A digital copy of the BH24 (14 January 2016 edition). Zimbabwe's premier business news free sheet published by the Zimpapers Newspapers Group (1980) Limited and available every week day from 15:30hrs to give a summary of the day's business news.

1. ByTawandaMusarurwa
HARARE - A significant number of for-
eign businesses currently operating in
the country are yet to comply with the
Indigensation and Economic Empow-
erment Act (Chapter 14:33) and Gov-
ernment will impose a "heavy" levy on
non-compliant firms.
Non-complaint firms could be levied up
to 10 percent of their gross turnover,
but the levy can be moderated up to
100 percent on the basis of compliance,
Youth Development, Indigenisation and
EconomicEmpowermentMinisterPatrick
Zhuwao said today.
"Existing businesses have had five years
to comply and five years later we still
don't see those businesses complying.
There are allegations of lack of clarity,
there are allegations that there is one-
size-fits all model and those allegations
are untrue.
"We have general notices that deal with
each and every sector.
"We are also using a provision within
the Act, to be precise section 17 of the
Act which allows for the imposition of a
levy to enable the funding of NIEEB and
NIEEF. That provision also is a provision
that we will use to enable adherence to
the National Indigenisation and Empow-
erment Charter, it is also a provision that
we will use to ensure the compliance to
the further indigenisation of the econ-
omy, and it is also a provision that we
will use for the economic empowerment
of Zimbabweans," Minister Zhuwao told
delegates at a business breakfast meet-
News Update as @ 1530 hours, Thursday 14 January 2016
Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw
Indigenisation levy to curb high levels of non-compliance: Minister
Minister Zhuwao

2. 2 news
02 03
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ing.
"Section 17 of the Act provides for the
Minister to impose one or more levies,
but as I impose one or more levies I
must get the concurrence of the Minis-
ter of Finance and I must get approval
within Parliament... . I am proposing a
levy at a very high rate at 10 percent
of gross turnover and I am not running
away from that statement.
"I am aware that 10 percent of gross
turnover of any business is potentially
crippling. I am aware that 10 percent of
gross turnover of any business can pos-
siblysinkthatbusiness.Iamveryaware
of that and it is very deliberate.
"Iamproposing10percentwhichcanbe
moderated by the extent to which any
business uses to comply with the indig-
enisation and economic empowerment
Act. It effectively means that businesses
as they plan we now decide to what
extent they want that levy moderated
and those decisions are decisions they
will put within their indigenisation imple-
mentation plans.
"So, those businesses that choose not
to comply will have made the conscious
decision that they are willing to pay 10
percent of their gross turnover as a levy.
But the levy can be moderated up to a
100 percent," he said.
In terms of the recently gazetted frame-
works, procedures and guidelines for
implementing the indigenisation Act, up
to 4 percent rebate can be earned by
a company through submission of an
indigenisation compliance plan, while
another 5 percent rebate can earned
through approval of the plan, and an
additional 10 percent is earned on full
implementation of the plan.
And another 30 percent rebate can be
earned through "socially and econom-
ically desirable objectives as recom-
mended by sector Line Ministers", while
up to 51 percent rebate can be achieved
"in accordance to the extent of indige-
nous shareholding."
Effectiveengagementwithfiscal,
monetarypolicies
Minister Zhuwao said more than ever
fiscal and monetary authorities were in
now line with how the indigenisation law
should be implemented.
"It is no secret that since the Act came
into effect fiscal and monetary authori-
tieshavenotalwaysseeneyetoeyewith
the implementing authority in the name
of the Ministry. We are now at a stage
where fiscal and monetary authorities
agreewiththemannerinwhichindigeni-
sation and economic empowerment will
be implemented.
"And fiscal and monetary authorities are
the authorities that not only have the
mandate but the instruments for man-
aging the economy."
.●

