Grateful 7 speech thanking everyone that has helped.pdf
Local car-makers failing to meet region’s rules of origin requirements
1. BH24 Reporter
HARARE – The demise of the
local motor vehicle compo-
nent industry has seriously
hindered the country’s vehi-
cle manufacturers’ ability to
meet requirements to export
into the region.
For instance, the Common
Market for Eastern and
Southern Africa (COMESA)’s
rules of origin entail that the
domestic value added/local
content quota requirement
for a product to get pref-
erential treatment ranges
between 25 and 35 percent
– depending on the type of
product.
Zimbabwean vehicle manu-
facturers are currently failing
to meet such quotas due to
the increase in imports of
vehicle components that the
country used to produce.
Deven Engineering managing
director Mr Patrick Mun-
yaradzi said the proliferation
of motor parts imports at low
or no duty means they have
to import the majority of
components for the vehicles
they produce.
“We used to have back-
ward and forward linkages
which were very vibrant. As
a result of these continued
imports and lack of support
to local vehicle manufactur-
ing industry we have seen
the demise of local compo-
nent manufacturers - the
value chain.” And to this
extent, their exports into the
region tend to be uncompet-
itive without the preferential
treatment that other export-
ers in competitive industries
are getting.
“The 25 percent rules of
origin requirement is local
content prerequisite for your
product to qualify to go into
the regional markets duty
free. If we take any vehicle
that is being manufactured
by any local manufacturer
and you say list down all
the components you use to
assemble and take 25 per-
cent including electricity and
water and say which are the
elements that constitute 25
percent of this entire list it
will be difficult to meet it.
News Update as @ 1530 hours, Wednesday 06 April 2016
Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw
Local vehicle exports uncompetitive
...as local car-makers are
failing to meet region’s
rules of origin requirements
2. “At present we can only tick
items such as labour, elec-
tricity, water as the local
components out of a com-
prehensive list. This is where
now the local value chain
needs to be resuscitated,
starting from ZISCO,” he
said.
“If we continue failing to
meet that 25 percent bench-
mark, exports into the region
will be difficult, while our
neighbours continue export-
ing to us.”
The uncompetitiveness of
local vehicle exports into
the region makes it a double
whammy for Zimbabwe’s
car manufacturers who are
already facing the challenges
of low local uptake for their
products as both Government
and individuals opt for both
new and second-hand vehicle
imports.●
2 news
Late start to tobacco season affects cash inflows
By Funny Hudzerema
HARARE -The delay in the com-
mencement of this year’s tobacco
selling season has affected the
injection of cash in the coun-
try which have resulted in the
liquidity crunch the country is
experiencing a senior official from
the Reserve Bank of Zimbabwe
(RBZ) has said.
RBZ deputy governor, Kupuk-
ile Mlambo said exports from
tobacco, gold and platinum
are bringing large volumes of
money in the country and the
shift in tobacco selling season
have affected the exportation
of tobacco to bring the required
foreign currency.
“In this country we depend on
three commodities for export
revenues its tobacco, gold and
platinum thus a high concentra-
tion of commodity dependence
for our revenues and we must not
be surprised now with the liquid-
ity crunch in the market.
“The liquidity crunch that we are
having now is partly because for
a long time the period between
October and February is always
dry period because the country
will be depending on earnings
from gold and platinum,” he said.
Dr Mlambo said the tobacco
selling season normally starts in
February but this year it started
on March 30 and that is creating
the liquidity crunch that the coun-
try is facing.
“Commodity dependence is real
in this country and what is hap-
pening on the international front
is commodity prices are falling
and we expect that even in 2016.
“For example oil prices are
expected to decline by 25 percent
in 2016, metals by 10 percent,
precious metals by 8 percent and
specifically gold is expected to
decline by 7,3 percent in 2016
and this is creating havoc in our
balance of payment,” he said.●
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5. HARARE –Steward Bank, a
subsidiary of mobile tele-
communications firm Econet
Wireless yesterday launched
a facility under which it will
provide financial assistance
to small and medium scale
enterprises (SMEs).
