Zimbabwe's Finance Minister Patrick Chinamasa said that all development assistance to Zimbabwe should come through the country's Vote of Credit to prevent double funding of projects and improve accountability; he also noted that using the Vote of Credit would make it easier for the government to allocate funding to uncovered areas and avoid directing funds to areas already covered by donors. The UN resident co-ordinator agreed on the need to strengthen aid coordination to better identify development needs and gaps.
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Zimbabwe unveils diamond cutting machinery to boost beneficiation
1. News Update as @ 1530 hours, Wednesday 06 May 2015
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Development assistance should come through Vote of Credit: Chinamasa
By Rumbidzayi Zinyuke
HARARE - Government says all devel-
opment assistance to the country
shouldcomethroughtheVoteofCredit
to prevent double allocation of funds to
thesameeconomicareasandenhance
accountability of donor funds.Speaking
at a Government-development part-
ner meeting on the review of the Aid
Co-ordination Architecture, Finance
and Economic Development Minister
Patrick Chinamasa said development
partners can discuss with government
how they want their funds to be dis-
bursed.
“We are saying aid should come
through the Ministry of Finance and
the money goes to the Vote of Credit.
From there, we agree as Govern-
ment and the development partners
involved, where they want the funds to
be directed,” he said.
He said this would make it easier for
Government to make budgetary allo-
cations towards areas that have not
been covered by development aid and
avoiddirectingfundstowardsthesame
areas that have already been covered
by donors.
Non-Governmental Organisations
operating in Zimbabwe were last year
accused of diverting development
funds to personal use instead of chan-
neling them through the state.Minister
Chinamasasaiditisdifficultforgovern-
ment to track aid that does not come
through the Vote of Credit.“If we (Gov-
ernment) do not know when the aid
has come, we cannot be expected to
be grateful and say ‘thank you’ when
we don’t know where the aid went or
how it was used,” he said.Minister Chi-
namasa said development assistance
plays a crucial role in attaining the
goals enshrined in ZimAsset.
“To help achieve this, Government
aims to place a transparent Aid and
Development Assistance Co-ordina-
tion framework that would significantly
improve effectiveness of development
assistance,buildtransparencyandlead
towardsnewlevelsofengagementand
mutual accountability between Zimba-
bwe and its development partners,” he
said.Speaking at the same event, UN
resident co-ordinator Mr Bishosw Para-
juli said there is need to strengthen aid
co-ordination to assist in clearly iden-
tifying and addressing development
needs and gaps.He said the review
of the Aid Co-ordination architecture
would help donors to appreciate the
full extent of the ongoing development
efforts, and cement further strong
development co-operation and foster
mutual accountability.
“The absence of a well-functioning
development mechanism not only
prevents the realisation of the above
enabling factors but also constrains the
Government’s ability to ensure align-
ment of donor resources to national
priorities, potentially depriving the
country of value for money,” he said.
He said a structured government-led
dialogue among stakeholders could
greatly promote transparency and
build trust among stakeholders.
“TheUnitedNationsteamstandsready
to support strengthening of the overall
national development co-operation. It
isthereforeimportantforustoadvance
development cooperation effectiveness
in line with international agreements,”
he said.●
3. 3 BH24
Constrained money supply keeps Zim inflation low in the region
BH24Reporter
HARARE - Zimbabwe's money supply
continuestoberelativelyflatduetothe
use of the multi-currency system.
According to the latest Common Mar-
ket for Eastern and Southern Africa
(COMESA) Harmonised Consumer
Price Index (HCPI), Zimbabwe main-
tains one of the lowest rates of total
inflation at -1 percent in March 2015,
only ahead of Rwanda which has a
total inflation rate of -3.3 percent.
COMESA's HCPI is specifically
designed as a macro-economic meas-
ure of monetary inflation, while some
national consumer prices indices -
including Zimbabwe's - have other
purposes such as cost of living meas-
urement.
Economists believe monetary infla-
tion to be 'real' inflation to the extent
that it reflects a sustained increase (or
lack thereof) in the money supply of a
country.
It occurs when central banks print too
much fiat currency. Too much of any-
thing devalues the existing supply and
thus it is with money.
Zimbabwe'suseofthemulti-currency
system has however meant that its
central bank - the Reserve Bank of
Zimbabwe - is not printing local cur-
rency,afactorthathasresultedincon-
strained money broad money supply
in the economy, hence the negative
inflation rate.
