that instead

of taking a video that will go viral, one could actual-ly be helping to save the life of someone who is on the brink of death. The question is what was more important? Has social me-dia taken away the human

instinct (ubuntu spirit), that would make any human being rush to assist in such a disaster, unprompted.

Paperless transactionsGiven the advent of technology, appli-

cations (apps) are now the fastest way to link organisations with customers. Contact-less payments are now the in thing, the old school customers still struggle with online payments because in their heads, ‘machines

cannot be trusted’. It is these laggards who are adamant about continuing to use cash as a mode of payment. Many still prefer to use cash that they can touch and feel. They are suspicious about card use, inaccuracies of bank charges and exposure of personal in-formation. The risk factor is valid because personal information may be accessed by other companies and it may be used for oth-er purposes such as personalised advertis-ing and marketing, targeted at one’s profi le. Maximised privacy may fast be a thing of the past with the integration of the digital platforms that now exists.

See full article on www.fi ngaz.co.zw Gwanzura is the chief executive of the Zim-

babwe Advertising and Research Foundation (ZARF). She is a seasoned marketer with over 20 years’ experience in the marketing and advertis-ing industry. She is a member of the Marketers Association of Zimbabwe (senior executive mem-ber). She writes in her personal capacity.

Pamela Gwanzura

The scourge of Covid 19 has forced businesses to find new and effective ways of working. With ever-tighten-

ing lockdown regulations being enunciated by government, employers need to find a way to work round the negative effects of the pandemic while remaining productive.

The most common adaptation that com-merce has had to employ is working from home (WFH). While the change has been obligatory, there are some benefits that come with employing an effective working from home policy.

For instance, employers can expand their work force without being constrained by office space. Companies also save on overheads such as employee shuttle ser-vices, electricity and so on. These are just some of the perks of the working from home revolution.

Regard must also be had to the new le-

gal obligations, considerations and oppor-tunities that arise from working from home ar-rangements.

This week’s piece will deal with what to look out for when crafting work from home policies as well as the legal im-plications that can arise from the several avail-able options.

Work from home policies

The type of work from home policy a company utilises should be informed by its overarching response strategy to the Covid-19 pandemic. Responses can either be short or long-term.

For example, one either wants to scale up the business and increase service fluidity

by creating an effective team with remote working capabilities. On the other hand, one may simply want to cut costs. The former would look to hire aggressively or alter-natively equip its in-of-fice staff with the skills and equipment needed to work from home.

The latter would cut out expenses such as shutting down entire

branches and using the savings to equip their staff to work from home.

In deciding the general principles that guide the chosen process, companies must decide what it is they want to achieve. Once they have done that, they can craft WFH policies that suit their needs. I will deal with some of the things to think about


Column

Some legal implications of working from home

Legal Matterswith

HiLary Muza

when crafting WFH policies.Who is eligible

Not all work can be done from home. There are technicians and other professionals whose expertise is most useful when applied on-site. A WFH poli-cy must be able to differentiate between those who are eligible and those who are not. Where possible, a middle ground where turning up to the office is re-quired periodically can be drawn up.

update terms of engagement It may be necessary to update employees’ con-

tracts of employment to cater for the new nature of work they are expected to do. An employer-employ-ee relationship must never have murky and unclear duties and obligations.

Unclear contractual relationships are hotbeds for disputes. A typical example is regulating whether re-muneration is time-based i.e based on hours worked or is performance-based i.e based on the volume of work done.

Employment contracts typically outline the hours that an employee is expected to work, usually 8am to 5pm. That no longer works in the WHF era. Perfor-mance-based contracts are beneficial to both parties in that they allow employees to be effective in the manner that best suits them, while ensuring that they are kept to a certain standard of performance. A good WHF policy specifies how an employee’s productiv-ity will be measured.

Sensitive information accessed and stored at home

Employees who have access to sensitive compa-ny information have to be put on terms to protect this information as they work from home. Employers do not control who accesses their information the same way they would in an office environment. Employ-ees may not even use company servers when they work from home.

Use of mobile devices and open networks opens company information to misappropriation. There is a need to deal with any potential exposure resulting from misuse of company information. One way to do this is by having employees sign non-disclosure agreements (NDAs).

These agreements outline the extent to which an employee is responsible for the information under their care, how and when they can access sensitive information and what they are expected to do to keep that information safe. Also, NDAs should state what happens if an employee mistreats information en-trusted to them.

Equipment A WFH policy must state what equipment, if any,

will be made available to an employee. This is com-mon sense, but there are underlying legal implica-tions that employers must protect themselves from.

Often, employers without set policies trouble-shoot problems on the fly and this leads to inconsis-tencies that can expose employers to needless legal disputes.

In the Australian case of McKean v Red Energy Pty Ltd [2020] FWC 5688, an employee claimed that he was "forced" to resign because his employer did not provide him with a desk to work from home.

The Fair Work Commission dismissed the case for the reason that having to buy a desk for himself was not tantamount to him being forced to resign. This case is instructive though because it shows that WFH policies are fertile grounds for labour disputes. if not handled well.

Modes of communicationThe digital space is awash with communication

options from SMSs to Zoom meetings. A WFH pol-icy must state what the employer considers appro-priate means of communicating both internally and with external clients.

Permitted modes of communication must include channels that optimise data protection. Specific email, phone and instant messaging platforms must be established through the WFH policy.

In conclusion, while establishing a WFH policy may be as simple as sending a company-wide mem-orandum, there are legal considerations to keep in mind that warrant giving your WFH policy the atten-tion it deserves.

