1. By Tawanda Musarurwa
HARARE – State-owned
mobile telecoms operator
NetOne says it expects to
pay a dividend to Govern-
ment at the end of this year.
Despite posting a loss for the
year ended December 31,
2015 of $3 million, manage-
ment believes that ongoing
restructuring efforts at the
firm will put it in good stead
going forward.
Acting CEO Mr Brian Mutand-
iro said the company was
now moving to focus on
getting a return on its base
station investments.
“Currently our turnover is
around $120 million per year,
but the network that we
have, the infrastructure is
about 50 percent of Econet.
Yet Econet is turning over
$700 million per year, so it
says that somewhere there
is something that we are not
doing and that is where we
are focusing right now.
“And I think by the end of
the year, NetOne should be
in a position to declare a
dividend to Government. We
must do justice to Govern-
News Update as @ 1530 hours, Friday 20 May 2016
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NetOne eyes improved bottomline, dividend to Govt
Mr Brian Mutandiro
2. ment’s efforts in guarantee-
ing the loans that have come
to NetOne,” he said.
“As at the end of 2015
there was a loss in NetOne
of about $3 million. For us
that’s a crime because our
competitor Econet is making
a lot of money, so there is no
reason why NetOne cannot
make money because we are
all eating from the same pot.
In 2014 half a billion was
spent on airtime so there is
money.
“We have set ourselves a
goal that within two years
we will be ahead of Econet in
terms of market share. Why
do I say that? Government is
a shareholder in NetOne and
within Government you have
got the biggest quantum of
money that moves, and if
OneWallet platform was per-
forming and if we just tapped
into that we would be able to
transform our business.”
He was addressing the Parlia-
mentary Portfolio Committee
on Youth and Development
at the company’s headquar-
ters today. Mr Mutandiro said
NetOne had been making
losses because it was not
fully taking advantage of its
wide base station capacity
across the country.
“We have been focusing on
setting up base stations, but
not following up on effec-
tively monetizing these base
stations. Our new focus is
to build sales and distribu-
tion networks and we can
see that our revenues are
coming.”
He noted that while Econet
was getting 12 cents for
every minute, NetOne was
getting around 2, 8c per
minute, which they are now
targeting to rise to at least
8c per minute this year.
“For instance, the ‘dollar-a-
day’ facility was simply giv-
ing away airtime,” he said.
But the state-owned mobile
telecoms operator says it will
also maintain its focus on
expanding its network across
the country.
“NetOne has been focused
on primarily rolling out the
network, we have got base
stations in most part of the
country where other net-
works are not present, but
we believe that were at 50
percent of where we should
be.
“And recently we have been
given another mandate by
Government to make sure
that we give the country 100
percent coverage, in fact it
one of the conditions from
POTRAZ that as we engage
them to renew the licence
they are saying that within
five years we must have
covered the country 100 per-
cent,” said Mr Mutandiro.
The firm so far completed 80
percent of the base station
rollout under the phase two
of its expansion project
which is being financed by
a loan facility to the tune of
$218 million.●
2 news
5. By Funny Hudzerema
HARARE -Companies and
retailers are the biggest cul-
prits of money externalisa-
tion in Zimbabwe which has
resulted in a cash deficit of
nearly $1 billion, Parliamen-
tary Portfolio Committee on
Finance and Economic Devel-
opment member Terence
Mukupe said.
Presetting at the retail
summit on externalisation
of funds MP Terence Mukupe
said people were pointing
fingers at politicians and
Government as big export-
ers of money but companies
were the biggest culprits
from the papers that Govern-
ment have.
Statistics indicated that a
total of $1, 8 billion was
externalised last year ille-
gally and legally by different
people and during the first
quarter of this year $50 mil-
lion was shipped out.
“Last year a total of $1, 2
billion was actually taken
out by corporates and two of
the culprits (Zimplats and
BancABC) have been fingered
already by the authorities.
“Individuals externalized
$684 million last year and
we have the Panama Papers
that have come out and the
individuals that are there are
running retail companies and
they are using their execu-
tives that are involved in the
exportation of money,” he
said.
He added that most of the
supermarkets are no longer
giving cash back but people
are buying with money where
are you putting the money?
“We all have collective
responsibility to reduce the
externalization of money as
Zimbabweans.
“To reduce that Government
has stated that people must
start to use the point of sell
systems and its surprising
that some of the biggest
wholesalers in the country
they didn’t have point of sell
systems right now wholesal-
ers such as Muhammad Musa
they don’t have a point of
sale where are they banking
the money,” he said.
