News Update as @ 1530 hours, Tuesday 24 March 2015

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By Rumbidzai Zinyuke

HARARE - The Government will send a technical team to Germany in the near future to discuss the country’s debt to the European country and ways on resolving it.

The country owes international financial institutions approximately $7,3 billion with about $3,7 billion due to the Paris Club and non-Paris club creditors and the remaining $2,6 billion to the World Bank, African Development Bank, EIB and IMF.Germany is the country’s largest creditor in the Paris Club being owed $739 million. Addressing journalists after meeting Ger-many’s regional director for sub-Saharan Africa and the Sahel Georg Schmidt, Finance minister Patrick Chinamasa said the trip to Berlin was at the Germans’ invi-tation. “We will engage and have dialogue so that we can sort out what needs to be sorted out in our relationship and that is what we have primarily agreed. We have also agreed that they are going to invite

us to visit Berlin. Initially we will send tech-nical people to visit the ministry of finance in Germany to talk about the debt, to talk about our economic relationship and how we can move it forward,” he said. Minister Chinamasa said the government is also committed to maintain the rule of law and make the country more attractive to future investors.

“The rule of law is very important in any legal system, it means that things become predictable. As we try to woo investors to come back, they will come into a system that is predictable, into a framework where they can have recourse into the law and find remedies. And we will work very strongly to achieve that end,” he said. Ambassador Schmidt, who is in the country to attend a two day con-ference organised by German think tanks on the rule of law and the implementation of a constitution said Germany was open to discussions on the Zimbabwean debt.

He said the debt problem is however

complicated because it involves a mul-ti-lateral and bi-lateral dimension. “The multi-lateral dimension is that we are part of the Paris Club so whatever we do, we have to coordinate very closely with our other partners in the Paris club,” he said. He also said Germany has been following the IMF’s mission to Zimbabwe closely. He said the success of the Staff Monitored Programme will be an important aspect in dealing with the bilateral debt. “So we encourage close co-operation with the IMF and in the future with other financial institutions which is also one of the main conditions for us, then to also engage in the bilateral debt talks. So the idea of sit-ting down and talking is always an impor-

tant one in an open spirit to see where we are going from here,” he said.

Schmidt said the rule of law is impor-tant in economic terms because the first thing foreign investors look into before they engage is (if there is a problem) the dispute settlement, the terms and conditions that they come under. “So the general framework and the rule of law is one critical factor for people from the pri-vate sector to actually get involved in the Zimbabwean economy and it’s upon the initiative of the Zimbabwean government that can regulate and actually create the conditions and the framework and Zim-babwe a country that has a lot to offer can actually attract foreign investment,” he added.

The IMF recently said there will not be any funds released to Zimbabwe until the country pays its arrears to the World Bank and there is a consensus among mem-bers of the Paris club on whether or not to give Zimbabwe funding. ●

Germany invites Zim delegation to Berlin for debt talks

Minister Chinamasa

Business Reporter

HARARE - The Central African Build-ing Society (CABS) posted total com-prehensive income of $22,6 million income for the year ended December 31, 2014 on the back of an increase in loans, advances and deposits during the period.

Total assets increased by 37 percent $852,35 million driven by deposits which went up by 41 percent.

Its loans and advances increased by

38 percent to $443,53 million as mort-gage funding improved. "The society delivered strong growth, with net sur-plus increasing by 31 percent to $24,03 million, up from $18,30 million in 2013.

Net interest income increased by 32 percent, compared to the same period in 2013. Non-interest income increased by 51 percent, due to the increase of transactions passing through the Soci-ety's various delivery channels.

"Comparatively, operating expenses increased by 37 percent, mainly due

to the impact of business growth and transformation. Consequently, the Society's cost to income ratio decreased from 64 percent in 2013 to 63 percent in 2014," said chairman Dr Leonard Tsumba in a statement accompanying its results.

CABS' prudential liquidity ratio was at 36.4 percent, while the minimum reg-ulatory ratio stood at 30 percent.

In terms of outlook, CABS said it will focus on expanding its mortgage and banking roles. ●

2 NEWS2 NEWS

Growth in deposits spur CABS

Zimre Park extension project stallsBusiness Reporter

Zimre Property Investments (ZPI) Ltd's $5,6 million Zimre Park extension pro-ject in Ruwa is at a stand-still as the company is still awaiting regulatory approval, chairman Mr Buzwani Moth-obi said.

