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Zim shifting to services, knowledge-based economy: World Bank
1. By Tawanda Musarurwa
HARARE - The World Bank has
lauded the growth of service
based industries and a knowl-
edge based economy in Zimba-
bwe.
In its latest Zimbabwe Eco-
nomic Update: Changing
Growth Patterns, the World
Bank said highlights shifting
trends in local industrial eco-
nomics as traditional linchpin
sectors such as mining, agri-
culture and manufacturing
have been negatively affected
by varying internal and exoge-
nous factors.
"Agricultural production now
represents a broadly constant
share of total output, while the
service sector is experiencing
News Update as @ 1530 hours, Wednesday 03 February 2016
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Zim shifting to services, knowledge-based economy: World Bank
2. dynamic growth.
"However, the manufacturing
and mining sectors are strug-
gling to cope with rising capital
costs, a difficult business cli-
mate and a decline in external
competitiveness. "As a result,
there has been a shift in eco-
nomic activity from industry to
services," said the World Bank.
"The service sector, currently
60 percent of gross domestic
product, grew at an average
rate of 8,5 percent per year
during 2010-14, 4,3 percent in
2015 and is projected to grow
by over 3 percent in 2016.
"Construction, finance and
insurance and hotels and distri-
bution recorded strong growth
in 2015.
"Telecommunications is also
expected to continue to make
important contributions to
overall growth as its customer
base continues to expand. In
2015, the mobile phone pene-
tration rate (active) rose to 93
percent, and internet access
reached 47 percent of the pop-
ulation.
"While the telecommunications
industry remains pivotal to the
service sector’s development,
signs of weakening domestic
demand are likely to dampen
its growth prospects in the
short-term. Knowledge-inten-
sive subsectors that employ
skilled workers and serve
upper-income consumers led
the sector’s growth."It added:
"Non-tradable services such as,
education and public adminis-
tration also experienced rapid
growth, partly in response to
increasing fiscal expenditures
and rising public sector wages,
including teachers’ salaries.
"The rise of knowledge-in-
tensive subsectors such as
finance, transport and com-
munications underscores the
growth potential of Zimbabwe’s
service sector."
The international financial
institution expects Zimbabwe's
GDP growth to remain at 1,5
percent. "Zimbabwe has enor-
mous potential for inclusive
growth, but it will be a complex
challenge to ensure that recov-
ery is truly broad-based and
not regressive," said the World
Bank.●
2 news
4. HARARE – Hospitality group,
African Sun Limited has closed
its Beitbridge Express Hotel
due to losses it was consist-
ently making over much of
the two decades it has been
running.
Like most other African Sun
hotels, the 104-roomed
Beitbridge Express Hotel, is
owned by Dawn Properties.
The hotel was opened in
1998, with African Sun tar-
geting to capitalise on the
traffic between Zimbabwe
and South Africa.
African Sun said it had agreed
with owners of the building,
Dawn Properties to terminate
the lease agreement for the
hotel.
“The rationale for the termi-
nation was as a result of the
prolonged loss making by the
hotel which was eroding the
group’s equity,” African Sun
said.
Beitbridge Express had con-
tinued to make losses in spite
of various initiatives imple-
mented to turn around its for-
tunes, the group said.
In the past two years, the
hotel’s accumulated losses
amounted to $507 944.
“The financial losses contin-
ued despite various initiatives
implemented as such the
board was left with no other
option, but to take the con-
sidered view that disinvesting
was the most prudent option,”
African Sun said.
As at the end of December
2015, the hotel recorded a
loss of $217 910 while its net
current liabilities stood at
$194 607.
Other African Sun hotels still
in operation include Crowne
Plaza Monomotapa and Hol-
iday Inn in Harare, Elephant
Hills and Kingdom Hotel in
Victoria Falls, Holiday Inn
Mutare and Carribea Bay in
Kariba.
In trying to enhance its via-
bility, African Sun - which
posted a $3,36 million loss
for its financial year end-
ing September 2015 - exited
another loss making entity,
Amber Accra Hotel in Ghana.