“A number of retail shops in
the country are externaliz-
ing money to other countries
since they don’t have a point
of sale where people can use
plastic money.
“Their products are only
bought with cash and we
don’t know where they are
banking their money because
when you ask for a cash back
it is a night mare for you to
get one,” said MP Mukupe.
He said a total of $50 million
has been externalized so
far this year alone through
different activities such as
the importation of goods
while the country is experi-
encing a cash deficit of $800
million.●
5 news
Companies biggest culprits of externalization: MP
6. BH24 Reporters
HARARE-The Ministry of
Agriculture, Mechanization
and Irrigation Development
in collaboration with United
Nations Development Pro-
gramme and support from
the European Union and
Department for International
Development have set up the
Zimbabwe Resilience Building
Fund.
The fund is expected to
raise at least $50 million
for investing in resilience
building activities in the next
five years by offering better
protection against economic
and environmental shocks.
Already $26 million worth
of funding agreements have
been signed.
Interventions will target
improving rural; livelihoods,
nutrition and food security as
well as health and access to
basic social services.
Officially launching the
fund in Harare yesterday,
Agriculture, Mechanisation
and Irrigation Development
Minister, Dr Joseph Made
said the overall objective of
the fund was to contribute
to increased capacities of
communities at risk to pro-
tect development gains and
achieve improved well-be-
ing outcomes in the face of
shocks and stresses.
“In our efforts to further
focus our resilience lens
as a nation, the Ministry of
Agriculture, Mechanisation
and Irrigation Development
in collaboration with UNDP in
Zimbabwe with initial support
from EU and DFID set up the
Resilience Fund (ZRBF),” he
said.
Minister Made said this would
be achieved through three
interlinked components.
“This will be achieved
through creating body of evi-
dence and building capacity
for increased application of
evidence based policy mak-
ing; improving the absorp-
tive, adaptive and transform-
ative capacities of at risk
communities and setting up
a crisis modifier mechanism
which will provide appropri-
ate, predictable, coordinated
and timely response to risk
and shocks from a resilience
perspective,” he said.
EU ambassador to Zimba-
bwe Mr Philippe Van Damme
said land was one of the key
resources for development
and prosperity of Zimbabwe
and its citizens.
“We must put people first
and allow them, especially
children to fulfil their full
potential. Building a resilient
community is in fact about
unlocking such human poten-
tial by easing the access of
people to key resources and
knowledge,” he said.
UNDP resident representative
Mr Bishow Parajuli said the
secretariat for the fund and
its governance was already
in place.
“I am pleased to inform you
that the secretariat for the
fund and its governance
structure is in place. So far
a series of dialogues with
Government, UN, NGOs and
Academia have taken place,
culminating in a strategic
framework for resilience in
Zimbabwe,” he said●
6 news
Agric Ministry, UNDP, EU & DFID set up Zimbabwe Resilience Building Fund
Mr Philippe Van Damme
7. BH24 Reporter
HARARE - Zimplow Holdings
says it has successfully con-
cluded disposal of two non-
core commercial properties in
Harare and Masvingo for $1,
27 million.
The group expects to utilise
the funds to retire its short
term debt. Said the company
in a notice to shareholders:
“The Company has success-
fully concluded the disposal
of two non-core commercial
properties in Harare and
Masvingo for considerations
as shown below: Harare, 34
Douglas Road Property, gross
proceeds excluding VAT of
$833 648 sold to Tatwick
Properties (Private) limited.
“Masvingo, Stand number
1661, Hughes Street Property,
gross proceeds excluding VAT
of $440 000 sold to Cranrid
Investments (Private) Lim-
ited,” said Zimplow.
“The proceeds from the dis-
posal of these two commercial
properties were used to retire
some of the company’s short
term borrowings.”
Last year, the struggling firm
raised $5 million through
a rights offer, which went
towards retiring part of its
$13 million debt.
Zimplow’s subsidiaries include
Barzem, Mealie Brand, CT
Bolts and Farmec.
. ●
Zimplow sells properties for 1, 2m
7 news
8. Movers CHANGE Today Price USc SHAKERS Change TODAY Price USc
Bindura 9.09 1.20 Delta -3.33 72.50
Proplastics 7.14 3.00 Hippo -0.25 20.00
RioZim 4.40 15.65
Index Previous Today Move Change
Industrial 106.95 105.80 -1.15 points -1.07 %
Mining 23.89 25.19 +1.30 points +5.44 %
8 zse tables
ZSE
Indices
Stock Exchange
Previous
today
02 03
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9. 9 DIARY OF EVENTS
The black arrow indicate level of load shedding across the country.
