Isabel dos Santos, the billionaire daughter of Angola's President, has been appointed as the new CEO of state energy firm Sonangol and has pledged to overhaul the company to improve efficiency and margins amid low oil prices. She plans to split Sonangol into three units and increase transparency to international standards in order to generate more revenue for Angola, which relies heavily on oil exports. Dos Santos aims to offset the "huge" economic impact of depressed oil prices through the reforms at Sonangol.

1. By Tawanda Musarurwa
HARARE – Listed Zimbabwean
heavyweights Delta Corpora-
tion and Econet Wireless Zim-
babwe continue to be the only
two local firms making the Top
250 African companies list.
The list which is published
annually by pan-African
business magazine African
Business, uses the companies’
financial data as provided by
Bloomberg as at March 31,
2016.
The beverages maker is the
best placed local firm at a
ranking of 140, with a total
market capitalization of $703
million and net income of $92
million.
Delta however slipped 40
places from last year’s ranking
of 100. Econet came in at
number 214 this year, from a
ranking of 153 in 2015. At the
time of computing the ranking,
the mobile telecoms operator
had a total market capitalisa-
tion of $402 million and net
News Update as @ 1530 hours, Tuesday 07 June 2016
Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw
Delta, Econet in Top250 African companies

2. income of $70 million.
Analysts attribute both firms’
decline to a challenging eco-
nomic operating environment
last year, with corporate earn-
ings generally subdued with
most local companies record-
ing negative earnings growth
rates.
Interestingly, in 2015 both
Delta and Econet posted neg-
ative returns on the Zimbabwe
Stock Exchange (ZSE) of -30,
88 percent and -64, 85 per-
cent, respectively.
The only large cap stocks to
post positive returns last year
were Afdis (+18, 47 percent),
Barclays (+70 percent), BAT
Zimbabwe (+7, 96 percent),
CBZ Holdings (+9, 90 percent)
and Simbisa (+30 percent).
But in terms of market cap-
italization Delta and Econet
remained the two largest
stocks on the local bourse.
The negative earnings growth
was however not peculiar to
the two Zimbabwean firms on
the Top250 African companies
list.
According to an analysis by
African Business the total
value of the top 250 compa-
nies fell by 20 percent from
the previous year due, largely
due to the decline in commod-
ity prices.
“The drop in combined market
capitalization from $948 billion
in our 2016 table to $764
billion this year is largely the
result of tumbling commodity
prices, particularly for oil and
mining commodities, and the
associated impact on the wider
continental economy.
“Low commodity prices influ-
ence exporting nations in
many different ways. Obvi-
ously they affect the balance
sheets and therefore market
value of companies involved
in the specific sectors con-
cerned.”
And it could be much of the
same for the sub-Saharan Afri-
can region going forward.
The World Bank, in its latest
outlook for the region, expects
sub-Saharan Africa to continue
to face notable challenges in
the short to medium term.
It forecasts commodity prices
to stabilise but remain low
through to 2017, while the
normalisation of monetary
policy in the United States
is expected to tighten global
financial conditions.
Meanwhile, equity analysts
still see Delta and Econet’s
prospects in the outlook as
bright.
“From a fundamental perspec-
tive our top picks for the year
are as follows Delta (TP $1,02,
PER 8.9x (+1)) on account
of valuation….while Econet
(TP $0,22, PER 11.9x (+1))
intuitively appears attractive,
however we remain concerned
around regulatory headwinds
(tariffs),” says IH Securities in
its Zimbabwe Equity Strategy
2016.●
2 news

