Antwerp at Zim’s Mine Entra

News Update as @ 1530 hours, Monday 28 July 2014Feedback: [email protected]: [email protected]

Belgium based Antwerp World Dia-mond Centre (AWDC) is among the close to 200 companies that partic-ipated at this year’s edition of the Zimbabwe prime mining exhibition, Mine Entra, as it sought to nurture its relations with the country, an official has said.

Zimbabwe has held two diamond auc-tions at Antwerp since last year where it raked in a combined $80 million.

But the country has not committed to continued auctioning of its gems at Antwerp as it seeks to maximize its mineral value by exploring alternative

markets such as the Dubai Diamond Exchange where one sale was con-ducted early this year.

The move has put Antwerp, which wants to be the sole auctioneer of the country’s gems, under pressure to lure Zimbabwe to commit to selling its dia-monds in Belgium.

Antwerp chief executive Ari Epstein said the global diamond centre was participating at the exhibition in Bula-wayo, which ran from July 23-25, for the first time. The exhibition was held under the theme, “Innovation, Benefi-ciation Growth”.

“By participating in this event the Ant-werp World Diamond Centre wishes to reaffirm its strong commitment to the sustainable development of the Zimba-bwe mining industry to ensure a long term benefit for the country’s econ-

omy,” said Epstein in a statement.

He said Antwerp remained “an opti-mal market for Zimbabwean rough diamonds due to the large number of potential buyers located in the city.”

About 1 700 diamond companies operate in Antwerp.

Epstein said improvements in prices of diamonds at the last auction Zimbabwe conducted in February were positive for local miners.

“The greatly improved prices have had an overall positive impact on the mar-ket, the local mining revenues and the increasing demand for transparency in the market,” he said.

“These higher revenues are a crucial element for the sustainable social and economic development of Zimbabwe.” ― New Ziana •

Antwerp at Zim’s Mine Entra

BH24

By Funny Hudzerema

The government has called on small-holder farmers to increase the pro-duction of small grains to boost food security in semi-arid regions and the country as a whole.

In a speech on his behalf at the Agri-cultural Biodiversity Stewardship and Award presentation ceremony in Uzumba Maramba Pfungwe last week, Minister of Agriculture Joseph Made said smallholder farmers play a crit-ical role in developing crop varieties which suit their climate to produce high yields.

“These indigenous crops and crop varieties are making significant contri-bution to household food and nutrition security. The same crops have great potential and can make important con-tribution towards making Zimbabwe re-establish its Food Basket status for the Sadc region a reality again if addi-tional support and market incentives are clearly defined,” he said.

He said government would promote conservation and sustainable utilisa-tion of the crops grown in the country. The award ceremony sought to iden-tify farmers from Tsholotsho, Chiredzi,

Goromonzi, Murehwa, Mutoko and UMP who promote agricultural bio-di-versity.

The farmers have developed their land-less farmer varieties in different crops which include rapoko, sorghum, maize and wheat to suit their areas.

Community Technology Development Organisation director, Andrew Mush-ita said government must empower people to develop their own seeds to save money spent on purchasing seeds every year.

“The role of smallholder farmers in seed saving is a crucial part of their learning and contributes to the preservation of indigenous knowledge that supports local foods reliant on traditional breeds and varieties that bring clear and wider food security and environmental bene- fits,” he said. •

3 NEWS

Small grains to boost food security: Made

Minister Made

AdM-DI156506-

BH24

5 NEWS

By Lynn Murahwa

The Ministry of Tourism and Hospitality Industry has misused over $ 300 000 that was originally allocated to 9 sep-arate projects since the beginning of the year.

According to evidence presented to the parliament portfolio committee on Pub-lic Accounts this morning, the Ministry diverted the funds without approval from treasury.

Bulawayo South MP Eddie Cross said the money was spent on unnecessary goods and services.

