Nestlé Zimbabwe to boost investment in empowerment scheme
1. By Funny Hudzerema
HARARE – Nestlé Zimba-
bwe is planning additional
investment in the Nestlé
Dairy Empowerment Scheme
(NDES) to increase milk pro-
duction.
The increase in milk out-
put is expected to result in
improved capacity at the
company’s factories.
Nestlé cluster manager for
Zimbabwe, Zambia and
Malawi Mr Ben Ndiaye said
the investment is aimed at
reducing the importation of
milk while capacitating local
farmers and assist Govern-
ment in economic develop-
ment.
“This year we want to extend
our investment to support
our farmers to grow the
silage which is the major
element in the cost of milk
production, by doing this
farmers will be able to
reduce the cost of producing
milk by 15 percent.
News Update as @ 1530 hours, Monday 09 May 2016
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Nestlé Zimbabwe to boost investment in empowerment scheme
2. “Last year we decided to
invest in farming sector or
in our total value chain in a
bid to increase production
through assisting the farmer
to boost our capacity in the
factory,” he said.
He however would not give
the estimates for the pro-
posed investments.
Mr Ndiaye said this while
touring the Magura daily
farm in Wedza, a project
funded by Nestle Company as
part of the company’s effort
to increase milk production
and quality at the farm.
Nestlé Zimbabwe embarked
on the NDES in 2011 to
assist in the revival of the
dairy industry in Zimbabwe
after the country’s annual
milk production dropped from
a peak of 260 million litres
in 1992 to 38 million litres in
2008.
The milking herd also
reduced in the same period
from 200 000 to 28 000.
Nestlé Zimbabwe had how-
ever already started assist-
ing dairy farmers well before
the launch of NDES.
The scheme entails impor-
tation and local sourcing of
dairy heifers to rebuild the
dairy herd for both the large
and medium scale commer-
cial farmers contracted to
supply raw milk to the Nestlé
Factory.
The project was extended
to small scale farmers in
Chitomborwizi who have
received 100 dairy calves.
The cows have now started
producing milk for the Nestlé
factory, with initial deliveries
in December 2015 at 1 900
litres for the month, growing
to 12 500 litres as at the end
of March, 2016.
At this rate, by end of 2016,
the small farmers will be
delivering 48 000 litres per
month to the Nestlé Factory.
“So this is major investment
which we are undertaking
this year to support our
farmers.
“The other investment is that
we want to strengthen our
commercial capabilities by
hiring 10 graduates whom we
are grooming to become the
future commercial leaders
of Nestlé in Zimbabwe and
Malawi,” he added.
Last year the company
invested $30 million in the
refurbishment of its factory
in an effort to increase pro-
duction currently the group
is not benefiting from the
investment due to increase
in imported Cremora on the
market.
He added that the group
is targeting to revive the
milk industry in Zimbabwe
through assisting small dairy
farmers and one of the big-
gest challenges which we are
facing is the parallel import
of Cremora.
“The production of milk has
increased in Zimbabwe but
the importation of milk is
still continuing,” he said.
●
2 news
5. 5 news
Zim should tap into top tourism markets
BH24 Reporter
HARARE-Zimbabwe should tap
into key tourism source markets,
namely China, the United States
and the Kingdom, if the county is
to remain a top tourist destination
on the continent.
The United Nations World Tour-
ism Organisation (UNWTO) has
announced the three countries –
China, the United States and the
United Kingdom – as the leading
source markets that drove out-
bound tourism last year.
This was on the back of these
countries’ strong currencies and
economies.
Zimbabwe launched its introduc-
tory National Tourism Policy in
2014, with Minister of Tourism
and Hospitality Industry Engineer
Walter Mzembi stating at the
time that by the year 2020, the
country’s tourism sector should be
a $5 billion economy, attracting
at least 5 million arrivals annually
and contributing 15 percent to
Gross Domestic Product (GDP).
If the local tourism sector is to
achieve such a target then the
authorities simply need to do
more in respect of putting in place
measures and strategies to ensure
that they tap into key tourism
outbound markets (especially for
the market such as the Chinese
one).
