nssa to provide funds for formalising informal economy

News Update as @ 1530 hours,Thursday 10 July 2014Feedback: [email protected]: [email protected]

By Rumbidzayi Zinyuke

The National Social Security Authority says it will provide the necessary funds to the informal sector as part of efforts to incorporate informal businesses into the formal sector.

Speaking on his return to Zimbabwe from the recently held International Labour Conference in Geneva, NSSA general manager James Matiza said his organisation would make funds availa-ble to the Small Enterprises Develop-ment Corporation (Sedco) for lending to informal businesses, as a way of transitioning them to the formal econ-omy.

“The lack of protection of workers within the informal sector was a mat-ter of common concern. For us, as a social security authority, our primary

concern is the fact that workers within the informal sector are not covered by the Workers’ Compensation Insurance Fund and are not contributing to the national pension scheme.

“Those in the informal sector do not contribute to the scheme and therefore cannot benefit from it.

Thus we, as NSSA, have an interest in supporting the formalisation of the informal economy, which is why we are ready to provide funding for informal sector businesses as a way of bringing them into the formal sector,” he said.

He said the ministers of Public Service, Labour and Social Welfare and of Small and Medium Enterprises and Cooper-ative Development were expected to meet soon to discuss cooperation in this exercise. He pointed out that work-

ers in the informal sector did not enjoy many other workers’ rights espoused by the International Labour Organisa-tion.

The conference in Geneva came up with proposals for formalising the infor-mal sectors of all countries in the world. Matiza represented Zimbabwe, which

was appointed chair of the government members of the Africa Group in the Committee. The committee adopted a number of conclusions intended to form the basis for a draft recommen-dation on transitions from the informal to the formal economy that will be considered by the International Labour Conference at its next session, due to be held next year.

Among the conclusions, was one that stated that the denial of rights at work, the absence of sufficient quality employment opportunities, inadequate social protection and the absence of recognised social dialogue were most pronounced in the informal economy.

One of the objectives of formalising the informal economy was to promote decent work for all, it said. •

NSSA to provide funds for formalising informal economy

By Tawanda Musarurwa

• Nickel producer to expedite resumption of smelting operations this year

Bindura Nickel Corporation (BNC)'s Trojan mine has bounced back in style, posting record revenues of $65 million for the year ended March 31, 2014.

Trojan Mine - which had been under care and maintenance since Novem-ber 2008 - put in turnover comprising of 7 129 tonnes of nickel at a value of $65 million and included the sale of by-products, namely copper and cobalt, said the company.

The upbeat performance saw the nickel producer registering an unprecedented turnaround in its profitability of $36 million year-on-year.

BNC's operating profit for the period under review stood at $17,3 million compared to the prior year loss of $13,1 million. The company said the strong cash flows will underpin financ-ing of future developments.

"Bindura Nickel Corporation re-en-

tered the ranks of nickel producers with significant production and profit performances in the financial year to 31 March 2014 – performances that hold promise for the future and that underpin the developments in train for

the current 2015 financial year. "The company is now generating strongly positive cash flows and is set to do so even at nickel prices lower than those currently prevailing," said BNC.

The miner said it had reaped rewards from its new plan as grade increased to 1,38 percent. In the year’s third quar-ter Trojan’s underground operations were directed towards advancing the

scheduled mining of the massive parts of the ore body where nickel grades are consistent and high and where mining costs can be well contained.

BNC made its first delivery of nickel

in concentrate in terms of an off-take agreement with Glencore Xstrata in April 2013, and the miner has said the positive operational and financial performance has necessitated the resumption of its smelter in the current year.

Management expects that resumption of smelter operations to produce nickel leach alloy will further drive revenues

and operating profit.

"The company’s greatly improved financial performance and determina-tion to further improve profitability has led to the decision to resume smelting operations at the company’s facilities....The move towards production and sales of nickel leach alloy rather than of nickel in concentrates has as its goals an improvement in the company’s rev-enue and a reduction in the costs of transporting the final product," said the nickel producer.

BNC believes that the cost of operating the smelter will be "more than offset" by the higher revenue per tonne of nickel in alloy than in concentrates.