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4. By Funny Hudzerema
HARARE - Listed roofing and build-
ing products manufacturer Turnall
has restructured its board in an
effort to minimise costs and boost
the company's profitability.
Company secretary Mr Kenias
Horonga said the restructuring
programme is a measure aimed at
returning back the company into
profitability.
“As part of that ongoing cost reduc-
tion and recovery programme the
company has decided to reduce the
size of the board.
“With effect from 8 January 2016,
Messrs P F Chingoka, Chirandu
Dhlembeu, Celestine Gadzikwa,
Peter Moyo, John Mushayavanhu,
James Mutizwa, Kiritkumar Naik
and Mrs L Sasikwa resigned from
the board,” he said.
Mrs Rita Likukuma has remains as
the chairperson of the board while
Mrs Portia Marufu remains a board
member.
“Joining them are new appointees
Messrs Innocent Chikwinya, Mun-
yaradzi Gwanzura, Noel Hayes and
Manfred Mahari,” he said.
He added that the new board mem-
bers are expected to bring a wealth
of experience and new perspective
into business.
“The results of these and other
changes will be a further signifi-
cant reduction in the fixed overhead
costs of business.
“This will enhance profitability and
release cash to pay borrowings and
invest in the business,” he added.
Horonga also said that the com-
pany will move on to look for fur-
ther opportunities which allow the
company to be the best supply of
building and construction materials.
In a trading update, the company
said it had returned to profitability
due to the cost cutting measures
the company introduced.
“Following significant turnaround
work that commenced in Septem-
ber 2014 the company returned to
profitability and recorded a profit
before tax of $489 738 for the first
half of 2015.
“Despite challenging market condi-
tions, the company has maintained
its market share and improved its
profitability into the second half,” he
said.
Mr Horonga added that a contin-
ued cost reduction programme is
essential to ensure competitiveness
and prosperity of the business in
the current depressed marketplace
particularly while traditional export
markets have become challenging
as a result of weaker regional cur-
rencies.●
4 news
Turnall restructures board

5. BH245

6. By Funny Hudzerema
HARARE - Government is work-
ing on a number of strategies
to recover the $1 billion which
customers owes to ZESA to
increase power supply of elec-
tricity in the country.
Energy and Power Develop-
ment Minister Samuel Undenge
told journalists today that the
increase in power tariffs are
being caused by some custom-
ers who are not paying their
electricity bills.
“We want people to pay for the
electricity that they are using,
a number of consumers are
not paying electricity so we
are working on mechanisms to
recover the money that ZESA
is owed.
“The customers who are not
complying with ZESA are delay-
ing efforts to construct other
power stations in the country,”
he said.
Government recently introduced
prepaid meters as a means of
ensuring efficiency in the billing
system and to encourage peo-
ple to pay for their electricity
but it seems the strategy has
not had the desired effect.
“As Government we call for all
the people to pay their dues
before Government interven-
tion to reduce power short-
ages,” he said.
He added that if people pay
the electricity the money will
be used towards construction
of other power stations than to
ask for tenders to other coun-
tries.
Meanwhile Minister Undenge
said Government is working
towards increasing the power
tariffs to suit with the cost of
production at power stations.
“The tariff which was being
used was never been reviewed
for the last five years so the
tariff is not cost reflective.
“Currently ZERA is holding con-
sultative meetings to determine
the percentage increase which
will not seriously affect compa-
nies, farmers , and individuals,”
he said.●
6 news
'Customer debts causing power shortages'

7. BH247

8. By Elita Chikwati
HARARE - The Agricultural and
Rural Development Author-
ity (ARDA) has received over-
whelming response from farm-
ers, state institutions and
private companies for joint
venture businesses to enhance
crop production.
This follows Arda’s invitation to
farmers and institutions with
land and water and private
companies with irrigation infra-
structure to come together and
work with Arda to boost agricul-
tural production.
Arda Board chairperson, Mr
Basil Nyabadza said the first
phase of the joint venture pro-
grammes was targeting 25 000
hectares of irrigable land for
winter cropping.
He said the programme was
aimed at bringing together the
private sector and the pub-
lic sector to fight against the
effects of El Nino and boost
food production.
“We are all aware of the cli-
mate change. This is why we
have brought the Arda Gradu-
ation programme to ensure the
public and private sectors pull
resources together and boost
agricultural production.
“We have received overwhelm-
ing response from ordinary
farmers, state institutions with
land and companies willing to
invest in agriculture.
“The programme will be imple-
mented in all areas with water
sources. We are inviting the pri-
vate players to derive meaning
to the land especially now when
there is a severe drought. Most
investors are willing to invest
in Zimbabwe because we are
using the multi-currency sys-
tem,” he said.
Mr Nyabadza said farmers and
institutions would be assured
of maximum utilisation of land,
better returns and skills trans-
fer.
“Farms should be run profes-
sionally. We are glad that there
have been some reviews made
on the investment condition and
this will attract more investors.
“Rain fed agriculture is now
a thing for the past .We need
agriculture founded on irriga-
tion and fortunately Zimbabwe
has got a reasonable amount
of water. We must incorporate
the latest technology to harvest
water for irrigation," he said.
Arda has already benefited from
public private partnerships and
is already producing maize,
wheat, livestock, tea and etha-
nol at some of its estates.
.●
8 news
ARDA gets overwhelming response from partners
Mr Basil Nyabadza