At the broader level, COMESA's
annual inflation rate stood at 10,7
percent in March 2015. The year on
year inflation rate (annual percentage
change) in the COMESA region as
measured by the HCPI-COMESA stood
at10,7percentforthemonthofMarch
2015, up from 9.8 percent registered
in February 2015.
A year earlier the rate was 12,4 per-
cent.
The month-on-month inflation rate in
the COMESA region as measured by
HCPI-COMESAstoodat1.6percentfor
the month of March 2015, unchanged
comparedtoFebruary2015.Itwas0.8
percent in March 2014.
Within the COMESA region, Sudan
recordedthehighestyearonyearinfla-
tion rate of (+27,1 percent) followed
by Malawi with an annual inflation rate
of (+19,9 percent) whilst Rwanda
recorded the least annual inflation rate
of (-3,3 percent) in March 2015.
The HCPI-COMESA comprises of
twelve divisions of expenditure. And
they posted the following average
price changes during the month of
March2015fromthepriorcomparable
period:
Food & Non-alcoholic Beverages
(+10.1 percent); Alcoholic Beverages
andTobacco(+26,1percent);Clothing
and Footwear (+8 percent); Housing,
Water, Electricity, Gas and Other Fuels
(+15,9 percent); Furnishings, House-
hold Equipment and Routine House-
hold Maintenance (+4.6 percent);
Health (+3,9 percent); Transport (+9
percent); Communication (+1,3 per-
cent); Recreation and Culture (+15,3
percent); Education (+21,3 percent);
Restaurants and Hotels (+12,1 per-
cent) and Miscellaneous Goods and
Services (+3 percent).
●
5. 5
By Funny Hudzerema
HARARE - Mr Mkhululi Ndlovu, the
managing director at Westchase
Consultants, was recently elected
Zimbabwe National Chamber of
Commerce Mashonaland vice-pres-
idency at the organisation's annual
general meeting.
Prior to this he was the ZNCC Mash-
onaland branch's chairman, a posi-
tion that has been taken up by Inte-
grated Properties managing director
Mr Mike Juru.
The AGM also saw the appointment
of Hunyani Holdings general man-
ager Mr Nick Alves to the position
of first vice chairman, and Surdax
Cleaning &Landscaping manag-
ing director Mrs Roselyn Charehwa
Musarurwa as second vice chair-
man.
Other new members of the exec-
utive committee include Avenues
Clinic managing director Mrs Mer-
issa Kambani, The Power of Touch
founder and managing director Mrs
Beatrice Sithole, Onara Transport
managing director Mrs Juliet Muton-
hori and BAT Zimbabwe human
resources business partner Mr Fran-
cis Mwale.
ZNCC Mashonaland regional man-
ager Mrs Christine Kahari said the
executive was selected according to
the expertise in business and their
knowledge of industry.
“The members were selected
according to our constitution and we
are set to do the final elections in
Victoria Falls to select the president
from the regional presidents which
were selected in all the regions,” she
said.
Meanwhile, ZNCC Harare branch
will hold its Annual Business Awards
Ceremony on May 15, which will this
year be running under the theme:
“Maintaining Competitiveness in a
Rapidly Changing Environment”.
Industry and Commerce Minister
Mike Bimha is expected to be the
keynote speaker at the event.
Categories this year include: Busi-
ness Man of the Year, Business
Woman of the Year, Entrepreneur
of the Year, Most Innovative SME
of the Year, Best Bank Supporting
SMEs, Rural Business Person of
the Year, Best Exporter of the Year,
Best Social Corporate Responsibility
Program, Best ICT Company of the
Year and Best Parastatal of the Year.
“This event has grown from
strength to strength and gained
popularity over the years and last
year’s attendance was close to 500
delegates,” said Mrs Kahari●
ZNCC Mashonaland appoints new executive
BH24
Mkhululi Ndlovu
7. 7 ANALYSIS7 NEWS
HARARE - The Zimbabwe Diamond and
Technology Centre (ZDTC) on Tuesday
unveiled the first batch of state of art
equipment which will enable the coun-
try to cut and polish diamonds before
exporting.
The centre signed a multi-million dollar
dealwithIndianfirm, SahajanandLaser
Technology Limited early this year for
supplyofthe machinery.
Although Zimbabwe is among the top
five producers of diamond in the world,
over the years it has been losing out
throughexportingrough diamonds.
ZDTC chairman Mr Lovemore Kurotwi
said the last batch of the machinery was
still awaiting clearance in India and was
expectedinthecountrysoon.