"This year the Ministry has misallo-cated funds over $336 000 that were meant for nine budgeted programs but was instead spent on business ser-vices, maintenance and the acquisition

of extra capital assets. “The Auditor General has said these misallocations were conducted deliberately, auditors do not use that kind of language lightly. You did not have treasury approval for this reallocation of resources and this means you have an officer working for the Ministry who was responsible for the deliberate misallocation of budget resources," he said.

The committee also accused the Minis-try of failing to adhere to statutory reg-ulations by failing to respect the Audi-tor General by not submitting financial statements since 2011.

The Ministry of Tourism has as well failed to account for up to $56000 in expenses and advances since 2011 saying it was largely attributed to under capitalisation and to a glitch in the Public Financial Management Sys-

tem (PFMS). Responding to questions from committee members, perma-nent secretary Florence Nhekairo said the amount in question could not be reconciled due to a malfunction that occurred with the PFMS. "The amount that is considered to be irreconcilable is

an amount of $56 219, this is the dif-ference between appropriation account and the sub PMG bank accounts. This resulted from the malfunctioning of the Public Financial Management System (PFMS) which made it difficult to recon-cile the figures.

"The PFMS resulted in some of the transactions failing to go through in a number of general ledgers even though there were adequate funds in the budget. It has since been rectified, the system is working very well now," she said. Nhekairo said the reason why the Ministry had failed to submit the financial statements in a timely man-ner was attributed to it being under-capitalised.

She said the unavailability of funds has hindered the Ministry from reconciling the amounts in question in a timely manner. "It all boils down to capacity, at that time there was really no capac-ity in the Ministry to follow through what we were supposed to do.

The money levels are very low and the structure that we normally sub-mit during the budget period has not been honoured due to unavailability of funds," she said. •

Ministry of Tourism misuses $300 000

MP Cross

BH24

The equities market has maintained its bearish trends from last week after it lost a further 0,09 percent in today’s trade.

Market watchers say the stocks are

likely to maintain the negative trend until the end of the year due to weaker economic growth.

The mainstream industrial index lost was down 0.16 points to close at

183.60 points. HIPPO lost 9.90 cents to 55.10 cents while TSL retreated by 1.10 cents to close at 25 cents. CBZ also dropped a cent to trade at 12 cents.

On the upside; TA Holdings gained 1.02 cents to close at 16.02 cents whilst Innscor and ZB both traded a cent higher at 75 cents and 7 cents respectively. Meikles added 0.50 cents to 16.50 cents and First Mutual moved up 0.49 cents to close at 6.01 cents.

The mining index rose 8.47 points to close trade at 75.00 points. Bind-ura was up by a further 0.94 cents to trade at 6.55 cents while Falgold, Hwange And Riozim were unchanged at previous trading levels. ― BH24 Reporter •

7 ZSE REVIEW

ZSE maintains loses

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Zimbabwe has been harping on about regional integration and trade for the past decade. The thrust of the matter is to improve Zimbabwe’s relations with other countries in the region and remove the trade barriers that make exporting local products expensive and onerous. Hence the participation in such initiatives as the Tripartite free trade Area agreement.

The proposed TFTA seeks to combine the existing Southern African Develop-ment Community, the Common Mar-ket for Eastern and Southern Africa and the East African Community. Further, it seeks to facilitate the con-struction of transport infrastructure, ease border crossings and reduce the administrative burden and transaction costs of intra-African trade.

We stand to benefit immensely from such an initiative considering the state of our transport infrastructure and congestion at border posts.

However, apart from deadlines that are always being extended and reforms that are taking too long to implement, there is little progress on

the TFTA.

But that does not mean all hope is lost.

Zimbabwe needs to improve trade so that it can be reintegrated into the intra-African trade that is the whole purpose of such initiatives. At the moment, we receive goods and ser-vices from other countries under the agreement but hardly export any. So we are definitely on the wrong side of the equation. It will take some work on our part to reap the benefits of

being part of the TFTA.

As the World Bank rightly put it, Zim-babwe should diversify its export basket and avoid primarily relying on the mining sector to drive economic growth in the short to medium term.