Seeking legal advice in drafting such a policy averts potential exposure down the line.

n Muza is an admitted legal practitioner, con-veyancer and notary public. He writes in his per-sonal capacity and is reachable at [email protected] and at 0719 042 628.


Column

THE complex interaction and possible overlap between different tax jurisdictions justifi es coordination efforts to avoid double taxation,

which can harm international trade and investment. Originally, countries established tax jurisdiction over their own residents and over non-residents to the ex-tent that they receive income from domestic sources.

Tax treaties allocate and often limit taxing rights and impose obligations on both contracting states. The core provisions of a tax treaty deal with this al-location function, while other provisions target the elimination of double taxation (for example, through credit or exemption in the residence country) and protection of treaty provisions against tax avoidance schemes. Tax treaties intend to benefi t taxpayers re-siding in either or both contracting states; the extent to which they do ultimately depends, inter alia, on how treaty provisions compare with the domestic law of each country.

Double taxation occurs when two states impose a comparable tax on the same taxpayer or when two or more people are taxed on the same income. Tax treaties are generally regarded as important instru-ments for the promotion of trade and investment be-cause they remove the potential for double taxation. A multinational enterprise or investor would not be willing to do business or invest in another country if this would result in being double taxed. Because it would be exposed to different countries' tax laws which could result in a potential for double taxation.

Generally, DTAs are modelled after the OECD Model (net capital exporting countries) or the UN Model (net capital importing countries). Zimbabwe-an DTAs import both models so interpretation of such can be done with reference to them. UN Model accords taxing rights to source state; while the op-posite is true for the OECD Model. In a tax treaty a balance is to be struck between taxing rights of the source and residence state. Some rights to tax are given to the source country, with the residence coun-try being required to relieve double taxation either by giving a credit for such source taxes paid, or by exempting the relevant income from its taxes.

The chief purposes of DTAs are to provide a means of settling, upon a uniform basis, the most common problems which arise in the fi eld of inter-national juridical taxation (per the OECD’s introduc-tion to its Model Tax Convention, hereafter ‘OECD MTC’); prevent evasion of tax, by making provision for exchange of information between tax authorities and for assistance in collection of the tax debts owed to the treaty partner; protect taxpayers against dou-ble taxation, direct or indirect, to a greater extent than the protection offered under domestic law; prevent tax from discouraging the free fl ow of international trade and investment and the transfer of technology; prevent discrimination between taxpayers and pro-vide a measure of fi scal and legal certainty in inter-national operations.

Ordinarily each country’s domestic legislation provides for unilateral relief where no tax treaty ex-ists. In the case of Zimbabwe, section 93 of the In-come Tax Act provides a credit for foreign taxes paid on income. Furthermore, sections 94, 95 and 96 give credits on Non-Residents Tax on Interest, Non-Res-idents Tax on Fees and Non Residents Tax on Roy-alties which have been withheld elsewhere. Hence in effect if the source tax rate is lower, the investor would pay the difference in Zimbabwe; but such a credit means that the income always bears taxes at the higher rate.

Every tax treaty specifi es the taxes to which it relates, for instance, the title to the OECD Model Tax Treaty highlights that it is a Convention with re-spect to taxes on income and capital. Article 2 of the OECD Model Tax Convention provides that the trea-ty applies to ‘taxes on income and capital imposed on behalf of a contracting State or of its political subdivisions or local authorities, irrespective of the manner in which they are levied’. Article 2(2) there-of provides that all taxes imposed on total income or total capital, elements of income or of capital, in-cluding taxes on gains from alienation of movable or immovable property, taxes on total amounts of wages or salaries as well as taxes on capital apprecia-tion shall be regarded as taxes on income and capital respectively.

A tax treaty applies exclusively to residents of one of the treaty states or both, as defi ned in the tax trea-ty therefore a person who is not a resident may not benefi t therefrom. For instance, Article 1 of the UK,

Facets of double taxation, treatiesZimbabwe tax treaty provides that the treaty “apply to persons who are resident of one or both of the Contracting States.”

Ordinarily, a resident of a contracting state is a person who is liable to pay taxes in one of the contracting states by reason of domicile, place of management or other similar criteria.

Article 4(1) of the OECD tax treaty is of the view that has however been the require-ments that one should be a resident does not include a person who is liable to tax in a Contracting State on the basis that income was received or accrued on the basis of be-

ing sourced in that State. It has also been said that other than the qualifi ca-tion of being resident of a contracting state, the person should also be benefi cially entitled to the income.

An absence of trea-ties could lead to tax treaty shopping i.e. ar-tifi cial creation of an entity in another state with the main or sole

purpose of obtaining treaty benefi ts which would not be available directly to such a person. The requirement of tax residency is meant to avoid the abuse of a tax treaty by non-treaty residents for the sake of deriving tax benefi ts, a practice commonly known as

treaty shopping.In conclusion double taxation is one

aspect of international taxation issues that could potentially affect any taxpayer. The knowledge of taxation treaties or DTAs and how they are administered is important for taxpayers. Taxpayers engaged in interna-tional trade are highly likely to be affected by double taxation and knowledge of the tax relief options available is essential to allow utilisation of the incentives.

Meanwhile Matrix Tax School invites you to take part in the Managing Tax Prac-tice course. The course will run from the 6th of July to the 26th of August 2021. We are open for late registrations. Tapera is the founder of Tax Matrix (Pvt) Ltd and chief executive of Matrix Tax School. He writes in his personal ca-pacity.