"The capital cost of restoring smelter operations is planned to be financed 50:50 from internal resources and debt. There is no intention to call on shareholders for equity funding," said BNC.

Despite the profits the BNC board has decided not to declare a dividend on the need to conserve capital to fund future development projects. •

3 MINING

BNC bounces back with record revenues

5 NEWS

By Lynn Murahwa

• Shortlisted bidders must prove funding says Motec Holdings boss

The fate of Motec Holdings subsidi-ary, Deven Engineering, hangs in the balance as the group awaits confir-mation of funds from the shortlisted bidders.

The Industrial Development Corpora-tion (IDC) announced earlier this year that it had put the coach building, transport solutions and general engi-neering company - Deven Engineer-ing - up for sale. The sale was part of Government’s plans to restructure the IDC allowing greater focus on the revival of the country’s struggling industry.

In an interview, Motec Holdings (Pri-vate) Limited group CEO Benjamin Khumalo said that the sale and direc-tion of the group is dependent on the bidders' ability to provide undisput-able proof that they have the funds available. "It really depends on if they can give us irrevocable proof of funds or not. If they can’t then it means we are back to the drawing table, so it’s possible for us to re-turn and it’s

also possible that among the ones we have short listed somebody will be able to give us proof.” He added that currently the company is awaiting proof of funds from the bidders before proceeding with the sale.

“We are at that stage where we are now calling on the short listed bidders who will give us irrevocable proof of their ability to pay. Once we receive that then we then move on,” he said.

Kumalo said although there are bid-ders who have been shortlisted the sale of the company cannot yet be confirmed. “At this point and time I cannot say we are definitely going to

sell to the short listed bidders or not,” he said. The names of the selected bidders could not be given, however, Khumalo said a total of three bidders have been identified.

“It is not proper to name names at this point and time because these things are confidential but we have short listed about three. We had sev-eral people who had put in bids but we have narrowed the list to three,” said Khumalo. The Motec Holdings subsidiary is up for sale as the com-pany seeks to mobilise capital to ena-ble its parent company, the IDC, to effectively execute its re-defined role of financial mediation. •

3 bidders shortlisted for Devon Engineering

7 TOURISM

By Funny Hudzerema

The Zimbabwean Government is set to sign a memorandum of under-standing (MoU) with the United States to promote tourism between the two

countries, an official has said.

Addressing journalists at his office Minister of Tourism and Hospital-ity Industry Walter Mzembi said the MoU will twin the Victoria Falls and the

Niagra falls and help boost tourism inflows from the US.

"Statics shows that the US has the uppermost number of tourists who visit Zimbabwe, but the number is declining in 2012 the country received 50 060 thousand "Last year, Zimba-bwe received 45 496 tourists from the US which shows that there is a decrease in arrivals,” he said.

Mzembi added that the partnership between the two countries will pro-mote the exchange of culture, mar-keting of products, training of person-nel and cooperation between the two nations to promote trade and tourism.

“The main reason for this discussion is to promote tourism between two countries which is now having a gap

due to the relationship between the two nations.

“USA and Canada through the Niagra falls they receive more than 25 to 35 thousand per year as compared to one million received in Victoria Falls per year so through partnership the num-ber of arrivals is going to increase”, he said. Minister Muzembi added that since China and India were amongst the top arrivals to Niagra Falls, then the twinning arrangement would also benefit Zimabbwe in terms of tapping into that market.

US ambassador to Zimbabwe Bruce Walton said Zimbabwe will bene-fit from the extensive number of US tourists.

“Americans have invested in the tour-ism sector in Zimbabwe so the part-nership can increase business transac-tions between the two nations through tourism,” said ambassador Wharton.

Ambassador Wharton also pledged to market Zimbabwe to different stakeholders in US so as to increase the number of arrivals in the country and create economic development through tourism. •

Zim to partner US to increase tourist arrivals

Minister Mzembi

9 TOURISM

Cape Town ― South Africa's new immigration regulations are already having grave effects on the flow of tourists into the country, particularly from one of its main growth markets -China, according to figures made available on Thursday.