“Relying principally on mining as a source of growth is likely to mute the poverty-reducing effects of growth without offsetting measures,” read part of the report commissioned by the World Bank titled “Trade in Zimba-

bwe: Changing incentives to enhance competitiveness.” The country has so much more it can offer to the world, particularly the Sub-Saharan region, and it goes beyond minerals.

A vibrant agriculture sector will be the first step to that revival.

Let’s get our agriculture going then the value chain will naturally follow. Industry, which relies on agriculture, will definitely receive a boost and those are the same products we need to export to other countries and utilise the TFTA.

We also need a tariff regime that takes into consideration that we are still a primary importer and will not benefit much until we start export-ing. Although government has made amendments to the tariff system, we need to ensure that the agriculture sector is protected until it is back on its feet.

Although the TFTA is still a dream, Zimbabwe needs to level its own play-ing field and be ready for it when it becomes reality. •

9 BH24 COMMENT

Zim needs trade reforms

BH24

funding round from 10 angel investors, which it will use to accelerate growth by improving its product offering and hiring customer support staff.

Angels include local businessmen Mahendra KD Shah, Ravi Shah and Ritesh Doshi, as well as four 88mph investors.

“The majority of travellers in Sub-Sa-haran Africa use the public bus system, but accessing information on sched-ules, pricing, availability of seats as well as acquiring a bus ticket is too tasking and can take a whole day,” said Francis

Gesora, co-founder and chief executive officer (CEO) of BookNow.

“This service intends to, and already is, bringing advantages in speed, infor-mation, cost and time savings to bus travellers and the industry.

We have been able to pull together an investor pool that brings strategic advantages to BookNow’s operations through their skills and expertise, which we are able to draw upon as we grow and expand.”

The company estimates the bus

industry in East Africato have a mar-ket value of US$150 million, and says it is the first startup to bring web and

mobile technologies to the industry. ― Human IPO •

The National Union of Metalworkers of South Africa plans to announce today whether it accepts the latest offer from employers and end a month-long wage strike in the metals and engineering industries.

“The strike continues,” Numsa General Secretary Irvin Jim said by phone. The union will probably announce its deci-sion at 4 p.m. local time, he said. The labour action by 220,000 workers is

costing the engineering industry about 300 million rand ($28.5 million) a day,

according to employers.

The Steel and Engineering Industries Federation of Southern Africa, the big-gest group of employers that’s known as Seifsa, offered a 10 percent annual wage increase for the lowest-paid workers for three years. Numsa has rejected a clause in the proposal that would prohibit unions from debating employment issues with individual businesses.

“We are hoping that their internal dis-cussion will allow us to conclude an agreement,” Seifsa Operations Director Lucio Trentini said by phone.

Central Bank Governor Gill Marcus warned last week about the effects of awarding of double-digit pay increases while inflation breached the bank’s tar-get for a third month. ― Bloomberg •

11 REGIONAL NEWS

South Africa Metals strike continues as Union decides on offer

Kenya’s BookNow closes $75k funding round

BH24

13 DIARY OF EVENTS

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

POWER GENERATION STATSGen Station

28 July 2014

Energy

(Megawatts)

Hwange 351 MW

Kariba 750 MW

Harare 30 MW

Munyati 32 MW

Bulawayo 28 MW

Imports 170 MW

Total 1331 MW

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

BH24

15 ZSE

ZSEMOvERS CHANGE TODAY PRICE USC SHAKERS CHANGE TODAY PRICE USC

BNC 16.75 6.55 CBZ -7.69 12.00

ZB 16.66 7.00 HIPPO VALLEY -15.23 55.10

STARAFRICACORPORATION 11.11 1.50 TSL -4.21 25.00

FIRST MUTUAL 8.87 6.01

TA HOLDINGS 6.80 16.02

MASIMBA 5.26 2.00

MEIKLES 3.12 16.50

PADENGA 2.04 7.50

INNSCOR 1.35 75.00

IndicesINDEx PREvIOUS TODAY MOvE CHANGE

INDUSTRIAL 184.95 183.76 -1.19 POINTS -0.64%

MINING 61.13 66.53 +5.40 POINTS +8.83%

Stocks Exchange

Previous

BH24

17 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 2,354.16 -7.26 -0.31% 18June