Under the facility, dubbed
the “Revamped SME
Account,” the financial insti-
tution will avail funding and
capacity building programs
such as financial literacy to
support growth of a sector
that has become a corner
stone of the Zimbabwean
economy.
The initiative would also pro-
vide free marketing for SME
products through the Econet
Wirelesses e-commerce plat-
form called Ownai, formerly
known as Tengai.
Small and Medium Scale
Enterprises and Co-opera-
tive Development Minister
Sithembiso Nyoni lauded the
initiative, which she said
would allow the sector to
create more jobs and grow
sustainably.
“Access to affordable finance
by SMEs is necessary to
create a conducive economic
environment for growth and
prosperity of these firms,”
she said.
Minister Nyoni said limited
access to affordable finance,
lack of adequate business
skills, poor business man-
agement were among the
major challenges facing the
small enterprises sector.
The last survey conducted in
the sector in 2012 showed
that it employed 5,7 million
people, close to half of the
country’s over 13 million
people.
Minister Nyoni urged other
players in the financial sec-
tor to come up with attrac-
tive products for SMES, most
of which remained unbanked.
“The sector has lost confi-
dence with banks due to lack
of attractive products that
could lure the sector to open
accounts with them,” she
said.
“Tapping into the sector will
ensure that money circulates
in the formal economy.”
She urged small business
operators to take advantage
of initiatives such as the
“Revamped SME Account” to
grow their businesses- New
Ziana ●
5 news
Steward Bank avails support for SMEs
7. By Funny Hudzerema
HARARE–Local internet
service provider ZOL is tar-
geting to introduce its fibre
optic network in more than
100 000 homes by 2017.
ZOL chief executive Mr Denny
Marandure said the group is
expecting an increase in the
number of internet sub-
scribers through introducing
cheap and affordable pack-
ages for its subscribers.
“Our real target is to con-
nect 100 000 homes by next
year but the challenge is in
the delaying of licensing and
costs of building infrastruc-
ture,” he said.
Mr Marandure however said
the target could be hindered
by the high cost of setting
up the requisite infrastruc-
ture and delays of licensing
approvals by local authorities
and the sector regulator.
“You must realise that as
we want to connect every
one we must consider the
infrastructural issues where
everywhere you go you must
make an application, there is
the Harare City Council, the
Postal and Telecommunica-
tions Regulatory Authority of
Zimbabwe (POTRAZ) there is
lot of things that hinders us
from moving forward.
“Without such constraints,
connecting 100 000 subscrib-
ers would be easy to achieve
in a short period of time,” he
said.
ZOL has so far covered more
than 15 000 homes in Harare
with its fibre optic internet.
Mr Marandure said an
increase in the penetration
of internet services in the
Zimbabwe will help reduce
the cost of internet in the
country.
“The more people sign up for
internet the cheaper it will
be or the less expensive so
that’s what we are working
on to reduce internet costs,”
he said.
He was speaking at the com-
pany’s launch of some new
fibre optic internet packages
for 2016.
The new launched packages
include the Fibroniks Lite
package costing $29 per
month with 15 megabytes
per month free Zol to Zol
calls and other benefits,
modern firmly package $199
dollars, an auto-connect
function and Basic Essentials
$39 per month.
All the package have a num-
ber of benefits which include
cordless ZOL phone hand-
set offering customers the
best low cost phone service
nationwide, with calls start-
ing from as little as 0,10c
per minute.
The packages are available
to users in Harare, Bulawayo
and Victoria Falls within
areas where fibre is already
installed.
According to POTRAZ, fibre
has become the fastest of
connections for internet
accounts, with 0,21 percent
of subscriptions in Zimbabwe
with mobile internet mak-
ing up 95,6 percent of total
internet subscriptions.●
7 news
ZOL targets 100 000 homes for fibre optic internet
8. BH24 Reporter
HARARE -Regional multi-re-
sources miner Premier African
Minerals says it expects positive
operational cash flow from its
49 percent owned RHA Tungsten
mine when it commences under-
ground operations this month.
