News Update as @ 1530 hours, Tuesday 05 May 2015

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We are up to date with licence fee payments, says Telecel

By Rumbidzayi Zinyuke

Telecel Zimbabwe says it is up to date with payments for its operating licence despite the sentiments that it has not been compliant.

Two months ago, Government cancelled an agreement with the firm which allowed it to operate without paying the $137,5 mil-lion needed to renew its operat-ing licence. In a statement, the company said it has not skipped a payment since the agreement was made and the next instal-ment was due next month.

“Telecel is currently in compli-ance with its obligations as per the Licence Renewal Agreement entered into between Tele-

cel, POTRAZ the regulator and the Government of Zimbabwe as represented by the Minis-try of Finance and the Ministry of Transport and Communica-tions.”

“Telecel has honoured all sub-sequent licence fees payment obligations as per the agreed payment plan and is currently up to date. The next instalment is due in June of this year. At no time was Telecel unable to pay for its agreed commitments and it is important for the public to know the true facts behind the story,” the company said.

The company said it had nego-tiated with Government to off-set the licence fees against the interconnection fees of $12 mil-

lion it was owed by TelOne and NetOne.

“An agreement was reached and signed on the August 6, 2013. The Agreement entailed pay-ment of an immediate lump sum of $14 million in addition to using debt accrued from the Government telecommunica-tions operators on interconnect fees to offset part of the fees. This debt amounted to $12 million. The balance would be payable in instalments over a period of 7 years,” the company said.

The company however said it paid through its bankers but the $6 million paid through Met-bank had not been forwarded to Potraz.Potraz last week can-

celled the mobile phone oper-ator’s licence with effect from April 28, and gave it 30 days to wind up operations and another 60 days to decommission its equipment.

ICT Postal and Courier Services Minister Supa Mandiwanzira said this was because the com-pany had failed to comply with the country’s indigenisation laws since 2002 when it started operations in the country.

Dutch-headquartered firm VimpelCom owns 60 percent of Telecel with the remaining 40 percent being controlled by Empowerment Corporation (EC), a local consortium.

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BH24

3 BH24

Bank lending rates for corporate clients decline

By Tawanda Musarurwa

HARARE-Zimbabwe's doing business environment reforms will initially exclu-sively focus on Harare, with a national steering com-mittee and technical work-ing groups having already been put in place, Zimba-bwe Investment Authority chief executive Mr Richard Mbaiwa has said.

Mr Mbaiwa told the Parlia-mentary Portfolio Commit-tee on Industry and Com-merce this morning that this is due to the fact that the capital city tends to be the focus of most competitive-ness survey. He said if suc-cessful, the model will be replicated to other cities.

"The main focus right now is the city of Harare and regis-trar of companies. Harare is the focal point in the World Bank Survey and other com-petitiveness surveys. So in

terms of reforms, our idea is to use the city of Harare as a model, which will be rep-licated to other cities," he said.

Zimbabwe is ranked 171 out of 189 countries on the 2015 World Bank Ease of Doing Business Index. This is notwithstanding indicated efforts at reforming the local doing business environment over the past few years.

In 2011, the Government set up the ZIA One-Stop-Shop to improve the local business operating environ-ment for new investors, but it seems this has had limited benefits as the country has only made marginal pro-gress on the rankings over the past few years.

Although admitting that the One Stop Shop had flopped due to "lack of legal back-ing", the ZIA boss said pro-gress was being made in

other areas, particularly with respect to work being carried out by newly estab-lished 'technical working groups'.

"Work done so far has led to the establishment of a national steering commit-tee and technical working groups that will look at each and every indicator ....there is a technical working group for each indicator.

"These technical working groups have actually started meeting and looked at the issues and recommenda-tions have actually come out of those technical work-ing groups which are going to be implemented, but also conveyed to the people who carry out these business surveys," he said.

Mr Mbaiwa added that the authority has begun engag-ing donors to assist in the financing of the reform pro-

cess.

"We are quite aware that there is limited fiscal space within Government and Treasury in terms of supporting some of these reform measures....

One of the things that we have done is that we have approached co-operating partners who have brought in resource people, consult-ants and they are prepared to fund computerisation of institutions such as the registrar of companies and others. We have already submitted the necessary requests for the funding requirements."

ZIA says it expects the country to move within the top 100 of the next World Bank World Bank Ease of Doing Business Index due to the ongoing reforms.

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4 BH24

5

By BH24 Reporter

HARARE-The country's bank lend-ing rates have remained high despite a marginal decline in rates for cor-porate clients, statistics from the Reserve Bank of Zimbabwe have shown.