Kenya 4,896.77 -13.83 -0.28% 21July

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 42,784.30 -107.52 -0.25% 21July

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 185.72 -0.21 -0.11% 21July

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 — "There is only one way To succeed in anyThing, and ThaT is To give iT everyThing." -vince lombardi

Globalshareholder.com

BH24

China’s Commerce Ministry castigated the United States on Monday for set-ting new import duties on Chinese solar products, saying Washington’s actions risked damaging the industry in both countries.

The US Commerce Department on Friday placed anti-dumping duties as high as 165.05 percent on solar panels and cells from China after a preliminary finding that the products were being

sold too cheaply in the US market.

The move, which must still be con-firmed, was the latest in a long-running solar industry trade spat between the world’s two largest economies, and comes on top of anti-subsidy duties levied last month.

The US side disregarded the facts in its decision, an unnamed Chinese commerce official from the trade rem-edies and investigations bureau said

in a statement posted on the minis-try’s website. “The frequent adoption of trade remedies cannot resolve the United States’ solar industry develop-ment problems. We hope the United States can prudently handle this investigation, quickly end investigation procedures and create a good environ-ment for competition in the global solar industry,” the official said.

Trade friction is unavoidable, but gov-ernments have a responsibility to pre-vent it from harming China-US rela-tions, the official said.

“If escalating problems in the China-US solar industry are ignored, in the end it will damage up and downstream industries in both countries.”

The US arm of German solar manufac-turer SolarWorld AG is seeking to close a loophole allowing Chinese producers to sidestep duties imposed in 2012, complaining that Chinese manufac-turers dodged those duties by shifting production of the cells used to make their panels to Taiwan. Under Friday’s preliminary ruling, Taiwanese produc-ers also face anti-dumping duties of up

to 44.18 percent.

But the Coalition for Affordable Solar Energy, which represents mainly installers, said the duties would hinder the deployment of clean energy by raising the prices of solar products and hurting consumers.

The solar industry has suffered in recent years from a glut of prod-ucts from China, falling prices and a withdrawal of consumer subsidies in Europe, which have squeezed margins and spawned a rash of trade disputes.

U.S. imports of solar products from China were worth $1.5 billion in 2013, half the level of 2011, while imports from Taiwan more than doubled to $657 million over the period, according to US data.

The U.S. Commerce Department will make its final decision by December 15. The US International Trade Com-mission is due to make a decision on whether the imports pose or threaten injury to US producers by January 29. •

19 INTERNATIONAL NEWS

China condemns US anti-dumping duties on solar imports

JUST why is South Africa contributing $10bn to the $50bn balance sheet of a proposed new Brics development bank?

It is a hefty chunk of change, equiva-lent to one-third of the capital in South Africa’s entire commercial banking sys-tem. It is slightly more than the capital of our biggest domestic development financier, the Industrial Development Corporation, and more than the African Development Bank’s (AfDB’s) paid up capital of $7.4bn.

There is no doubt that development takes finance. Finance Minister Nhlan-hla Nene has said Africa’s current infrastructure needs will take $100bn to fund. With $50bn of capital, plus leverage raised on international capital markets, the Brics bank will be able to fund that and more.

The trouble is the New Development Bank, as it will be branded, will have to spend some of its capital on getting itself off the ground. These infrastruc-ture costs will, to some extent, be duplicated. One alternative is the AfDB, and it already has all that infrastructure

in place. But another way could make the cost to South Africa minimal, and it involves using our own Development Bank of Southern Africa (DBSA). The Brics bank will have to deliver addi-tional value for it to be worth the extra cost.