Tax Matters with

MARVELLOUS TAPERA

PLATFORM and parts sharing is nothing new in the motor industry

and JLR certainly follows the same trail when it comes to its SUV models with the Jaguar E-PACE and the Range Rover Evoque having an awful lot in common under their otherwise very dissimilar skins.

There are lots of good rea-sons for this sharing phenom-enon which I won’t go into here as most of those reasons are self-obvious, but I some-how doubt that much of the buying public is aware of how little in the way of mechanical componentry separates the Jag from the Evoque.

The fact is though that it’s the Evoque that has grabbed a far bigger portion of the compact, sporting SUV pie probably because they see the connection between the moth-er brand and the SUV concept in general as a better fi t.

Sadly, the E-PACE just hasn’t set the cash tills alight in its bid to compete with ri-vals such as the Audi Q3, the BMW X1, the Merc GLB and the Volvo XC40, and given that the relatively new CEO of JLR, Thierry Bollore, has fi guratively set the cat among the pigeons in his headlong “re-imaging” campaign, the future of the current Jaguar range is very much up in the air … along with the pigeons!

For now though, let’s con-centrate on the very newest interpretation of the compact Jaguar SUV with D200 power and fancy HSE/R-Dynamic trim. To all intents and purpos-es, this 2021 model is visually hard to distinguish from the original E-PACE launched in RSA in the fi rst quarter of 2018 and that’s no bad thing as the high-riding Jag exhibits a sporting persona founded in a swoopy cabin design and in a muscular fender execution which sees the front and rear wheels nonetheless standing slightly proud of the body-work.

The end result is an appar-ently contradictory but very successful blend of sportiness and muscularity which in this instance was further elevated by the attractive extra-cost coat of nicely glossy metallic Bluefi re paintwork it showed off to good effect. I would be letting the side down if I didn’t mention panel gaps, a subject which to my dismay seems not to bother too many motor-ing hacks for whom the posi-tioning of the red line on the rev counter seems to assume much greater importance.

The test unit scored well but not brilliantly on my “gap scale,” but the few deviations – namely minor variations in chrome trim alignment of both

front doors and a faintly devi-ant leading bonnet edge – were not of any great signifi cance, albeit Monsieur Bollore would doubtless have something to say.

On a related matter, but less obvious to the eye, Jag-uar’s boffi ns have paid con-siderable attention to sealing of the doors which all benefi t from double aperture seals as well as lower sill seals. Even the trailing edges of the rear doors sport seals to keep the wheel arch intrusion clean. I was though, surprised by the number of spot welds on show around the inner tail-gate aperture and reluctantly report that the lower trailing edge of the driver’s door in-fl icted a nasty cut on my left leg when I alighted in a hurry to stop rain drops entering the cabin. Owing to the consider-able tumblehome of the lower part of the front doors, there’s “more door” standing proud to do such damage if you get my drift.”

As this unit carried an HSE badge, its equipment levels are top drawer stuff. Externally, not too much has changed, albeit that slick new daytime running lights and animated indicators add a bit of pizzaz and improved visibility. Rather dark privacy glass is a R4 900 option along with a huge fi xed panoramic roof at R15 800, but the smart red brake cali-

pers are standard fare together with the posh 20-inch alloys carrying 235/50 rubber. I’m not sure that this wheel/tyre combo did not look a little too big for the E-PACE and when time comes to replace the rub-ber, a healthy bank balance will be needed. Hidden away in the rear was an optional deployable tow bar which is offered at R15 300.

It’s inside that the up-dates are most evident. The fi rst-generation E-PACE let the side down a tad with some rather dowdy plastics lurking in the lower reaches, but with the exception of the hard door pockets which are cushioned only with vestigial rubber “mats” – the cubby by contrast is kitted out with high grade fl ock – all other furnishings on the new model look good and are neatly fi tted.

The superbly comfortable and supportive electrically adjustable, heated and cooled sports front seats, with 3 x memory positions for the driv-er, are covered in perforated, white-stitched Windsor leather as are the steering wheel and the rear seat which is usefully split 40:20:40. Headroom in the back is surprisingly good but kneeroom is only average. Talking of cooling, fully elec-tronic air con, controlled pri-marily by clever multi-func-tional rotary switches, is on board along with an air purifi -

er, electric windows and fold-ing mirrors.

The dash features lots of squishy areas as do the doors, both of which are capped with artifi cial leather. Anthracite suede cloth (alcantara) inlays add plushness to the door cards while the same material is used for the roof lining and pillars. The latter, in concert with a shallow rear window, are somewhat intrusive as far as external visibility is con-cerned, but Jaguar makes up for this with the provision of a 360-degree camera supple-mented by front and rear park sensors and on-screen graph-ics.

High grade carpet covers the fl oor as well as the nicely fi nished and easily accessed luggage area (577L/1234L) which hides a biscuit spare wheel.

Other niceties included the optional Technology Pack which in return for R23 200 de-livers a head-up display, Clear-Sight rear view mirror and a phone charging pad with sig-nal booster and lots of connec-tion ports. A 400W/12-speak-er Meridian surround sound system relieves purchasers of R14 900 in return for some rather dandy, ear pleasing mu-sic but the centrepiece of the updated E-PACE interior is the standard 11.4-inch PiviPro touchscreen infotainment unit complete with nav (integrated

with the new TFT instrument display) and smartphone con-nectivity.