3. BH243

4. BH244

5. By Funny Hudzerema
HARARE - The Zimbabwe
Energy Regulatory Authority
(ZERA) has so far licensed 24
Independent Power Producers
despite the fact that most
of the projects are being
undermined by the shortage
of funds and lack of clear poli-
cies in the energy sector.
ZERA chief executive officer
Gloria Magombo said among
all the registered IPP pro-
gramme only 10 are producing
electricity to the national grid
at low capacity.
“We have licensed about 24
power projects to date under
the Independent Power Pro-
ducers programme of the 24
projects we have got 10 pro-
jects which are operational.
“Our market have got very
serious liquidity issues and
most of the power projects to
move from prefeasibility to
bankable feasibility they need
access to funding for project
preparation,” she said.
She added that there is need
to come up with an integrated
energy resources plan and
after its development will
come up with competitive pro-
curement framework for IPP.
“We believe that as a country
we need to move from the
current unsolicited bids which
tend to be expensive because
we don’t have control of those
bids and there is no compe-
tition.
“Once we have finalised the
integrated energy resources
plan we should be able to
come up with a competitive
bidding process for procure-
ment of additional capacity
going forward which will be
based on list costs of the
economy,” she said.
This was said during a work-
shop which was organised by
the Ministry of Macro-Eco-
nomic Planning and Invest-
ment Promotion in collabora-
tion with the United Nations
Development Programme
(UNDP) to gather macroe-
conomic policies in order to
grow the economy as well as
guiding the budgetary pro-
cess.
“Among the IPPs we are
looking at the coal genera-
tors Tongaat Hullet project
in Triangle and sugar mill
producing power mainly for
own consumption with Hippo
Valley being able to add an
additional of 4 or 6 megawatts
when they have surplus to the
grid.
“We also have green fuel
which is producing 18, 3
megawatts and supply 5
megawatts when it has excess
and we have five generators
mainly small hydro now with
the capacity of 24 megawatts
which are mainly in the Honde
Valley area,” she said.
She also said ZERA is set to
license a number of small
solar projects apart from the
ZPC once which can produce 5
to 25 megawatts contributing
a total of 300 megawatts.
“There is need for clarity on
the policies and laws of indi-
genization applicable to the
energy sector which is an area
where there is consistently
having questions. People are
saying it’s not about the pol-
icy but they want to see clear
policies on paper which they
can use in their operations,”
she said.
She added that there should
be a clear pricing policy of
energy which will reflects the
cost of production and if there
is need to subsidies because
there are certain sectors
which needs to be subsidies
there should also be a clear
subsidy indicating where that
subsidy is coming from.
The IPPs are also raising the
issue that there is need to
strengthen ZETDC as an off
taker in terms of its credit
worthiness to be improved.
●
ZERA licences 24 independent power producers
5 news

6. BH246

7. BH247

8. HARARE – Zimbabwe’s larg-
est retail chain, OK Zimba-
bwe took a massive hit on
net profit, slumping to $672
000 for the year ended March
31, 2016 from $7,5 million
last year owing to a com-
bination of factors, chiefly
weak consumer demand.
The retailer also saw its
revenues drop to $438
million from $463 million,
as consumers spent less
due to shrinking disposable
incomes.
As a result, OK Zimbabwe
said it will not declare a
dividend, and instead re-in-
vest the small profit in the
business.
“Gross margins softened in
a market whose consump-
tion is increasingly weighted
towards slow margin basic
products and which is expe-
riencing ever-increasing
competition,” OK Zimbabwe
chairman David Lake said.
“Operating costs declined but
the decrease was not ade-
quate to counter the nega-
tive effect of lower sales and
gross margins.”
Attributable earnings per
share also dropped signifi-
cantly to 0.06 from 0.65 last
year.
To maintain its market share
in the wake of increasing
competition, Mr Lake said
the group will open two new
OK Mart Stores in Gweru and
Victoria Falls, a new outlet
in Waterfalls while two other
branches would be moved
to “larger stores” which are
under construction in Harare.
In the review period, two
new stores were opened in
Mutare and Zvishavane.
“Despite the difficult envi-
ronment, the group will
take the necessary steps
to improve margins without
losing market share,” Mr
Lake said. “Focus will be on
further cost reductions to
improve profitability.”
He said product supply for
the group remained consist-
ent in the review period, with
South Africa remaining the
major source of goods for
the retail chain.
-New Ziana ●
8 news
OK Zim in massive profit drop

9. BH249

10. BH2410

11. HARARE - Zimbabwe risks losing
up to four months of mineral
production this year due to the
prevailing cash shortages which
have led to delays in processing
crucial external payments, the
Chamber of Mines has said.
Zimbabwe is currently battling to
contain a cash crisis which has
been caused by a number of
reasons including the depletion
of bank nostro balances and the
dysfunctionality of the multi-cur-
rency system because of the
pre-dominant use of the US dollar.
The US dollar has virtually sub-
stituted all the other currencies
including the South African Rand,
the Pula and the Euro that were in
use at the adoption of the mul-
ti-currency regime in 2009.
Chamber of Mines president Toen-
depi Muganyi said delays of up to
20 days in processing external
payments were being faced and
this was affecting mining oper-
ations.
“The mining industry has not
been spared from the current
crisis which has manifested in
production disruption as mining
houses fail to effect payments
to suppliers timeously. Delays in
the process of external payments
have crippled their operations,”
he said.
“With potential production loss
of up to four months, this will
remain a huge potential risk to
the outlook.”
Mr Muganyi said small scale
miners were also affected as they
were failing to access funds to
purchase crucial inputs. Zimba-
bwe’s mining sector recorded
improved productivity in the first
three months of 2016 compared
to the same period last year, but
earnings dropped by about 3.5
percent to $420 million on the
back of low mineral prices.
First quarter production figures
show that there was an increase
in production ranging between
eight and 64 percent for the bulk
of the top minerals such as gold,
platinum, copper and palladium.
Coal and chrome are the two
minerals that recorded a negative
growth in production.
The loss of output would further
dent national export earnings, and
increase strains on a sector bat-
tling low international commodity
prices. According to the chamber,
most mines in Zimbabwe were
operating at between 60 and 85
percent of capacity.-New Ziana●
11 news
Chamber of Mines predicts reduced mineral output
02 03
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12. BH2412