In its weekly economic report, the central bank said lending rates for corporate clients went down to 8,85 percent during the week ending April

24 from 8,90 percent in the previous week.

Weighted lending rates for individu-als however firmed to 12,69 percent from 12,59 percent recorded in the prior period.

The gap between lending and deposit rates has remained wide with the majority of bank deposits being short-term leading to higher rates for fixed deposits.

The Zimbabwean banking sector has been struggling under the tight liquidity challenges that have crip-pled the economy over the past years and since the adoption of mul-ti-currency regime, has used high interest rates on loans as a means to survive the high cost of money asso-ciated with country risk.

Government negotiated with banks to reduce their lending rates to levels below 10 percent per annum in 2013 but the agreement was suspended before the end of the year after banks complained that the move had narrowed margins.

During the week, average savings deposit rates remained unchanged at 3,54 percent, while deposits with 1 month and 3 month tenors fell to 9,21 percent and 10,81 percent respectively.

The RBZ said the total value of transactions processed through the National Payment System during the week under review rose to US$1, 11 billion, up from US$1, 04 billion recorded in the previous week.

This was a result of a general increase in transactions processed through the system.

Real Time Gross Settlement (RTGS) transactions went up 7 percent to $962,98 million in the review period from $900,06 million recorded in the prior week.

Transactions made through the Automated Teller Machines were also up 10 percent at $53,9 million from $49 million while Point of Sale trans-actions went up 41 percent to $27,8 million from $19,7 million.

Cheques transactions were up 19 percent at $3,17 million from $2,67 million in the prior period.

Mobile based transactions were how-ever 3 percent down to $67,04 mil-lion from $69 million in the previous week.

In terms of proportions, RTGS pay-ments continued to dominate the NPS, accounting for 86,37 percent of the total value of transactions, fol-lowed by Mobile-based transactions at 6,01 percent and ATMs at 4,84 percent.●

Bank lending rates for corporate clients decline

BH24

6 BH24

7 ANALYSIS7 NEWS

By Conrad Mwanawashe

MANUFACTURES will this year focus on initiatives to unlock manufacturing com-petitiveness and will interrogate issues including developing value chains for vari-ous sectors when they converge in Gweru for the Confederation of Zimbabwe Indus-tries conference.

CZI president Mr Charles Msipa said this year’s conference will have a dual approach with one focusing on how com-panies can improve internal efficiencies and the development of value chains.The conference will be running under the

theme: “Unlocking Manufacturing Com-petitiveness”.

“We are going to convene for our annual congress in Gweru from July 29-31 and will be held at the Executive Lodge in Gweru. It will be the first to be hosted in the Midlands in Gweru seeing that the Midlands industrial sector has taken a hammering over the course of the last six or seven years,” said Mr Msipa.

“It’s going to be a dual approach; first approach is what companies/firms can do internally within their environments to improve their own efficiencies in order to improve their overall competitiveness.”

Mr Msipa said the conference will have some keynote speakers from the Lean Institute Africa from South Africa to talk about lean manufacturing which focuses on efficiency in manufacturing operations.

“We will also share some local experiences from local manufacturers from some value chain initiatives that have been tak-ing place in some value chains such as edible oils and cotton and clothing value chains. We will share some of the lessons from the value chains that have taken place recently,” said Mr Msipa.The value chain approach looks at the whole spec-trum from raw materials right through to

the finished product.

For instance, instead of just looking at what is happening in the issues relating to cooking oil, including the volume of imported cooking oil; the value chain for cooking oil would look at the production of soya beans, the conditions around the production of soya beans and cotton seed, the extraction of the oil, processing into the final product.There have been some initiatives where industrialists and policy makers have looked and devel-oped a strategy for the whole value chain over the last 12 months, according to Mr Msipa.

“We have an initiative in the cotton to clothing value chain where they devel-oped a strategy for the development of cotton to clothing value chain. The strat-egy would look at how to boost produc-tion of cotton, processing, manufacture of fabric and manufacture of clothes,” he said.

Vice President Mnangagwa is expected to headline senior Government officials who have confirmed attendance at the confer-ence. The conference will also include a tour of performing and struggling indus-tries to understand “what’s working and what’s not working”.●

CZI to focus on competitiveness

Mr Charles Msipa

BH24

HARARE - Volumes were improved in today's trades, but the downward trend of the industrial index contin-ued as it declined 0.47 points (or 0,30 percent) to close at 154.91.

Fidelity Life lost 1,50 cents to close at 7,70 cents, while seed manufac-turer SeedCo lost a cent to trade at 94 cents and telecoms giant Econet was down 0,50 cents to 48,50 cents.