Mr Kurotwi said the equipment had the
capacity to cut and polish all diamonds
minedinthecountry.
“This machinery is for the industry and
withthistechnologyonesetof laserhas
the capacity to cut 100 big stones and
alternatively 700 small stones per day.
Ifwemultiplybythenumberofunitswe
are talking of thousands of stones to be
cutperday,”hesaid.
“We are not doing any experiments.
All other countries that are mining dia-
monds have established such centres. It
is only us who are the major producers
butdonothavethemachinerytocutour
stones,”headded.
At least nine experts from India are in
the country to commission and train
localstooperatethescientificequipment.
Mr Kurotwi said the Indians would be in
the country until the local experts were
familiarwiththemachinery.
HesaidChinaandDubaihadexpressed
interestinpartneringtheZDTC.
Mr Kurotwi said there was need to
merge the seven local companies that
were cutting and polishing diamonds for
easiercontrol.
Speaking at the same event beneficia-
tion firm Supertrend Enterprises chair-
man Retired Colonel Charles Mugari said
the only way the country could make
money was by selling processed dia-
monds.
“We are exporting jobs out there and
with our current economic challenges it
is high time we start thinking positively
and see how we can stop exporting
those jobs and create new ones by add-
ingvaluetoour ownminerals,”hesaid
Zimbabwe mines most of its diamonds
from the vast Marange fields in Mani-
caland province which are estimated to
havethecapacitytosupply
25percentofglobaldemand.
Researchers contend that Zimbabwe
has the potential to generate over $8
billion and create over 200 000 jobs
annually when it starts processing its
minerals.-NewZiana●
Zim Diamond Centre unveils state of the art machinery
MrLovemoreKurotwi
9. Industrial stocks bucked a six-day
losing streak to bump 0.47 (or 0.30
percent) in today's trades to close
at 155.38.
AFDIS gained 10 cents to trade at
50 cents, while giant retailer OK
Zim added a cent to 11 cents and
StarAfrica moved up 0.40 cents to
close at 1.40 cents.
ART was the biggest gainer, as it
doubled to 0.60 cents, while bev-
erages manufacturer Delta gained
a marginal 0.01 cents to trade at
105.01 cents.
Only two counters traded on the
downside. Telecoms giant Econet
retreated by 0.52 cents to 47.98
cents whilst ZPI lost 0.20 cents to
close at 0.80 cents. Higher trades
in trades in Delta, Econet and
AFDIS pushed the value of trades
to $2,17 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, respec-
tively. - BH24 Reporter
- BH24 Reporter●
9 ZSE REVIEW
Equities recover after six day losses
10. REGIONAL NEWS10
Growth in its South African ferro-
chrome and coal operations were a
highlight amid a mixed production
performance for the March quarter
reported by diversified global miner
Glencore on Tuesday.
Although prices for almost all com-
modities have continued to weaken,
reflecting oversupply, expansion pro-
jects launched during the years of
higher prices are only now coming on
stream.
Attributable ferrochrome produc-
tion had risen 15 percent to 385 000
tonnes compared with the same quar-
ter last year, as the Lion 2 expansion
project startedlast April, Glencore
said. Total coal production from SA,
Australia and South America grew 4
percent to 35.6-million tonnes, driven
by the commissioning of two new pro-
jects in SA.
Glencore,whichproducesandmarkets
more than 90 commodities, including
agricultural produce, reported higher
quarterlyoutputofferrochrome,nickel
and zinc compared with a year ago but
lower output of copper, cobalt, lead
and platinum group metals (PGMs).
The lower PGMs’ production reflected
poor ground conditions at the Eland
Platinum mine near Brits.
Within its energy division, the group’s
South African export thermal coal pro-
duction rose 14 percent and domes-
tic thermal coal by 6 percent as the
Tweefontein and Wonderfontein mines
ramped up.
The group’s share of oil production in
Equatorial Guinea and Chad grew 52
percent to 2.6-million barrels, both
from the ramp up of two new fields
and an increase shown in its interests
in Chad.
Average cash copper prices have fallen
17 percent between the first quarter
of last year and this year, while coal
prices have fallen by about 20 percent
on average over the past year.
BHP Billiton CEO Andrew Mackenzie
said last month the group was deliv-
ering strong operating results while
efforts to improve productivity and
lower costs were helping to offset
weak prices.