Michael Tollman, the CEO of tourism consulting company Cullinan Holdings, said a 70 percent drop in travel from China to South Africa is forecast due to the new immigration regulation's hasty implementation.

Furthermore, it is alleged that travel agencies in China have resorted to diverting clients eager to travel to South Africa to visit other African nations instead.

Members at the Southern African Tour-ism Services Association (SATSA) have already reported a number of can-cellations, further proving that South Africa's tourism sector is at stake due to the new immigration regulations' implementation. Since the Department of Home Affairs (DHA) implemented the new regulations in late May, there has been an avalanche of criticism and confusion.

The regulations require visa applicants

to collect their visas in person. It also stipulates that all South African children must travel with an unabridged birth certificate showing the names of the parents, and where one parent is not travelling with the child, an affidavit is also required.

Opponents say the regulation does not only affect South African travellers,

but also impacts tourist flows to the country. James Vos, DA Shadow Dep-uty Minister of Tourism, said that "this would mean that the new visa regula-tions are killing South Africa's tourism industry and cutting the country off from access to one of our key growth markets."

"We will continue to submit these ques-tions on a regular basis to continually monitor tourism figures," Vos said in a statement.

Home Affairs Minister Malusi Gigaba last week defended the much-criticised new immigration regulations, saying the act was meant to boost security in the country. "We would not want a situation where criminals do as they like, " the minister said. He said his department has to ensure that it regu-

lates international migration in national interest and in the interest of national security.

One purpose of the new regulation was to ensure that everyone who enters or leaves the country has relevant paperwork, and that they are treated humanely, Gigaba said.

But Vos said the minister introduced the new regulations prematurely and that these new rules have severely hindered tourism and investment into South Africa.

"The DA will continue to push for a review of these regulations in order to ensure we continue to be a top tour-ist destination globally, so that we can grow our economy and create jobs," Vos said. ― Xinhua •

S. Africa's new immigration regulations stem inflow of tourists

AdM-DI156506-

BH24

The equities market was 1,15 percent weaker bucking gains from the past two days, weighed down by loses from heavyweights Delta and African Sun.

The industrial index lost 2.17 points to

close at 186.63 points.

Loses were recorded in beverages giant Delta which went down 5 cents to 125 cents while Masimba retreated 0.30 cents to close at 1.70 cents. African

Sun, Powerspeed and Zimplow slipped 0.10 cents each to close at 2.70 cents, 1.6 cents and 8 cents respectively.

On the upside, Seedco which added 0.99 cents to close at 73 cents and Econet which moved up 0.80 cents to settle at 74 cents. NicozDiamond, Old Mutual and ZHL each rose 0.10 cents to close at 1.30 cents, 256.10 cents and 0.90 cents respectively.

Market turnover was much lower than in the past two days at $686 755.

The mining index increased by 1.64 points to close at 56.97 points after Bindura gained 0.20 cents to settle at 4.50 cents. Hwange and Riopzim maintained previous trading levels whilst Falgold was down 0.20 cents at 2 cents. — BH24 Reporter •

11 ZSE REVIEW

Equities back in the red

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BH24

Zimbabwe's latest broad economic policy - the Zimbabwe Agenda for Sus-tainable Socio-Economic Transforma-tion (ZimAsset) - has been described as positive by a number of agencies, not least the World Bank, the African Development Bank, and International Monetary Fund.

This is because it has the potential to revive the country's economic fortunes if implemented to the letter.

An analysis of the ZimAsset document shows that its strength lies in its rec-ognition of the importance of value chains.

The policy outlines key economic clus-ter areas that need to be improved, and outlines the strategies that will be followed and the results envisaged.

Critically, the policy looks at the com-plete value chain of a particular cluster, focusing on where and how along that particular value chain can activities be enhanced for the better of the sector.

This value chain approach, which was popularised in the 1980s by Michael Porter, is the key strength of ZimAsset.

Because the ZimAsset policy is based on this value chain analysis, it gives an indication of where intervention is required and how it can be best imple-mented.