"The Zimre Park extension project...has been delayed by regulatory approvals and will commence once these are in place," he said in a statement accom-panying the property firm's full year

financial results to December 31, 2014 :The project, which was initially set to be unveiled during the fourth quarter of last year and has 238 residential stands on 603 795 square metre lot, was set to be completed by August this year.

The current delays could see that com-pletion timeline reviewed. The rate of return on the project, according to initial ZPI projections is 22 percent. In terms of financial performance for the year under review, ZPI reported a decline in both revenue and profit for

the year ended 31 December 2014. Revenue for the period was down 15 percent to $5,7 million, while profit for the period declined to $252 862 from $1,812 million in the prior comparable period. Rental income went down 7 percent to $3,62 million due to a high level of defaults.

"Tenants are failing to pay current rental rates and are re-negotiating existing contracts. This has resulted in declining revenues as well as the average rental rates achieved," said Mr

Mothobi. Projects income was down 26 percent to $2,03 million. Total adminis-trative costs increased by 15 percent to $2,95 million.

ZPI reported that due to the subdued revenue performance, operating profit for the period was $1,10 million , which was 44 percent lower than the $1,96 million achieved in the previous year. The ZPI board has recommended a final dividend of $0,012 cents per share. ●

BH24

Financial service group, BancABC plans to expand its operations to 15 other countries in the next three years, an official has said.

The group, which is owned by Atlas Mara, an investment vehicle co-owned by former Barclays chief executive Mr Bob Diamond and African billionaire Mr Ashish Takkar, currently has operations in five countries namely Botswana, Mozambique, Tanzania, Zambia, and Zimbabwe.

BancABC managing director Mr Joe Sibanda said the banking group was

performing well in spite of challenges being faced in some of the economies in which it was operating.

“The growth strategy of the bank is quite impressive. We have not listed the countries we are going to expand to yet but we are going to look at the opportunities.

We are going to open new branches in countries where there are best oppor-tunities,” he said.

While Mr Sibanda did not name the countries where the bank would

expand its operations, BancABC has previously indicated it would explore new markets in Angola, Uganda and South Sudan.

He credited the group’s new investors, Atlas Mara with the idea to grow its footprint on the continent. The banking group was dually listed on the Zimba-bwe Stock Exchange

(ZSE) and the Botswana Stock Exchange but was delisted on the ZSE in February this year following its acqui-sition by Atlas Mara. — New Ziana ●

44 NEWS

BancABC targets expansion into 15 countries

BH24

The National Social Security Authority (NSSA) should seriously consider rais-ing pension payouts from $60 to $150 per month as well as reduce the retire-ment age by 10 years to between 45 and 50 years.

The compulsory Government pension fund has been under constant criticism for its meager payouts and failure to reduce the retirement age in light of the low life expectancy in Zimbabwe.

In its report which has been tabled before Parliament, the Portfolio Com-mittee on Public Service, Labor and Social Welfare said NSSA had the capacity to increase payouts.

“On the basis of the widespread mul-ti-million dollar projects NSSA is cur-rently engaged in, the entity has adequate capital to increase monthly pension benefits from $60 to $150, an amount which should be payable to survivors in the event of the death

of the actual members so that there is meaningful social impact on lives,” it said.

The Committee said NSSA should ensure that pensioners started receiv-ing their benefits as soon as they retired, even before reaching the age of 60, a recommendation which followed stakeholder complains that pensioners were dying before they enjoyed their benefits. A study by the United Nations Economic Commission for Africa has

put the life expectancy for Zimbabwe at 54 years and 52.7 years for males and females respectively.

To guard against losing public funds, the committee said NSSA “must be thorough and cautious” when ventur-ing into projects using public funds.

The pension fund has already been caught up in the complex financial web where it has lost millions of dollars of pensioners’ funds after investing in institutions such as banks that have folded operations as a result of mis-management.

The committee said it was also impor-tant that NSSA invested in schemes, such as housing, that its membership was also able to participate in. NSSA housing projects do not benefit lowly paid members,” the committee noted as some of the complaints raised by stakeholders.

As a body surviving on workers funds, the committee said it was critical that the pension fund involved workers in its decision making processes. — New Ziana ●

66 NEWS

NSSA should increase payouts, reduce retirement age

Business Reporters

Agribusiness chief executives have identified Zimbabwe as one of the Afri-can countries into which they are plan-ning to expand.