13. HARARE - – The mainstream
industrial index dropped 0.77
in today’s trades to close at
103.33.
Dragging down the bourse
was SeedCo, which lost $0,
0168 to trade at $0, 5532
and beverages giant Delta,
which declined $0, 0150 to
close at $0, 6800.
Gains were noted in CFI
Holdings, which added $0,
0120 to $0, 0726, giant
insurer Old Mutual, which
rose by $0, 0025 to settle at
$2, 2425.
Also on the upside was
Padenga, which closed at $0,
0750 after a $0, 0008 gain
and Ariston, which was up
$0, 0003 to $0, 0045.
The mining index moved up
0.47 to settle at 26.24 on
the back of a $0, 0060 rise
in RioZim to close at $0,
1700. Bindura, Falgold and
Hwange maintained previous
price levels at $0, 0120, $0,
0050 and $0, 0300, respec-
tively BH24 Reporter ●
Equities market extends losses
13 zse

14. Movers CHANGE Today Price USc SHAKERS Change TODAY Price USc
CFI Holdings 19.80 7.26 SeedCo -2.94 55.32
Ariston 7.14 0.45 Delta -2.15 68.00
RioZim 3.65 17.00
Padenga 1.07 7.50
Old Mutual 0.11 224.25
Index Previous Today Move Change
Industrial 104.10 103.33 -0.77 points -0.74%
Mining 25.77 26.24 +0.47 points +1.82%
14 zse tables
ZSE
Indices
Stock Exchange
Previous
today

15. 15 DIARY OF EVENTS
The black arrow indicate level of load shedding across the country.
POWER GENERATION STATS
Gen Station
06 June 2016
Energy
(Megawatts)
Hwange 415 MW
Kariba 583 MW
Harare 0 MW
Munyati 25 MW
Bulawayo 0 MW
Imports 0 - 400 MW
Total 1448 MW
9 JUNE -- First Mutual Holdings Annual General Meeting; Place: Royal Harare Golf Club, Harare; Time: 14:30hrs
15 JUNE 2016 -- Rainbow Tourism Group 7th Annual General Meeting; Time: Jacaranda Rooms 2 and 3 at the Rainbow Tour-
ism Hotel and Conference Centre, 1 Pennefather Avenue, Samora Machel Avenue West, Harare; Time: 1200 hours...
16 JUNE 2016 -- RioZim 60th Annual General Meeting; Place: No. 1 Kenilworth Road, Highlands, Harare; Time: 10.30 hours...
22 JUNE 2016 -- Zimre Holdings Limited 18th Annual General Meeting; Place: NICOZDIAMOND Auditorium, 7th Floor Insur-
ance Centre, 30 Samora Machel Avenue, Harare; Time: 1430 hours...
22 JUNE 2016 -- GB Holdings Limited Annual General Meeting; Place: Cernol Chemicals Boardroom, 111 Dagenham Road, Wil-
lowvale, Harare; Time: 11.30 hours...
23 JUNE 2016 -- Zimpapers 89th Annual General Meeting; Place: Zimpapers Ltd Boardroom, Sixth Floor Herald House, Cnr. G.
Silundika/Sam Nujoma Street, Harare; Time: 1200hrs…
THE BH24 DIARY

