The highs and lows of 2017

29 Dec, 2017 - 00:12 0 Views
The highs and lows of 2017 Depositors spent hours in banking queues

eBusiness Weekly

Africa Moyo
The year 2017 started slowly and painfully for bank depositors, the unemployed and manufacturers.

The cash shortages, which started in March last year, worsened as depositors spent hours in banking queues, but always walked home empty-handed.

For job-seekers, the situation went out of hand as company closures became the order of the day.

The situation was made worse by political bickering in the ruling Zanu-PF with two factions — G40 and Lacoste — accusing each other of plotting to unseat former President Robert Mugabe.

Foreign currency bottlenecks also threatened to tear apart the country as shortages — particularly of cooking oil and fuel — started creeping in.

Crucially, producers of the kaylite packaging were dealt a devastating blow when Government banned then on July 12, citing health reasons.

Planas, a company set up by a Chinese national to produce kaylite packaging, said it lost investments and stock worth $8 million following the ban as their machines were designed to manufacture that product alone.

However, despite all the challenges, Zimbabwe was not short of “good stories” to tell.

Several developments took place, headlined by the resignation of former President Mugabe; there was also the official launch of the Tokwe Mukosi Dam and the ground-breaking ceremony of the dualisation of the Harare-Beitbridge highway.

Resignation of former President Mugabe

The November 21 resignation of former President Mugabe was the biggest story of the year.

The resignation came as proceedings ad begun in Parliament for the impeachment of the veteran ruler who had presided over the country’s affairs since independence from Britain in 1980.

By the time of his resignation, Zimbabwe had hogged international limelight after the military stepped in to contain a potentially volatile situation where “criminals surrounding the (former) President” were committing crimes, taking advantage of their proximity to one centre of power.

Major-General Dr Sibusiso Moyo, now retired and redeployed as Foreign Affairs and International Trade Minister, became a household name after appearing on ZBC TV announcing the military exercise.

“We wish to assure the nation that His Excellency, the President Robert Gabriel Mugabe and his family are safe and sound and their security is guaranteed.

“We are only targeting criminals around him who are committing crimes . . . that are causing social and economic suffering in the country.

“As soon as we have accomplished our mission, we expect that the situation will return to normalcy,” said Dr Moyo, who was promoted to Lieutenant-General on retirement from the force.

The Zimbabwe Defence Forces had stepped in on November 14, 2017.

Since then, events in the country have moved fast, with a new regime led by President Emmerson Mnangagwa assuming the reins on November 24.

In his maiden speech, President Mnangagwa announced a “new way” of doing things, in which hard work would be key.

On November 30, the President appointed a lean Cabinet of 22 ministers.

The Cabinet has six new ministers — Air Chief Marshal Perrance Shiri (Retired), Lieutenant General Dr Moyo, July Moyo, Professor Clever Nyathi and Winston Chitando.

The new ministers took their oath of office before President Emmerson Mnangagwa at State House on December 4.

In the spirit of the pronouncement by President Mnangagwa in his inaugural speech that he would “hit the ground running”, Finance Minister Patrick Chinamasa immediately presented the 2018 nation budget, which ushered in a raft of proposed changes to investment laws.

Chief among the changes was restricting the 51/49 percent shareholding structure enshrined in the Indigenisation and Economic Empowerment Act to the diamonds and platinum sectors.

This has resulted in several foreign investors expressing interest in setting up businesses.

Market watchers had previously criticised some sections of the Indigenisation Act, particularly on the shareholding structures, saying the 51/49 percent requirement in favour of locals, scared away investors.

Through the 2018 budget, Government also slashed the rate of royalty for all platinum group mining companies to 2,5 percent from 10 percent.

The Chamber of Mines of Zimbabwe says the reduction will go a long way in enhancing viability at a time when mineral prices are depressed.

This came when Government also indicated it had deferred the 15 percent levy on raw platinum exports cognisant of progress towards implementation of an agreed road map to construct value addition plants.

The levy has been deferred further for raw and semi-beneficiated platinum until January 1, 2019.

Harare-Beitbridge ground-breaking

Other key issues that happened during the course of the year were the ground breaking ceremony of the dualisation of the Harare-Beitbridge highway.

Former president Mugabe officially launched the $1 billion Beitbridge-Harare highway dualisation project on May 18, this year.