It also entered into a deal
with Legacy Hotels of South
Africa to manage five of its
local hotels for the next five
years.-New Ziana.●
4 news
African Sun shuts down Beitbridge Hotel
6. By Tawanda Musarurwa
HARARE - Telecoms giant
Econet Wireless Zimbabwe
continues to extend its ten-
tacles into the educational
technology and e-learning
platforms through its intro-
duction of a second zero-
rated product - Ruzivo Digi-
tal Learning.
Although the platform, which
was endorsed by the Minis-
try of Primary and Second-
ary Education Curriculum
Development Unit (CDU),
presently caters for primary
education, Econet says it has
plans to extend to secondary
learners.
Zimbabwe has over 3,6 mil-
lion pupils enrolled in primary
and secondary schools. CEO
Econet Services Dr Jimmy
Shindi said "we are develop-
ing secondary school content
in the background and we
will let you know soon."
Similar to Econet's other
digital educational platform
- EcoSchool - Ruzivo Digital
Learning is zero-rated, which
basically means that it can
be assessed without data
charges.
But on creating an account
and signing up for the ser-
vice the pupils are required
to pay a minimum of $2 a
month, which is only paya-
ble via the telecoms firm's
mobile money platform, Eco-
Cash. The learning material
is also specific to the Zimba-
bwean learning curriculum
"Content is developed by an
internal team in line with the
national curriculum," said Dr
Shindi.
The novel interactive digital
learning platform is expected
to complement the Govern-
ment’s efforts in providing
education resources to help
improve overall pass rates.
Econet Wireless CEO Mr
Douglas Mboweni said:
“At Econet we believe that
investing in the education of
our children is key to unlock-
ing the nation’s economic
prosperity across all sectors.
"Zimbabwe is rated amongst
the top literate countries
in Africa and we would like
to see that great achieve-
ment maintained for this and
future generations.” ●
6 news
Econet's Ruzivo Digital Learning targets 3,6 million users
7. BH24
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8. BH24 Reporter
HARARE – The Zimbabwe Rev-
enue Authority is working on
a raft of measure to increase
revenue collection after failing
to meet successive targets.
The revenue authority has in
recent years failed to meet
its target, including last year,
a factor that chairperson Mrs
Willia Bonyongwe attributed
to the depressed economy and
Zimra’s limitations.
Net revenue collections for
2015 fell 3 percent to $3,50
billion from $3,60 billion in the
previous year. It was however
marginally above the revised
target for the year of $3,46
billion. The initial target for
the year was initially $3,76
billion.
“The revenue collections for
2015 reflect largely the sub-
dued state of the economy
during the reporting period.
However, it also reflects the
limitations of ZIMRA in terms
of lack of robust enforcement
particularly on Local VAT,
incomplete digitalisation and
budgetary constraints.
“ZIMRA is working on a com-
prehensive tax management
system to increase the effi-
ciency and cost of collect-
ing while at the same time
increasing revenues by plug-
ging all the leakages. The tax
management system should
be operational by end of 2016.
This will have a huge positive
impact on all tax heads. In the
meanwhile, ZIMRA is going to
vigorously enforce all current
fiscal legislation to increase
the level of compliance. The
public is urged to assist the
Authority in identifying busi-
nesses which do not offer fis-
cal receipts or who do not pay
their taxes.
“ZIMRA is also working on
introducing cargo tracking in
2016 and on increasing the
number of scanners, subject
to availability of funding. This
will cut down on smuggling.
All these initiatives will greatly
improve the convenience of
our stakeholders and also fulfil
our goal to serve efficiently,”
Mrs Bonyongwe said.●
8 news
Zimra in bid to boost revenue collection
10. HARARE -The equities
market dropped for a
third straight day, losing
1.34 to close at 100.99 as
heavyweight counters lost
ground.
NatFoods lost a hefty
$0,4700 to close at
$2,2000, while PPC
dropped by $0,0975 to
settle at $0,8000.
Giant insurer Old Mutual
decreased by $0,0299 to
$1,6700, and other losses
were in Meikles which was
$0,0026 lower at $0,0740
and Padenga which closed
at $0,0690 after a $0,0010
loss.
However, Econet added
$0,0005 to trade at
$0,2205 while GetBucks
rose $0,0001 to close at
$0,0370.