According to the UNWTO, China
continues to lead global outbound
travel after double-digit growth in
tourism expenditure every year
since 2004, benefitting Asian
destinations such as Japan and
Thailand as well as the United
States and various European
destinations. Spending by Chinese
travellers increased 25 percent
last year to reach $292 billion, as
total outbound travellers rose 10
percent to 128 million.
But other key markets cannot
be ignored. Tourism expenditure
from the world’s second largest
source market, the United States,
increased by 9 percent last year
to $120 billion, while the number
of outbound travellers grew by 8
percent to 73 million.
And expenditure from the United
Kingdom, the fourth largest mar-
ket globally, increased 8 percent
to $63 billion with 65 million of its
residents travelling abroad, up 9
percent.
By contrast Germany, the world’s
third largest market, reported a
small decline in spending ($76
billion), partly due to the weaker
euro, while France’s expenditure
on outbound tourism reached $38
billion, Russia’s $35 billion and
that of the Republic of Korea a
total of $25 billion.
Meanwhile, according to UNWTO,
international tourism receipts in
destinations around the world
grew by 3,6 percent last year, in
line with the 4,4 percent increase
in international arrivals.
“For the fourth consecutive year,
international tourism grew faster
than world merchandise trade,
raising tourism’s share in world’s
exports to 7 percent in 2015. The
total export value from interna-
tional tourism amounted to $1, 4
trillion,” said the global tourism
body.●
8. BH24 Reporter
HARARE -Cambria has
finally settled the Consilium
Corporate Recovery Master
Fund Ltd’s claim against it of
$5,07 million.
The investment company
gave instructions to effect
payment $5 072 327,66 last
week. Of this sum, approx-
imately $3 293 000 has
been paid by Cambria; the
remainder has been made
available with the assistance
of Ventures Africa Limited,
a related party by virtue of
being 50,55 percent share-
holder and a company in
which Samir Shasha (a direc-
tor in the Company) is the
beneficial holder, on terms
yet to be agreed.
The Company said in a
statement it will provide
further details on any agree-
ment with Ventures Africa
Limited in relation to the
sums provided on Cambria's
behalf once finalised, in
accordance with AIM Rule 13.
The claim had arose over
loans provided to the Cam-
bria by Consilium and the
validity of latter’s attempt
to accelerate the repayment
of the loans as a result of an
alleged change of control on
April 13, 2015.
On April 13, Cambria share-
holders approved the sub-
scription by Ventures Africa
Limited of 107,000,000 ordi-
nary shares in the Company
which resulted in VAL owning
50,55 percent of Cambria.
CCRMF and related parties
hold 14,9 percent of Cambria
Africa's shares.●
Cambria settled Consilium’s $5 million claim
8 news
11. HARARE-The Zimbabwe Man-
power Development Fund
(ZIMDEF) has said its income
for the year ended December
2014 increased by $1,8 mil-
lion to $48,1 million, buoyed
by improved collection and
debt management policies.
Established through an Act,
the Fund’s broad mandate is
to finance the development
of critical manpower in Zim-
babwe through the collection
and disbursement of skills
development levies.
In a statement, Zimdef said
in the period under review
total revenue amounted to
$47 666 850 compared to
$46 130 701 in 2013.
“The improved performance
was largely due to a com-
bination of an aggressive
collection strategy, improved
debt management policies
and sterling co-operation
from employers contributing
the 1 percent training levy
under such harsh economic
conditions,” said the Fund.
Skilled manpower training
and development remained
the Fund’s core business
with more than $3,95 mil-
lion disbursed for industrial
attachment allowances and
$8.08 million for appren-
ticeship wages and other
expenses.
Polytechnics received grants
for training equipment
and consumables worth
$4,78 million in 2014. The
National Main Power Advisory
Council, Industrial Training
and Trade Testing Depart-
ment and Higher Education
Examination Council received
a combined grant of $2,61
million.
ZIMDEF said despite chal-
lenges facing the economy,
it managed to meet most
stakeholder needs.
Training levy collections
for the year 2014 totalled
$45,92 million, and this
was 6 percent above the
performance for 2013 which
stood at $43,21 million.