16. LUANDA - Isabel dos San-
tos, the billionaire daughter
of President Jose Eduardo
dos Santos, pledged a root
and branch overhaul of
state energy firm Sonangol
on Monday to improve its
efficiency and margins to
offset the "huge" impact of
depressed oil prices.
A presidential decree carried
on Angolan state media last
week said Isabel dos Santos,
ranked as Africa's richest
woman by Forbes magazine,
would become chief executive
after the firing of Sonangol's
board.
After being sworn in as chief
executive on Monday, dos
Santos told reporters she
was looking to split Sonangol
into three units overseeing
operations, logistics and con-
cessions to international oil
companies.
The 43-year-old business-
woman, who is a major
investor in various Angolan
and Portuguese telecoms,
banking, media and energy
companies, also pledged
to improve transparency at
Sonangol, the central pillar
of sub-Saharan Africa's third
biggest economy.
With militants causing serious
production outages in Nige-
ria's Niger Delta, Angola is
currently Africa's biggest oil
producer.
"Our objective is to increase
the revenue, efficiency and
transparency of the com-
pany," dos Santos said. "We
want to implement govern-
ance rules similar to the
international standards."
Angola, which relies on oil
exports for 95 percent of
its foreign exchange, is
often cited by anti-bribery
campaigners as one of the
world's most corrupt coun-
tries. President dos Santos's
administration says it has a
"zero tolerance" approach to
graft.
Isabel dos Santos also said
on Monday she was looking
into the possibility of devel-
oping a domestic oil refinery
to reduce Angola's need to
import nearly all its diesel
and gasoline. - Reuters●
16
Rand weaker, focus on Fitch, GDP dataAngola's dos Santos promises overhaul of
state oil firm Sonangol
regioNAL News
JOHANNESBURG -South
Africa's rand weakened in
early trade on Tuesday as
market focus shifted to a
rating review from Fitch
and first-quarter eco-
nomic growth numbers both
expected on Wednesday.
At 0646 GMT, the rand
traded at 14,9510 per dollar,
0,34 percent softer from its
New York close on Monday.
The currency broke below
15,0000/dollar for first
time in nearly four weeks
on Monday after S&P Global
Ratings on Friday affirmed
the investment-grade credit
status of Africa's most
industrialised country.
"While rating reprieve was
welcomed by government,
Fitch is also due to issue rat-
ing update this week, while
real GDP data is set to be
released on Wednesday that
should provide clearer pic-
ture of South African econ-
omy," NKC African Economics
said in a note.
Analysts expect Fitch to
affirm South Africa's invest-
ment grade credit rating but
lower its outlook to negative.
Fitch, which rates South
Africa one step above spec-
ulative grade with a stable
outlook, has not said when
it will publish its review. The
Treasury says it expects the
review on June 8.
In fixed income, the yield
for the benchmark instru-
ment due in 2026 added 4.5
basis points to 9,1 percent,
losing some momentum after
firming on Monday following
S&P's review - Reuters●

17. European shares advanced
for a second day as investors
speculated that the Federal
Reserve may delay its next
interest rate increase beyond
July.
The Stoxx Europe 600 Index
climbed 1 percent to 345.65
at 8:16 a.m. in London. The
equity benchmark yester-
day rebounded from its first
weekly drop in a month as
energy and raw-material
producers advanced, with
UK shares rising the most
among major western-Euro-
pean markets as the pound
weakened amid heightened
concerns of a Brexit.
Speaking after the close of
European trading yester-
day, Fed Chair Janet Yellen
reiterated her belief that the
US economy still has forward
momentum and that consum-
ers could provide a signif-
icant step up in spending
this quarter to propel overall
growth. But she was silent on
when another rate increase
would be needed, playing
down a June move and rais-
ing doubts about July.
The central bank will
announce its next rate deci-
sion on June 15. Traders are
now pricing in a 2 percent
chance of an increase this
month -- down from 22
percent before disappointing
payroll data on Friday -- and
a 22 percent probability in
July. December is now the
first month with more than
even odds for a move.
After falling as much as
5,4 percent from an April
20 high, European shares
regained momentum at the
end of May, before stumbling
last week amid resurgent
worries about global growth.
The Stoxx 600 is still down
5,5 percent this year.
Rio Tinto Group and BHP
Billiton Ltd. led a gauge of
commodity producers to the
best performance of the 19
industry groups on the Stoxx
600 for a second day. Energy
companies advanced as oil
held gains at about $50 a
barrel. Among stocks moving
on corporate news, Burck-
hardt Compression Holding
AG rose 1,1 percent after
posting an annual increase in
sales. - Bloomberg●
17
European shares climb as Fed interest rate rise horizon recedes
internatioNAL News