POWER GENERATION STATS
Gen Station
20 May 2016
Energy
(Megawatts)
Hwange 431 MW
Kariba 481 MW
Harare 17 MW
Munyati 28 MW
Bulawayo 19 MW
Imports 0 - 400 MW
Total 1304 MW
THE BH24 DIARY
10. regioNAL News10
Incident at Exxon terminal tests Nigeria's foundering oil output
NEW YORK/YENAGOA
- Nigeria's oil production
showed further signs of
strain on Thursday as intrud-
ers blocked access to Exxon
Mobil's terminal exporting
Qua Iboe, the country's larg-
est crude stream.
Exxon Mobil said the ter-
minal continued to operate
even as the intruders blocked
staff from gaining access
from early morning hours.
The incident is the latest in
a string of attacks and other
problems at the oil infra-
structure in Africa's largest
crude producer.
"Some unknown persons
obstructed access to the
bridge leading to (the ter-
minal), thereby preventing
our personnel and the public
from conducting their legiti-
mate businesses," a spokes-
man said in an email.
"A peaceful removal of the
obstructions is ongoing,"
after intervention from gov-
ernment, security agencies
and community leaders, the
spokesman said, adding that
Exxon "condemns this crimi-
nality."
Samuel Ayande, chairman of
the Artisan Fishermen Asso-
ciation, which is in contact
with various locals who have
information about develop-
ments on the ground, said a
threatening letter from mili-
tants was impacting Exxon's
decision over staffing and
operations at the terminal.
Exxon directed enquiries
about militant threats to
security agencies, though
it said the company had
"plans in place to assure the
security of our personnel and
assets."
The spokesman did not
respond to earlier reports
that the facility was emp-
tied of crude or that Exxon
had removed staff from the
terminal.
Militant activity in the oil-
rich Niger Delta has taken
out some 500,000 barrels
per day of crude oil produc-
tion from other companies in
Nigeria, pushing oil output
in Africa's largest-producing
nation to more than 22-year
lows. - Reuters
While President Muham-
madu Buhari has extended a
multi-million-dollar amnesty
signed with militants in
2009, he upset them by
ending generous pipeline
protection contracts. He also
cut the amnesty budget,
which partly funds training
for unemployed, by around
70 percent.
The Niger Delta Avengers,
a little-known radical group
which has claimed a string
of attacks on pipelines,
has warned oil companies
to leave the region within
two weeks and has said it
wanted a greater share of oil
revenues and an end to oil
pollution- Reuters●
11. Gold is heading for the long-
est run of weekly losses this
year courtesy of the Federal
Reserve, which signaled in
comments from policy mak-
ers and meeting minutes that
U.S. interest rates may rise
as early as June.
Bullion for immediate deliv-
ery was little changed at
$1,254.05 an ounce at 2:55
p.m. in Singapore, down for
a third week, the longest
losing streak since Novem-
ber, according to Bloomb-
erg generic pricing. It sank
to $1,243.90 on Thursday,
the lowest since April 28,
as a resurgent dollar hurt
demand.
Gold’s rally in 2016, which
saw prices climb to a
15-month high, has been
thrown into reverse as inves-
tors reassess the likelihood
of higher U.S. borrowing
costs, which damp the appeal
of bullion. Following the
release of the April minutes
that suggested increases
were on the cards, New York
Fed President William Dudley
said on Thursday a June-July
time frame for a hike was
reasonable, while Richmond
Fed President Jeffrey Lacker
said there was a very strong
case for a raise next month.
Stronger Dollar
“Gold prices took the brunt
of the selling,” Australia &
New Zealand Banking Group
Ltd. said in a note Friday,
predicting the flows into bul-
lion-backed exchange-traded
products may be set to
reverse. “Commodities were
weaker across the board as
the stronger dollar weighed
on investor sentiment.”
The odds of a rise in June
or July are now at 28 per-
cent and 47 percent, from
4 percent and 17 percent
last Friday, according to Fed
funds futures. The Bloomberg
Dollar Spot Index is set for a
third weekly gain as bullion
has dropped 1.5 percent this
week, the most since the
period to March 25.