The mining index was flat
at 19.53 as Bindura, Fal-
gold, Hwange and RioZim
maintained previous
price levels at $0,0100,
$0,0050, $0,0300 and
$0,1040 respectively.
- BH24 Reporter ●
ZSE10
Industrials in third consecutive loss
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12. Movers CHANGE Today Price USc SHAKERS Change TODAY Price USc
GetBucks 0.27 3.70 NatFoods -17.60 220.00
Econet 0.22 22.05 PPC -10.86 80.00
Meikles -3.39 7.40
Old Mutual -1.75 167.00
Padenga -1.42 6.90
Index Previous Today Move Change
Industrial 102.33 100.99 -1.34 points -1.31%
Mining 19.53 19.53 +0.00 points +0.00%
12 zse tables
ZSE
Indices
Stock Exchange
02 03
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14. 14 DIARY OF EVENTS
The black arrow indicate level of load shedding across the country.
POWER GENERATION STATS
Gen Station
03 February 2016
Energy
(Megawatts)
Hwange 420 MW
Kariba 285 MW
Harare 30 MW
Munyati 29 MW
Bulawayo 24 MW
Imports 0 - 300 MW
Total 1371 MW
—10 February 2016 - Nampak Zimbabwe Annual General Meeting: Venue 68 Birmingham Road, Southerton, Harare: Time 12:00
—18 February 2016 - 70th Annual General Meeting of the members of CAFCA ; Place: Boardroom at the company’s registered office
at 54 Lytton Road, Workington, Harare; Time: 12:00 hours
—23 February 2015 - 38th Annual General Meeting of the members of Powerspeed Electrical Limited; Place: Powerspeed Board-
room, Gate 1, Powerspeed Complex, Corner Cripps Road and Kelvin Road North, Graniteside, Harare; Time: 1100 hours
25 February 2016 - Extraordinary General Meeting (“EGM”) of the Shareholders of Radar Holdings Limited; Place: Tanganyika
House, 6th Floor Boardroom, Harare; Time: 0900 hours...
25 February 2016 - The 49th Annual General Meeting of Mashonaland Holdings Limited; Place: The Boardroom, 19th Floor, ZB Life
Towers, 77 Jason Moyo Avenue, Harare; Time: 1200 hours...
THE BH24 DIARY
15. WASHINGTON - The Interna-
tional Monetary Fund said on
Tuesday it stands ready to help
sub-Saharan Africa's oil export-
ers cope with plunging crude
prices and growing fiscal pres-
sures but has not received any
new funding requests from the
region.
Nigeria and Angola instead have
turned to the World Bank for
assistance, even though the IMF
is typically viewed as the world's
go-to crisis lender.
Facing an estimated $15 billion
budget deficit in 2016, Nige-
ria's finance ministry has said
it is looking to borrow as much
as $5 billion. It has held dis-
cussions with the World Bank,
African Development Bank and
China's Export-Import Bank due
to their "concessionary rates of
interest."
The World Bank is discussing
potential financing for Nigeria
and Angola through a program
to support structural changes in
an emerging market country's
economy and government insti-
tutions.
The two sub-saharan African
countries are the latest in what
may become a long line of
oil-exporting countries to seek
financial assistance to help stem
growing deficits as falling crude
prices crush revenues. The IMF
and World Bank are already
talking to Azerbaijan about a $4
billion financing package.
On Tuesday, US crude fell back
below $30 a barrel, half its price
in June 2015 and down from
about $100 two years ago.
"The sharp decline in oil prices
represents a formidable shock
on the oil exporting countries of
sub-Saharan Africa, especially in
view of their strong reliance on
oil receipts for fiscal and exter-
nal revenues," an IMF spokes-
woman said in a statement.
The IMF noted that despite rising
deficits, several of these coun-
tries still have adequate foreign
exchange reserves and low lev-
els of overall debt. This would
suggest that a balance-of-pay-
ments crisis is not imminent.
When IMF managing director
Christine Lagarde visited Nige-
ria in January to meet new Pres-
ident Muhammadu Buhari, she
insisted that she was not there
to negotiate a loan program..