Also trading in the negative was hotelier Meikles which was 0,20 cents lower at 8,50 cents whilst African Sun, Ariston and RTG were each 0,10 cents down to settle at 2,70 cents, 0,40 cents and 1,10 cents, respectively.

Similarly as yesterday, there were no counters that traded in posi-tive territory, while 11 counters traded flat. The volume increase

was largely attributable to trades in Delta, Seedco and Econet, which pushed up the value of trades to $1,7 million.

The mining index was flat at 42.93

points as BNC, Falgold, Hwange and RioZim maintained previous price levels at 4 cents, 0,40 cents, 3,50 cents and 6 cents in that order. - BH24 Reporter●

9 ZSE REVIEW

Industrial stocks keep falling

REGIONAL NEWS 10

South Africa's rand was stable against the dollar early on Tues-day and was expected trade in a narrow range for most of the session given a dearth of market moving data.

Government bonds extended recent gains, pushing yields to their highest in nearly 2 weeks, in line with US Treasuries after higher than expected factory data stoked rate hike expecta-tions in the world's largest econ-omy.

By 0640 GMT the rand traded at 12,0500 against the greenback, barely changed from Monday's

close at 12,0605.

"The rand will continue trading in a narrow range as participants wait on the sidelines ahead of the Germany factory order release on Thursday and the all-impor-

tant US employment report on Friday," Barclays Africa said in a note.

In fixed income, government debt maturing in 2026, the benchmark for the market, was

yielding 4 basis points higher at 8,095 percent compared to where it ended the previous ses-sion.

"A move above 8,13 percent could cause another bout of price weakness and the medium term objective of 8,5 percent could become a reality sooner rather than later," Standard Bank trader Warrick Butler said.

Traders and analysts said Reserve Bank Governor Lesetja Kganyago's speech later in the morning could give some clues on the outlook for South African interest rates.

The bank's monetary policy com-mittee will hold its third policy meeting of the year later this month. - Reuters●

Rand largely flat

11 ZSE

ZSE

MOVERS CHANGE TOdAy PRICE USC SHAKERS CHANGE TOdAy PRICE USC

ARISTON -20.00 0.40

FIDELITy LIFE -16.30 7.70

RTG -8.33 1.10

AFRICAN SUN -3.57 2.70

MEIKLES -2.29 8.50

SEEDCO -1.05 94.00

ECONET -1.02 48.50

INdICES

INdEx PREVIOUS TOdAy MOVE CHANGE

INDUSTRIAL 155.38 154.91 -0.47 POINTS -0.30%

MINING 42.93 42.93 +0.00 POINTS +0.00%

Stocks Exchange

12 dIARy OF EVENTS

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

POWER GENERATION STATS

Gen Station

24 April 15

Energy

(Megawatts)

Hwange 442 MW

Kariba 614 MW

Harare 30 MW

Munyati 29 MW

Bulawayo 26 MW

Imports 0 MW

Total 1153 MW

20 May 2015 - The Seventy-Fifth Annual

General Meeting of Astra Industries Limited; Place: The Auditorium at Astra Park, Cor-

ner Ridgeway North / Northend Roads, Highlands, Harare; Time: 12:00 hours.

21 May 2015 - The 20th Annual General Meeting of Members of NMBZ Holdings Lim-

ited; Place: 4th Floor, Unity Court, Corner 1st Street/ Kwame Nkrumah Avenue, Harare;

Time: 10:00 hours.

28 May 2015 - The twentieth Annual General Meeting of dairibord Holdings Limited;

Place: Mirabelle Room, Meikles Hotel, Harare; Time: 11:30 am.

29 May 2015 - The 13th Annual General Meeting of NICOZdIAMONd Insurance Lim-

ited; Place: NICOZDIAMOND Auditorium, 7th floor Insurance Centre, 30 Samora Machel Avenue; Time: 12:00 hours.

THE BH24 dIARy

The European Commission raised its euro-area growth forecast as the impact of a weaker euro and unprec-edented monetary stimulus help the economy overcome pressure on con-fidence from the continuing crisis in Greece.

Gross domestic product in the 19-nation currency bloc is forecast to increase 1,5 percent this year, up from a prediction of 1,3 percent in February, according to the commis-sion, the European Union executive in Brussels. It slashed its growth projec-tions for Greece at a time when the cash-strapped country is struggling to persuade its euro-area partners to help pay its bills.

“The legacy of the crisis will continue to be felt for years to come,” Marco Buti, the head of the commission’s economics department, said in the report. “Will the economy be able to generate a self-sustained and bal-anced expansion once these tempo-rary tailwinds fade? The answer is not self-evident.”