According to a 2009 United Nations Industrial Development Organisation (UNIDO) working paper entitled 'Value chain diagnostics for industrial develop-ment -

Building blocks for a holistic and rapid analytical tool' benefits that can be derived from conducting a value chain analysis include: improvement in

the quality of products and services; improvement in production and pro-cessing efficiencies; creation of new processing and transformation activi-ties; better linkages among value chain actors; and improved marketing and distribution of products and services.

Additionally, the implementing agent can also benefit from effective flow of technologies, information, and skills within the value chain; reduced entry barriers; the establishment of regula-tory frameworks that create an ena-bling environment for value chains to function; improved compliance with existing standards; promotion of fair practices between actors; and improvement of vertical integration of the value chain through improved contractual arrangements and chain governance.

A breakdown of ZimAsset shows then that the Government is fully aware of the areas across the country's numer-ous sectors that need to be addressed and how this can and will be resolved.

Take the case of Zimbabwe's agri-culture/agro-industry for example.

Zimbabwe is historically an agricul-ture-based economy and a decline in agriculture performance in past decades has also seen a decline in performance in the manufacturing sector (which is mostly dominated by agro-processing industries) .

Agro-processing industries refer to those activities that transform agricul-tural commodities into different forms that add value to the product, and may be primary or secondary.

ZimAsset outlines broad strategies in respect of enhancing production capacity, financing facilities, market enhancement and policy re-alignments in terms of imports and exports and numerous other factors that need to be implemented.

As Government has since acknowl-edged, the key constrain in the full implementation of ZimAsset is the lack of funding for the programmes.

But there are other focus areas of the policy that do not require extensive funding - such as mending policies that can go on now. •

13 BH24 COMMENT

Why ZimAsset is such a good policy

The International Monetary Fund (IMF) said on Wednesday lending to Kenya's manufacturing sector was picking up, supporting expectations of robust eco-nomic growth.

Economic expansion in the East African nation slowed to 4.1 percent in the first quarter of this year from 5.2 percent a year earlier.

A spate of gun and bomb attacks have scared away tourists, while low rainfall curbed farm output.

But the IMF told a news conference the increase in lending to manufactur-ers, renewed foreign investor interest, mainly in the extractive industries, and stable macroeconomic policies would support overall growth.

"These are also supporting signals that are positive for increased growth, certainly if not immediately, then over time," Mauro Mecagni, who led an IMF appraisal mission to Nairobi, said at the end of the visit. The IMF expects Ken-ya's economy to grow by 5.5-6 percent this year and Mecagni said data from

one quarter alone was not enough to warrant an immediate review of the projection.

The government expects the economy to grow by 5.8 percent this year while the World Bank forecasts 4.7 percent.

Kenya's debut Eurobond, which was oversubscribed by five times last month, reinforced the sense of confi-dence, Mecagni added. The IMF also expects 47 new counties, created last year to decentralise government, to help economic growth by channelling

development funds more effectively, the IMF said.

The counties have struggled to use their budgets effectively in the fiscal year ended June. ― Reuters •

15 REGIONAL NEWS

IMF says credit to Kenyan manufacturers picking up, to support growth

17 DIARY OF EVENTS

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

POWER GENERATION STATSGen Station

10 July 2014

Energy

(Megawatts)

Hwange 551 MW

Kariba 750 MW

Harare 45 MW

Munyati 29 MW

Bulawayo 21 MW

Imports 0 MW

Total 1396 MW

14 July - BNC Results Presentation update, Place: Chapman Golf Club, Time: 9.30 to 11.30 am.

16 July - Mobile Markets & Telecoms Forum Con-ference & Exhibition, Place: Holiday Inn (Harare), Time: 8:00am

23 -25 July - Mine Entra, Place: Zimbabwe Inter-national Exhibition Centre, Bulawayo

24 July - OK Zimbabwe Thirteenth Annual Gen-eral Meeting Place: OKMart Functions Room, First Floor, OKMart, 30 Chiremba Road, Hillside, Time: 15:00 hours.