ZIMDEF noted: “The Fund
disbursed $14.54 million for
grants, rebates and building
projects that are critical in
the development of skilled
human capital.”
Projects worth mentioning
are Lupane State University,
Harare School of Hospitality
and tourism and Manicaland
University. During the year,
the Fund’s administration
costs accounted for $14.88
million with more than $5
million being a provision for
a bad debt owed to Met-
bank. Going forward ZIMDEF
said it hoped for an economic
upturn that would improve
the fund’s operations.
“This will in turn boost the
levels of levy contributions
by eligible employers for
the improved human capital
development.” -New Ziana●
11 news
ZIMDEF income increases
14. HARARE -The local equities
market posted a 13th gain
on the trot as the main-
stream industrial index
gained 0.07 to open the new
week at 107.10.
Milk processor Dairibord
gained $0,0050 to close
at $0,0600, while Innscor
put on $0,0004 to $0,2304
and Delta marginally rose
$0,0003 to trade at $0,7300.
Starafrica corporation
was the only counter to
lose ground as it dropped
$0,0010 to close at $0,0090.
The mining index rebounded
1.55 to close at 21.55 on
the back of a gain in RioZim
which was up by $0,0200 to
trade at $0,1300.
Bindura, Falgold and Hwange
maintained previous price
levels at $0,0100, $0,0050
and $0,0300 in that order
. - BH24 Reporter ●
ZSE14
Industrials keep upward trend
02 03
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16. 16 DIARY OF EVENTS
The black arrow indicate level of load shedding across the country.
POWER GENERATION STATS
Gen Station
06 May 2016
Energy
(Megawatts)
Hwange 458 MW
Kariba 702 MW
Harare 30 MW
Munyati 33 MW
Bulawayo 18 MW
Imports 0 - 300 MW
Total 1319 MW
• African Sun EGM, Holiday Inn, 09 May, 1400hrs,
• Innscor EGM, Royal Golf Club, 10 May, 0900hrs
• 18 May - ZB Building Society AGM; Place: 21 Natal Road, Avondale, Harare; Time: 12:00hrs
• 18 May - The 76th AGM of Astra Industries Limited; Place: Auditorium at Astra Park, Corner Ridgeway North/Northend
Roads, Highlands, Harare; Time: 12:00hrs
• 19 May - The Fifth Annual General Meeting of Padenga Holdings Limited; Place: Royal Harare Golf Club, 5th Street extension,
Harare; Time: 08.15am
• 19 May - NMBZ AGM; Place: Unity Court, Corner 1st Street Kwame Nkrumah Avenue; Time: 10:00am
• 19 May - Turnall Holdings AGM; Place: Jacaranda Room, Rainbow Towers; Time: 12:00
THE BH24 DIARY
17. JOHANNESBURG- AngloGold
Ashanti Ltd posted a free
cash flow in its first quarter
compared with an outflow
last year due to cost and
debt cuts, Africa's biggest
bullion producer said on
Monday.
"We generated significant
free cash flow again despite
the lower gold price, which
shows the continued success
of our self-help measures
to reduce debt by improving
margins," said Srinivasan
Venkatakrishnan, chief
executive officer, AngloGold
Ashanti.
The company, which has
17 mines in nine coun-
tries, said free cash flow in
three months to March-end
reached $70 million from an
outflow of $40 million in the
first quarter of 2015.
Adjusted gross profit edged
up to $210 million at the end
of March from $209 million in
the same period last year.
AngloGold said it cut debt
and costs during the quarter,
resulting in cash flow, bene-
fiting weaker local currencies
against the dollar.
South African miners sell
their commodities in dol-
lars while paying costs in
rand, boosting margins when
the exchange rate weakens
against the greenback.
Production in the quarter
fell 7 percent to 861 000
ounces compared with the
same period last year, due
to planned reductions from
Obuasi, Tropicana and Morila
mines, and unplanned output
drop in Kibali joint venture. -
Reuters●
regioNAL News17
AngloGold Ashanti posts free cash flow in Q1
18. Crude rose as expanding
Canadian wildfires knocked
out about 1 million barrels a
day of production, outweigh-
ing the new Saudi Arabian oil
minister’s pledge to main-
tain the country’s policy of
near-record output.