18. By Michael Adeyeye Oshi
Although it’s problematic
to generalise about a large,
diverse place it’s fair to say
that Africa is fast emerging as a
consumer continent. It is pop-
ulated by “Afropolitans”, who
are sometimes also referred to
as Pan-Africanists. These are
young, urban, well educated
people. They are willing to
spend money on luxury goods.
However, these people are a
relatively small middle class
in a sea of poverty. They are
unlikely to drive a classical
“trickle down” improvement
to Africa’s general economic
picture.
It’s also worth noting that not
much of what these young con-
sumers covet is actually being
produced on the continent. I
would argue that Africa should
be called the “borrowed conti-
nent” rather than a consumer
continent. Its raw materials are
exported, refined elsewhere and
generate big profits for other
countries. Researchers come,
conduct their work and run
their experiments. Then they
leave again to write it all up.
How did people’s high hopes
during the era of independence
lead to this? And can those high
hopes ever be resurrected? Can
Africa discard the mantle of
“borrowed continent”?
A history of control
To understand the situation
that Africa finds itself in now,
it’s worth looking back into the
continent’s history.
Most countries started to gain
independence from colonial
powers during the 1960s and
1970s. At this time there were
two primary blocs on the con-
tinent: the Casablanca and the
Monrovia groups.
The Monrovia group envisaged
a continent whose controlling
power remained with West-
ern governments. Develop-
ment would come through the
exchange of resources with the
western world, trading Africa’s
vast mineral resources and
agricultural produce.
The Casablanca group, mean-
while, envisaged a self-reliant
continent that would be capable
of governing itself through
intra-continental trade. This
continent would integrate
socio-economic cultural values
among all countries.
Although the two had differ-
ent missions, they upheld a
singular vision – the idea of a
united Africa. Over time these
aspirations were swept under
the carpet and in May 1963 a
partially unified body emerged:
the Organisation of African
Unity. This was relaunched as
the African Union in 2001, at
which time it adopted grandiose
plans to improve governance
in its member states through
a process of peer review and
monitoring. These plans haven’t
been seriously implemented.
Instead, the relative pluralism
and openness witnessed during
the late 1990s and early 2000s
is being eroded by a new wave
of authoritarianism.
Ordinary Africans have not
enjoyed much of the oneness
imagined by this “union”. Much
of the blame for this lies with
western powers that remain
embedded on the continent.
African leaders have also
compromised notions of unity
through grievous maladminis-
tration and systemic oppression
of their own people. And so
18 analysis18 analysis
How to turn Africa from a “borrowed continent” to a global powerhouse

19. 19 analysis19 analysis
Africa remains little more than
a test site for new scientific
experiments and a place from
which raw materials can be
extracted. This is known as
neo-colonialism.
Today the neo-colonialists are
more likely to come from the
East than the West. Against
this backdrop, how can Africa
shift its role from borrower to
creator and producer?
The answers lie with integrating
the continent’s people, tapping
into existing indigenous knowl-
edge and focusing on capacity
development. Technology is key
to all of this work.
Technology a great leveller
and limiter
Technology can reform how
people interact – think of cheap
communication services like
mobile phone and social media
apps. It can be used to estab-
lish free, open, world class
research facilities like physical
and applied science laboratories
and engineering installations.
In these spaces, Africans can
create their own products and
services. Technology also has
the power to reform governance
by, for instance, offering online
government services.
Digital copying and sharing cost
next to nothing, which means
that classical scarcity-based
economic theory becomes less
applicable.
Also, when all but a coun-
try’s poorest people have the
means of recording, sharing
and publishing – in the form of
a smartphone, tablet or laptop
– classical methods of social
control begin to fail.
On one hand, the classical path
to industrialisation seems more
distant than ever. Manufactur-
ing is ever more automated
worldwide. So much so, that
some people are turning away
from demanding job creation
and protection to demanding
basic income grants to alleviate
mass unemployment.
But on the other hand, the glo-
balised economy is seeding its
own destruction. High energy
use is leading to climate change
and its unnatural disasters.
A growing global population
is leading to conflict over
resources.
It seems possible that rapid
social change must not only aim
for decentralisation, but use
decentralisation as its method.
Paradoxically, the technology
that brainwashes us for mass
consumption can also help us to
grapple with local survival and
dignity. For instance, there’s
a need to hybridise universal
scientific knowledge with local
indigenous wisdom, as well as
local biodiversity – including
traditional crops.
This process mustn’t be propa-
gated by wasteful bureaucratic
agencies but by grassroots
movements that are empow-
ered by cheap instant commu-
nication and locally produced
energy.
Working collectively
Of course technology does not
come without risks or dangers.
It’s important that ordinary
people and their governments
are well prepared to use tech-
nology effectively. In this, as
in all endeavours related to
turning Africa from borrowed
continent to creator, it’s crucial
that countries on the continent
identify their weaknesses and
strengths.
This will help when setting and
working towards common goals.
There’s already a template
countries can use for this work:
the AU 2063 Agenda, whose call
for seamless borders in Africa
resonates to the new world.
Although the countries in the
continent remain largely closed
off, some – such as Namibia,
Rwanda and Ghana) – are
gradually opening their arms
to accept other government
officials and ordinary Africans
using a “no visa” or visa on
arrival policy.
All of these developments also
progressively create a mental
shift for Africans.
– The Conversation ●