The European Central Bank’s quan-titative-easing program “is having a significant impact” on financial mar-

kets and the economy, the commis-sion said. “Fiscal policy is also accom-modating growth.” Lower oil prices, the euro’s depreciation and steady global growth also are supporting the European economy, it said.

debt Pile

Tuesday’s report shows that while the euro area is slowly recovering, France, the bloc’s second-largest economy, will not expand as quickly in 2016 as the EU forecast just three months ago. Italy, the third-largest euro-zone economy, will see its debt pile get larger this year as it records growth of 0,6 percent, according to the forecasts.

The cut in the growth forecast for Greece -- where Europe’s debt bomb exploded more than five years ago -- may make it harder for Prime Minister Alexis Tsipras’s government to convince the EU and the Interna-tional Monetary Fund that it should row back austerity while it struggles to record a primary budget surplus.

“There is a choice for the Greek gov-ernment to make -- time is running out,” European Commission Vice

President Valdis Dombrovskis said in a statement. “All fundamentals for a return to growth and stability are still very much there.”Greece will grow by 0,5 percent in 2015, the commission projected. That compares with a 2,5 percent prediction in the EU’s most recent forecasts published in Febru-ary.

“Positive momentum” in the Greek economy has “been hurt by uncer-tainty since the announcement of snap elections in December,” the commission said. “The current lack of clarity on the policy stance of the government vis-a-vis the country’s policy commitments in the context of the EU/IMF support arrangements worsens uncertainty further.”

The Brussels-based commission fore-cast euro-area inflation to start creep-ing up again and avoid the deflation it predicted in February. yet it will remain below the ECB’s goal of just under 2 percent throughout this year and next. Inflation will stand at 0,1 percent in 2015, before quickening to 1.5 percent in 2016, the commission said. - Bloomberg●

13 INTERNATIONAL NEWS

EU raises growth outlook as ECB counters Greek threat

By Emmanuel Iruobe

Philosophically, it could be argued that nations are endowed with different sets of natural resources for the sole purpose of facilitating trade and exchange – if every nation had the exact same resource profile, there’d be no need for any form of exchange.

Beyond philosophy, how-ever, the case for boosting global trading has never been louder with the recent growth slowdown in the global econ-omy. A series of analyses from the International Mone-tary Fund (IMF), which has a long history of advocating for more criss-crossing of goods and services, suggest that trading does more than just provide money for nations, it triggers a virtuous cycle that spikes growth and innova-tion, while reducing poverty. “If you care about growth and innovation; if you care about jobs and the real incomes of

the middle-class; if you care about poverty reduction and greater economic fairness; if you do care about all these things, you need to be seri-ous about fostering global trade,” advocates Christine Largarde, the IMF’s Manag-ing Director.

Africa has witnessed impres-sive economic growth in the last decade—fuelled by increased foreign investment inflow and better commod-ities trading—but a slow-down in the transfer of goods poses a number of setbacks. Africa is expected to suffer a shrunken portfolio of invest-ment inflows should the slowdown persist.

However, should global trading improve, here are the gains Africa’s stands to attract:

More jobs: A strong corre-lation exists between trading and job creation. The IMF reports that exports of goods

and services directly and indirectly supported an esti-mated 11,7 million US jobs in 2014.

Ironically, Africa contin-ues to suffer from massive unemployment. Its two big-gest economies—Nigeria and South Africa—both have more than 20 percent of their population unable to secure a job. Interestingly both countries, despite attract-ing significant international investments, noticeably have marginal trade relations with neighbours. With the US already providing more than 10 million jobs from trade avenues, both economies can take a cue from the global economic leader.

Economies of Scale: Coun-tries like Nigeria are known for oil production, while South Africa is known for dia-mond and platinum mining, as well as telecom services and finance. East Africa pro-vides a suitable tourism des-

tination in Kenya and Ethio-pia. These could all form the basis of specialisation for most of these regions.

Encouraging structural reforms: The IMF believes that trade reforms, which result from increased trad-ing, can increase external competition in the products and services markets. This, it believes, encourages key infrastructure investments, and strengthens institutions by encouraging better gov-ernance and an improved business environment.

This can be seen in China’s renewed investments strides across Africa. The country, which has sunk a minimum of $200 billion into Africa’s infrastructure landscape, has improved road access, improved aviation and sup-ported governments’ effort in rebuilding the emerging African economy. - Ventures

Africa●

14 ANALYSIS

Why increased global trading is good for Africa

14 ANALySIS