Rio Tinto CEO Sam Walsh said the
group’s solid production in the March
quarter was driven by a focus on effi-
ciencies. - BDLive●
Glencore's SA coal production grows
ArcelorMittal (SA)
to reduce output at
Newcastle by 6pc
ArcelorMittal's South African
unit will cut second-quarter
production by 6 percent at its
Newcastle plant due to slack
demand from its domestic
market, it said on Tuesday.
"Production to be reduced by
a further 6 percent to 4,300
tons per day to reduce the
steel stock on hand," the firm
said in a presentation deliv-
ered at the plant in South
Africa's eastern KwaZulu-Natal
province. - Reuters●
12. 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
13. European Central Bank officials will
debate tighter rules for the liquidity
that Greek lenders rely on for sur-
vival, two people familiar with the
matter said, a move that underscores
the fragility of the country’s financial
system.
The Governing Council will discuss
Wednesday whether to raise dis-
counts on the collateral Greek banks
pledge in exchange for emergency
funding, said the people, who are
familiar with the agenda and asked
not to be identified. Governors will
also review how much more Emer-
gency Liquidity Assistance to offer
Greek banks.
With access to capital markets shut
and deposits flowing out of their
vaults, ELA is the last thread keep-
ing Greece’s banks afloat. While
economists say the ECB is unlikely
to demand higher haircuts without a
green light from Europe’s politicians,
the debate shows how concerned
some central bankers are about
Greece’s solvency 100 days after
Prime Minister Alexis Tsipras came to
power.Greek bonds plunged yester-
day as Tsipras’s government stepped
up its game of brinkmanship with
international creditors, blaming them
for a failure to end an impasse in the
country’s bailout talks.
“Tighter collateral requirements could
send a strong message to the Greek
government that time is running out,”
said Holger Schmieding, chief econ-
omist at Berenberg Bank in London.
Still, the ECB will not take big polit-
ical decisions, without the support
of European Union governments,
according to Schmieding.
New Slide
Greek bonds resumed their slide
today, with the yield on two-year
notes rising 66 basis points to 21.64
percent at 11:06 a.m. in Athens,
after climbing 149 basis points on
Tuesday. The benchmark stock index
slipped 0.4 percent after dropping 3.9
percent on Tuesday, the most in six
weeks.
Greece is sending mixed signals
about just how much money it has
left. While officials say they can make
payments to the International Mon-
etary Fund this week and next, one
policy maker signaled last month that
the country may struggle to keep its
finances afloat beyond the end of
May.
An interest payment of 200 million
euros ($225 million) to the IMF by
Greece will be made today “as nor-
mal,” Alternate Finance Minister Dim-
itris Mardas said in interview with
Mega TV. - Bloomberg●
13 INTERNATIONAL NEWS
ECB considers tighter noose on Greek banks
GREEK FINANCE MINISTER YANIS VAROUFAKIS
14. Mobile phones have proven to
be potential game-changers
in boosting access to financial
products and services to people
in Africa. This is particularly true
for those at the bottom of the
socio-economic pyramid as seen
in East Africa. It has often been
appraised based on its contribu-
tion to ‘banking the unbanked’,
but mobile money has achieved
much more, it has saved the
continent nearly $2 billion previ-
ously lost annually to inefficient
money transfer.UK-based think-
tank, Overseas Development
Institute (ODI), in a 2014 report
noted that Africans in Diaspora
pay an average of 12 percent
to money transmitters to send
$200 home. This is a far-cry
from the global average of 7.8
percent and more than double
the 5 percent target set by the
G8. “These excess fees cost the
African continent $1.8 billion
a year; enough money to pay
for the primary school educa-
tion of 14 million children in the
region.”
Why Africa pays so much
Weak competition, concentra-
tion of market power and flawed
financial regulation all contrib-
ute to high remittance charges,
according to ODI. Western Union
and MoneyGram are the two
leading money transfer oper-
ators (MTOs) that account for
two-thirds of remittance trans-
fers, and ODI estimates that
both will account for $586 mil-
lion of the loss associated with
the remittance ‘super tax’, part
of it through opaque foreign
currency charges. ‘Exclusivity
agreements’ between MTOs,
their agents and banks also
restrict competition and make
prices jump. However, WorldRe-
mit, a UK-based company
founded by a Somalian, is pro-
viding much-needed petition.