According to PriceWaterhouseCooper (PwC)’s latest Agribusinesses Insights Survey 2014/2015 agribusiness chief executives are very positive about the possibility of expansion into other African countries with 72,7 percent indicating that they would pursue such opportunities.

“Furthermore, access to existing and new markets allows agribusinesses to broaden their reach and increase their potential to sell products and services to more customers.

“African chief executives identified the following as countries where they are planning to invest: Ethiopia, Angola, DRC, South Africa, Zambia, Zimbabwe, Mozambique, Lesotho, Botswana, and Tanzania," said PwC National Agribusi-ness Industry Leader Mr Frans Weil-bach in the report.

The country’s economy, which is still

largely agro-based offers a broad range of investing opportunities, according to Zimbabwe Economic Policy Analysis and Research Unit (Zeparu)'s agro-in-dustries/food and beverages value chain diagnostic study released last year.

"After the adoption of the multicur-rency system, the food processing sector has seen the emergence of new players and diversification by already existing players to expand their prod-uct range. Most of the upcoming play-ers are small-medium entrepreneurs whose processes are partially mecha-nised," said Zeparu in the study.

Africa is increasingly becoming an attractive hub for foreign investors, especially in the agri-business sector in view of various economic, political and social reforms, resulting in an improved business environment that is conducive to foreign direct investment, PwC says.

As obstacles to boosting agricultural output in Africa are overcome and agri-cultural output is increased, there will be ample opportunity for the manu-facturing and marketing of agricultural products such as fertilizers, pesticides and seeds, as well as a demand for food-processing services such as grain refining.

In the report the biggest challenges to business growth cited by chief exec-utives were the scarcity of natural resources, access to technology and climate change.

Other concerns raised by businesses were access to finance, labour unrest, regulatory restrictions, and energy costs.

African agribusinesses also feel that there is a long way to go towards better support from African governments in

the sector. "To take the African agricul-tural sector with its enormous potential to the next level, public-private part-nerships throughout the value chain as a whole are key," says Mr Weilbach.

For agribusinesses to remain compet-itive, they need to be aware of and respond effectively to the rapid pace of technological change in the agricul-tural sector globally. Farm-level data and precision farming have played an important role in their operations over the past ten years.

Additionally, in the last three years precision farming principles have been integrated with new technologies such as cloud computing, data mining, mod-elling, and neural networks, all of which can be applied very effectively to agri-culture on a new and higher level of artificial intelligence (AI) farming.

"The mega-trends may be perceived as being far removed from us here in Africa, but their significance should not be underestimated. They will define our future and we will do well to pre-empt their impact rather than sit back and wait for the results," concludes Mr Weilbach. ●

77 AGRICULTURE

Agribusiness investors eye Zimbabwe

BH24

HARARE – Industrial equities on the local bourse bucked yesterday's bear-ish trend to push the industrial index by 0.23 (or 0,14 percent) to close at 161.71 as trades continued to be thin.

NMB gained 0,50 cents to close at 3,50 cents following the announcement of Mr Benedict Chikwanha's appointment as the chairman of the group and its flagship arm, NMB Bank, with effect from March 19.

Also on the upside, ZHL added 0.20 cents to settle at 1.20 cents.

Trading in the negative was Fidelity Life, which dropped 0.50 cents to trade at 4.50 cents, and OK Zimbabwe which shed 0,20 cents to 13 cents. Diversi-fied conglomerate Innscor marginally dropped by 0,01 cents to 56,50 cents.

The mining index slipped 2.70 points

(or 5,78 percent) to close at 44.01 after Bindura's second loss in as many days. The nickel producer eased 0.30 cents to close at 4 cents.

Volumes continue to be depressed. In today's trades, the value of trades

stood at $462 588, mainly propped by trades in SeedCo, Innscor, and Afdis.

Falgold, Hwange and RioZim main-tained previous trading levels at 0,50 cents, 4 cents and 7 cents, respec-tively. —BH24 Reporter •

9 ZSE REVIEW

Equities recover

South Africa's Finance Minister Nhlanhla Nene said on Tuesday the temporary suspensions of key officials at the state-owned power utility Eskom was a con-cern, but the firm's financial stability was on course.

Standard & Poor's (S&P) downgraded the struggling Eskom to junk last week, underlining the fragile state of South Afri-ca's economy and the suspension of the utility's chief executive officer and three other senior executives, which it said reduced the agency's confidence in the utility.

South Africans face frequent, controlled power cuts which Eskom implements to prevent the national grid from being overwhelmed as Africa's most advanced economy faces its worst energy crisis since 2008.