RHA Tungsten mine is located
approximately 20 kilometres
south-east of Hwange and
270km north of Bulawayo.
Premier said re-equipping of the
120 meter vertical shaft nearing
completion, and it was antici-
pating positive operational cash
flow from the site, before capital
expenditure and working capi-
tal, when first ore from the 870
level is processed and crushing
circuit upgrades are installed.
It added that upgrades to crush-
ing circuit planned for this April,
with the total cost of the crush-
ing circuit upgrade is expected
to be less than $100 000.
Management expects the crush-
ing circuit upgrade to “take less
than two weeks to install and
commission once all components
are at site at RHA.”
Said chief executive officer Mr
George Roach:“Re-equipping
the 120 meter existing vertical
shaft at RHA has taken a little
more time than was originally
expected but with all equipment
now on site and power reticu-
lation installed, this project is
nearing completion and ore will
arrive at surface during this
month.
Upgrades to the crushing circuit
have been agreed by Premier's
consultant and Appropriate
Process Technologies (APT), who
have been instructed to proceed
immediately at their expense.
“Premier has dramatically
reduced fixed expenditure at
RHA and we remain confident
that as and when 870 ore is
processed at the grades indi-
cated, and through-put and
recovery meet design criteria,
RHA will operate profitably."
Earlier in January, Premier
announced that its plan is to
process around 32 000 tonnes
of run of mine ore at an average
grade of 6.20 kg/t to produce
249 tonnes of concentrate at 63
percent WO3 over six months.●
8 news
RHA Tungsten mine to be profitable as operations begin
Tungsten
9. HARARE -The equities mar-
ket snapped the mini-losing
streak as the mainstream
industrial index gained 0.09
to close at 97.40.
The risers were led by giant
insurer Old Mutual, which
gained $0,0074 to trade at
$2,2119, while FBC Holdings
added $0,0015 to $0,0629
and Barclays rose $0,0009
to settle at $0,0279.
Trading in the red was
cement producer PPC, which
eased $0,0475 to trade
at $0,6500 and Dairibord
which slid $0,0009 to close
at $0,0510.
Beverages giant Delta shed
$0,0001 to $0,5650.
The mining index was flat
at 19.69 as Bindura, Fal-
gold, Hwange and RioZim all
maintained previous price
levels at $0,0102, $0,0050,
$0,0300 and $0,1040
respectively
.- BH24 Reporter ●
ZSE9
Equities buck losing trend
02 03
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11. 11 DIARY OF EVENTS
The black arrow indicate level of load shedding across the country.
POWER GENERATION STATS
Gen Station
06 April 2016
Energy
(Megawatts)
Hwange 504 MW
Kariba 453 MW
Harare 30 MW
Munyati 16 MW
Bulawayo 23 MW
Imports 0 - 400 MW
Total 1334 MW
Upcoming AGM
• Falgold, KPMG Building, Corner 14th Avenue/Josiah Tongogara Street, Bulawayo,13 April, 1000hrs
THE BH24 DIARY
12. JOHANNESBURG - South
Africa's rand edged up
against the dollar today but
was still off recent four-
month highs, with local
political uncertainty as well
as overall low risk appetite
seen capping any significant
gains.
Stocks opened slightly
firmer, with the JSE securi-
ties exchange's Top-40 index
up 0,5 percent from Tues-
day's close.
At 0714 GMT the rand traded
at 15,0350 to the greenback,
gaining 0,4 percent from its
previous close in New York.
The rand has however lost
significant ground since
rallying to 14,6050 to the
dollar last week as inves-
tors cheered a court ruling
that President Jacob Zuma
unconstitutionally ignored a
directive to pay for some of
the state-funded upgrades to
his home.
President Zuma, who has
been dogged by controversy
since becoming president in
2009, survived an impeach-
ment motion by the oppo-
sition on Tuesday thanks to
the ruling African National
Congress's majority in par-
liament.
Investor sentiment has been
shaky since President Zuma
inexplicably fired the former
finance minister in Decem-
ber, raising fears that Pre-
toria might veer away from
prudent fiscal policies.