9. BH249

10. HARARE - The mainstream
industrial index lost a further
0.42 (or 0,38 percent) to settle
at 111.14 in trading that was
dominated by counters in the
red.
Giant insurer Old Mutual lost a
significant $0,0400 to close at
$1,9400, while Meikles eased
$0,0030 to trade at $0,0794
and beverages giant Delta
closed at $0,6675 after a
$0,0025 loss.
Also trading negatively was
Mashonaland, which dropped
by $0,0020 to $0,0200 and
banker Barclays which was
$0,0010 lower at $0,0410.
On the upside, CFI Holdings
added $0,0066 to close at
$0,0566 and telecoms giant
inched up $0,0003 to $0,2103.
The mining index was
unchanged at 21.74 as Bindura,
Falgold, Hwange and RioZim
maintained previous price
levels at $0,0128, $0,0050,
$0,0300 and $0,1040 respec-
tively. - BH24 Reporter ●
ZSE10
Industrials in further losses
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11. Movers CHANGE Today Price USc SHAKERS Change TODAY Price USc
CFI Holdings 13.20 5.66 Mashonaland -9.09 2.00
Econet 0.14 21.03 Willdale -4.76 0.20
Meikles -3.64 7.94
Barclays -2.38 4.10
Old Mutual -2.02 194.00
Delta -0.37 66.75
Index Previous Today Move Change
Industrial 111.56 111.14 -0.42 points -0.38%
Mining 21.74 21.74 +0.00 points +0.00%
11 zse tables
ZSE
Indices
Stock Exchange

12. 12 DIARY OF EVENTS
The black arrow indicate level of load shedding across the country.
POWER GENERATION STATS
Gen Station
14 January 2016
Energy
(Megawatts)
Hwange 556 MW
Kariba 589 MW
Harare 0 MW
Munyati 30 MW
Bulawayo 28 MW
Imports 100 MW
Total 1220 MW
21 January 2016 - CZI/Herald Business Annual Economic Outlook 2016 Half Day Symposium; Venue: Meikles Hotel, Harare; Time:
08:30 to 12:50hrs
10 February 2016 - Nampak Zimbabwe Annual General Meeting: Venue 68 Birmingham Road, Southerton, Harare: Time 12:00
THE BH24 DIARY

13. JOHANNESBURG - South
Africa's sharply weaker rand
and a severe drought pose
significant risks to the infla-
tion outlook and have further
complicated monetary policy,
central bank deputy governor
Daniel Mminele said.
Despite weak growth and the
lack of demand pressures,
inflation remains high, partly
due to a rigid labour market,
Mminele said in a speech made
in London this week and later
posted on the bank's website.
The South African Reserve
Bank will conclude its first pol-
icy meeting of the year on Jan.
28, and some analysts are pre-
dicting an interest rate hike to
curb inflation pressures caused
by a sharp depreciation in the
rand.
The bank's monetary policy
committee (MPC) hiked rates
by 50 basis points last year,
balancing the need to contain
price pressures without con-
straining a struggling econ-
omy, which is expected to grow
1,5 percent at most in 2015.
The rand has weakened as
much as 18 percent against
the dollar since mid-December,
a free-fall triggered by Presi-
dent Jacob Zuma's firing of the
finance minister and on con-
cerns about the global impact
of weak growth in China.
"Rand depreciation remains a
significant source of risk for
the South African economy,"
Mminele said, noting that the
local currency had underper-
formed its emerging market
peers.
"In general, risks to the infla-
tion outlook for 2016 remain
tilted to the upside and have
recently deteriorated further."
Wage increases not linked to
productivity and the shortage
of skilled workers also meant
that average salary expec-
tations remained above cur-
rent and expected inflation,
Mminele said.
The impact of the drought rav-
aging southern Africa on food
prices was expected to out-
weigh the effect of lower global
oil prices.
"Looking ahead, domestic con-
straints, exchange rate devel-
opments, the domestic drought
and tighter financial conditions
pose significant risks to the
inflation outlook," Mminele
said.
South Africa is also vulnerable
to global economic and finan-
cial markets developments and
the opening weeks of 2016
suggest monetary policy has
been complicated, Mminele
said.
"Risks will require close mon-
itoring as we move deeper
into 2016, and preparedness
to take decisive action within
our flexible inflation targeting
framework," he said.
"The MPC will need to assess
very carefully whether the cur-
rent monetary policy stance
remains appropriate."
- Reuters●
regioNAL News13
Weak rand poses upside inflation risk - Mminele