Gone is the clunkiness of the original system and in is a unit with high-defi nition graphics, a clearer user menu and much more rapid reac-tion times to inputs. Sure, the systems, complete with over-the-air software updating ca-pability, take some learning and I still need to be convinced that touch screen function-ality is better than a remote rotary controller, but there’s no doubting PiviPro is a ma-jor step forward. (Please go on-line or consult your local dealer for a full run-down of the multitude of options avail-able as well as the differences between all the models in the range in terms of standard kit)

Powering the D200 is a 2.0 turbo D fortifi ed by a very competitive maximum power output of 146kW and a torque peak of 430Nm that holds from 1 750 to 2 500rpm. This Inge-nium engine has been accused of being rather gruff but in this application, I thought its rum-blings were very well isolated other than when stretched to around 4 000rpm when a mild-ly gravelly sound intrudes into the cabin. Wind noise is very well controlled and road noise intrusion is good, other than on coarse tar, which means over-all refi nement levels are very pleasing.

Note that the engine’s de-livery is punchy when needed – 0-100 takes 8.4s on the way to 211 km/h - and relaxed on the cruise, but given its low rev muscle, the need for a 9-speed auto is called into question. Sure, the gearbox, complete with useful paddle shifters, does its work smoothly and decisively, but all those gears are really there to massage government-instigated emis-sions and consumption fi gures.

Over a week’s varied use, I recorded an overall con-sumption of 9.5L/100km but this rose to a disappointing 12.7L/100km on a typical cold start 7km run to the shops and back.

Along with the engine, steering and suspension, the way the gearbox reacts is con-trolled by the driving mode – Eco, Comfort or Dynamic - that takes your fancy. I pre-ferred Comfort as the prima-ry ride on those huge 20-inch wheels, already bordering on being a tad unyielding on bro-ken surfaces, is better suited to typical urban roads. The trade-off for that fi rmness comes in minimal body roll and excel-lent rebound control over dips and crests.

Despite its rather lardy un-laden weight of around 1.9 tonnes, the E-PACE avoids feeling ponderous and the engine has enough muscle to avoid ever feeling over-whelmed. And thanks to the permanent AWD system, traction is never a problem even on loose surfaces or when making rapid, turning exits from T-junctions. The brakes too deal with the mass with consummate ease, but I thought the pedal feel was a little on the soft side.

Finally, on the dynamic front. Jaguars have always been lauded for their steering feel. In this application, and regardless of the driving mode selected, I found the weight-ing of the helm either side of straight ahead to be artifi cially stodgy, being endowed with a rubbery resistance akin to elas-tic bands competing with each other. But once past that point, weighting and responsiveness felt spot on.

Getting back to where we began, the E-PACE under the skin is more Land Rover than Jaguar and that may just be why better-heeled car buyers haven’t taken to the concept of a Jaguar in a set of SUV clothes in the numbers hoped for. Is it that they feel more comfortable behind a badge that’s been associated with the product genre, whereas that leaper logo belongs to more overtly sporting steeds? Whatever, the newly wrought E-PACE, subject to mild res-ervations about ride quality and rear cabin space, really has the wherewithal to compete in a sector awash with premium rivals, but my word, it’s not a value leader in this spec in RSA at R1 056 300 (inclusive of R117 500 worth of extras).

MotoringThe Financial Gazette July 22-28 2021 | Page 22

TOP GEAR with

Richard Wiley

Jaguar E-PACE D200 AWD HSE R-DynamicEvoque in a cat suit

E-PACE shows off its attractive styling.

Nicely appointed rear cabin is a tad tight on fore/aft space Comfy, supportive seats and modern displays are highlights.


NG: As a diversifi ed group, with operations across the region, how have you managed to navigate the environments in the respective markets?

SK: Southern Africa and Sub-Saharan Africa (SSA) has been severely hit by Covid-19, with several countries unable to combat the effects of the pandemic in their economies. The SSA economy is estimated to have contracted by 3,7 percent in 2020, pushing the region into its fi rst recession in 25 years. Worst affected were those economies reliant on tourism and other contact intensive industries, international trade and export of commodities/resources.

Zimbabwe went through multi-faceted economic challenges, which included hyperinfl ation, eroded earnings, power shortages, money supply growth, depressed consumer spending and low productivity. Despite the challenges faced in 2020, good rains and improved agricultural output (Pfumvudza) are ex-pected to spur economic growth.

In Botswana, a decline in private consumption and demand and a volatile diamond market resulted in implementation of economic diversifi cation.

The Zambian government has initiated a creditor engagement strategy to obtain debt service relief with external creditors, while Malawi’s new government came in with promises of a stable, corruption free, sound economic management and diversifi cation of the predominantly agricultural economy.

Mozambique continues to face insurgent attacks mostly in the gas rich northern provinces, which are gaining intensity with potential to destabilise the country and divert scarce fi nancial resources. There-fore, going forward, the group will focus on expand-ing attention from being insurance-centric to wealth creation through investment banking pursuits in stra-tegic national developments through Zimre Capital. The group will also complete the reorganisation of regional operations to enhance competitive capital position.

NG: Around 2018, you adopted a strategy to recapture your subsidiaries as part of efforts to recover your DNA. Now that you have managed to get back Fidelity Life Assurance and ZPI, what is your plan going forward?

SK: We are now moving to realign and reallocate group fi nancial resources to effi cient utilisation. ZPI was acquired through a successful offer to minorities, and acquisition of Fidelity from Nssa and Imara. We are also crystallising control over wallet power through the ZPI Delink and optimising group treasury.