“With fair and transparent
prices, we are challenging the
“Remittance Super Racket” of
incumbent money transfer com-
panies in Africa which continue
their practices of agent-exclu-
sivity arrangements and charg-
ing unreasonable fees. We are
embracing mobile money as new
technology that is set to revolu-
tionise banking from the ground
up and make money transfers
more convenient for everyone,”
CEO & Founder of WorldRemit,
Ismail Ahmed said in an inter-
view. Ahmed, who founded the
online money transfer service in
2010 aims to use technology to
shake-up the industry, which he
considers stagnant. “By taking
the industry online and refus-
ing to engage in anti-compet-
itive practices, we are bringing
fairer, lower cost remittances
to Africa.”Years of experience
working with a number of remit-
tance businesses, as well as
international policy makers has
taught him that mobile money is
a technology that addresses an
important human need; access
to financial services. With this at
the back of his mind, he part-
nered with EcoCash and MTN to
enable instant transfers to the
telcos’ mobile wallets. The com-
pany is also close to launching
instant mobile money transfers
to Econet in Burundi. More
than 50 percent of Worldremit’s
transfers to Africa are currently
received as Mobile Money or air-
time top-ups.
Why is remittance impor-
tant to Africa?
Money sent home by friends
and relatives working abroad are
critical to the survival of many in
rural communities within Africa.
Without a decent job or mon-
ey-making trade, many rural
dwellers depend on handouts to
cater for domestic bills.
This has made the innovative
transfer service popular within
Africa. The continent received
$32 billion in 2013 and is
expected to receive more than
$40 billion by 2016. Somalia
is heavily dependent on remit-
tances. Money sent home by
Somali Americans to Mogadishu
is estimated to hit $215 mil-
lion annually. This accounts for
about 4 percent of the country’s
GDP.
14 ANALYSIS
How mobile money is saving Africa $2bn annually
14 ANALySIS
15. According to Jonathan
Scanlon of Oxfam America,
remittances to Somalia is
the largest and most impor-
tant financial flow going
into the country. “It really
is a lifeline for the coun-
try.”Nigeria, Africa’s larg-
est economy also depends
on remittances for foreign
exchange. Money transfer,
mainly from North America
and Europe, makes up the
country’s second highest
foreign exchange earner.
The country is also Africa’s
top remittance recipient,
accounting for around two-
thirds of total remittance
inflows to Sub-Saharan
Africa. Remittance to Nige-
ria is recorded at $21 bil-
lion for 2014 alone. While
making a case for donor
agencies to restructure the
way aids are channelled for
more efficiency, Hong Kong-
based Ghanaian academic
Adams Bodomo claimed that
Africans living outside the
continent send more money
home than what traditional
Western donors send as
Official Development Assis-
tance (ODA).Africans in
the Diaspora have recog-
nised the importance of
the money they send home
to their families are. With
mobile money proving to
be a more effective means
of transferring funds home,
they are increasingly adopt-
ing the service.A GSMA
report for 2014 highlights
that “2014 saw a steep
increase in the number of
international remittances
via mobile money, primarily
driven by the introduction
of a new model using mobile
money as both the sending
and receiving channel”.
Banking the unbanked
Mobile money continues
to expand the reach of
financial services in highly
unbanked Africa. Accord-
ing to Frans Prinsloo, Man-
aging Director at Hollard
International, South Afri-
ca’s largest privately-owned
insurance group, “The rapid
uptake of mobile telephony,
the introduction of smart
phones and cloud comput-
ing, and the availability of
affordable data have for-
ever changed the financial
services landscape.”Today,
the number of active Mobile
Money accounts globally
now exceeds 100 million and
sub-Saharan Africa accounts
for more than half (53 per-
cent).“Cash is increasingly
becoming an obsolete tech-
nology as the developing
world sprints ahead of the
developed in its adoption
of Mobile Money,” Ahmed of
WorldRemit further explains.
Bill Gates recently made a
big bet that by 2030, almost
everyone will have a mobile
money account. “Not having
access to a range of cheap
and easy financial services
makes it much more difficult
to be poor.“Traditional banks
cannot afford to serve the
poor because of their costs.
That’s why 2.5 billion adults
don’t currently have a bank
account,” Gates stressed.
Mobile money is affording
the poor access to more
financial services everyday.
From savings account to
credit insurance, the tech-
nology is saving Africa, a
continent where nearly 50
percent of its population are
resident in rural communi-
ties.
However, there is still a long
way to go to finally estab-
lish a robust cross-border
transaction market using
mobile technology. Although
its potential to lower costs
is undisputed, its use
remains limited due to the
regulatory burden related
to combating money laun-
dering and terrorist financ-
ing, according to the World
Bank. - Ventures Africa
Ventures Africa●
15 ANALYSIS15 ANALySIS