Futures increased as much
as 2,9 percent in New York
and 2,5 percent in Lon-
don. The blaze has led to
cuts equivalent to about 40
percent of Canada’s oil-
sands production, based on
IHS Energy estimates. Ali
al-Naimi will be succeeded
by Saudi Arabian Oil Co.
Chairman Khalid Al-Falih, an
ally of Prince Mohammed bin
Salman, who has backed the
nation’s policy of prioritizing
market share over prices and
insisted any output freeze
must involve Iran.
Oil has rebounded after
slumping to the lowest level
since 2003 earlier this year
amid signs the global over-
supply will ease as US output
declines. While American
production has dropped,
the Organisation of Petro-
leum Exporting Countries
has boosted supply to more
than 33 million barrels a day,
underpinned by gains from
Iran and Iraq.
“The market is taking a cau-
tious approach to the Cana-
dian fires and keeping the
price a little higher given it’s
in the vicinity of the main
producing region,” said David
Lennox, an analyst at Fat
Prophets in Sydney. “There
is no doubt the Saudi policy
is working, we’re seeing
declines in US production.
The stockpile situation will
probably keep any rally from
being substantive.”
West Texas Intermediate for
June delivery gained as much
as $1,28 to $45,94 a barrel
on the New York Mercantile
Exchange and was at $45,43
at 2:52 p.m. Hong Kong
time. The contract advanced
34 cents to close at $44,66
on Friday. Total volume
traded was more than double
the 100-day average.
Oil Minister
Brent for July settlement
rose as much as $1,11
to $46,48 a barrel on the
London-based ICE Futures
Europe exchange. The con-
tract increased 36 cents to
$45,37 on Friday. The global
benchmark crude was at a
discount of 7 cents to WTI
for July.
Canadian oil-sands produc-
ers Suncor Energy Inc, the
country’s biggest energy
company, Phillips 66 and
Statoil ASA have declared
force majeure -- a provision
protecting companies from
liability for contracts that
go unfulfilled for reasons
beyond their control -- on
supplies from the region.
While the fire approached
Suncor’s operations, there
was no damage as firefight-
ers held the blaze southwest
of the area and the company
said it has begun planning
the restart of production.
Current weather conditions
and forecasts show the fire
moving east, away from the
site, Suncor said. Cnooc
Ltd.’s Nexen operations to
the south of Fort McMur-
ray have suffered “minor”
damage, said Chad Morrison,
a wildfire manager for the
Alberta government.
Non-OPEC supply is poised to
slip by about 700,000 barrels
a day this year, while global
demand is forecast to rise
by about 1,2 million bar-
rels daily, according to the
International Energy Agency.
Al-Falih, speaking in January
at the World Economic Forum
in Davos, indicated that the
country plans to act vigor-
ously to defend its market
share and exports as the
market re-balances.
“Saudi Arabia will maintain
its stable petroleum poli-
cies,” Al-Falih said in a state-
ment on Sunday. – Bloomb-
erg ●
internatioNAL News18
Oil rises as Canadian fires eclipse Saudi Oil Minister reshuffle
Khalid Al-Falih
19. By Dominic Barton & Acha
Leke
IN 2010, the McKinsey Global
Institute described African econ-
omies as "lions on the move".
Today, despite the collapse of
global commodity prices and
the political shocks that slowed
growth in North Africa, the con-
tinent’s economic lions are still
moving forward.
Africa achieved average real
annual gross domestic product
(GDP) growth of 5,4 percent
between 2000 and 2010, adding
$78bn annually to GDP (in 2015
prices). But growth slowed to
3,3 percent, or $69bn, a year
between 2010 and last year.
New research from the McKinsey
Global Institute that will be pub-
lished in October shows that the
shine has not come off Africa’s
growth story, but it has become
more nuanced.
The deceleration in growth since
2010 has been concentrated in
two groups of economies — oil
exporters and northern coun-
tries rebuilding after the political
convulsions of the Arab Spring.