"We indeed are concerned with those developments, but equally concerned we are about the manner in which it was reported," Nene said in response to questions from parliamentarians about the suspension of four senior managers, including Eskom's chief executive.

The government has said it aimed to sell "non-core" assets to raise 23 billion rand ($1.93 billion), for Eskom this year,

which faces a funding gap to 2018 of up to 200 billion rand as it struggles to keep the lights on and build new power plants.

"The financial sustainability of Eskom,

which unfortunately also has been impacted on by the ratings downgrade we have seen, we are still on track with regards to the financial sustainability of

Eskom," Nene said.

S&P's rating downgrade is likely to raise borrowing costs for the cash-strapped utility. — Reuters ●

REGIONAL NEWS 10

South Africa's finance minister concerned about Eskom suspensions

11 DIARY OF EVENTS

The black arrow indicate level of load shedding across the country.

POWER GENERATION STATS

Gen Station

24 March 15

Energy

(Megawatts)

Hwange 203 MW

Kariba 738 MW

Harare 0 MW

Munyati 30 MW

Bulawayo 24 MW

Imports 20 MW

Total 1020 MW

26 MARCH - Willdale Annual General Meeting of Willdale Limited; Place: Boardroom, Willdale Administration Block, Tenerife Factory, 19.5km peg Lomagundi Road, Mount

Hampden; Time: 1100 hrs...

31 MARCH - African Sun Ltd's Forty Third Annual General Meeting of Share-

holders; Place: Kariba Room at Holiday Inn Harare, Corner 5th Street and Samora Machel Avenue; Time: 1100 hours...

THE BH24 DIARY

12 ZSE

ZSEMOVERS CHANGE TODAY PRICE USC SHAKERS CHANGE TODAY PRICE USC

ZIMRE HOLDINGS 20.00 1.20 FIDELITy LIFE -10.00 4.50

NMBZ 16.66 3.50 BNC -6.97 4.00

OK ZIM -1.51 13.00

INNSCOR -0.01 56.50

INDICES

INDEx PREVIOUS TODAY MOVE CHANGE

INDUSTRIAL 161.48 161.71 +0.23 POINTS +0.14%

MINING 46.71 44.01 -2.70 POINTS -5.78%

Stocks Exchange

Euro-area business activity expanded faster than economists forecast this month, signaling that a fragile recov-ery in the 19-nation region is becoming more sustained.

A Purchasing Managers Index for the manufacturing and services industries across the region rose to 54.1 from 53.3 in February, London-based Markit Economics said Tuesday. Economists forecast a reading of 53.6, according to a Bloomberg poll. Markit said its sur-veys suggest the euro-region economy grew 0.3 percent this quarter, sup-ported by a 0.4 percent expansion in Germany, Europe’s largest economy.

The currency bloc’s economy, over-coming its longest recession, is gath-ering strength as the European Central Bank starts its large-scale asset-pur-chase program. While it may be too early to declare victory over the threat of a deflationary spiral of falling prices and households postponing spending, ECB President Mr Mario Draghi has said that a sustained recovery is taking hold.

“The improvement provides welcome news to a region awaiting signs that the ECB’s quantitative easing is stimu-lating the real economy,” said Mr Chris

Williamson, chief economist at Markit in London. “Worries persist, however, in relation to Greece and Russia, which are a reminder that ongoing recovery is by no means assured.”

A gauge of euro-area services rose to 54.3 in March from 53.7 in February, according to the release. A similar index for manufacturing increased to 51.9 from 51.

France, Germany

The euro was little changed after the report and traded at $1.0983 at 10:13 a.m. Frankfurt time.

“We finally start to see the effects of the weaker oil and cheaper euro on the real economy, especially in the manufacturing sector,” said Ms Anna Maria Grimaldi, an economist at Intesa Sanpaolo SpA in Milan. “After stalling in

January and February, all signs point to a recovery that should become more sustained in coming quarters.”

The composite gauges for Germany and France were both well above the 50-point mark that divides expansion from contraction, according to earlier releases from Markit. The German index advanced to 55.3 from 53.8, marking a 23rd straight month of growth.

In France, the index slipped to 51.7 from 52.2. While that signals “modest” growth of about 0.2 percent this quar-ter, the country is still seeing its best performance since 2011, according to Markit. The report also showed that euro-area employment growth picked up this month, and prices charged for goods and services fell at a slower pace.