1 August - Sixteenth Annual General Meeting of the members of Econet Wireless Zimbabwe Limited, Place: Econet Park, 2 Old Mutare Road, Msasa, Harare, Time; 10.00am

THE BH24 DIARY

19 ZSE

ZSEMOvERS CHANGE TODAY PRICE USC SHAKERS CHANGE TODAY PRICE USC

ZIMRE 12.50% 0.90 MASIMBA -15.00% 1.70

NICOZDIAMOND 8.33% 1.30 FALGOLD -9.09% 2.00

BNC 4.65% 4.50 POWERSPEED -5.88% 1.60

SEEDCO 1.37% 73.00 DELTA -3.85% 125.00

ECONET 1.09% 74.00 AFRICANSUN -3.57% 2.70

OLD MUTUAL 0.04% 256.10 ZIMPLOW -1.23% 8.00

IndicesINDEX PREvIOUS TODAY MOvE CHANGE

INDUSTRIAL 188.80 186.63 -2.17 POINTS -1.15%

MINING 55.33 56.97 +1.64 POINTS +2.96%

Stocks Exchange

21 AFRICA STOCkS

Botswana 8,664.65 -11.96 -0.14% 12July

Cote dIvoire 246.37 +2.18 +0.89% 07Mar

Egypt 7,949.60 -75.68 -0.94% 06Mar

Ghana 2,352.45 +6.43 +0.27% 27June

Kenya 4,885.09 +51.07 +1.06% 30June

Malawi 12,662.47 +0.00 +0.00% 07Mar

Mauritius 2,074.51 -3.51 -0.17% 07Mar

Morocco 9,544.10 +21.01 +0.22% 07Mar

Nigeria 42,482.49 +714.93 +1.71% 30June

Rwanda 131.27 +0.00 +0.00% 24Oct

Tanzania 2,018.97 +25.40 +1.27% 07Mar

Tunisia 4,624.39 -39.32 -0.84% 07Mar

Uganda 1,503.90 +0.81 +0.05% 10Sep

Zambia 4,242.74 +14.95 +0.35% 10April

Zimbabwe 186.56 -0.52 -0.28% 30June

African stock round up Commodity Prices

Name Price

Crude Oil 1,300.91 -0.21%

Spot Gold USD/oz 1,292.63 -0.26%

Spot Silver USD/oz 19.38 -0.46%

Spot Platinum USD/oz 1,421.25 -0.33%

Spot Palladium USD/oz 798.50 -0.64%

LME Copper USD/t 6,770 -0.18%

LME Aluminium USD/t 1,780 -1.17%

LME Nickel USD/t 18,230 -1.73%

LME Lead USD/t 2,095 -1.41%

Quote of the day — "Be who you are and say what you feel, Because those who mind don't matterand those who matter don't mind." ― dr. suess

Globalshareholder.com

China's central bank and currency reg-ulator are investigating a state media report that alleged Bank of China Ltd broke rules on transferring money over-seas, two government officials familiar with the matter said.

The probe focuses on whether Bank of China violated regulations in its opera-tions or aided money laundering, the people said, asking not to be named as they aren’t authorized to speak publicly

on the matter.

Starting an investigation doesn’t mean the Beijing-based bank has done any-thing wrong, they said.

Bank of China, the nation’s largest for-eign-exchange lender, yesterday denied a report by China Central Television claiming that it circumvented the rules by helping customers transfer unlimited amounts of yuan overseas and convert

it into other currencies through a prod-uct called “Youhuitong.”

The bank said it introduced a cross-bor-der yuan transfer service in 2011 with the knowledge of authorities.

A press officer for the bank didn’t imme-diately respond to a request today for comment on the probe. The People’s Bank of China and the State Administra-tion of Foreign Exchange didn’t immedi-

ately reply to faxes seeking comment.

Chinese foreign-exchange rules cap the maximum amount of yuan that individuals are allowed to convert into other currencies at $50,000 each year and ban them from transferring yuan abroad directly. Policy makers have taken steps in recent years including allowing freer movements of capital in and out of China as they seek to boost the global stature of the yuan.

Shares Fall

Shares of Bank of China in Hong Kong fell 1.2 percent to HK$3.45 as of the city’s midday trading break. The stock slid 2.8 percent yesterday, the most on the Hang Seng Finance Index, following the CCTV report.