The widening of the highway is expected to reduce carnage along one of the busiest roads in Southern Africa and improve north-south trade.

The ground-breaking ceremony took place along the highway at Chaka business centre in Chirumhanzu.

Geiger International of Austria was contracted by Government to dualise the highway under a 25-year Build Operate and Transfer model.

Later that day, the former leader also commissioned the $250 million Tokwe-Mukosi dam in Chivi.

NRZ deal approved

Mid October, Cabinet also approved the $400 million National Railways of Zimbabwe (NRZ) deal which will see a consortium led by the Diaspora Infrastructure Development Group (DIDG) with South Africa’s Transnet financing the project.

Negotiations are currently underway between Government technocrats and DIDG/ Transnet to conclude the deal, which is expected to see many people getting jobs while industry would move their consignments at affordable costs.

Internet connectivity failure

On December 5, business came to a standstill across the country after internet connectivity went down from mid-morning to about 5pm.

A major fibre optic cable linking Zimbabwe to neighbouring South Africa was damaged, causing temporary internet blackout.

This saw retailers losing business as customers were unable to transact on point of sale (POS) machines, which require connectivity between banks.

The situation has been exacerbated by the gradual shift witnessed in the country towards plastic money as foreign currency shortages have resulted in a serious cash squeeze.

Trade deficit challenges

The battle to export more, to reduce the import bill continues but statistics were unkind for the first 10 months after the country recorded a $1,6 billion trade deficit.

Figures released by Zimbabwe National Statistics Agency (Zimstat) show that earnings from January to end of October fell short of the $3 billion mark settling at just over $2,9 billion.

Imports on the other hand hit $4,47 billion, a figure that took the deficit to a staggering $1,56 billion.

The deficit was, however, 25 percent less than the $2 billion recorded in the same period last year after the country took delivery of imports worthy $4,2 billion against $2,2 billion earned from exports.

Caledonia pushes up gold production

Caledonia Mining Corporation’s gold production for the third quarter ended September 30reached a record 14 396 ounces at its Blanket Mine.

Production for the period under review at Blanket Mine, which is located in Gwanda, Matabeleland South province, was seven percent higher than the same period last year.

Caledonia attributed the rise to higher grades, occasioned by the improved mine flexibility as a result of the measures taken in previous quarters.

The higher gold production resulted in higher revenues and pushed up net profit attributable to shareholders in the quarter to $3,1 million, which is almost three times higher than the third quarter of 2016 and over four times higher than the preceding quarter.

Govt relaxes import restrictions

On November 13, Government relaxed import restrictions as part of efforts to increase availability of goods, at competitive prices.

But the import controls on basic commodities do not render Statutory Instrument 64 of 2016 ineffective, but is rather a call for organisations with free funds to obtain licences for import permits to ensure adequate supplies during the festive season.

SI 64 of 2016 has now been consolidated into SI 22 of 2017.

“We have always clarified that SI 64 (of 2016) is not a ban but a restriction on imports. We cannot import when we are producing enough goods for the country and the same can be said on shortages, we cannot have empty shelves . . . because we do not want imports.

“What this means is that when there is a shortage due to foreign currency deficiencies, we allow those with free funds to import basic commodities and my Ministry is ready to process permits and licences to that effect,” said Industry Minister Mike Bimha.

During the year, mobile financial services overtook traditional methods of transacting with $11 billion worth of transactions being recorded through the innovative digital platforms alone between January and September this year.

The country also improved its doing business rankings after it gained two places to 159 out of 190 on the World Bank’s 2018 ease of doing business global rankings.

The improvement came after Zimbabwe implemented positive reforms in four key indicators to make doing business easier for investors.

Zimbabwe was ranked 161 on the World Bank’s 2017 doing business rankings.

Long serving Industrial Development Corporation of Zimbabwe Limited general manager Michael Ndudzo left the institution after 26 years of service.

Motec Holdings (Pvt) Limited group chief executive Benjamin Kumalo has since replaced him.

Kumalo is a chartered accountant with 26 years of experience within the IDCZ Group during which he rose through the ranks from being group financial controller of Motec Holdings in 1991 to its group chief executive officer until his latest appointment.

Motec Holdings is IDCZ’s strategic business unit in the motor and transport sector.

Kumalo also chairs various boards such as Willowvale Motor Industries, Zimre Holdings Limited and FBC Building Society.

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