"With the exception of Chad,
which already had a program
in place with the IMF prior to
the oil price shock, we have
not received any new request
for financial assistance from
sub-Saharan African oil export-
ers," the IMF spokeswoman
added. "We indeed stand ready
to assist the authorities, should
such a request materialise."
Although wealthier Gulf oil pro-
ducers are expected to fare bet-
ter due to deeper reserves, the
IMF issued a warning last week
to Bahrain that it, too should cut
deficits now reaching 15 percent
of economic output, which have
weakened investor sentiment. -
Reuters●
regioNAL News15
IMF says ready to lend to African oil producers; no requests yet
16. Gold stabilised near a three-
month top early on Wednes-
day, its safe-haven appeal
kept intact by concerns over
a wobbly global economy that
has put share markets under
pressure.
FUNDAMENTALS
* Spot gold was off 0,2 per-
cent at $1 127,07 an ounce
by 0044 GMT, not far below
Tuesday’s peak of $1 130,30,
its strongest since Nov. 3.
* US gold for April deliv-
ery was flat at $1 127,70 an
ounce.
* Global interest rates are
likely to go even lower before
they rise as financial market
volatility and the spectre of
deflation raise fresh doubts
about central banks’ ability to
fulfil their mandates, policy-
makers and economists said.
* That should be supportive
for gold, an asset that thrives
on uncertainty. Expectations
that the Federal Reserve may
also go easy on raising inter-
est rates amid the global eco-
nomic headwinds had helped
gold rise the most in a year
in January.
* But Kansas City Fed Bank
President Esther George said
the Fed should push ahead
with interest rate hikes
because of the strong funda-
mentals of the US economy.
* India’s latest attempt to
curb the country’s love for
gold – by forcing buyers of
high-value jewellery to dis-
close their tax code – has
boosted unofficial trading in
the world’s second-biggest
gold consumer, rather than
promote transparency and
dent demand.
MARKET NEWS
* Asian shares sagged as oil
prices sank again due to fad-
ing hopes of a deal to curb a
global glut, prompting inves-
tor to seek shelter in safe-ha-
ven assets and lifting bonds
and gold to multi-month
highs.
* The yen and euro held on
to overnight gains against the
dollar, driving down US debt
yields to nine-month lows
and dulling the greenback’s
appeal. - Reuters●
internatioNAL News16
Gold prices stick near 3-month high
17. By Ben Sharples
Oil bulls distressed that last
week’s rally fizzled can find
some comfort in forecasts for
a bigger and longer rebound
by the end of the year.
Analysts are projecting prices
will climb more than $15 by
the end of 2016. New York
crude will reach $46 a bar-
rel during the fourth quar-
ter, while Brent in London
will trade at $48 in the same
period, the median of 17 esti-
mates compiled by Bloomberg
this year show. A global sur-
plus that fueled oil’s decline
to a 12-year low will shift to
deficit as US shale output
falls, according to Goldman
Sachs Group Inc.
US production will drop by
620 000 barrels a day, or
about 7 percent, from the
first quarter to the fourth,
according to the Energy
Information Administration.
Meanwhile, the International
Energy Agency forecasts
total non-OPEC supply will
fall by 600 000 barrels a day
this year. That may pave the
way for a rebound as lower
prices have stimulated global
demand. Oil is the “trade of
the year,” according to Citi-
group Inc., which is among
banks from UBS Group AG to
Societe Generale SA that pre-
dict a gain in the second half.
“US shale should take the
hit, that’s where you will see
cuts and supply should start
to taper off,” Daniel Ang, an
investment analyst at Phillip
Futures, said by phone from
Singapore. “On top of that,
there are bullish demand
forecasts for the second half.”
West Texas Intermediate and
Brent both closed at the low-
est level since 2003 on Jan.
20. WTI for March delivery
ended the session at $29,88 a
barrel on Tuesday and would
need to gain 54 percent to
reach the median estimate
of $46 a barrel. The London
contract for April delivery
settled at $32,72 and needs
a 47 percent boost to hit $48.
The median price was taken
from estimates provided this
year by 17 analysts who gave
forecasts for both oil grades.
Shrinking Output
WTI and Brent added 4,4 per-
cent and 8 percent last week,
respectively, amid speculation
Russia and OPEC will meet to
discuss trimming crude out-
put. They have since given up
most of those gains.