14. Anheuser-Busch InBev NV sold
$46 billion of bonds in what
may become the largest cor-
porate offering in history, sig-
naling that investors’ need for
yield trumps caution amid tur-
moil in financial markets.
The world’s biggest brewer
issued the notes to finance
its takeover of SABMiller Plc.
The company received a record
$110 billion in investor orders,
allowing it to reduce yields
enough to shave about $100
million in potential annual
interest costs, according to
data compiled by Bloomberg
and a person with knowledge
of the transaction. With the
company still potentially rais-
ing debt in other currencies,
the deal may surpass the $49
billion Verizon Communica-
tions Inc. raised two years ago
in the biggest company bond
offering on record.
“There was tremendous inter-
est for the bonds and spreads
have tightened, all indications
of strong demand in the debt
on a day when credit wasn’t
very strong,” said Donald
Ellenberger, who oversees
about $10 billion as head of
multi-sector strategies at Fed-
erated Investors in Pittsburgh.
“It’s a high-quality consumer
company, and there is a lot of
interest there.”
AB InBev’s debt sale marks
what is poised to be the busiest
day ever for corporate-bond
issuance in the US, with about
$54,5 billion of debt expected
to be sold in a single session,
even as credit markets grap-
ple with a slowdown in China,
a commodities slump and
an interest rate boost by the
Federal Reserve. The concern
has pushed corporate borrow-
ing costs and the cost to pro-
tect against defaults by North
American investment-grade
companies to three-year highs.
‘Headline Risks’
“It’s always hard for a market
to digest this kind of deal, par-
ticularly when you have macro
factors affecting investors’
decisions,” said Jody Lurie,
a corporate credit analyst at
Janney Montgomery Scott LLC.
“This is an interesting deal to
test the market after the Fed
hike and after all the headline
risks have come out.”
Officials at AB InBev declined
to comment on the bond sale
when contacted by e-mail.
The longest-dated piece of
the deal was $11 billion of 4,9
percent bonds maturing in 30
years that sold at 205 basis
points above benchmark secu-
rities. While that’s down from
an initial offer of 225 basis
points, it’s still a 48 basis-
point premium compared to
the yield on bonds of similar
maturity and rating, accord-
ing to Bank of America Merrill
Lynch Indexes.
Concessions
“A deal this big usually has to
come with a concession,” said
Jack Flaherty, a money man-
ager in New York at GAM Hold-
ings AG, which oversees $127
billion. “We are buying."
AB InBev agreed to buy SAB-
Miller in October for about
$110 billion. Combined they
would produce almost one in
three beers worldwide. The
takeover would give AB InBev
brands such as Peroni and
Grolsch and control of about
half of the industry’s profit.
The company had lined-up $75
billion of loans to help fund the
takeover.
“Even though spreads are wide
in the corporate-bond market,
in the longer-term context of
the absolute interest rate”
company borrowing costs are
low, said Joe Mayo, the head
of credit research at Conning,
a global insurance investment
manager with about $92 billion
under management.
AB InBev’s debt sale may be
the first in a series of mega-
deals slated to fund some
$630 billion of takeovers this
year. Companies will proba-
bly sell $280 billion of invest-
ment-grade corporate debt in
2016 to fund acquisitions glob-
ally, up from a record $258
billion last year, according to
an estimate from Barclays Plc
that excludes financial compa-
nies.
“There is a lot of demand,”
said Rebecca Cummins, a
Santa Fe, New Mexico-based
money manager at Thornburg
Investment Management Inc.,
which oversees $65 billion.
“Given that there is a large
pipeline of M&A deals still to
come, that this seems to be
going well may be a positive
sign.” - Bloomberg●
internatioNAL News14
AB InBev raises $46 billion in bond market to purchase SABMiller

15. By Frik Els
A meagre 0,6 percent of private capi-
tal raised in 2015 for natural resource
investment is destined for mining pro-
jects. Just two funds closed on $400
million in private investments for metals
and mining last year according to data
by industry tracker Preqin.
Investors aren't necessarily staying
away from mining assets because of a
weak outlook. Of the $63 billion raised
for natural resources more than 90 per-
cent were going into oil and gas oppor-
tunities, which arguably have even
worse fundamentals.
Mick Davis' X2 Resources is still sitting
onits$5,6billionwarchest,despitereg-
ular rumours about Canadian copper or
Australian coal buys doing the rounds.
Mergers and acquisitions among pub-
licly traded companies in mining is just
as subdued.
According to Bloomberg data M&A in
the sector fell to the lowest since 2003
with only $38 billion of assets changing
hands, compared to during the boom
years which topped out at $226 bil-
lion in 2006. That's despite many high
quality assets being put up for sale by
distressed companies including by the
marquee names in the mining world.
One possible explanation for the low
levels of activity comes from Paul Gait,
a mining analyst at Sanford C. Bern-
stein Ltd. in London, who is quoted by
Bloomberg:
"It is surprising that we haven’t seen
more M&A. But the wild swings that
we are getting in the commodity mar-
kets are dampening down M&A activity
becausetheyaremakingithardtogeta
handle on what fair value actually looks
like.” - Mining.com ●
15 analysis15 analysis
One reason why no-one's buying bargain mines