Holdings in gold-backed
ETFs were at the highest
level since December 2013
as of Thursday, when they
expanded by 5.9 metric tons
even as bullion fell for a
second day, data compiled by
Bloomberg show. The hold-
ings have risen 25 percent
this year, gaining every day
apart from one since April
26. - Bloomberg●
internatioNAL News11
Gold takes ‘brunt of the selling’ as Fed primes markets for hike
12. By Zhang Jingwei
Recently, the Obama admin-
istration filed a lawsuit at
the World Trade Organization
(WTO) over China's broiler
chicken products. Moreover,
members of the European
Parliament opposed recogni-
tion of China's market econ-
omy status last Thursday.
China's trade disputes with
the U.S. and the EU have
been ongoing since the coun-
try joined the WTO in 2001.
However, people should not
read too much into these dis-
putes within the WTO frame-
work. Trade disputes, being
fundamentally different from
geopolitics, are economic and
market actions.
It must be noted that the
EU's refusal of China's mar-
ket economy status was a
non-legislative resolution.
Therefore, there might be
some wiggle room for mem-
bers of the European Parlia-
ment to pass a resolution to
upgrade China's status.
According to Article 15 stip-
ulated in WTO's Protocol on
the Accession of China, the
importing WTO member in
anti-dumping and anti-sub-
sidy investigations may use
a "methodology" that is not
based on a strict comparison
with domestic prices or costs
in China but choose a third
country with market economy
status as a comparison. The
provision will expire on Dec.
11, 2016, 15 years after the
date of China's accession.
China has suffered due
to this provision. During
anti-dumping investigations,
the EU either chose emerging
economies or small manu-
facturing countries, none
of which can compete with
China as a manufacturing
12 analysis12 analysis
EU's trade protection and China's market economy
13. 13 analysis13 analysis
giant. Quality of products
from those "alternative"
countries was poorer than
China's and cost much
more. Therefore, China will
certainly be suspected of
dumping.
Although unreasonable, the
clause has been effective for
15 years under the frame-
work of the WTO, so that
China has had to face a large
number of lawsuits and trade
fights from the U.S. and the
EU, as well as with emerging
India and Mexico.
According to statistics,
Chinese products have been
involved in 56 cases of EU's
total 73 anti-dumping inves-
tigations, including steel,
iron, machines, chemical
engineering and ceramics.
However, the EU has been
divided on the anti-dumping
and anti-subsidy investi-
gations against China. For
instance, Germany's former
Vice Chancellor Philipp Rösler
warned in 2013 that impos-
ing anti-dumping duties on
Chinese solar panels would
be a grave mistake.
The EU was rocked by a
sovereign debt crisis due to
unbalanced economic devel-
opment, the lack of finan-
cial restriction policies and
member states' requests for
the same market and wel-
fare conditions. It is more
difficult for EU members to
reach a consensus on trade
barriers.
The EU's trade barriers and
trade protectionism are not
necessarily a consensus of
all the member states. For
example, many trade fights
against China were not
launched by China's major
trade partners but by some
small EU countries merely for
their own interests.
Despite EU's divergence
on the issue of whether to
recognize China's economy
market status, the group
must face the fact that its
members have basic common
interests with China.
First, the EU is reluctant to
recognize China's market
economy status and expects
to maintain its privilege, as
it has benefited from using
"alternative countries" to
conduct trade with China,
EU's second largest trading
partner.
Second, the EU is not yet
out of its debt crisis, and
the effect of its negative
interest rate policy remains
uncertain. Consequently, the
idea of trade protectionism
is spreading through the EU,
pushing the group to protect
the interests of its member
states through trade barri-
ers.
This egoistic tendency also
results in EU's disinclination
to recognize China's market
economy status.
Third, China's daily trade
volume exceeds 1 billion
euros, and products exported
to China are EU business
tycoons' biggest source of
profits. Comparing with the
trade wars against China, it
is more advantageous for EU
to recognize China's market
economy status.
It must be noted that Chi-
na-EU trade disputes can
be solved through negotia-
tions. For instance, EU could
either fulfill its commitment
to China under the WTO's
rules or reach a mutually
beneficial agreement before
Dec. 11, 2016. China should
focus on issues that the EU
really cares about, such as
the relation between gov-
ernments and enterprises,
reform of the state-owned
companies, accounting
standards for business enter-
prises, regulation on bank-
ruptcy, property preservation
and market exchange rate.
The EU and China should
jointly find a win-win solu-
tion to deal with their trade
frictions rather than imple-
menting trade protection
measures. – China.org.cn ●
*Zhang Jingwei is a
researcher with the Char-
har Institute.