The economies of Egypt, Libya,
and Tunisia did not grow at all
between 2010 and last year,
in stark contrast to average
annual growth among the three
economies of 4,8 percent in the
previous decade.
The rate of growth among oil
exporters such as Algeria,
Angola, Nigeria and Sudan fell
sharply, to 4 percent from 7,1
percent. Productivity growth
also declined in these two sets
of economies. The annual rate of
productivity growth in the Arab
Spring countries fell from 1,7
percent to 0,6 percent, and in
Africa’s oil exporters, from 2,6
percent to 0,4 percent.
THE rest of Africa maintained
stable rates of GDP and pro-
ductivity growth in the past
five years. Real GDP grew at
an annual rate of 4,4 percent a
year, virtually the same as it was
in 2005-10. Productivity grew at
a compound annual rate of 1,7
percent during the same period,
consistent with 1,6 percent from
2000-10.
The resilience of large parts of
Africa in the face of challenging
conditions reflects the continuing
diversification in many econo-
mies. Between 2010 and 2014,
services generated 48 percent
of Africa’s GDP growth, up from
44 percent in the preceding
decade. Growth in Africa’s man-
ufacturing sector has been low
at 4,3 percent a year between
2010 and 2014, but utilities and
construction achieved significant
expansion to ensure that indus-
try overall generated 23 percent
of Africa’s growth, up from 17
percent in the preceding decade.
Resources made a negative 4
percent contribution to growth
between 2010 and 2014, com-
pared with 12 percent during the
19 analysis19 analysis
African growth story is still on the move
20. previous decade.
In the long-term, three power-
ful positive trends are likely to
sustain Africa’s growth. First, its
young population and growing
labour force is a valuable asset
in an ageing world. In 2034,
Africa is expected to have the
world’s largest working-age pop-
ulation of 1,1-billion.
There have been 21-million new
formal, wage-paying jobs cre-
ated in the past five years, and
53-million in the past 15. Stable
jobs grew at a rate of 3,8 per-
cent between 2000 and last year,
1 percent faster than growth in
the labour force. This is still far
from the job-creation trajec-
tory Africa needs to fuel future
growth, but it is progress.
Second, Africa is still urbanis-
ing and much of the economic
benefit lies ahead. Productivity
in cities is three times as high
as in rural areas and, in the next
decade, an additional 187-mil-
lion Africans will live in cities,
according to the United Nations.
This urban expansion is con-
tributing to rapid growth in
consumption by households and
businesses. Household con-
sumption grew at a 4,2 percent
compound annual rate between
2010 and last year — faster than
the continent’s GDP growth rate
— to reach $1,3-trillion last year.
We project Africa’s consumers
will spend $2-trillion by 2025.
But companies will need to
gather detailed market intelli-
gence on the whereabouts of the
most promising consumer mar-
kets. Only 75 cities accounted
for 44 percent of total consump-
tion last year.
NIGERIAN consumers alone may
account for up to 30 percent
of Africa’s consumption growth
in the next decade. Other
segments to target include
households earning more than
$20 000 per annum in SA and
Morocco, two of Africa’s most
diversified economies with a
large consumer base, or those
earning $5 000-$20 000 in the
fast-growing economies of East
and West Africa. Third, African
economies are well positioned to
benefit from rapidly accelerating
technological change that can
unlock growth and leapfrog the
limitations and costs of physical
infrastructure in important areas
of economic life.
East Africa is a global leader in
mobile payments. The penetra-
tion of smartphones is expected
to hit the 50 percent mark in
2020, from only 2 percent in
2010.
In sub-Saharan Africa, cellu-
lar-enabled, machine-to-ma-
chine connections are expected
to grow about 25 percent per
annum to 30-million by 2020,
according to GSMA Intelligence,
changing the game in sec-
tors from healthcare to power.
Spending on infrastructure has
doubled in the past decade, and
is now 3,5 percent of GDP.
Foreign direct investment
reached $73bn in 2014, up from
$14bn in 2004. Africa has 700
large — and increasingly pan-Af-
rican — companies earning
revenues of more than $500m.