Media reports referring to “an ‘under-ground bank’ and 'money laundering' are inconsistent with the facts,” Bank of China said in a statement on its website yesterday.

The cross-border yuan transfer service only allows money to be moved for emi-gration and overseas property invest-ment, it said. ― Bloomberg •

23 INTERNATIONAL NEWS

China said to probe alleged Bank of China money laundering

By Sifelani Tsiko

Zimbabwe is set to embark on an ambi-tious program to boost the country’s rice output after the country signed a memorandum of understanding with China recently.

Businessman and farmer, Ambassa-dor Christopher Mutsvangwa struck a deal with renowned Chinese agricul-tural scientist Professor Yuan Longpin’s National Hybrid Rice Research and Development Center in Changsha in Hunan Province to start a pilot hybrid rice production exercise that could eas-ily transform Zimbabwe into a major rice growing hub in the Sadc region using varieties suitable to local condi-tions.

“After I met Professor Yuan Longpin – revered as the “Father of Hybrid Rice,” Yuan expressed his desire to support the pilot project to enhance the coun-try’s rice output and reduce hunger and poverty,” said Ambassador Mutsvan-gwa who is also Foreign Affairs Deputy Minister. He signed an Mou on behalf of his firm, Moncris Private Limited while

Prof Longpin signed for the National Hybrid Rice Research and Develop-ment Center, under a deal which was approved by Agriculture, Mechanisa-tion and Irrigation Development Minis-ter Joseph Made.

“Prof Longpin pledged to put capital into the rice project to make Zimba-bwe the rice breeding pad of southern Africa,” Ambassador Mutsvangwa said.

“The ministry of agriculture is part of

this project and a team of technical experts is coming in the third week of July to start making preparations for the implementation of the rice project at my farm in Norton.

“Prof Longpin also expressed his desire to meet the President (Mugabe) dur-ing the upcoming summits” Under the agreement, the Chinese rice develop-ment centre will provide rice hybrid varieties for on-farm trials by Moncris

on Zimbabwean soil.

“On completion of this initial seed trial both parties will evaluate the results and make necessary recommenda-tions for further progress.

Moncris will provide the land, labour, logistical support and finally seek the necessary Government approval to ensure smooth progress of all commer-cial activities carried out by all parties partaking in this agreement,” read the

24 ANALYSIS

Realising Zimbabwe’s rice promise

MOU.

All sides committed themselves to subsequently set a formal agreement, form a joint venture company to coop-erate and implement large scale hybrid rice production.

The key objective of the deal supported by both the Chinese and Zimbabwean governments is to enhance the coun-try’s long term food security position and food production strategies.

Agricultural experts say rice is rapidly growing in importance in Zimbabwe and most other African countries. They say it is now the leading provider of

food calories in West Africa and Mada-gascar and it is now the second largest source of food energy in sub-Saharan Africa as a whole.

“Wheat as a winter crop is facing seri-ous challenges,” said Ambassador Mutsvangwa. “We cannot compete with countries such as Argentina and others that produce the crop at lower cost.

So it is imperative to seek strategies to boost the production of crops such as rice to fight against hunger.” He said the growing demand for rice provides a strong impetus to explore ways to improve growth and efficiency of local

rice production as well as developing policies to control large imports that can impede the development of the domestic rice sector.

Many families in Zimbabwe are now spending a greater share of their total budget on rice and an agricultural expert at the University of Zimbabwe says rice is no longer a luxury food but has become the main source of calories for many people in the country.

“There is huge shift from maize to rice as the younger generation seeks food which is cheaper and easy to prepare,” he says. “Urbanisation is changing the country’s food taste and such projects,

if well supported, can enhance the country’s food security and cut huge amounts spent on imports.”

He says rice driven by urbanization is now increasingly the food of choice as food tastes become globalized. The opportunity costs of women’s labour, the ease and rapidity of cooking rice are key factors in urban areas.

Other experts say urbanisation is often accompanied by increased consump-tion of food away from home, some-thing which has spurred rice demand due to the convenience of rice storage, preparation and cooking. To be con-tinued tomorrow

25 ANALYSIS