"The rand is back above
15, but not only because of
domestic events," Standard
Bank said in a note, point-
ing to a general sell-off in
emerging market currencies.
"We still believe that the
currency will struggle to
maintain a foothold below 15
into mid-year."
In fixed income, the yield
on debt due in 2026 eased 2
basis points to 9,24 percent
in early trade - Reuters●
regioNAL News12
Rand seen struggling due to local politics, risk aversion Zambia's kwacha
gains 1,6 pct as
copper ticks higher
JOHANNESBURG - Zam-
bia's kwacha strengthened 1,6
percent against the dollar today,
extending sharp gains to the
second straight session as cop-
per prices cruised higher.
By 0643 GMT the kwacha had
gained 1,12 percent to 10,64
per dollar, after strengthening to
as much as 10,61.
Zambia is Africa's second big-
gest producer of copper, which
saw its prices tick higher today
. - Reuters●
13. Pfizer Incorporated decided
to terminate its $160 billion
merger with Allergan Plc,
a person familiar with the
matter said, marking an end
to the largest-ever health-
care acquisition as officials
in Washington crack down on
corporate inversions.
Pfizer will need to pay a
$400 million fee to Aller-
gan for expenses relating to
the deal, the person said,
asking not to be identified
as the information is private.
Allergan, which is run from
New Jersey but has a legal
domicile in Dublin, last year
agreed to merge with Pfizer
in a deal that would have
given the New York-based
company a foreign address
and a lower tax rate.
The decision represents a
victory for President Barack
Obama, whose administration
on Monday proposed tough-
er-than-expected new rules
aimed at making inversions
like the Pfizer-Allergan
deal harder to achieve. In
an inversion, a US com-
pany shifts its tax address
overseas, often through a
merger. In the Pfizer-Aller-
gan deal, the new company
would have been located in
Ireland.
The Treasury Department
said Monday that new rules
would limit companies’ abil-
ity to participate in inver-
sion transactions if they’ve
already done them within the
past 36 months.
Allergan has been involved in
several such acquisitions in
that time frame. Represent-
atives for Pfizer and Allergan
declined to comment.
Prior to April 4, Allergan
“was a great fit,” Bloomberg
Intelligence analyst Asthika
Goonewardene said via
e-mail. But the new policies
would have stretched the
combined entity’s ability to
garner the favorable Irish
tax rate, he said.
Criticism
Pfizer had been examining
how it might be able to chal-
lenge new rules from the US
Treasury Department, people
with knowledge of the matter
said earlier.
From the moment it was
announced last November,
the Pfizer-Allergan transac-
tion drew criticism from US
public officials and from both
Democratic and Republican
presidential candidates.
Obama on Tuesday told
reporters that inversions
make “hardworking Amer-
icans feel like the deck
is stacked against them.”
Since the first inversion in
1982, 53 US companies have
shifted their tax addresses
offshore -- 22 of them since
2012.
Pfizer has said it has stra-
tegic reasons for pursuing
the acquisition, though it
would also help the company
escape the US’s 35 percent
tax rate, which applies to
profits made anywhere in the
world.
Ever since a tax-law change
in 2004, the main way that
US companies have been
able to claim a foreign
address has been to buy a
smaller company abroad and
adopt its domicile.
The law requires the for-
eign company to be at least
one-fourth the size of the US
one.
Monday’s proposed rule
tightens that restriction by
saying that if a foreign com-
pany has bulked up through
mergers with other US
companies in the last three
years, as Allergan has, that
additional bulk isn’t counted
toward its size. Treasury offi-
cials have said they weren’t
targeting any particular tax-
payers with the new rule.
“It is fair to say the admin-
istration would be pleased
if corporate inversions that
happened solely so corpo-
rations don’t pay their fair
share won’t go through,”
Josh Earnest, a White House
spokesman, said Tuesday
during a press briefing.