The oil price rout will shut
sufficient production to erode
the global glut and crude will
turn into a new bull mar-
ket before the year is out,
analysts including Goldman
Sachs’ Jeff Currie said in a
Jan. 15 report. US produc-
tion hit a record high of 9,61
million barrels a day in June,
according to weekly data from
the EIA, and is forecast to
average 9,11 million barrels a
day in the first three months
of the year. It may fall to
average 8,49 million barrels a
day during the fourth quarter,
according to the agency.
‘Drown in Oversupply’
“We’ll see higher oil prices”
with “supply and demand
tightening in the second half
of the year,” Bob Dudley, chief
executive officer of BP Plc,
17 analysis17 analysis
Oil prices could jump 50pc by year- end
18. 18 analysis18 analysis
said in a Bloomberg Televi-
sion interview Tuesday. The
market will remain “tough
and choppy” in the first half
as it contends with a surplus
of 1 million barrels a day, he
said.
A worldwide oversupply con-
tributed to a 30 percent
slump in WTI and 35 percent
decline in Brent last year. US
crude supplies have swelled
to a record and the Organi-
sation of Petroleum Export-
ing Countries have effectively
abandoned output targets as
they seek to defend market
share.
“We need to see supply giving
up and I think that all falls
to the US,” Dominic Schnider,
the head of commodities and
Asia-Pacific foreign exchange
at UBS’s wealth-management
unit in Hong Kong, said Fri-
day in a Bloomberg Televi-
sion interview. Schnider at
the beginning of this year
correctly predicted Brent
would drop near $30 a barrel.
“We’re still oversupplied.”
Ratings Cut
Natixis SA lowered its fore-
casts for 2016 and 2017 over
concerns that Iran will boost
exports after sanctions were
lifted and on the possibility
a more stable Libyan govern-
ment will increase produc-
tion. The Paris-based bank
projects WTI will average $38
a barrel in the fourth-quar-
ter, the lowest of 17 esti-
mates compiled by Bloomb-
erg. And while the IEA sees
supply outside OPEC sliding,
it warned last month that
“the oil market could drown
in oversupply.”
The price slump prompted
Exxon Mobil Corp. to cut its
drilling budget to the lowest
in 10 years, while Stand-
ard & Poor’s reduced Chev-
ron Corp.’s credit rating for
the first time in almost three
decades. The agency also cut
Royal Dutch Shell Plc’s debt
rating to the lowest since S&P
began coverage in 1990.
There are signs supply and
demand will start to come
back into balance this year,
OPEC Secretary-General
Abdalla El-Badri said January
25 at a conference in London.
Global demand is forecast to
increase by about 1,3 million
barrels a day, while supply
from outside the producer
group is expected to contract
by about 660 000 a day, he
said.
Russia Production
Output from Russia, which
vies with Saudi Arabia and
the US as the world’s top pro-
ducer, may fall this year by
as much as 150 000 barrels
a day, or about 1,3 percent,
according to analysts includ-
ing Neil Beveridge, at San-
ford C. Bernstein & Co. The
country’s production set a
post-Soviet high in January
as output of crude and a light
oil called condensate climbed
1,5 percent from a year ear-
lier to 10,878 million barrels
a day, according to the Energy
Ministry’s CDU-TEK unit.
Iraq, the second-biggest pro-
ducer in OPEC, and Pierre
Andurand, the founder of the
$615 million Andurand Capital
Management, predict oil may
rise to $50 a barrel, while the
United Arab Emirates sees
the glut shrinking, even after
Iran boosts exports.
While prices continue to fluc-
tuate, buy the December
2016 WTI contract below $40
a barrel because prices are
forecast to average $48 by
the end of the year, accord-
ing to Mark Keenan, the head
of commodities research for
Asia at Societe Generale in
Singapore. There may be
“meaningful signs” of shale
production balancing in the
second half, Keenan predicts.
“The combination of contin-
ued demand growth and fall-
ing U.S. production will even-
tually help create a floor in
the market from where it will
be able to rally back towards
the $40 to $50 range by year-
end,” Ole Hansen, head of
commodity strategy at Saxo
Bank A/S, said by e-mail. -
Bloomberg●