The memories of a rich history and contribution to the Zimbabwean economy through different sectors of insurance, property, and agro-processing, plus renewed strategic thinking have delivered a new dawn to group value for all stakeholders. Zimre now has complete control and infl uence of the pillars of value extraction across the group creating capacity to offer complimentary products and serve customer needs, control wallet power and deployment of resources and destiny and return earned on all investments. For us, our DNA comes through our history. Unfortunately, we could not recover NicozDiamond after we lost it to First Mutual Holdings. But we then used the funds we got from Nicoz to rebuild and bring back the short-term business through Credsure. We also increased our presence in ZPI and also used the funds to strengthen the reinsurance operations. You will see that we have gone back to what defi nes the Zimre DNA, where we are in control of the value chain. In essence, we now have wallet power, and these are the investments that will impact on growth for business and shareholder value.

NG: How far have you gone in terms of capital-ising your regional operations?

SK: We are moving in phases. What we did in Botswana some three years ago is that there was a perception that the economy is small, but for us we saw opportunities and a number of Zimbabwean companies are also moving into that economy. In the fi rst phase of our investment, we needed between US$7 to US$10 million and so far, we have US$3,5 million sitting in Botswana, which is going to be unlocked by consolidation of the two licences. When we transferred some capital into Botswana, in terms of exchange control, it was approved. We now have control of our assets and we are now able to raise some of the required capital.

NG: In Botswana you were moving to consoli-date Emeritus International and Emeritus Rein-surance, how far have you gone in that regard?

‘We are sticking to what we know’

SK: We are in the process of consolidating Emeritus International and Emeritus Botswana. In the region, we can grow our topline if we address the issue of competitive capital. We are now taking advantage of changes in the regulation in Botswana and we will try to maximise our capital and minimise operating expenses through one licence.

NG: Overall, how would you describe the performance of your business units?

SK: The company saw improved premium collections and claims recoveries due to prudent underwriting and aggressive credit control. Debtor control and management were implemented, pruning loss making business. Business operated with a solid GCR Rating of A- at National level and CCC at International level.

NG: What has happened with regards to your shareholding in Zupco and CFI Holdings?

SK: Along the way we had become a conglomerate, which saw us in the agro value chain through CFI, away from the core business of insurance. This also taught us a lesson that when you venture into an area that you don’t have control of, you will have challenges. Therefore, as a conglomerate, we have not been very successful, so we will stick to what we know, which is insurance.

On Zupco, you will fi nd out in the next two to three weeks that we have reached an agreement with the government, which will allow us to move on with our ambitions. The outstanding one will remain CFI.

NG: What is your strategy in terms of growing Credsure, your short-term in-surance unit?

SK: We are currently onboarding more

underwriting management agency (UMA) with dynamic impact and strategies to acquire businesses that complement innovative customer propositions. We are also refreshing the Credsure brand to achieve effective repositioning and currency and attain a credit rating that will also cement the character of the business in terms of quality and strength. The UMA portfolio grew 12,5 percent. In 2020, the business launched a digital application called Autosure, which enhanced convenience and accessibility for customers.

NG: What has been the impact of Covid-19 on group operations?

SK: The impact of Covid-19 has been felt, however, accelerated digitisation of service delivery channels through increased investment in ICT ensured continuous business infl ows. The impact of the pandemic was equally felt in regional operations, albeit with minimal fi nancial impact.

NG: What is your short to medium terms strategy for Zimre Property In-vestments?

SK: The company will continue to embark on portfolio diversifi cation by reconfi guring existing spaces for other uses in line with market demands. It will also pursue a retail and commercial development model that will be supported by sustainable fi nancing structures that enhance liquidity to the portfolio. We will also reorganise the business structure to delink the asset holding company from the service offering company.

Since 2016, Zimre Holdings (Zimre) has been restructuring, seeking to re-gain control of select business units as well as disposing of "non-core and non-strategic" investments. As a result, the group has recovered control of

two key units. The Financial Gazette’s business reporter, Nelson Gahadza (NG), spoke to Zimre’s chief executive, Stanley Kudenga (SK), pictured, to get insights

on the group’s focus going forward. Below are excerpts of the interview:


News

SUPERMARKET group Pick n Pay on Wednesday updated the market about the impact of last

week’s riots in KwaZulu-Natal and Gauteng on its business, confirming in a voluntary Sens announcement that 136 stores across the company were “looted and/or damaged by fire”.

Half (68) of the affected outlets were Pick n Pay-branded stores and the other half were Boxer stores, which largely targets the lower end of the South Afri-can grocery market.

Of the overall total, the group not-ed that 28 were Pick n Pay compa-ny-owned supermarkets, 15 were Pick n Pay franchise stores and 64 were Boxer supermarkets.

“The remaining 29 stores comprised Pick n Pay Clothing stores (2), Express Convenience stores (14), independent Market stores (9) and Boxer Build stores (4). In addition, 76 liquor stores across Pick n Pay and Boxer were looted and/or burned, but were not in any event trad-ing due to the government’s Covid-19 restrictions,” Pick n Pay said.

The group also highlighted that two of its distribution centres (DCs) in Pine-town Durban were looted and damaged.

Fellow Cape Town- headquartered food retail competitor Shoprite revealed on Tuesday that over 200 of its stores were affected in the two provinces.

“Alongside all South Africans, the Pick n Pay Group was saddened by the civil unrest and destruction last week in KwaZulu-Natal and parts of Gauteng…. At the peak of the unrest, a significant number of Pick n Pay and Boxer stores in the affected areas were closed as a pre-caution,” the company noted in its Sens update.