That value may be political. It is clear from the Fortaleza declaration of the Brics summit that announced the bank’s establishment, that the Brics members are trying to dilute the power of the World Bank and International Monetary Fund (IMF) in the world economy. The Brics bank will over-lap the World Bank, but with capital of $223bn, the 70-year-old Bretton Woods institution will remain the big

daddy. Diluting the power of the IMF and World Bank could well be worth it. World Bank policies of the past had destructive consequences for countries’ taking facilities. An alternative source of funding will give future governments more flexibility on the conditions they must submit to. Beyond the political value, South Africa does not appear to be getting much else.

The headquarters will be in Shanghai and the starting three principal execu-tives of the bank will be Indian, Rus-sian and Brazilian. Africa is, apparently, going to be a priority for the new bank and a regional African office is going to be opened in South Africa.

The Brics bank needs to avoid duplicat-ing infrastructure as much as possible. The way to do that is to tie the Africa office closely to the DBSA. Last year, the Treasury decided to inject another R7.4bn into the DBSA as capital to sup-port its expansion into a major pan-Af-rican development funder, alongside its local commitments. So, there is an obvious step to take: reconstitute the DBSA as the African branch of the Brics bank to ensure minimal duplica-

tion. Doing so will also meet much of South Africa’s funding commitment to the new bank, though some cash is also going to have to go into a parent balance sheet.

Nene has said the capital South Africa is contributing will amount only to about $2bn in cash and be staged over a number of years. Presumably the other $8bn will be in the form of guar-antees on other equity commitments. The savvy civil servants at the Treasury have probably already figured this out. What we will contribute is the DBSA — or at least its regional activities — which will be able to get on with what it is set to do anyway. The Brics bank will have much better credit ratings than the DBSA could get.

So, the real effect of the Brics bank could be to take the DBSA and turn it into a much weightier player with a globally potent credit rating, allowing it to raise cheap finance. The cost of such a strategy is that South Africa would have to give up political control of one of its own important African develop-ment initiatives. •

20 ANALYSIS

Instead of building new Brics bank, revamp what SA already has

In a bid to offset the current housing backlog repetitive layouts of identical units with just minimum of outside space to grow vegetables hardly ade-quate for self-sustenance are strewn out over vast acres of land.

The Harare City Council and its con-stant water problems pledging to ensure that those small gardens never see the light of day.

Cabs has been steering the project for a couple of years now, and the Infra-structure Development Bank of Zimba-bwe has just said it will follow suit soon.

Why have we chosen the path of self-denigration? These constructs….these units (Mobster can hardly call them homes – for they are really not) are so reminiscent of the African town-ships that our fathers and grandfathers were forced to dwell in exchange for their labour, in dramatic contrast to the capacious gardens of houses in the European suburbs.

Is this what we have chosen for our-selves, a perpetuation of poverty? A perpetuation of an unvoiced repression (this time self-imposed)?

Because we lack a mind of our own for changing things, and doing them in a better way? That’s the case, most apparently. Just look at the continua-tion of construction of extensive mul-ti-storey brick and concrete hostel

blocks – that in the colonial era were meant to accommodate hordes of black single male workers.

What’s even worse is that we are now constructing the same hostels for proper families.

And then there is the increasing pro-vision of serviced, semi-serviced and at times even just arid land for self-built projects – a clear indication that the councils have reached their limit (which, I must say had always been set dreadfully low).

It’s not because the country is now facing a liquidity challenge, and we are now failing to cope. This is what has always been. It’s just that the council authorities’ technical incompetency is now more glaring than ever.

The beauty of freedom is choice, and choice only exists to the extent that there are options….

Our world is not just. People do not necessarily get what they deserve and necessarily deserve what they get.

It hurts to say, but bad things do hap-pen to some people on the basis of the bad decisions other people make.

(Mobster is a Zimbabwean philos-opher who has an opinion on just about anything. She however has a particular liking for business and economics stuff. However her opinions are not necessarily rep-resentative of this platform. You can send your feedback to her on [email protected]) •

21 MOBSTER’S MONDAY MUSINGS

A perpetuation of repression