CNBC reported earlier that
the two companies would
mutually end their planned
merger, without naming its
sources.... - Bloomberg●
internatioNAL News13
Pfizer to terminate $160 billion merger with Allergan
14. By Nigel Gambanga
Zimbabwe is facing another
cash crisis. That much is
pretty obvious to the people
standing in queues outside
some of the retail banks
around the country.
Though not as crippling as
the cash shortages that the
country has experienced
in the past, the current
spate has affected scores of
account holders who have
had to experience frustra-
tions related to this.
Despite assurances from
different institutions that
the situation is manageable,
some people have already
tagged the situation as the
start of something that could
spiral out of control and lead
people down a very familiar
and uncomfortable road.
Zimbabweans generally
prefer to deal in cash and
when it comes to the secu-
rity of the formal financial
system and questions about
the reliability of banks, it
doesn’t take much to rattle
the entire population.
For more than a 10 years cit-
izens have been subjected to
different waves of financial
services mayhem.
From banks facing curator-
ship and then going under,
accounts of speculative prac-
tices from the champions of
indigenous financial insti-
tutions to a hyperinflation
experience that eroded the
value of bank deposits and
came tied with its own cash
shortages, most Zimbabwe-
ans will tell you that they
have seen the rough side of
14 analysis14 analysis
Mobile money is the most credible solution to Zimbabwean cash crisis
15. 15 analysis15 analysis
formal financial services.
The solutions that have been
embraced for the current
shortage by those affected
are fairly obvious.
A report in the Herald out-
lined some of these measures
which have included $500
limits on withdrawals, the
disabling of the Zimswitch
cross-bank ATM facility and
the suspension of the Point
of Sale cashback facility from
some retailers.
The governor of the Reserve
Bank of Zimbabwe Dr John
Mangudya also encouraged
people to use plastic money
instead of relying on cash.
This came ahead of a direc-
tive issued to tobacco farm-
ers to open bank accounts
from which they would
receive the payments for the
sale of their crop.
Where is mobile money in
all this?
One measure that isn’t being
pursued as aggressively,
though, is the mass adoption
of mobile money services as
a way of working around this
potential crisis.
Despite its strong presence
across the country where it
has outpaced formal bank-
ing services, mobile money
has only been mentioned as
one alternative and not as
the leading solution that it is
primed to be.
Some likely reasons could
be the high costs attached
with mobile money trans-
actions as well as the fact
that the leading provider of
mobile financial services,
Econet’s EcoCash, (it holds
74,3 percent of registered
mobile money subscribers)
which handles the majority
of mobile money transac-
tions (it pushed 96,9 percent
of transactions in the last
quarter of 2015) is a private
sector operator and not a
public sector solution.
However, all this is flying in
the face of the reality that
mobile money has estab-
lished a firm place in the
Zimbabwe financial services
matrix. Our country’s econ-
omy has slowly embraced the
movement of money through
informal trading channels
and mobile money has
emerged as a convenient tool
for carrying these transac-
tions.
In the most recent telecom-
munications sector quarterly
report from the industry reg-
ulator POTRAZ, mobile money
services registered transac-
tions valued at $533 million
dollars in the three months
ending December 2015 from
an aggregate of 7,3 million
mobile money subscribers.
The service’s popularity has
been fuelled by a high mobile
penetration rate, the ubiq-
uity of mobile money agents
(there are over 33 000
mobile money agents across
Zimbabwe) limited require-
ments for signup as opposed
to formal banks’ account reg-
istration and of course, the
significant distrust that the
country’s banks have earned.
Mobile money service pro-
viders also appreciate the
convenience that they can
deliver and have been going
out of their way to integrate
their platforms with as many
third-party services as possi-
ble in the hopes of mopping
up as much transactional
revenue as possible.
All this points to how mobile
money should be at the
centre of this cash crisis
workaround or at the very
least, how it should be more
of a solution than the use of
plastic money alternatives
which the central bank has
been advocating for.
For the sake of progress,
until the actual solution
for the real problem that is
instigating this cash crisis
has been identified, it would
probably be worth exploring
how the use of mobile money
can be positioned as a solu-
tion. - TechZim●