“As a result of this swift action, casu-alties were kept to a minimum, and the small number of colleagues who were injured are now thankfully well on the road to recovery.”

“As the situation began to improve from Wednesday July 14, the group was able to re-open stores in KZN and Gauteng that were closed as a precau-tion, and a large majority of all stores are now fully open and trading,” the compa-ny said.

“The civil unrest had a significant impact on the group’s operations in the affected areas – particularly in KZN – as a result of physical damage to property, looting of stock, and an interruption to trade.

“The group moved rapidly to imple-ment its formal disaster recovery plans to restore affected operations in KZN and Gauteng, and to replenish stock levels in the affected regions,” Pick n Pay added.

The company noted that of the 136 stores which were looted and/or burned, 32 have already been cleaned, repaired and have either been reopened or will reopen by the end of this week.

“A number of looted liquor stores are also ready to be reopened when Covid-19 regulations permit.

“By the end of this week, we expect the proportion of the store network still closed to have reduced to seven per-cent…. Through tremendous teamwork both of the (affected) DCs will have been repaired and restocked, and will recom-mence operations,” Pick n Pay added.

It pointed out that Pick n Pay and Boxer stores in KZN are currently being serviced from the group’s Boxer distri-bution centre in Lynnfield, near Pieter-maritzburg.

“The process of restocking stores across the region has been greatly as-sisted by our national, centralised distri-bution capability. Well over 200 trucks have so far been routed into KZN from as far afield as the Western Cape and our Longmeadow DC in Gauteng to bring vital stocks to our stores in the affected areas,” it said.

“Although the situation remains frag-ile in some areas, the group is tremen-dously encouraged by the progress it has achieved in recent days, and is confident of its ability fully to restore its operations in the affected areas.”

Pick n Pay Group CEO, Pieter Boone, commented: “On behalf of the board and my team, I want to thank colleagues across Pick n Pay and Boxer – including our valued franchise partners – for your tremendous teamwork and unfailing morale during this very difficult period.”

“We ask for understanding from our customers for any remaining disruption as we work tirelessly to deliver an unin-terrupted supply of food and groceries around the country. Pick n Pay and Box-er remain absolutely determined to serve customers in all the communities where our stores are located.”

Gareth Ackerman, chairman of Pick n Pay Group said: “Recent events under-line the importance of food security in South Africa.

Businesses like the Pick n Pay Group – alongside our valued partners, suppli-ers and producers – play a vital role in maintaining a sustainable and continu-ous food supply.”

He added: “In achieving this, busi-nesses depend crucially on social, po-litical and economic stability, effective security, and fully-functioning transport and other infrastructure.

“In the wake of the Covid-19 pan-demic and the recent civil unrest, all stakeholders must work together to achieve stability, security and growth. Pick n Pay has played an integral part in the lives of South Africans for the past 54 years, and will continue to do so.”

Meanwhile, Boone said that the group has seen good sales growth over the past week in areas unaffected by the disruption.

“We are working to restore a full service as rapidly as possible in the af-fected areas, and will not rest until every impacted store is repaired, restocked and reopened to customers.” — Moneyweb

Pick n Pay: 136 storeswere looted, damaged

Pieter Boone

News Worth Knowing

Life & ArtsPage 31July 22-28 2021

Diana Rodrigues

IF PARENTS could choose careers for their children, the world would

be full of doctors, lawyers and engineers.

Over the last few years, students worldwide have been encouraged to study STEM subjects (science, technology, engineering and mathematics), rather than the arts and humanities (lan-guages, literature, history, politics, religion).

In the race to achieve a middle income economy by 2030, Zimbabwe launched its national space agency, and is encouraging students to take 'A' levels in mathe-matics, physics and comput-er science.

While seasoned astro-nauts, IT specialists , doctors and lawyers can command high salaries, the importance of art should never be under-estimated.

It's art that gives meaning to our lives, and helps us un-derstand the world.

The art of music is im-portant in every society, re-flecting and influencing hu-man emotion throughout history.

Without encouragement from the music of Thomas Mapfumo, Comrade Chinx, Zex Manatsa and the Bhun-du Boys, the struggle for freedom fighters in the 60s and 70s would have seemed impossible.

A little known musical in-strument, the chipendani, or

single stringed musical bow, is played at many family gatherings significant in Shona society.

Not just an instrument played by herd boys, or by grown men socialising over beer, the chipendani often features at Bira ceremonies when the ancestors are called upon for guidance.

Thomas Mukarobgwa, an artist and sculptor who start-ed working with Frank McE-wen at the newly opened Na-tional Art Gallery in 1957, played the chipendani as a young boy, while herding the family cattle in the wilds of Nyanga, in the Eastern High-lands.

Thomas Mu, as he was

known affectionately, was a major influence in the devel-opment of contemporary Zimbabwean visual art.

Mukarobgwa’s love of the landscape, evident in many works of art, will have devel-oped during his early years as a herd boy, surrounded by the montane forests, grass-lands and perennial rivers of Nyanga.

Where I Used To Go With My Cattle, an oil painting from 1962, is an abstract de-piction of a wild Nyanga landscape, created from bold brush strokes and many lay-ers of vivid colours.

The strong relationship between humans and the nat-ural world is often expressed

by a number of Zimbabwean artists through landscape painting.

Less well known than Mukarobgwa, but growing exponentially in popularity, is landscape artist Sheena Chadwick.

In 1963, aged 19, she left her home town of Kirkwall in the windswept islands of Orkney to visit family in Zimbabwe (then known as Rhodesia).