These companies together
boast $1,4-trillion in revenues,
and many continue to grow
extremely fast.
Large companies in utilities,
transportation and healthcare
have achieved double-digit reve-
nue growth in domestic currency
terms between 2008 and 2014.
Undoubtedly, policy makers will
need to grapple with significant
challenges ahead. As the price
of oil and other commodities
has fallen, Africa’s finances have
deteriorated: the continent ran a
weighted average budget deficit
of more than 6,9 percent of GDP
last year, from only 3,3 percent
of GDP five years earlier.
In 2010, Africa was running a
small current account surplus of
0,4 percent of GDP; by last year,
that had turned into a deficit of
6,7 percent. Several countries
are in talks for financial assis-
tance, including Angola with the
International Monetary Fund
(IMF) and Nigeria with the Chi-
nese government.
Political instability is also more
prevalent. The number of vio-
lent incidents measured by the
Uppsala Conflict Data Program
20 analysis20 analysis
21. 21 analysis21 analysis
jumped from 858 in 2010 to
2,022 in 2014.
Most of Africa was booming
five years ago — 25 of the top
30 economies had accelerated
their growth from the previous
decade. This year, however,
the number of countries whose
growth was similar or quicken-
ing halved to 13 — Botswana,
Cameroon, Côte d’Ivoire, the
Democratic Republic of the
Congo, Ethiopia, Gabon, Ghana,
Kenya, Madagascar, Namibia,
Senegal, Tanzania and Zimbabwe
— and the six largest economies
experienced slowing growth,
partly reflecting lower resource
prices and the Arab Spring.
This mixed picture means that
companies and investors assess-
ing Africa’s potential need to be
specific about the growth and
stability of individual countries.
We measured three aspects of
stability: macroconomic stability,
economic diversification, and
political and social stability.
Three distinct groups of coun-
tries emerges from this.
ABOUT one-fifth of Africa’s GDP
comes from countries we call
growth stars, with high rates
of growth and a high score on
stability. These countries, among
them Côte d’Ivoire, Ethiopia,
Kenya, Morocco and Rwanda,
are not dependent on resources
for growth, and are reforming
their economies and increasing
competitiveness.
The second group, the unstable
growers that account for 43 per-
cent of Africa’s GDP, experienced
high growth rates in the past five
years, but achieved lower scores
on stability.
This group of countries includes
Angola, the Democratic Republic
of the Congo, Nigeria and Zam-
bia, which need to diversify their
economies away from resources,
to improve their security, or sta-
bilise their macroeconomies.
And then there are the slow
growers that accounted for 38
percent of GDP last year includ-
ing SA, Madagascar, Egypt, Libya
and Tunisia.
The imperative now is for policy
makers and businesses to work
together to accelerate economic
reforms and strengthen the fun-
damentals that underpin growth.
One key will be to diversify
exports and national revenue
sources to eliminate the volatility
that arises when resource prices
change considerably. This is criti-
cal to increasing Africa’s ability
to finance its own development
by better mobilising domestic
resources through improved
tax and customs collections and
encouraging more savings.
This will require countries to
increase pension provisions,
expand access to banking and
financial services and deepen
their capital markets.
BETTER planning of urbanisa-
tion is critical to unlocking the
growth opportunity in full and to
make African cities competitive.
A stronger focus on expanding
power supply and electricity is
needed to solve the number
one challenge to the business
environment.
Improving educational systems
to develop the skills needed now
and into the future is vital, as
are further efforts at regional
integration of manufacturing and
trade and improving physical and
digital infrastructure.
The economic and political
turbulence in parts of Africa in
recent years has been a shock,
but it has not derailed the
growth story. The IMF forecasts
that Africa will be the sec-
ond-fastest growing region in
the world between this year and
2020, with annual growth of 4,3
percent.
What the past five years have
proved is that Africa’s economic
lions need to improve their
fitness to make the most of their
potential and continue their
march towards prosperity. –
BDLive ●
• Barton is the global man-
aging partner of McKinsey
& Company and co-chair
of World Economic Forum
on Africa. Leke is a senior
partner in the Johannesburg
office and leads the McKinsey
Global Institute in Africa