Deflationary pressure “eased during the month, linked to higher wages and rising import costs resulting from the euro’s depreciation,” Mr Williamson said. “The survey data therefore indi-cate that the ECB’s quantitative easing has been started at a time when the euro zone’s economic upturn is already starting to gain traction.” — Bloomb-erg ●

13 INTERNATIONAL NEWS

Germany lifts Euro-Area economy as stimulus put in action

Starting a business just like other events in a person’s life must be well planned and timed and a number of factors must be taken into considera-tion before launching out the new ven-ture. Before I delve into those factors and my opinion of what time is right to start your business, I would like to draw your attention to times that peo-ple commonly start businesses.

Most people commonly start their busi-nesses about these times;

School Years

This is period of time during which you are studying for expertise in a chosen field. It maybe during secondary school or university (BSc or MSc) you may suddenly come into a nice idea and you decide to try your hands out on it. you may decide to partner with someone else maybe your school mate, friend or family member.

Starting a business during this time is usually with low risk as you have almost nothing to lose; your parents probably fund your studies and asso-ciated costs and you are not at risk

to lose any essentials aside from the money, time and effort put into starting the business. Starting a business dur-ing this time can be risky, in the sense that you might get so involved with the idea and begin to neglect school work, it might affect your studies and lead you to drop out.

Ironically, a lot of celebrated entrepre-neurs started their business during this times e.g. Bill Gates, Mark Zuckerberg, Steve Jobs and many others.

Post School Years

This is the period when you have fin-ished your education (at least to a certain level, usually BSc) and you are waiting at home hoping to get a good job soon. Most times, the people who start businesses at this time have been waiting for about 2-3 years, and have gotten tired of hearing the popular “start your own business, be your own boss” song.

They usually start out as a freelanc-ers or part time businesses because they are still looking out for jobs and aren’t fully committed to the business

yet. They start the business primarily to provide themselves with a source of income and to preserve their dignity as they can say they started their own businesses.

They usually go for low cost ideas, as they may not have access to substan-tial funding and don’t want to gamble too much with other people’s money.

Example of businesses that are started at this time are sales of bags and shoes, catering businesses, soap/cream mak-ing, home tutoring, poultry farms etc.

14 analysis

When is the best time to put that great idea to the test?

14 ANALYSIS

Job Loss

This is the period when you have been laid off or retired from your job. Most times, the push for entrepreneurship maybe for reasons such as putting their gratuity to good use, creating a source of stable income and preserving their dignity among others. Depend-ing on the jobs they just lost and their financial intelligence, they usually go into business with a lot of money.

They are already used to having an office, a secretary, an official car and an organised and structured environment therefore, they start out in business by getting a shiny business card, renting a lovely office, employing 10 people and starting big (all this is good).

Unfortunately they usually run out of money after a few months and their business might fail because it wasn’t properly planned and it started in a craze at the impulse of the moment. Example of businesses that are started at this time are consulting firms, farms, manufacturing companies etc.

Marriage

This will commonly apply to women and is usually the time period starting from when they get married. Some women may become housewives after

marriage or giving birth so they can have more time to take care of their family and new babies. And when the babies starts rolling in year after year, getting a job may not be feasible and so they are thrust into entrepreneur-ship. These are usually home based businesses, with offices not far from home.

They are usually started with capital from their husbands in an attempt to set his wife up and eliminate her bore-dom and loneliness while he is at the office.

Example of businesses that are started at this time are retail shops (where things like shoes, bags, baby things, food stuff, home supplies etc. are sold), schools, salons, bars and restaurants, recreational centres and gyms, phar-macies etc.

While there are many paths to entre-preneurship, I chose to highlight the above. What stage are you at right now and when do you think is appro-priate for you to start your own busi-ness? Now, when the risk is minimal? After you are laid off from the job you probably hate? When you get married and find it hard to keep up with job responsibilities and family pressures? Or when you spent your active years and are retired?

Of course, there are also those who decide that NOW is the time to change the direction of things and take charge of their time, effort and financial futures.

yes, there are many factors that can determine when a person starts a business such as availability of funds, support from family and friends, acqui-sition of relevant skills and education amongst others; but true entrepre-neurs know that they can’t be satis-fied with the status quo and need to start NOW. This doesn’t mean they quit school and their jobs or rush into it without planning; it means they don’t wait for life to present them with opportunities, they go out, look for it and make it happen. It depends on you. Stop waiting. Start NOW! — Ven-tures Africa ●

15 ANALYSIS