Here she met and fell in love with her future husband.

Entranced, also, by Zim-babwe’s powerful landscape, varied in all its forms, she became inspired to express her emotions through the vi-sual arts.

Joining an active arts group at the University of Zimbabwe, Sheena learned the basic techniques of paint-ing.

Later she enrolled for classes with renowned artist Ann Lindsell-Stewart, where she learned how to use oil paints, and developed skills in still life, portrait and land-scape painting.

“Ann taught me to see”, said Sheena.

Three years later, Lind-sell-Stewart immigrated to South Africa, and Sheena took over her classes, pass-ing on her painterly skills to others.

An accomplished artist in her own right, Sheen Chad-

wick has travelled around the countryside, holding workshops for artists in Karoi, Mutare, Hippo Valley and the Lowveld.

On trips to the wilderness of the Zambezi Valley and the dry savannas of the Lowveld, Sheena has been inspired to paint the mystical baobab tree, which she de-scribes as ‘a potent icon in this country’.

Overall, the steep valleys, grasslands and dwarf msasa trees clinging in the mist to the rocky slopes of Nyanga, are the landscapes Sheena loves best, coming to life in paintings such as Nyanga Musasa Season, and Julias-dale View.

For visitors to Zimbabwe, or homesick diasporans, there can be no better me-mento of the beauties of Zimbabwe than an original landscape painting by a tal-ented local artist, or a hand-made musical instrument to remind you of our unique culture.

The growing trend to in-corporate the visual arts and writing and design skills, when solving problems in in-dustries and STEM occupa-tions, emphasises the impor-tance of art in life.

So if your ambition is to be an astronaut or to work as a control engineer for the na-tional grid, include at least one ‘A’ level subject from the arts or the humanities, and bring creativity, satisfac-tion and happiness into your life.

Visual arts help us understand the world

Juliasdale View by artist Sheena Chadwick

ZOOM is integrating third-party apps into its video conferences, as it

looks to stay ahead in the post-pandemic world.

It hopes that the addition of apps will "make meetings more engaging, more productive and actually even more fun".

Zoom is betting on a future of hybrid working, and hoping to maintain its 300 million daily meeting participants.

Experts say it is also keen to compete with rivals such as Mic-rosoft Teams.

Zoom already has a market-place that has 1 500 apps, but they need to be downloaded and

added to meetings separately.At launch, 50 apps will be

available, including meeting planning app Asana and Dot Collector, which allows for re-al-time feedback and polling.

In an interview with the BBC, Zoom's product lead for Apps, Ross Mayfield, explained how he saw apps being used in Zoom: "Using apps for things like tak-ing notes, whiteboarding, log-ging action items and managing your tasks to make you more productive."

And beyond work he envisag-es apps "including video games, casual games, charades, board games, card games, things like

that, as a way of playing with friends and family."

He added: "Game developers are actually building games spe-cifically for team-building exer-cises, icebreakers and kind of keeping that social connectivity in the changing world."

It is not yet clear how much people will continue to use Zoom and similar video confer-encing services as the world continues to ease lockdowns af-ter the Covid-19 crisis.,

The firm, which saw exponen-tial rise over the pandemic, re-cently announced a $14,7 billion (£10,7 billion) acquisition of Five9, a cloud-based call centre

operator. It said it expected sales to rise

more than 40 percent this year, reaching more than $3,7bn (£2,66 billion).

Zoom chief executive Eric Yuan has previously said he is convinced that the post-pandem-ic world will continue to em-brace a hybrid model of work-ing.

Mayfield reiterated that view: "The world we are returning to is a hybrid workplace, we're to re-main remotely connected with people, it's not just going to be the same people in the same of-fice doing the same things."

He described what he called

"the second chapter of Zoom" as the firm transforms "from a kill-er app to a platform that becomes embedded in a more useful way" in people's lives.

Ben Wood, an analyst with CCS Insight, said of the move: "The battle of the video confer-encing platforms is intensifying for Zoom, as Microsoft Teams continues to make incremental improvements.

"Having announced a slew of apps back in October 2020, Zoom is keen to add more value to the platform and app partner-ships is a quick win that many users will appreciate." — bbc.com

Zoom offers app store with team-building games

SportNews Worth Knowing

July 22-28 2021Page 32

SPORT SHORTSTrio scores fifties as Zim

go down fighting

AFTER a one-year delay, weeks of neg-ative headlines and public backlash, the Tokyo Olympics are set to open tomorrow. But that’s still a maybe, as Covid-19 continues to cause a distur-bance throughout Japan.

GIANNIS Antetokounmpo scored 50 points as the Milwaukee Bucks claimed their first NBA title for 50 years with a 105-98 victory over the Phoenix Suns.

The Bucks' 4-2 series win was sealed in front of a 17 000 crowd as 65 000 celebrated outside the Fiserv Forum.

They are only the fifth team to win the best-of-sev-en finals series after losing their first two matches.

"I'm happy I was able to do it with this team for Milwaukee," said Antetokounmpo.

The Suns were seeking a first NBA crown in their 53-year history, having also lost NBA Finals series in 1976 and 1993.

However, they were unable to contain Antetokoun-mpo, who became only the seventh player to register 50 points in a finals game.

It was also the third game in the series in which the 26-year-old has managed at least 40 points and 10 rebounds. — bbc.com

REGIS Chakabva, Ryan Burl and Sikandar Raza notched brilliant half-centuries to help Zimbabwe to a total of 298, giving them a great chance of a victory over Bangladesh in the third and final one-day international at Harare Sports Club on Tues-day.

However, when they chased the target, Bangla-desh proved equal to the task as they cruised to a five-wicket victory, led by a century from their captain, Tamim Iqbal, thus winning the series by three matches to nil.

The tourists won the toss and put Zimbabwe in to bat on what soon proved to be the best batting pitch of the series. Zimbabwe made two changes, bringing in Burl and Donald Tiripano for Tinashe Kamunhukamwe and Richard Ngarava.

This time Chakabva was promoted to open the batting with Tadiwanashe Marumani. — ZC

Milwaukee Bucks win first title for 50 years

Joshua versus Oleksandr Usyk fight confirmed

THERE was an almost in-escapable inevitability to the clash between Lewis

Hamilton and Max Verstappen at the British Grand Prix on Sunday.

The two drivers are locked in a fierce fight for the Formula One world championship.

They are competitive, deter-mined and, crucially, unwill-ing to yield to one another for fear it would expose a chink that could be exploited. The irresistible force and the im-movable object butted heads and, when neither gave way at Silverstone, the nature of their title fight fundamentally changed.

Lewis Hamilton won the British Grand Prix after a first-lap collision that shunted his title rival Max Verstappen out of the race.

Hamilton and Verstappen are in a two-horse race for the world championship and have battled closely this season.

But this is the first time they have collided on track. In the opening four races when they were similarly matched on pace they vied with one another re-peatedly and did brush against each other at Imola when, no-tably, Hamilton gave ground rather than risk being knocked out as Verstappen muscled his

way past.Come the British GP, how-

ever, the circumstances were different, with the world cham-pion trailing Verstappen by a formidable 33 points. The Red Bull has improved dramatical-ly, proving the quicker car for the past five races, and if Ver-stappen had stayed in front over the opening laps at Silverstone, Hamilton would probably have been powerless against him.

Having battled across half of that first lap, Hamilton at-tempted a pass up the inside of the high-speed Copse corner.

Neither driver would yield and the champion’s left front wheel clipped the right rear of Verstappen’s car, sending it hurtling into the barriers at 180mph.

He was unhurt and Ham-ilton went on to win despite a 10-second penalty. It was a high-risk move but acceptable to attempt and, as Hamilton proved by repeating it twice later in the race, entirely fea-sible.

"Most times I’ve conced-ed to avoid incident with him. Unfortunately the aggression stayed from his side and we collided."

Verstappen condemned the move as dangerous and his team principal, Christian

Horner, insisted it had put the 23-year-old’s life in danger, the “amateur” act of a “desperate” driver.

These were battle lines fi-nally being drawn and Ham-ilton reacted in turn with the most personal criticism of Ver-stappen he has yet issued.

“I was pretty aggressive as a youngster. I’m a lot older now and I know it’s a marathon not a sprint,” said the 36-year-old.

“I have a better view in how I approach my racing. But we’re in a battle and I think this year he has been very aggres-sive and most of the times I’ve had to concede and just avoid incident with him and live to fight on later in the race. But unfortunately the aggression stayed from his side and we collided.”

Verstappen has always been clear he will get his elbows out and Hamilton has now served notice that he will not placid-ly stand back and take it. With the win and Verstappen’s DNF, that 33-point gap has been reduced to eight, which will doubtless rankle hugely with him and Red Bull.

Hamilton was judged by the stewards to be at fault and took a penalty but accusations that he is a “dirty’ driver simply do not hold water with his record

over 15 seasons in F1. Indeed, Charles Leclerc and Valtteri Bottas both agreed it was a racing incident, as did the dou-ble world champion Fernando Alonso.

“It was an unfortunate mo-ment of the race but nothing intentional or nothing that any of the two drivers did wrong in my opinion,” he said.

Which seems a reasonable interpretation from a great driver. But it is unlikely to ease the tension as this cold war hots up.

There are potentially 13 races remaining this season and each one could stage an-other flashpoint between the two drivers. They are pushing to the limit and the intensity of that fight has now been ramped up to another level.

Intimidation has been part of drivers’ armouries since the world championship began and what is clear is that neither Hamilton nor Verstappen will submit to being on the receiv-ing end.

What had been a gripping fight now has a dramatic per-sonal element that neither can ignore and, since neither will be backing off, Silverstone was likely the overture to one of the sport’s great rivalries. — theguardian.com

ANTHONY Joshua's world heavyweight title defence against Oleksandr Usyk will take place at Tottenham Hotspur Stadium on 25 September.

Joshua, 31, will risk his IBF, WBA and WBO belts against the Ukrainian, who is his mandatory challenger. Usyk, 34, has not fought for a title as a heavyweight but held all four belts a division lower at cruiserweight.

Joshua was ordered to defend his WBO title after the collapse of his bout with fellow Briton Tyson Fury.

"We are two Olympic gold medallists who have fought our way to the top and never avoided challeng-es," Joshua said.

"The venue is exceptional, the atmosphere will be electric, I'm honoured to be the first person to fight in such an awe-inspiring venue. The stage is set and I am ready to handle business."

Despite months of negotiations a fight between Joshua and WBC world champion Fury for all four belts failed to materialise.

Joshua called Fury "a fraud" after their pro-posed Saudi Arabia meeting was called off. — skysports.com

The Hamilton-Verstappen title fight just got personal

... and F1 is the winner

Lewis Hamilton (right) responded to Max Verstappen’s accusation of ‘dangerous’ driving by declaring his Red Bull rival the aggressor at Silverstone.

Mining, manufacturing to anchor growth: P3

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